Filed by FirstEnergy Corp. Pursuant to
Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Commission File No.: 333-21011
Subject Company: FirstEnergy Corp.
retiree
update
August 2000
Inside
2
What Electric Choice in Ohio Means to You
3
GPU Facts At A Glance
4
Diversified Energy Services
5
In Sympathy
6
Club News
Make a Difference by Helping Kids Read
FirstEnergy and GPU Agree to Merge
Dear Retiree:
A new chapter begins for our Company with the announcement that we have
entered into a merger agreement with Morristown, New Jersey-based GPU,
Inc. FirstEnergy, which will acquire all of the common stock of GPU,
will remain headquartered in Akron. Our combination will add GPU Energy,
which serves electric customers in Pennsylvania and New Jersey, to the
FirstEnergy family of companies. The merger, which we hope to complete by
mid-2001, will require, among other things, approvals from each company's
shareholders and various regulatory agencies. Joining the companies will
create a stronger enterprise with greater resources for providing more
value to our customers and shareholders and more opportunities for
employees. The merger will not affect your pension and health care
benefits.
FirstEnergy will become a larger enterprise with more resources to meet
the challenges of our changing industry. I will be vice chairman, and
remain chief executive officer, and Fred D. Hafer, 59, GPU's chairman,
president and chief executive officer, will serve as chairman until his
retirement at age 62. Here are some other facts about the merger:
- By joining forces, we will become the sixth largest investor-owned
electric system in the nation, based on total customers served.
- We'll double our electric utility customer base in the region, serving
4.3 million customers within 37,200 square miles of Ohio, Pennsylvania
and New Jersey - comprising a wider, more diverse service area that
stretches from the Indiana border to the East Coast.
- We'll double the market for our electric generation, natural gas,
telecommunications and mechanical contracting and construction resources.
- Our combined mechanical contracting and construction business will be
the nation's fourth largest, with approximately $1 billion in annual
revenues and 3,800 employees.
- We anticipate that our combination will produce a number of other
benefits, including: cost savings from the combination of operations;
more efficient use of our generation assets; more opportunities to
increase revenues; and lower needs for new capital.
Through this merger, we will make a better future for ourselves in the
energy industry - a future that would not be as promising without your
past efforts. Thank you for your continued support.
Sincerely,
Pete Burg
Chairman and CEO
What Electric Choice in Ohio Means to You
Beginning January 1, 2001, all consumers in Ohio will be able to change
their electricity supplier under the state's new electric utility
restructuring law. Their local electric company will continue to deliver
the electricity and provide services such
as metering, billing, and maintenance.
Key provisions of the law include:
- A five-percent reduction in the generation portion of residential
customers' bills.
- A requirement that companies meet certain standards to be licensed by
the Public Utilities Commission of Ohio (PUCO) to sell electricity in
Ohio.
- Anti-"slamming" protection to ensure customers' electric suppliers
cannot be changed without their consent.
- A new billing statement that lists generation, transmission,
distribution,
transition and other customer charges separately.
- Recovery of transition costs, which are expenses incurred by electric
companies as a result of years of government regulations related to
requirements to serve customers.
Transition costs were reviewed and approved for recovery by the PUCO and,
for the most part, are already in the price of electricity. The new law
allows electric utilities to continue to recover the costs, but only up
to 10 years.
Additional information is being prepared that will help Ohio consumers
determine if they'll save money by switching to another electricity
supplier. A statewide promotional campaign - reinforced by local electric
company communications efforts - is set to begin this fall.
FirstEnergy Transition Plan
As part of the restructuring process, FirstEnergy submitted a Transition
Plan to the PUCO.
Initially, more than 40 different consumer, environmental, power marketer
and industrial groups were granted intervenor status, meaning they could
challenge any part of our plan in public hearings held by the PUCO.
Through negotiation, however, we were able to satisfy the concerns of
most of the intervenors, and our amended Transition Plan was approved by
the PUCO on July 19, 2000.
Settling the Transition Plan offers us an opportunity to recover $6.9
billion in transition costs without facing substantial write-offs that
would have seriously affected our financial stability as well as our
ability to succeed in a more competitive energy market.
As part of our Transition Plan, we agreed to help jump-start competition
by providing generation to suppliers and shopping incentives to
customers. We will sell 1,120 megawatts of power to marketers, brokers,
and aggregators at set prices for sales to our retail customers through
2005. The shopping incentives for residential, commercial and industrial
customers are 45 percent, 30 percent and 15 percent, respectively, above
the price we will be offering to electricity suppliers.
Although we don't know what new suppliers will charge, our goal is to
stimulate shopping by having a sufficient difference between the shopping
credit and what new suppliers charge customers for generation. Any
remaining credit will be used to reduce the overall electric bill.
We plan to work hard to get customers to switch to our unregulated
FirstEnergy Services (FES) subsidiary, which will count toward the 20-
percent shopping target. FES offers unregulated electricity sales,
facility services, natural gas, and telecommunications services. In
2000, projected FES revenues are $1.3 billion; by 2005, $3 billion.
FirstEnergy Develops New Program
FirstEnergy has partnered with two local community colleges to implement
a new, two-year electric utility technology degree.
The Power Systems Institute (PSI), partnering with Lakeland Community
College, in Kirtland, and Stark State College of Technology, in Canton,
has designed a curriculum that will help prepare students for employment
in a variety of electrical fields, with emphasis on line work.
Students who successfully complete the two-year program will receive an
Associate of Technical Studies degree, with a focus on electric utility
technology. A maximum of 20 students per year, per school, will be
accepted into the PSI program.
If you have any family or friends who might be interested in this
program, have them call Rick Luse, director, Power Systems Institute,
FirstEnergy, 216-479-3018, for more details.
GPU Corporate Profile
GPU develops, owns and operates transmission and distribution facilities
globally, serving 4.8 million customers around the globe.
GPU Energy operates GPU's U.S. electric
companies - Jersey Central Power and Light (JCP & L), Metropolitan
Edison Company (Met-Ed) and Pennsylvania Electric Company (Penelec).
These operating companies have been supplying electricity to residents in
New Jersey
and Pennsylvania for more than a century. Today, GPU Energy annually
provides approximately 44 billion kilowatt-hours of electricity to more
than 2 million
customers in half the land areas of both states.
Additional information about GPU can be found online at www.gpu.com.
<TABLE>
FirstEnergy and GPU: Facts At A Glance
<CAPTION>
Period Ended June 30, 2000 FirstEnergy GPU New FirstEnergy
<S> <C> <C> <C>
U.S. Customers 2.2 million 2.1 million 4.3 million
International Customers 0 2.7 million 2.7 million
Total Customers 2.2 million 4.8 million 7.0 million
U.S. Electric Utility
Employees 9,800 4,900 14,700
U.S. Non-Electric Utility
Employees 3,500 400* 3,900
International Employees 0 4,664 4,664
Total Employees 13,300 10,830 24,130
U.S. Service Area
(Square Miles) 13,200 24,000 37,200
U.S. Generating
Capacity (MW) 12,071 496 12,567
International Generating
Capacity 0 1,557 1,557
Total Capacity 12,071 2,053 14,124
U.S. Peak Load (MW) 12,713 9,816 22,529
U.S. Transmission Line
Miles 8,752 6,000 14,752
U.S. Transmission
Interconnections 37 66 103
U.S. Distribution Line
Miles 55,932 62,000 117,932
Financial Highlights
12 Months Ended
June 30, 2000
Revenues $6.7 billion $5.3 billion $12.0 billion
Net Income $582 million $431 million**
Earnings Per Share $2.58 $3.52**
Current Annual Dividends
Per Share $1.50 $2.18
Common Shares Outstanding 228.6 million 122.9 million
Capital Expenditures $717 million $541 million $1.3 billion
U.S. Kilowatt-hours
Sold 70.8 billion 45.3 billion 116.1 billion
Financial Highlights
At June 30, 2000
Total Assets $18.1 billion $20.5 billion $38.6 billion
Total Common Equity $4.6 billion $3.2 billion
<FN>
* Approximate figure excludes contract union employees
** Excludes one-time write-offs
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995
This publication contains forward-looking statements within the meaning
of the "safe harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. Investors are cautioned that such
forward-looking statements with respect to revenues, earnings,
performance, strategies, prospects and other aspects of the
businesses of FirstEnergy Corp. and GPU, Inc. are based on current
expectations that are subject to risks and uncertainties. A number of
factors could cause actual results or outcomes to differ materially from
those indicated by such forward-looking statements. These factors
include, but are not limited to, risks and uncertainties relating to:
failure to obtain expected synergies from the merger, delays in obtaining
or adverse conditions contained in any required regulatory approvals,
changes in laws or regulations, economic or weather conditions affecting
future sales and margins, changes in markets for energy services,
changing energy market prices, availability and pricing of fuel and other
energy commodities, legislative and regulatory changes (including revised
environmental and safety requirements), availability and cost of capital
and other similar factors. Readers are referred to FirstEnergy's and
GPU's most recent reports filed with the Securities and Exchange
Commission.
Additional Information and Where to Find It
In connection with the proposed merger, FirstEnergy Corp. and GPU, Inc.
will file a joint proxy statement/prospectus with the SEC. INVESTORS AND
SECURITY HOLDERS ARE ADVISED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the joint proxy statement/prospectus (when available) and other
documents filed by FirstEnergy and GPU with the SEC at the SEC's Web site
at http://www.sec.gov. Free copies of the joint proxy
statement/prospectus, once available, and each company's other filings
with the SEC may also be obtained from the respective companies. Free
copies of FirstEnergy's filings may be obtained by directing a request
to: FirstEnergy Corp., Investor Services, 76 S. Main St., Akron, Ohio
44308-1890, Telephone: 1-800-736-3402. Free copies of GPU filings may be
obtained by directing a request to GPU, Inc., 310 Madison Avenue,
Morristown, New Jersey 07962, Telephone: 1-973-401-8720.
FirstEnergy, its directors, certain executive officers, and certain other
employees (Thomas M. Welsh, manager of Communications, and Kurt E.
Turosky, manager of Investor Relations) may be deemed under the rules of
the SEC to be "participants in the solicitation" of proxies from the
security holders of FirstEnergy in favor of the merger. FirstEnergy's
directors, and executive officers beneficially own, in the aggregate,
less than 1% of the outstanding shares of FirstEnergy common stock.
Security holders of FirstEnergy may obtain additional information
regarding the interests of the "participants in the solicitation" by
reading the joint proxy statement/prospectus relating to the merger when
it becomes available.
GPU, its directors (Theodore H. Black, Fred D. Hafer (Chairman; CEO and
President), Thomas B. Hagen, John M. Pietruski, Robert Pokelwaldt,
Catherine A. Rein, Bryan S. Townsend, Carlisle A.H. Trost, Kenneth L.
Wolfe and Patricia K. Woolf), certain executive officers (Ira H. Jolles
(Senior Vice President and General Counsel), Bruce L. Levy (Senior Vice
President and CFO) and Carole B. Snyder (Executive Vice President
Corporate Affairs)) and certain other employees (Jeff Dennard (Director
of Corporate Communications), Joanne Barbieri (Manager of Investor
Relations) and Ned Raynolds (Manager of Financial Communications)) may be
deemed under rules of the SEC to be "participants in the solicitation" of
proxies from the security holders of GPU in favor of the merger. GPU's
directors, and executive officers beneficially own, in the aggregate,
less than 1% of the outstanding shares of GPU common stock. Security
holders of GPU may obtain additional information regarding the interests
of "participants in the solicitation" by reading the joint proxy
statement/prospectus relating to the merger when it becomes available.
Diversified Energy Services
Since its creation in 1997, FirstEnergy has been transformed from an
electric utility holding company into a diversified energy services
enterprise equipped to meet all of our customers' energy needs.
We are now involved in the exploration and production of oil and natural
gas, and the transmission and marketing of natural gas to more than
43,000 customers inside and
outside of our service area. In 2000, projected revenues are $419
million.
Our resources include:
- Interests in more than 7,700 oil and gas wells
- Oil and natural gas drilling rights to more than 980,000 acres in the
Appalachian Basin
- Proved reserves of 450 billion cubic feet equivalent of natural gas and
oil - about 90 percent of it is natural gas
- 5,000 miles of pipeline
In addition, FirstEnergy is the Midwest's largest provider of mechanical
contracting, facilities management and energy management services, with
sales exceeding
$500 million annually. Our 11 Facilities Services Group companies employ
approximately 3,400 people and provide a wide range of services,
including heating, ventilating, air conditioning, refrigeration, process
piping, plumbing and electrical and facility control systems.
Natural Gas and Oil Operations
FirstEnergy Trading Services, Inc., Akron, OH
Great Lakes Energy Partners, L.L.C., Hartville, OH
Marbel Energy Corporation, Lancaster, OH
980,000 acres where we have drilling rights
Facilities Services Group Companies
Ancoma, Inc., Rochester, NY
Colonial Mechanical Corporation, Richmond, VA
Dunbar Mechanical, Inc., Toledo, OH
Edwards Electrical &Mechanical, Inc., Indianapolis, IN
Elliott-Lewis Corporation, Philadelphia, PA
The Hattenbach Company, Cleveland, OH
L. H. Cranston and Sons, Inc., Timonium, MD
Roth Bros., Inc., Youngstown, OH
R.P.C. Mechanical, Inc., Cincinnati, OH
Spectrum Control Systems, Inc.,Cincinnati, OH
Webb Technologies, Inc., Norfolk, VA
In sympathy
Our sympathy to the families of these retirees who passed away.
March
CENTRAL REGION
Elmer T. Culberson
Appliance Serviceman-A
Helen M. Helmetz
Akron Credit & Collection
Supervisor, Consumer Service
Eastern Region
Henry R. Stevens
Surveyman-B
EDGEWATER PLANT
Richard Schofield
Mechanic-B
GENERAL OFFICE
Melva Johnson
General Report Clerk
Margaret Perebzak
Plant Accountant-B
Kurt F. Richards
Project Representative
Community Development
BRUCE MANSFIELD PLANT
Florence Farrar
Associate System
Support Technician
Northern Region
Herbert A. Bang
Trouble Lineman
Michael L. Famageltto
Mechanic-A
Ernest B. Roth
General Construction
Mechanic
Western Region
Marcel Vernaz
Shop Meter Mechanic
April
AVON LAKE PLANT
Max C. Schmidt
Plant Helper
CENTRAL REGION
Stanley G. Bradway
Senior Specialist
District Manager
Charles W. Hall
Fireman Engineer
GENERAL OFFICE
Eva L. Bunker
Lab Technician-A
NEW CASTLE PLANT
Arthur L. Altman
Custodian
NORTHERN REGION
Daniel H. Hespen
Residential Marketing Rep.
Albert J. Krupa
Service Installer Gr. I
Betty C. Long
Secretary
Ronald Mozeleski
System Planning Engineer
Howard E. Simcox
General Meter Tester
John H. Slivka
General Supervisor -
Structure & Subway
SAMMIS PLANT
Ralph Murray
Mechanical
Maintenance Foreman
WESTERN REGION
Leo V. Toska
Shift Foreman
May
ASHTABULA PLANT
George L. Herron
Plant Head Control Operator
Millard W. Vandermark
Plant Head Control
Operator
CENTRAL REGION
James Parti
Shift Supervisor -
Gorge Plant
Zane Bly
Truck Operator-A
Raymond Haefka
Garage Supervisor
GENERAL OFFICE
Margaret Long
Senior Treasury Clerk
NORTHERN REGION
Ray D. Coleman
Materials & Fleet
Management
James P. Curran
Relief Trouble Dispatcher
Carl M. Hanhilammi
Service Line Mechanic
Charles F. Pearn
Shop Cable Splicer-A
PENN POWER
Chester Badger
Line Supervisor
Clare E. Brown
General Coordinator - Operations
WESTERN REGION
Ervon W. Fick
Site Facilities Specialist
John D. Fulton, Sr.
Line Department
Vernon D. Kesling
Instrumentation &
Control Foreman
Wanda Sobocinski
Home Plan Representative
June
CENTRAL REGION
George Costaras
Substation Electrician-A
EASTERN REGION
Mary Hulea
Janitress
Helen Moore
Accounting Clerk -
Warren Division
NORTHERN REGION
Robert H. McKibben
Engineer - Lines & Distribution
WESTERN REGION
Lane Elting
Protective Systems Specialist
William J. Mominee
Head Boiler Operator
Bay Shore Plant
Santiago Sanchez
Senior Yard Maintenance Man - Acme Plant
Club News
- For information about Penn Power retirees, check out:
www.ccia.com/~cascade/.
- Ohio Edison Marion area retirees meet the third Tuesday of each month
at the Gateway Smorgasbord, in Marion. All FirstEnergy retirees, spouses
and guests are welcome.
- For the past 20 years, Ohio Edison Akron area retirees have met the
second Friday of every month at the First Congregational Church, in
Akron, 292 East Market Street. For more information about the luncheon
meetings, call Dick Lang, 330-896-3117, or Bob Vogel, 330-688-5343.
Congrats!
Congratulations to the following people for winning the Cleveland Indians
ticket contest announced in the previous Retiree Update:
Stephen Biro
Shaker Heights, Ohio
William Fleming
Parma, Ohio
Paul Palagyi
Conneaut, Ohio
Bonnie Bing Wuertz
Sandusky, Ohio
Make a Difference by Helping Kids Read
OhioReads is Governor Bob Taft's education initiative to improve the
reading skills of Ohio's kindergarten through fourth-grade students so
they can pass the reading portion of the Fourth Grade Proficiency Test.
In 1999, 40 percent of the students failed.
FirstEnergy is doing its part to help. Chairman and CEO Pete Burg is a
member of the governor's OhioReads Business Advisory Council and
almost100 FirstEnergy employees are currently volunteer tutors. As
Company retirees, your participation in this worthwhile program also
would be greatly appreciated.
For more information on your community's OhioReads initiative, go online
to www.ohioreads.org, or call Delores Jones, manager, Community Support,
at 330-384-5022.
Retiree Update is published for retirees of FirstEnergy and its operating
companies and subsidiaries by the Communications Department. Send story
ideas to Mark Durbin, editor, through e-mail,
[email protected], or call
Mark at 330-761-4365.
</TABLE>
