SEC File No. 70-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM U-1
DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L")
300 Madison Avenue
Morristown, New Jersey 07960
METROPOLITAN EDISON COMPANY ("Met-Ed")
2800 Pottsville Pike
Reading, Pennsylvania 19640
PENNSYLVANIA ELECTRIC COMPANY ("Penelec")
1001 Broad Street
Johnstown, Pennsylvania 15907
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
100 Interpace Parkway
Parsippany, New Jersey 07054
(Names of companies filing this statement and
addresses of principal executive offices)
GENERAL PUBLIC UTILITIES CORPORATION
(Name of top registered holding company parent of applicants)
Don W. Myers, Vice President W. Edwin Ogden, Esq.
and Treasurer Ryan, Russell, Ogden & Seltzer
M. A. Nalewako, Secretary 1100 Berkshire Boulevard
GPU Service Corporation P.O. Box 6219
100 Interpace Parkway Reading, Pennsylvania 19610
Parsippany, New Jersey 07054
Richard S. Cohen, Esq. Robert C. Gerlach, Esq.
Jersey Central Power & Light Co. Ballard Spahr Andrews &
300 Madison Avenue Ingersoll
Morristown, New Jersey 07960 1735 Market Street
Philadelphia, PA 19103
Douglas E. Davidson, Esq.
Berlack, Israels & Liberman
120 West 45th Street
New York, New York 10036
(Names and addresses of agents for service)
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Item 1. Description of Proposed Transactions.
A. GPU proposes to organize a new, wholly-owned
subsidiary company to be known as GPU Generation Corporation
("GPUGC"). Promptly upon the obtaining of the requisite
regulatory authorizations, GPUGC will undertake responsibility
for the operation, maintenance and rehabilitation of all non-
nuclear generation facilities owned and/or operated by JCP&L,
Met-Ed and Penelec (collectively, the "GPU Companies"). GPUGC
will also undertake responsibility for the design, construction,
start-up and testing of any new non-nuclear generation facilities
which the GPU Companies may need in the future. (Energy
Initiatives, Inc. will continue to develop, construct, own and
operate independent power production facilities for the GPU
System.) In addition, GPUGC will assume (subject to obtaining
the requisite consent of the station co-owners) the
responsibilities of Penelec and JCP&L under certain operating
agreements (the "Joint Operating Agreements") under which they
operate and maintain certain fossil fuel and hydroelectric
generation facilities (i.e., the Keystone, Conemaugh and Homer
City coal-fired facilities and the Yards Creek and Seneca pumped
storage hydroelectric facilities) each of which is jointly owned
by a GPU Company with one or more unaffiliated utilities. In
this way, all of the resources of the GPU Companies relating to
fossil fuel and hydroelectric plants will be combined in a single
organization.
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The proposed realignment and combination of the
GPU System's fossil fuel and hydroelectric generation functions
is substantially similar to the combination of the GPU System
nuclear operating functions under GPU Nuclear Corporation, which
the Commission authorized by Order dated September 5, 1980 in SEC
File No. 70-6443 (HCAR No. 35-21708).
B. The GPU System believes that a combination of the
operations of all the GPU System's fossil fuel and hydroelectric
generation facilities into a single, unified management structure
will permit an increased focus and concentration on the non-
nuclear generation side of the GPU Companies' supply resources,
resulting in a reduction of the construction, operation and
maintenance costs of such generation facilities in the future.
The realignment of the non-nuclear generation operations will
also permit the GPU Companies to more closely focus and dedicate
their remaining efforts and resources on their local distribution
and customer service functions. The GPU Companies anticipate
that the realization of future efficiencies and cost reductions
from the combined operation of the GPU System's non-nuclear
generation facilities will ultimately produce net cost savings to
the GPU Companies and their customers which will enhance their
respective competitive positions.
C. Because a substantial portion of the GPU System's
non-nuclear generation facilities are located in Pennsylvania,
GPUGC will be incorporated in Pennsylvania and will maintain its
principal offices in Johnstown, Pennsylvania, where Penelec is
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now headquartered. GPUGC's Board of Directors will include the
Presidents of each of the GPU Companies. Ownership of the
generation facilities, however, will remain unchanged so that
each GPU Company will continue to own the utility plant currently
reflected on its respective books, as well as any capital
additions made to its respective facilities or other new
generation investments made at its request for its own account.
To implement this program, the GPU Companies intend to enter into
an operating agreement (the "Operating Agreement") with GPUGC
(the form of which is being filed as Exhibit B hereto).
D. In effect, the GPU Companies will simply make use
of the staff, facilities and other combined resources of GPUGC
(which, at least initially, will be largely derived from existing
GPU System staff, facilities and resources) to operate and
maintain the same generation facilities in which the GPU
Companies presently have an interest. From time to time, GPUGC
may also employ others (who may or may not be present employees
of the GPU System) and engage consultants and contractors as
needed for the discharge of its functions.
It is also contemplated that certain general and
administrative functions and services, such as finance/treasury,
accounting, internal auditing, legal, data processing, taxes,
insurance, human resources and environmental, will be performed
for GPUGC at cost by GPU Service Corporation ("GPUSC") and/or one
or more of the GPU Companies.
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E. The Operating Agreement between GPUGC (as
operator) and the GPU Companies (as owners) will provide that the
services rendered by GPUGC will be furnished at cost. The costs
of GPUGC thus to be taken into account will include all costs of
doing business, including reasonable compensation for necessary
capital as permitted by Rule 91. To the extent practicable,
costs will be determined and accumulated and allocated to the GPU
Company owner of the particular generation facility to which the
services relate, in the manner provided in the Operating
Agreement. To the extent that costs are not directly allocable
to a particular generation facility, such costs will be allocated
among the GPU Companies in the same proportions as the direct
costs are allocated among the GPU Companies pursuant to the
preceding sentence.
F. GPU will acquire for cash all of the 2,500
authorized shares of GPUGC's common stock, at a price of $20 per
share or an aggregate consideration of $50,000. If necessary,
GPU will make open account advances to GPUGC from time to time;
the aggregate amount of such advances by GPU to GPUGC outstanding
at any time will be not more than $1 million. Interest on such
open account advances will accrue at a rate equal to the
Citibank, N.A. base rate as in effect from time to time. It is
anticipated that the maintenance of the Working Capital Accounts
provided for in the proposed Operating Agreement, along with open
account advances made by GPU to GPUGC from time to time, will
obviate the need for GPUGC to raise additional capital. In the
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event that it becomes necessary for GPUGC to raise additional
capital, however, GPUGC would seek further authorization from the
Commission to do so to the extent required.
G. It is not anticipated that GPUGC will take title
to any material amounts of equipment or property nor become
obligated under any material contracts (except for the Operating
Agreement with its affiliates and its assumption of
responsibilities under the Joint Operating Agreements). Rather,
GPUGC will employ the facilities and properties of its affiliates
(including GPUSC) in carrying out its responsibilities, and
agreements with unaffiliated entities will be entered into either
directly by the owners of the generation facilities involved or
by GPUGC as agent for such owners.
H. It is not presently contemplated that union
employees of the GPU Companies (or GPUSC) will be transferred to
the payroll of GPUGC. Rather, such employees will continue to
perform their services at and on behalf of the GPU System's non-
nuclear generation facilities as employees of the same entities
within the GPU System with which they are currently associated.
There will be filed with your Commission, at least sixty days
before the taking of any such action, written notice of (1) the
proposed transfer of union employees to GPUGC's payroll, (2)
proposed changes in the methods of allocation to be employed by
GPUGC, and (3) any other proposed material changes in the conduct
and organization of GPUGC's operations, including related
financial information.
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Item 2. Fees, Commissions and Expenses.
The estimated fees, commissions and expenses to be
incurred in connection herewith will be filed by amendment.
Item 3. Applicable Statutory Provisions.
A. The acquisition by GPU of shares of the capital
stock of GPUGC is subject to Sections 9(a) and 10 of the Act.
B. The making of open account advances by GPU to
GPUGC is subject to Section 12(b) of the Act and Rule 45
thereunder.
C. GPUGC will be a service company under the Act and,
as such, its organization and the conduct of its business are
subject to Section 13(b) of the Act and Rules 86-95 thereunder.
In particular, GPUGC will be subject to the Uniform System of
Accounts for Mutual Service Companies and Subsidiary Service
Companies and will be obligated to file annual reports on Form U-
13-60 pursuant to Rule 94 under the Act. Declarants believe that
the information set forth in this Declaration includes
substantially all of the information that would be required by a
Form U-13-60 and that this Declaration therefore complies with
the requirements of such Form U-13-60.
It is further requested that, following GPUGC's
organization, GPUGC be permitted to file with the Commission Form
U-13-60 in lieu of any Certificates Pursuant to Rule 24 under the
Act.
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Item 4. Regulatory Approval.
A. Since the Operating Agreement is believed to be a
"management, advisory service, construction or other engineering
contract" within the meaning of Title 48:3-7.1 of the New Jersey
Statutes, JCP&L's execution thereof will require the approval of
the New Jersey Board of Regulatory Commissioners ("NJBRC") and
JCP&L has filed a Petition with the NJBRC seeking such approval.
B. The carrying out of the Operating Agreement
insofar as it relates to Met-Ed and Penelec will require the
approval of the Pennsylvania Public Utility Commission ("PaPUC")
under Chapter 21 of the Pennsylvania Public Utility Code (66
Purdons Pa. C.S.A. Section 2101 et seq.) and Met-Ed and Penelec shall
file such Applications with the PaPUC seeking such approval as
are necessary.
C. No state commission has jurisdiction with respect
to the subject transactions except as set forth above and,
assuming that your Commission authorizes and approves all aspects
of the subject transactions (including the accounting therefor),
no other Federal commission has jurisdiction with respect thereto
except that GPUGC's provision of services under the Operating
Agreement may be subject to Federal Energy Regulatory Commission
jurisdiction under Section 205 of the Federal Power Act.
Item 5. Procedure.
It is requested that the Commission issue an order with
respect to the transactions proposed herein at the earliest
practicable date but, in any event, not later than June 15, 1994.
It is further requested that (i) there not be a recommended
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decision by an Administrative Law Judge or other responsible
officer of the Commission, (ii) the Office of Public Utility
Regulation be permitted to assist in the preparation of the
Commission's decision, and (iii) there be no waiting period
between the issuance of the Commission's order and the date on
which it is to become effective.
Item 6. Exhibits and Financial Statements.
(a) Exhibits:
A-1 Form of Articles of Incorporation of
GPUGC.
A-2 Form of By-Laws of GPUGC.
A-3 Form of GPUGC stock certificate -- to be
filed by amendment.
B Form of Operating Agreement.
C Not applicable.
D-1 Copy of Petition filed by JCP&L with the
NJBRC.
D-1(a) Copy of order of NJBRC -- to be filed by
amendment.
D-2 Copy of filing by Met-Ed and Penelec with
the PaPUC.
D-2(a) Copy of Order of PaPUC (or of evidence of
the filing with the PaPUC and of approval
by the PaPUC in accordance with the fourth
sentence of paragraph (b) of Section 2102
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of the Pennsylvania Public Utility Code) -
- to be filed by amendment.
E Not applicable.
F Opinion of Berlack, Israels & Liberman --
to be filed by amendment.
F-2 Opinion of Richard S. Cohen, Esq. -- to be
filed by amendment.
F-3 Opinion of Ryan, Russell, Ogden & Seltzer
-- to be filed by amendment.
F-4 Opinion of Ballard Spahr Andrews &
Ingersoll -- to be filed by amendment.
G GPU System non-nuclear generation
facilities.
H Proposed form of public notice.
(b) Financial Statements:
1 None.
Note: GPU Corporate and consolidated actual and
pro forma financial statements are omitted
since they are not deemed to be material
or relevant or necessary for a proper
disposition of the proposed transactions.
2 None.
3 None.
4 None.
Item 7. Information as to Environmental Effects.
The proposed transactions are designed to combine in a
single organization responsibility for the operation and
maintenance of the GPU System non-nuclear generation facilities,
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but not otherwise to affect the manner in which such facilities
are operated. Consequently, the issuance of an order by your
Commission with respect to the subject transactions is not a
major Federal action significantly affecting the quality of the
human environment.
No Federal agency has prepared or is preparing an
environmental impact statement with respect to the subject
transactions. Reference is made to Item 4 hereof regarding
regulatory approvals with respect to the proposed transactions.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS STATEMENT TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
JERSEY CENTRAL POWER & LIGHT COMPANY
METROPOLITAN EDISON COMPANY
PENNSYLVANIA ELECTRIC COMPANY
By: _____________________________
Don W. Myers
Vice President and Treasurer
Date: April 5, 1994
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EXHIBITS TO BE FILED BY EDGAR
A-1 Form of Articles of Incorporation of
GPUGC.
A-2 Form of By-Laws of GPUGC.
B Form of Operating Agreement.
D-1 Copy of Petition filed by JCP&L with the
NJBRC.
D-2 Copy of filing by Met-Ed and Penelec with
the PaPUC.
G GPU System non-nuclear generation
facilities.
H Proposed form of public notice.
<PAGE>
Exhibit A-1
GPU GENERATION CORPORATION
_______________
ARTICLES OF INCORPORATION
I. The name of the Corporation is GPU GENERATION CORPORATION
II. The location and post office address of the registered
office of the Corporation in the Commonwealth of Pennsylvania is:
c/o Pennsylvania Electric Company
1001 Broad Street
Johnstown, Cambria County, Pennsylvania 15907
III. The purposes for which the Corporation is incorporated are
as follows:
A. The undertaking of responsibility for the safe operation,
maintenance, repair, rehabilitation, design, construction, start-
up and testing of non-nuclear electric generating stations and
plants used for the production, generation, manufacture,
transmission, transportation, distribution, furnishing and supply
of electricity, on behalf of and by contract with the owners
and/or operators of such stations and plants.
B. The engaging in all other lawful business for which
corporations may be incorporated under the Pennsylvania Business
Corporation Law of 1988.
IV. The Corporation is incorporated under the provisions of the
Business Corporation Law of 1988.
V. The term of existence of the Corporation shall be perpetual.
VI. The aggregate number of shares which the Corporation shall
have the authority to issue is two thousand five hundred (2,500)
shares of the par value of $20.00 per share, all of which shall
be designated "Common Shares".
VII. The name and address of the sole incorporator is
________________, 100 Interpace Parkway, Parsippany, New Jersey
07054.
VIII. The number of directors shall not be less than three nor
more than twelve. The number of directors within said minimum
and maximum limits which shall constitute the Board of Directors
shall be specified in the By-Laws of the Corporation.
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IN WITNESS WHEREOF, the Incorporator has hereunto signed and
sealed these Articles of Incorporation this __ day of ______,
1994.
______________________________
______________, Sole Incorporator
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Exhibit A-2
GPU GENERATION CORPORATION
BY-LAWS
Offices
1. The principal office of the Corporation shall be in
Johnstown, Pennsylvania. The Corporation may also have offices
at such other places as the Board of Directors may from time to
time designate or the business of the Corporation may require.
Seal
2. The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its organization, and the words
"Corporate Seal" and "Pennsylvania". If authorized by the Board
of Directors, the corporate seal may be affixed to any
certificates of stock, bonds, debentures, notes or other
engraved, lithographed or printed instruments, by engraving,
lithographing or printing thereon such seal or a facsimile
thereof, and such seal or facsimile thereof so engraved,
lithographed or printed thereon shall have the same force and
effect, for all purposes, as if such corporate seal had been
affixed thereto by indentation.
Shareholders Meetings
3. All meetings of shareholders shall be held at the principal
office of the Corporation or at such other place as shall be
stated in the notice of the meeting. Such meetings shall be
presided over by the chief executive officer of the Corporation
or, in his absence, by such other officer as shall have been
designated for the purpose by the Board of Directors, except when
by statute the election of a presiding officer is required.
4. Annual meetings of shareholders shall be held during the
month of May in each year on such day and at such time as shall
be determined by the Board of Directors and specified in the
notice of the meeting. At the annual meeting the shareholders
entitled to vote shall elect by ballot a Board of Directors and
transact such other business as may properly be brought before
the meeting. Prior to any meeting of shareholders at which an
election of directors is to be held, the Board of Directors shall
appoint one judge of election to serve at such meeting. If there
be a failure to appoint a judge or if such judge be absent or
refuse to act or if his office becomes vacant, the shareholders
present at the meeting, by a per capita vote, shall choose
temporary judges of the number required. No director or officer
of the Corporation shall be eligible to appointment or election
as a judge nor shall a person who is a candidate for an office to
be filled at the meeting act as a judge.
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5. Except as otherwise provided by law, or by the Articles of
Incorporation, as amended from time to time, the holders of a
majority of the shares of stock of the Corporation issued and
outstanding and entitled to vote, present in person or by proxy,
shall be requisite for, and shall constitute a quorum at, any
meeting of the shareholders. If, however, the holders of a
majority of such shares of stock shall not be present or
represented by proxy at any such meeting, the shareholders
entitled to vote thereat, present in person or by proxy, shall
have power, by vote of the holders of a majority of the shares of
capital stock present or represented at the meeting, to adjourn
the meeting from time to time without notice other than
announcement at the meeting, until the holders of the amount of
stock requisite to constitute a quorum, as aforesaid, shall be
present in person or by proxy. At any adjourned meeting at which
such quorum shall be present, in person or by proxy, any business
may be transacted which might have been transacted at the meeting
as originally noticed.
6. At each meeting of the shareholders each shareholder having
the right to vote shall be entitled to vote in person or by proxy
appointed by an instrument executed in writing by such
shareholder, or by his duly appointed attorney, but no proxy
shall be valid after the expiration of three (3) years from the
date of its execution unless the shareholder executing it shall
have specified therein the length of time it is to continue in
force which shall be for some specified period. Each holder of
record of stock having voting power shall be entitled to one vote
for each share of stock standing in the name of such holder on
the stock transfer books of the Corporation, provided that at all
elections of directors of the Corporation each such holder shall
be entitled to as many votes as shall equal the number of shares
of stock such holder is entitled to vote, multiplied by the
number of directors to be elected, and may cast all such votes
for a single director or may distribute them among the number of
directors to be voted for, or any two or more of them, as such
holder may see fit. The vote for directors, and upon the demand
of any shareholder or duly authorized proxy, the vote upon any
question before the meeting, shall be by ballot. For all
elections of directors, the candidates receiving the highest
number of votes from each class or group of classes, if any,
entitled to elect directors separately up to the number of
directors to be elected by the class or group of classes shall be
elected. All other matters shall be determined by a vote of the
holders of a majority of the shares of the capital stock present
or represented at a meeting and voting on such questions. Shares
of capital stock of the Corporation, belonging to the Corporation
or to a corporation controlled by the Corporation through stock
ownership or through majority representation on the Board of
Directors, shall not be voted.
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7. A complete list of the shareholders entitled to vote at any
meeting of shareholders, arranged in alphabetical order, with the
residence of each, and the number of shares held by each, shall
be prepared by the Secretary and filed in the principal office of
the Corporation at least fifteen days before the meeting, and
shall be open to the examination of any shareholder at all times
prior to such meeting, during the usual hours for business, and
shall be available at the time and place of such meeting and open
to the examination of any shareholder.
8. Special meetings of the shareholders for any purpose or
purposes, unless otherwise prescribed by law or by the Articles
of Incorporation, may be called by the Chairman of the Board of
Directors or by the President or by a majority of the Executive
Committee, and shall be called by the President or Secretary at
the request in writing of holders of record of twenty percent of
the shares of capital stock of the Corporation issued and
outstanding and entitled to vote. Business transacted at all
special meetings of the shareholders shall be confined to the
purposes stated in the call.
9. (a) Notice of every meeting of shareholders, setting
forth the time and the place and briefly the purpose or purposes
thereof, shall be given, not less than ten nor more than fifty
days prior to such meeting, to each shareholder of record (at the
shareholder's address appearing on the stock books of the
Corporation, unless the shareholder shall have filed with the
Secretary of the Corporation a written request that notices
intended for such shareholder be mailed to some other address, in
which case it shall be mailed to the address designated in such
request) as of a date fixed by the Board of Directors pursuant to
Section 41 of the By-Laws. Except as otherwise provided by law,
by the Articles of Incorporation, as amended, or by the By-Laws,
items of business, in addition to those specified in the notice
of meeting, may be transacted at the annual meeting.
(b) Whenever by any provision of law, the vote of
shareholders at a meeting thereof is required or permitted to be
taken in connection with any corporate action, the meeting and
vote of shareholders may be dispensed with, if all the
shareholders who would have been entitled to vote upon the action
if such meeting were held, shall consent in writing prior or
subsequent to such corporate action being taken, and all such
consents shall be filed with the Secretary of the Corporation.
However, this section shall not be construed to alter or modify
any provision of law or of the Articles of Incorporation under
which the written consent of the holders of less than all
outstanding shares is sufficient for corporate action.
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Directors
10. The business and affairs of the Corporation shall be managed
under the direction of its Board of Directors, which shall
consist of not less than three nor more than twelve directors as
shall be fixed from time to time by a resolution adopted by a
majority of the entire Board of Directors; provided, however,
that no decrease in the number of directors constituting the
entire Board of Directors shall shorten the term of any incumbent
director. Each director shall be at least twenty-one years of
age. Directors need not be shareholders of the Corporation.
Directors shall be elected at the annual meeting of shareholders,
or, if any such election shall not be held, at a shareholders'
meeting called and held in accordance with the provisions of the
Business Corporation Law of the Commonwealth of Pennsylvania.
Each director shall serve until the next annual meeting of
shareholders and thereafter until such director's successor shall
have been elected and shall qualify.
11. In addition to the powers and authority by the By-Laws
expressly conferred upon it, the Board of Directors may exercise
all such powers of the Corporation and do all such lawful acts
and things as are not by law or by the Articles of Incorporation,
as amended, or by the By-Laws directed or required to be
exercised or done by the shareholders.
12. Unless otherwise required by law, in the absence of fraud no
contract or transaction between the Corporation and one or more
of its directors or officers, or between the Corporation and any
domestic or foreign corporation, partnership, firm or association
of any type or kind in which one or more of its directors or
officers are directors or officers or have a financial or other
interest, shall be void or voidable solely for such reason, or
solely because such director or officer is present at or
participates in the meeting of the Board or committee thereof
which authorizes the contract or transaction, or solely because
the votes of such director or directors are counted for such
purposes if:
(a) the material facts as to the relationship or interest
and as to the contract or transaction are disclosed or are known
to the Board of Directors and the Board authorizes the contract
or transaction by the affirmative votes of a majority of the
disinterested directors even though the disinterested directors
are less than a quorum;
(b) the material facts as to such relationship or
interest and as to the contract or transaction are disclosed or
are known to the shareholders entitled to vote thereon and the
contract or transaction is specifically approved in good faith by
vote of those shareholders; or
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(c) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or ratified
by the Board of Directors or the shareholders.
No director or officer shall be liable to account to the
Corporation for any profit realized by such director or officer
from or through any such contract or transaction of the
Corporation by reason of the interest of such director or officer
as aforesaid in such contract or transaction if such contract or
transaction shall be authorized, approved or ratified as
aforesaid.
No contract or other transaction between the Corporation and
any of its affiliates shall in any case be void or voidable or
otherwise affected because of the fact that directors or officers
of the Corporation are directors or officers of such affiliate,
nor shall any such director or officer, because of such relation,
be deemed interested in such contract or other transaction under
any of the provisions of this Section 12, nor shall any such
director be liable to account because of such relation. For the
purpose of this Section 12, the term "affiliate" shall mean any
corporation which is an "affiliate" of the Corporation within the
meaning of the Public Utility Holding Company Act of 1935, as
said Act shall at the time be in effect.
Nothing herein shall create liability in any of the events
described in this Section 12 or prevent the authorization,
ratification or approval, in any other manner provided by law, of
any contract or transaction described in this Section 12.
Meetings of the Board of Directors
13. The first meeting of the Board of Directors, for the purpose
of organization, the election of officers, and the transaction of
any other business which may come before the meeting, shall be
held on call of the Chairman within one week after the annual
meeting of shareholders. If the Chairman shall fail to call such
meeting, it may be called by the President or by any director.
Notice of such meeting shall be given in the manner prescribed
for special meetings of the Board of Directors.
14. Regular meetings of the Board of Directors may be held
without notice except for the purpose of taking action on matters
as to which notice is in the By-Laws required to be given, at
such time and place as shall from time to time be designated by
the Board, but in any event at intervals of not more than three
months. Special meetings of the Board of Directors may be called
by the Chairman or by the President or in the absence or
disability of the Chairman and the President, by a Vice
President, or by any two directors, and may be held at the time
and place designated in the call and notice of the meeting.
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15. Except as otherwise provided by the By-Laws, any item or
business may be transacted at any meeting of the Board of
Directors, whether or not such item of business shall have been
specified in the notice of meeting. Where notice of any meeting
of the Board of Directors is required to be given by the By-Laws,
the Secretary or other officer performing such duties shall give
notice either personally or by telephone or telegraph or
facsimile transmission at least twenty-four hours before the
meeting, or by mail at least three days before the meeting.
Meetings may be held at any time and place without notice if all
the directors are present or if those not present waive notice in
writing either before or after the meeting.
16. At all meetings of the Board of Directors or a committee
thereof a majority of the entire Board or committee shall be
requisite for, and shall constitute, a quorum for the transaction
of business, and the act of a majority of the directors present
and voting at any meeting at which there is a quorum shall be the
act of the Board of Directors, except as may be otherwise
specifically provided by law or by the Articles of Incorporation
or any amendment thereto or by the By-Laws.
17. Any action required or permitted to be taken by the Board or
any committee of the Board may be taken without a meeting if,
prior or subsequent to such action, all members of the Board or
the committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents
thereto by the members of the Board or committee shall be filed
with the minutes of the proceedings of the Board or committee.
Any regular or special meeting may be adjourned to any time or
place by a majority of the directors present at the meeting
whether or not a quorum shall be present at such meeting, and no
notice of the adjourned meeting shall be required other than
announcement at the meeting.
Committees
18. The Board of Directors may, by the vote of a majority of the
directors in office, create an Executive Committee, consisting of
two or more members, of whom one shall be the chief executive
officer of the Corporation. The other members of the Executive
Committee shall be designated by the Board of Directors from
their number, shall hold office for such period as the Board of
Directors shall determine and may be removed at any time by the
Board of Directors. When a member of the Executive Committee
ceases to be a director, he shall cease to be a member of the
Executive Committee. The Executive Committee shall have all the
powers specifically granted to it by the By-Laws and, between
meetings of the Board of Directors, may also exercise all the
powers of the Board of Directors ; provided, however, that
the Executive Committee shall not have power or authority to (i)
submit to the shareholders any action requiring approval of the
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shareholders under the Pennsylvania Business Corporation Law of
1988 , (ii) create or fill vacancies on the Board of Directors,
(iii) amend or repeal these By-Laws or adopt new By-Laws, (iv)
amend or repeal any resolution of the Board that by its terms is
amendable or repealable only by the Board, or (v) act on any
matter committed by these By-Laws or by resolution of the Board
to another committee of the Board.
19. The Executive Committee shall cause to be kept regular
minutes of its proceedings, which may be transcribed in the
regular minute book of the Corporation, and all such proceedings
shall be reported to the Board of Directors at its next
succeeding meeting. The action of the Executive Committee shall
be subject to revision or alteration by the Board of Directors,
provided that no rights which, in the absence of such revision or
alteration, third persons would have had shall be affected by
such revision or alteration. A majority of the Executive
Committee shall constitute a quorum at any meeting. The Board of
Directors may by vote of a majority of the total number of
directors provided for in Section 10 of the By-Laws fill any
vacancies in the Executive Committee. The Executive Committee
shall designate one of its number as Chairman of the Executive
Committee and may, from time to time, prescribe rules and
regulations for the calling and conduct of meetings of the
Committee, and other matters relating to its procedure and the
exercise of its powers.
20. From time to time the Board of Directors may appoint any
other committee or committees for any purpose or purposes, which
committee or committees shall have such powers and such tenure of
office as shall be specified in the resolution of appointment.
The chief executive officer of the Corporation shall be a member
ex officio of all committees of the Board unless otherwise
directed by the Board in respect of any committee or committees.
Compensation and Reimbursement of Directors and Members
of the Executive Committee
21. Directors, other than salaried officers of the Corporation
or its affiliates, shall receive compensation for their services
as directors at such rate as shall be fixed from time to time by
the Board, and all directors shall be reimbursed for their
reasonable expenses, if any, of attendance at each regular or
special meeting of the Board of Directors.
22. Directors, other than salaried officers of the Corporation
or its affiliates, who are members of any committee of the Board
shall receive compensation for their services as such members at
such rate as shall be fixed from time to time by the Board, and
shall be reimbursed for their reasonable expenses, if any, in
attending meetings of such committee or otherwise performing
their duties as members of such committee.
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Officers
23. The officers of the Corporation shall be chosen by vote of a
majority of the directors in office and shall be a President, one
or more Vice Presidents, a Secretary and a Treasurer, and may
include a Chairman, a Comptroller, one or more Assistant
Secretaries, one or more Assistant Treasurers, and one or more
Assistant Comptrollers. If a Chairman shall be chosen, the Board
of Directors shall designate either the Chairman or the President
as chief executive officer of the Corporation. If a Chairman
shall not be chosen, the President shall be the chief executive
officer of the Corporation. The Chairman, if there be one, and a
President who is designated chief executive officer of the
Corporation, shall be chosen from among the directors. A
President who is not chief executive officer of the Corporation
and none of the other officers need be a director. If a
Comptroller shall not be chosen, the Board of Directors shall
designate another officer as principal accounting officer of the
Corporation who in his capacity as such shall have the duties and
responsibilities set forth in Section 33 hereof. Any two offices
may be occupied and the duties thereof may be performed by one
person, but no officer shall execute, acknowledge or verify any
instrument in the name of the Corporation in more than one
capacity.
24. The salaries and other compensation of the officers (other
than assistant officers) of the Corporation shall be determined
from time to time by the Board of Directors. The salaries and
other compensation of the assistant officers of the Corporation
shall be determined from time to time by the chief executive
officer.
25. The Board of Directors may appoint such officers and such
representatives or agents as shall be deemed necessary, who shall
hold office for such terms, exercise such powers, perform such
duties, and receive such salaries or other compensation, as shall
be determined from time to time by action of the Board of
Directors.
26. The salary or other compensation of all other employees
shall be fixed by the chief executive officer of the Corporation
or by such other officer as shall be designated for that purpose
by the Board of Directors.
27. The officers of the Corporation shall hold office until the
first meeting of the Board of Directors after the next succeeding
annual meeting of shareholders and until their respective
successors are chosen and qualify. Any officer elected pursuant
to Section 23 of the By-Laws may be removed at any time, with or
without cause, by the vote of a majority of directors then in
office. Any other officer and any representative, employee or
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agent of the Corporation may be removed at any time, with or
without cause, by action of the Board of Directors, or, in the
absence of action by the Board of Directors, by the Executive
Committee, or the chief executive officer of the Corporation, or
such other officer as shall have been designated for that purpose
by the chief executive officer of the Corporation.
The Chairman
28. (a) If a Chairman shall be chosen by the Board of
Directors, such Chairman shall preside at all meetings of the
Board at which such Chairman shall be present.
(b) If a Chairman shall be chosen by the Board of
Directors and is designated by the Board as chief executive
officer of the Corporation, such Chairman
(i) shall have supervision, direction and control of the
conduct of the business of the Corporation, subject,
however, to the control of the Board of Directors and the
Executive Committee, if there be one;
(ii) may sign in the name and on behalf of the
Corporation any and all contracts, agreements or other
instruments pertaining to matters which arise in the
ordinary course of business of the Corporation, and, when
authorized by the Board of Directors or the Executive
Committee, if there be one, may sign in the name and on
behalf of the Corporation any and all contracts,
agreements or other instruments of any nature pertaining
to the business of the Corporation;
(iii) may, unless otherwise directed by the Board of
Directors pursuant to Section 38 of the By-Laws, attend
in person or by substitute or proxy appointed by such
Chairman and act and vote on behalf of the Corporation at
all meetings of the shareholders of any corporation in
which the Corporation holds stock and grant any consent,
waiver, or power of attorney in respect of such stock;
(iv) shall, whenever it may in the opinion of such
Chairman be necessary or appropriate, prescribe the
duties of officers and employees of the Corporation whose
duties are not otherwise defined; and
(v) shall have such other powers and perform such other
duties as may be prescribed from time to time by law, by
the By-Laws, or by the Board of Directors.
(c) If a Chairman shall be chosen by the Board of
Directors and is not designated by the Board as chief executive
officer of the Corporation, such Chairman
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(i) may sign in the name and on behalf of the Corporation
any and all contracts, agreements or other instruments
pertaining to matters which arise in the ordinary course
of business of the Corporation and, when authorized by
the Board of Directors or the Executive Committee, if
there be one, may sign in the name and on behalf of the
Corporation any and all contracts, agreements or other
instruments of any nature pertaining to the business of
the Corporation; and
(ii) shall have such other powers and perform such other
duties as may be prescribed from time to time by law, by
the By-Laws, or by the Board of Directors.
The President
29. (a) If a Chairman shall not be chosen by the Board of
Directors, the President shall preside at all meetings of the
Board at which such President shall be present.
(b) If the President shall be designated by the Board of
Directors as chief executive officer of the Corporation, the
President
(i) shall have supervision, direction and control of the
conduct of the business of the Corporation, subject,
however, to the control of the Board of Directors and the
Executive Committee, if there be one;
(ii) may sign in the name and on behalf of the
Corporation any and all contracts, agreements or other
instruments pertaining to matters which arise in the
ordinary course of business of the Corporation, and, when
authorized by the Board of Directors or the Executive
Committee, if there be one, may sign in the name and on
behalf of the Corporation any and all contracts,
agreements or other instruments of any nature pertaining
to the business of the Corporation;
(iii) may, unless otherwise directed by the Board of
Directors pursuant to Section 38 of the By-Laws, attend
in person or by substitute or proxy appointed by such
President and act and vote on behalf of the Corporation
at all meetings of the shareholders of any corporation in
which the Corporation holds stock and grant any consent,
waiver, or power of attorney in respect of such stock;
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(iv) shall, whenever it may in the opinion of such
President be necessary or appropriate, prescribe the
duties of officers and employees of the Corporation whose
duties are not otherwise defined; and
(v) shall have such other powers and perform such other
duties as may be prescribed from time to time by law, by
the By-Laws, or by the Board of Directors.
(c) If the Chairman shall be designated by the Board of
Directors as chief executive officer of the Corporation, the
President,
(i) shall be the chief operating officer of the
Corporation;
(ii) shall have supervision, direction and control of the
conduct of the business of the Corporation, in the
absence or disability of the Chairman, subject, however,
to the control of the Board of Directors and the
Executive Committee, if there be one;
(iii) may sign in the name and on behalf of the
Corporation any and all contracts, agreements or other
instruments pertaining to matters which arise in the
ordinary course of business of the Corporation, and, when
authorized by the Board of Directors or the Executive
Committee, if there be one, may sign in the name and on
behalf of the Corporation any and all contracts,
agreements or other instruments of any nature pertaining
to the business of the Corporation;
(iv) at the request or in the absence or disability of
the Chairman, may, unless otherwise directed by the Board
of Directors pursuant to Section 38 of the By-Laws,
attend in person or by substitute or proxy appointed by
such President and act and vote on behalf of the
Corporation at all meetings of the shareholders of any
corporation in which the Corporation holds stock and
grant any consent, waiver, or power of attorney in
respect of such stock;
(v) at the request or in the absence or disability of the
Chairman, whenever in the opinion of such President it
may be necessary or appropriate, shall prescribe the
duties of officers and employees of the Corporation whose
duties are not otherwise defined; and
(vi) shall have such other powers and perform such other
duties as may be prescribed from time to time by law,
by the By-Laws, or by the Board of Directors.
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Vice President
30. (a) The Vice President shall, in the absence or
disability of the President, if the President has been designated
chief executive officer of the Corporation or if the President is
acting pursuant to the provisions of Subsection 29(c)(ii) of the
By-Laws, have supervision, direction and control of the conduct
of the business of the Corporation, subject, however, to the
control of the Board of Directors and the Executive Committee, if
there be one.
(b) The Vice President may sign in the name of and on
behalf of the Corporation any and all contracts, agreements or
other instruments pertaining to matters which arise in the
ordinary course of business of the Corporation, and, when
authorized by the Board of Directors or the Executive Committee,
if there be one, may sign in the name and on behalf of the
Corporation any and all contracts, agreements or other
instruments of any nature pertaining to the business of the
Corporation except in cases where the signing thereof shall be
expressly delegated by the Board of Directors or the Executive
Committee to some other officer or agent of the Corporation.
(c) The Vice President may, if the President has been
designated chief executive officer of the Corporation or if the
President is acting pursuant to the provisions of Subsection 29
(c) (ii) of the By-Laws, at the request or in the absence or
disability of the President or in case of the failure of the
President to appoint a substitute or proxy as provided in
Subsections 29 (b) (iii) and 29 (c) (iv) of the By-Laws, unless
otherwise directed by the Board of Directors pursuant to Section
38 of the By-Laws, attend in person or by substitute or proxy
appointed by such Vice President and act and vote on behalf of
the Corporation at all meetings of the shareholders of any
corporation in which the Corporation holds stock and grant any
consent, waiver, or power of attorney in respect of such stock.
(d) The Vice President shall have such other powers and
perform such other duties as may be prescribed from time to time
by law, by the By-Laws, or by the Board of Directors.
(e) If there be more than one Vice President, the Board
of Directors may designate one or more of such Vice Presidents as
an Executive Vice President. The Board of Directors may assign
to such Vice Presidents their respective duties and may, if the
President has been designated chief executive officer of the
Corporation or if the President is acting pursuant to the
provisions of Subsection 29 (c) (ii) of the By-Laws, designate
the order in which the respective Vice Presidents shall have
supervision, direction and control of the business of the
Corporation in the absence or disability of the President.
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The Secretary
31. (a) The Secretary shall attend all meetings of the Board
of Directors and all meetings of the shareholders and record all
votes and the minutes of all proceedings in books to be kept for
that purpose; and shall perform like duties for the Executive
Committee and any other committees created by the Board of
Directors.
(b) The Secretary shall give, or cause to be given,
notice of all meetings of the shareholders, the Board of
Directors, or the Executive Committee of which notice is required
to be given by law or by the By-Laws.
(c) The Secretary shall have such other powers and
perform such other duties as may be prescribed from time to time
by law, by the By-Laws, or by the Board of Directors.
(d) Any records kept by the Secretary shall be the
property of the Corporation and shall be restored to the
Corporation in case of the Secretary's death, resignation,
retirement or removal from office.
(e) The Secretary shall be the custodian of the seal of
the Corporation and, pursuant to Section 45 of the By-Laws and in
other instances where the execution of documents on behalf of the
Corporation is authorized by the By-Laws or by the Board of
Directors, may affix the seal to all instruments requiring it and
attest the ensealing and the execution of such instruments.
(f) The Secretary shall have control of the stock ledger,
stock certificate book and all books containing minutes of any
meeting of the shareholders, Board of Directors, or Executive
Committee or other committee created by the Board of Directors,
and of all formal records and documents relating to the corporate
affairs of the Corporation.
(g) Any Assistant Secretary or Assistant Secretaries
shall assist the Secretary in the performance of the Secretary's
duties, shall exercise the powers and duties of the Secretary at
the request or in the absence or disability of the Secretary, and
shall exercise such other powers and duties as may be prescribed
by the Board of Directors.
The Treasurer
32. (a) The Treasurer shall be responsible for the
safekeeping of the corporate funds and securities of the
Corporation, and shall maintain and keep custody of full and
accurate accounts of receipts and disbursements in books
belonging to the Corporation, and shall deposit all moneys and
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other funds of the Corporation in the name and to the credit of
the Corporation, in such depositories as may be designated by the
Board of Directors.
(b) The Treasurer shall disburse the funds of the
Corporation in such manner as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements.
(c) Pursuant to Section 45 of the By-Laws, the Treasurer
may, when authorized by the Board of Directors, affix the seal to
all instruments requiring it and attest the ensealing and the
execution of such instruments.
(d) The Treasurer shall exhibit at all reasonable times
such accounts and records to any director of the Corporation upon
application during business hours at the office of the
Corporation where such accounts and records are kept.
(e) The Treasurer shall render an account of all
transactions as Treasurer at all regular meetings of the Board of
Directors, or whenever the Board may require it, and at such
other times as may be requested by the Board or by any director
of the Corporation.
(f) If required by the Board of Directors, the Treasurer
shall give the Corporation a bond, the premium on which shall be
paid by the Corporation, in such form and amount and with such
surety or sureties as shall be satisfactory to the Board, for the
faithful performance of the duties of the Treasurer's office, and
for the restoration to the Corporation in case of the death,
resignation, retirement or removal from office of the Treasurer,
of all books, papers, vouchers, money and other property of
whatever kind belonging to the Corporation in the possession or
under the control of the Treasurer.
(g) The Treasurer shall perform all duties generally
incident to the office of Treasurer, and shall have other powers
and duties as from time to time may be prescribed by law, by the
By-Laws, or by the Board of Directors.
(h) Any Assistant Treasurer or Assistant Treasurers shall
assist the Treasurer in the performance of the Treasurer's
duties, shall exercise the powers and duties of the Treasurer at
the request or in the absence or disability of the Treasurer, and
shall exercise such other powers and duties as may be prescribed
by the Board of Directors. If required by the Board of Directors,
any Assistant Treasurer shall give the Corporation a bond, the
premium on which shall be paid by the Corporation, similar to
that which may be required to be given by the Treasurer.
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Comptroller
33. (a) The Comptroller of the Corporation shall be the
principal accounting officer of the Corporation and shall be
accountable and report directly to the Board of Directors. If
required by the Board of Directors, the Comptroller shall give
the Corporation a bond, the premium on which shall be paid by the
Corporation, in such form and amount and with such surety or
sureties as shall be satisfactory to the Board, for the faithful
performance of the duties of the Comptroller's office.
(b) The Comptroller shall keep or cause to be kept full
and complete books of account of all operations of the
Corporation and of its assets and liabilities.
(c) The Comptroller shall have custody of all accounting
records of the Corporation other than the record of receipts and
disbursements and those relating to the deposit or custody of
money or securities of the Corporation, which shall be in the
custody of the Treasurer.
(d) The Comptroller shall exhibit at all reasonable times
such books of account and records to any director of the
Corporation upon application during business hours at the office
of the Corporation where such books of account and records are
kept.
(e) The Comptroller shall render reports of the
operations and business and of the condition of the finances of
the Corporation at regular meetings of the Board of Directors,
and at such other times as may be requested by the Board or by
any director of the Corporation, and shall render a full
financial report at the annual meeting of the shareholders, if
called upon to do so.
(f) The Comptroller shall receive and keep custody of an
original copy of each written contract made by or on behalf of
the Corporation.
(g) The Comptroller shall receive periodic reports from
the Treasurer of the Corporation of all receipts and
disbursements, and shall see that correct vouchers are taken for
all disbursements for any purpose.
(h) The Comptroller shall perform all duties generally
incident to the office of Comptroller, and shall have such other
powers and duties as from time to time may be prescribed by law,
by the By-Laws, or by the Board of Directors.
(i) Any Assistant Comptroller or Assistant Comptrollers
shall assist the Comptroller in the performance of the
Comptroller's duties, shall exercise the powers and duties of the
Comptroller at the request or in the absence or disability of the
Comptroller, and shall exercise such other powers and duties as
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may be prescribed by the Board of Directors. If required by the
Board of Directors, any Assistant Comptroller shall give the
Corporation a bond, the premium on which shall be paid by the
Corporation, similar to that which may be required to be given by
the Comptroller.
Vacancies
34. If the office of any director becomes vacant for any reason,
including vacancies resulting from an increase in the number of
directors, the directors then in office, although less than a
quorum, by a majority vote, may fill such vacancy and each person
so selected shall hold office for the unexpired term in respect
of which such vacancy occurred. Pending action by the Board of
Directors at such meeting, the Board of Directors or the
Executive Committee may choose a successor temporarily to serve
as an officer of the Corporation.
Resignations
35. An officer or any director of the Corporation may resign at
any time, such resignation to be made in writing and transmitted
to the Secretary. Such resignation shall take effect from the
time of its receipt by the Corporation, unless some time be
fixed in the resignation, and then from that time. Nothing
herein shall be deemed to relieve any officer from liability for
breach of any contract of employment resulting from any such
resignation.
Duties of Officers May be Delegated
36. In case of the absence or disability of any officer of the
Corporation, or for any other reason the Board of Directors may
deem sufficient, the Board, by vote of a majority of directors
then in office, may, notwithstanding any other provisions of the
By-Laws, delegate or assign, for the time being, the powers or
duties, or any of them, of such officer to any other officer or
to any director.
Indemnification of Directors, Officers and Employees
37. (a) A director shall not be personally liable for
monetary damages as such for any action taken, or any failure to
take any action, unless the director has breached or failed to
perform the duties of his or her office under the Pennsylvania
Business Corporation Law of 1988, as amended, and the breach or
failure to perform constitutes self-dealing, willful misconduct
or recklessness. The provisions of this subsection (a) shall not
apply to the responsibility or liability of a director pursuant
to any criminal statue, or the liability of a director for the
payment of taxes pursuant to local, state or Federal law.
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(b) The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, whether formal or
informal, and whether brought by or in the right of the
Corporation, its shareholders or otherwise, by reason of the fact
that such person was a director, officer or employee of the
Corporation (and may indemnify any person who was an agent of the
Corporation), or a person serving at the request of the
Corporation as a director, officer, partner, fiduciary or trustee
of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, to the fullest extent
permitted by law, including without limitation indemnification
against expenses (including attorneys' fees and disbursements),
damages, punitive damages, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by
such person in connection with such proceeding unless the act or
failure to act giving rise to the claim for indemnification is
finally determined by a court to have constituted willful
misconduct or recklessness. If any such person is not entitled
to indemnification in respect of a portion of any liabilities to
which such person may be subject, the Corporation shall
nonetheless indemnify such person to the maximum extent for the
remaining portion of the liabilities.
(c) The Corporation shall pay the expenses (including
attorneys' fees and disbursements) actually and reasonably
incurred in defending a civil or criminal action, suit or
proceeding on behalf of any person entitled to indemnification
under subsection (b) in advance of the final disposition of such
proceeding upon receipt of an undertaking by or on behalf of such
person to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the
Corporation, and may pay such expenses in advance on behalf of
any agent on receipt of a similar undertaking. The financial
ability of such person to make such repayment shall not be a
prerequisite to the making of an advance.
(d) For purposes of this Section: (i) the Corporation
shall be deemed to have requested an officer, director, employee
or agent to serve as fiduciary with respect to an employee
benefit plan where the performance by such person of duties to
the Corporation also imposes duties on, or otherwise involves
services by, such person as a fiduciary with respect to the plan;
(ii) excise taxes assessed with respect to any transaction with
an employee benefit plan shall be deemed "fines"; and (iii)
action taken or omitted by such person with respect to an
employee benefit plan in the performance of duties for a purpose
reasonably believed to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Corporation.
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(e) To further effect, satisfy or secure the
indemnification obligations provided herein or otherwise, the
Corporation may maintain insurance, obtain a letter of credit,
act as self-insurer, create a reserve, trust, escrow, cash
collateral or other fund or account, enter into indemnification
agreements, pledge or grant a security interest in any assets or
properties of the Corporation, or use any other mechanism or
arrangement whatsoever in such amounts, at such costs, and upon
such other terms and conditions as the Board of Directors shall
deem appropriate.
(f) All rights of indemnification under this Section
shall be deemed a contract between the Corporation and the person
entitled to indemnification under this Section pursuant to which
the Corporation and each such person intend to be legally bound.
Any repeal, amendment or modification hereof shall be prospective
only and shall not limit, but may expand, any rights or
obligations in respect of any proceeding whether commenced prior
to or after such change to the extent such proceeding pertains to
actions or failures to act occurring prior to such change.
(g) The indemnification, as authorized by this Section,
shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be
entitled under any statute, agreement, vote of shareholders or
disinterested directors or otherwise, both as to actions in an
official capacity and as to actions in any other capacity while
holding such office. The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section shall
continue as to a person who has ceased to be an officer,
director, employee or agent in respect of matters arising prior
to such time, and shall inure to the benefit of the heirs,
executors and administrators of such person.
Stock of Other Corporations
38. The Board of Directors may authorize any director, officer
or other person on behalf of the Corporation to attend, act and
vote at meetings of the shareholders of any corporation in which
the Corporation shall hold stock, and to exercise thereat any and
all of the rights and powers incident to the ownership of such
stock and to execute waivers of notice of such meetings and calls
therefor.
Certificates of Stock
39. The certificates of stock of the Corporation shall be
numbered and shall be entered in the books of the Corporation as
they are issued. They shall exhibit the holder's name and number
of shares and may include the holder's address. No fractional
shares of stock shall be issued. Certificates of stock shall be
signed by the President or a Vice President and by the Treasurer
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or an Assistant Treasurer or the Secretary or an Assistant
Secretary, and shall be sealed with the seal of the Corporation
or a facsimile thereof. Where any certificate of stock is
countersigned by a transfer agent or registrar who is not an
officer or employee of the Corporation, the signatures of any
such President, Vice President, Secretary, Assistant Secretary,
Treasurer, or Assistant Treasurer upon such certificate may be
facsimiles, engraved or printed. In case any such officer who
has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such before such certificate
of stock is issued, it may be issued by the Corporation with the
same effect as if such officer had not ceased to be such at the
date of its issue.
Transfer of Stock
40. Transfers of stock shall be made on the books of the
Corporation only by the person named in the certificate or by
attorney, lawfully constituted in writing, and upon surrender of
the certificate therefor.
Fixing of Record Date
41. The Board of Directors is hereby authorized to fix a time,
not exceeding fifty (50) days preceding the date of any meeting
of shareholders or the date fixed for the payment of any dividend
or the making of any distribution, or for the delivery of
evidences of rights or evidences of interests arising out of any
change, conversion or exchange of capital stock, as a record time
for the determination of the shareholders entitled to notice of
and to vote at such meeting or entitled to receive any such
dividend, distribution, rights or interests, as the case may be;
and all persons who are holders of record of capital stock at the
time so fixed, and no others, shall be entitled to notice of and
to vote at such meeting, and only shareholders of record at such
time shall be entitled to receive any such notice, dividend,
distribution, rights or interests.
Registered Shareholders
42. The Corporation shall be entitled to treat the holder of any
share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or
other claim to, or interest in, such share on the part of any
other person, whether or not it shall have express or other
notice thereof, save as expressly provided by statutes of the
Commonwealth of Pennsylvania.
Lost Certificates
43. Any person claiming a certificate of stock to be lost or
destroyed shall make an affidavit or affirmation of that fact,
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whereupon a new certificate may be issued of the same tenor and
for the same number of shares as the one alleged to be lost or
destroyed; provided, however, that the Board of Directors may
require, as a condition to the issuance of a new certificate, the
payment of the reasonable expenses of such issuance or the
furnishing of a bond of indemnity in such form and amount and
with such surety or sureties, or without surety, as the Board of
Directors shall determine, or both the payment of such expenses
and the furnishing of such bond, and may also require the
advertisement of such loss in such manner as the Board of
Directors may prescribe.
Inspection of Books
44. The Board of Directors may determine whether and to what
extent, and at what time and places and under what conditions and
regulations, the accounts and books of the Corporation (other
than the books required by statute to be open to the inspection
of shareholders), or any of them, shall be open to the inspection
of shareholders, and no shareholder shall have any right to
inspect any account or book or document of the Corporation,
except as such right may be conferred by statutes of the
Commonwealth of Pennsylvania or by the By-Laws or by resolution
of the Board of Directors or of the shareholders.
Checks, Notes, Bonds and Other Instruments
45. (a) All checks or demands for money and notes of the
Corporation shall be signed by such person or persons (who may
but need not be an officer or officers of the Corporation) as the
Board of Directors may from time to time designate, either
directly or through such officers of the Corporation as shall, by
resolution of the Board of Directors, be authorized to designate
such person or persons. If authorized by the Board of Directors,
the signatures of such persons, or any of them, upon any checks
for the payment of money may be made by engraving, lithographing
or printing thereon a facsimile of such signatures, in lieu of
actual signatures, and such facsimile signatures so engraved,
lithographed or printed thereon shall have the same force and
effect as if such persons had actually signed the same.
(b) All bonds, mortgages and other instruments requiring
a seal, when required in connection with matters which arise in
the ordinary course of business or when authorized by the Board
of Directors, shall be executed on behalf of the Corporation by
the President or a Vice President, and the seal of the
Corporation shall be thereupon affixed by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer,
who shall, when required, attest the ensealing and execution of
said instrument. If authorized by the Board of Directors, a
facsimile of the seal may be employed and such facsimile of the
seal may be engraved, lithographed or printed and shall have the
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same force and effect as an impressed seal. If authorized by the
Board of Directors, the signatures of the President or a Vice
President or the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer upon any engraved,
lithographed or printed bonds, debentures, notes or other
instruments may be made by engraving, lithographing or printing
thereon a facsimile of such signatures, in lieu of actual
signatures, and such facsimile signatures so engraved,
lithographed or printed thereon shall have the same force and
effect as if such officers had actually signed the same. In case
any officer who has signed, or whose facsimile signature appears
on, any such bonds, debentures, notes or other instruments shall
cease to be such officer before such bonds, debentures, notes or
other instruments shall have been delivered by the Corporation,
such bonds, debentures, notes or other instruments may
nevertheless be adopted by the Corporation and be issued and
delivered as though the person who signed the same, or whose
facsimile signature appears thereon, had not ceased to be such
officer of the Corporation.
Receipts for Securities
46. All receipts for stocks, bonds or other securities by the
Corporation shall be signed by the Treasurer or an Assistant
Treasurer, or by such other person or persons as the Board of
Directors or Executive Committee shall designate.
Fiscal Year
47. The fiscal year shall begin the first day of January in each
year.
Dividends
48. (a) Dividends in the form of cash or securities, upon the
capital stock of the Corporation, to the extent permitted by law,
may be declared by the Board of Directors at any regular or
special meeting.
(b) The Board of Directors shall have power to fix and
determine, and from time to time vary, the amount to be reserved
as working capital; to determine whether any, and if any, what
part of any, surplus of the Corporation shall be declared as
dividends; to determine the date or dates for the declaration and
payment or distribution of dividends; and, before payment of any
dividend or the making of any distribution, to set aside out of
the surplus of the Corporation such amount or amounts as the
Board of Directors from time to time, in its absolute discretion,
may think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for such other purpose as it shall deem
to be in the interests of the Corporation.
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Notices
49. (a) Whenever under the provisions of the By-Laws notice
is required to be given to any director, officer or shareholder,
it shall not be construed to require personal notice, but, except
as otherwise specifically provided, such notice may be given in
writing, by first class or express mail or by depositing a copy
of the same in a post office, letter box or mail chute maintained
by the United States Postal Service or Courier Service for
delivery to that person, postage prepaid, addressed to such
shareholder, officer or director, at his or her address as the
same appears on the books of the Corporation.
(b) A shareholder, director or officer may waive in
writing any notice required to be given to him or her by law or
by the By-Laws.
Participation in Meetings by Telephone
50. At any meeting of the Shareholders, Board of Directors or
the Executive Committee or any other committee designated by the
Board of Directors, one or more directors or shareholders may
participate in such meeting in lieu of attendance in person by
means of the conference telephone or similar communications
equipment by means of which all persons participating in the
meeting will be able to hear and speak.
Oath of Judges of Election
51. The judges of election appointed to act at any meeting of
the shareholders shall, before entering upon the discharge of
their duties, be sworn faithfully to execute the duties of judge
at such meeting with strict impartiality and according to the
best of their ability.
Amendments
52. The By-Laws may be altered or amended by the affirmative
vote of the holders of a majority of the capital stock
represented and entitled to vote at a meeting of the shareholders
duly held, provided that the notice of such meeting shall have
included notice of such proposed amendment. The By-Laws may also
be altered or amended by the affirmative vote of a majority of
directors then in office at a meeting of the Board of Directors,
the notice of which shall have included notice of the proposed
amendment.
In the event of the adoption, amendment, or repeal of any
By-Law by the Board of Directors pursuant to this Section, there
shall be set forth in the notice of the next meeting of
shareholders for the election of directors the By-Law so adopted,
amended or repealed together with a concise statement of the
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changes made. By the affirmative vote of the holders of a
majority of the capital stock represented and entitled to vote at
such meeting, the By-Laws may, without further notice, be altered
or amended by amending or repealing such action by the Board of
Directors.
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Exhibit B
GENERATING STATION
OPERATING AGREEMENT
among
JERSEY CENTRAL POWER & LIGHT COMPANY
and
METROPOLITAN EDISON COMPANY
and
PENNSYLVANIA ELECTRIC COMPANY
and
GPU GENERATION CORPORATION
This AGREEMENT made and entered into this _____ day of
___________, 1994 by and among Jersey Central Power & Light
Company (" JCP&L"), Metropolitan Edison Company ("Met-Ed"),
Pennsylvania Electric Company ("Penelec") and GPU Generation
Corporation ("GPUGC").
W I T N E S S E T H:
WHEREAS, JCP&L, Met-Ed, Penelec and GPUGC are each a wholly-
owned subsidiary of General Public Utilities Corporation ("GPU"),
a registered holding company under the Public Utility Holding
Company Act of 1935 (the "1935 Act"); and
WHEREAS, JCP&L, Met-Ed and Penelec (hereinafter referred to
collectively as "Owners" and individually as an "Owner") each
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owns and operates certain fossil fuel, hydro-electric(1) and
pumped storage generation stations, plants and other related
generation facilities and may, in the future, own additional such
facilities, which are set forth and generally described on
Schedule 1 hereto, as it may from time to time be hereafter
amended or supplemented without the necessity of an amendment to
this Agreement (individually a "Generation Facility" or
collectively, the "Generation Facilities"); and
WHEREAS, Penelec and JCP&L each has heretofore entered
into agreements with other utilities under which it has agreed to
operate and maintain certain fossil fuel, hydro-electric or
pumped storage (non-nuclear) generation facilities for the mutual
benefit of the co-owners, as the same may be amended or
supplemented from time to time (such agreements being
collectively called, the "Joint Operating Agreements"); and
WHEREAS, each Owner believes that in order to more
efficiently and economically provide for the operation,
maintenance, repair, and rehabilitation of its respective
Generation Facilities and of the facilities subject to the Joint
Operating Agreements, and for
____________________
(1) One such hydro-electric generation station, York Haven,
is owned by York Haven Power Company ("YHP"), a wholly-owned
subsidiary of Met-Ed. This Agreement is executed by Met-Ed on
its own behalf and on behalf of YHP.
2
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Operating Agreements, and for the construction of new or
additional generation facilities on its behalf if, in the future,
it deems that it is necessary or appropriate to do so, all such
activities should be conducted and coordinated on the Owners'
behalf by a single, separate organization; and
WHEREAS, each Owner now desires that GPUGC, which has been
organized for such purposes, undertake the operation,
maintenance, repair and rehabilitation of its Generation
Facilities, provide for the construction of any new or additional
non-nuclear generation facilities which an Owner may request in
the future, and assume the obligations of Penelec and JCP&L
under the Joint Operating Agreements, subject in each case to the
receipt of any necessary regulatory approvals and the consents or
agreements of the owners of the facilities subject to the Joint
Operating Agreements.
NOW THEREFORE, in consideration of these premises, the
parties, intending to be legally bound, do hereby agree as
follows:
3
<PAGE>
Article 1
Services to be Provided
1.1 GPUGC, consistent with such written guidelines as may be
jointly developed with the Owners, shall provide and be
responsible for (i) the operation and maintenance of the
Generation Facilities in a safe and reliable manner in
accordance with all applicable licenses, permits and
requirements of federal, state and local regulatory
agencies, (ii) the generation of power and energy at the
Generation Facilities to the credit of and for the benefit
of the Owner of each such Generation Facility as
economically as is reasonably practicable, (iii) the repair
and rehabilitation of the Generation Facilities as may,
from time to time, be necessary, appropriate or reasonably
practicable and advisable and (iv) as and to the extent
deemed by an Owner to be necessary or appropriate, the
construction of new or additional non-nuclear generation
facilities for such Owner. GPUGC also shall make such
further modifications of and additions to and retirements
from the Generation Facilities as shall be consistent with
such operation, maintenance, repair and rehabilitation.
Such services and construction may be provided by GPUGC
through its own personnel or in part, by others under
contractual or other arrangements, including the use of an
Owner's personnel under the direction and supervision of
GPUGC.
4
<PAGE>
1.2 In furtherance of the foregoing, each Owner authorizes
GPUGC, among other things, to:
(a) Select, hire, control and discharge personnel, who,
unless otherwise agreed, shall be employees solely of
GPUGC, and select and retain the services of contractors
and consultants.
(b) As and when requested by an Owner, arrange for the
procurement, on behalf of such Owner, of requisite fuel
for such Owner's Generation Facilities and for the
transportation and storage thereof.
(c) Arrange for the purchase on behalf of each Owner of
repair, modification, rehabilitation, operation,
maintenance and construction materials, services and
supplies as necessary for such Owner's Generation
Facilities.
(d) Design, construct, startup and test 1) modifications of
and additions to the Generation Facilities and 2) new or
additional non-nuclear generation facilities for each
Owner upon such Owner's request.
(e) Determine, establish and maintain inventory levels of
material, supplies, parts and equipment for each of the
Generation Facilities.
(f) Keep each Owner informed in a reasonable manner
concerning repair, modification, rehabilitation,
operation and maintenance activities and additions to and
retirements from such Owner's Generation Facilities.
5
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(g) Prepare, or arrange for the preparation of annual budgets
and forecasts of operation and maintenance expenses,
including budgets and forecasts for the costs of repair,
modification and rehabilitation, capital expenditures and
plant retirements relating to Generation Facilities, in
accordance with normal and customary procedures, to be
submitted to each Owner for approval with respect to its
Generation Facilities. The approval of such budgets
shall be required before action may be taken thereunder,
provided that work required to prevent hazardous
conditions or substantial reduction in generation may be
undertaken prior to such approval with prompt
notification thereof given to each Owner. Such budgets
and forecasts shall be revised from time to time to
reflect material changes in circumstances.
(h) Perform any services and take any action on behalf of an
Owner, related to the repair, modification,
rehabilitation, operation, maintenance, renewals,
replacements, additions and retirements pertaining to the
Generation Facilities as may be necessary or appropriate
to comply with any applicable statutes, rules,
regulations, guidelines or similar criteria, and any
provisions or conditions of construction permits and
operating licenses or similar authorizations granted or
that may be hereafter granted in connection with the
Generation Facilities and as such permits, licenses or
6
<PAGE>
other authorizations may hereafter or thereafter be
amended.
(i) In its capacity as operator of each of the Generation
Facilities and as agent for the Owner thereof, provide
communications to, and receive communications from, any
governmental agency having jurisdiction with respect to
any aspect of the operation, maintenance,
rehabilitation, repair and modification of such
Generation Facility and, in such capacities, represent
(or engage others to represent) each Owner with respect
thereto.
(j) Perform or, if deemed desirable by GPUGC, contract on
behalf of each Owner with others, for the repair,
modification, rehabilitation, maintenance, renewal and
replacement required to place, keep and maintain such
Owner's Generation Facilities in good and efficient
operating condition, to protect the properties on which
such Generation Facilities are located, to conduct
research and development with respect to non-nuclear
generation and to disburse or receive funds in connection
therewith. Such work and contracts relating thereto
shall be subject to normal and customary GPUGC review and
approval procedures.
(k) Perform any additional services pertaining to the
Generation Facilities to which each respective Owner and
GPUGC shall have mutually agreed.
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<PAGE>
(l) Arrange for 1) the maintenance, in accordance with normal
and customary accounting procedures, of such necessary
books of record, books of account and memoranda of all
transactions and 2) the provision of such reports to the
Owners with respect thereto as each Owner shall desire to
meet its own accounting and statistical requirements and
to conform to the applicable lawful rules, regulations
and requirements of all regulatory bodies having
jurisdiction over each Owner. The operating costs
incurred and capital expenditures made for each of the
Generation Facilities shall be accumulated in a separate
set of accounts.
(m) Provide or arrange for the provision of such other data
or information with respect to each of the Generation
Facilities as may be reasonably requested by the Owner
from time to time.
1.3 Matters and questions arising in connection with the
operation, maintenance, rehabilitation, repair, or
modification of a Generation Facility which are not within
the scope of the authority delegated to GPUGC under this
Agreement and which are not specifically provided for in
this Agreement shall be jointly determined from time to time
by the Owner of such Generation Facility and GPUGC.
8
<PAGE>
1.4 The costs for services provided by GPUGC pursuant to the
terms, conditions and provisions of this Agreement shall be
paid to GPUGC as provided in Article 3 hereof.
ARTICLE 2
Operation of Generation Facilities
2.1 In order that the safe operation of the Generation
Facilities is assured, the Owners shall not effect any
operating or physical changes to their respective
transmission and distribution facilities which may affect
the safe operation of the Generation Facilities without
prior consultation with and the concurrence of GPUGC.
2.2 Each Generation Facility shall be operated in accordance
with good utility practice and pursuant to an operating plan
developed and updated regularly by GPUGC and the Owner
thereof and in accordance with each Owner's obligations, if
any, under the Pennsylvania-New Jersey-Maryland ("PJM")
Interconnection Agreement to which JCP&L, Met-Ed and Penelec
are signatories and in accordance with the "GPU Three Party
Agreement" between and among JCP&L, Met-Ed and Penelec or
other applicable power pooling agreements or arrangements,
as such obligations may presently exist or may hereafter be
modified from time to time, including the obligations, if
any, of each Owner to maintain the design integrity of each
Generation Facility under the requirements of the
9
<PAGE>
MidAtlantic Area Council ("MAAC") and the National Electric
Reliability Council ("NERC").
2.3 The point of interconnection between any Generation Facility
and the Owner's transmission system and the extent of
GPUGC'S operational responsibility therefor shall be
determined from time to time by each of the respective
Owners of the Generation Facilities and GPUGC.
ARTICLE 3
Working Capital Accounts
3.1 GPUGC shall arrange for a working capital account ("the
Working Capital Account") to be established for each Owner,
from which GPUGC shall make payments for all costs incurred
in providing its services and in discharging its
responsibilities hereunder. Each Owner shall fund its
Working Capital Account by providing or transferring funds
promptly on receipt of telephone or other notice or
direction from or on behalf of GPUGC of such Owner's
obligation therefor.
3.2 Upon termination of this Agreement, as hereinafter provided,
any residual unexpended balance in each Working Capital
Account after payment of the costs actually incurred, and
reasonable commitments therefor, as set forth in Section 3.1
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<PAGE>
hereof shall be credited to the Owner which contributed to
such Working Capital Account.
ARTICLE 4
Charges, Financial Statements and Billings
4.1 GPUGC shall arrange for the prompt reporting of the
following information by written statements issued quarterly
to the Owners:
(a) The costs of operation, maintenance, repair,
rehabilitation and modification of each of the Generation
Facilities, and the cost of any plant additions and
retirements including applicable cost of removal and
salvage, all to be accounted for on an accrual basis and
classified as required to meet GPUGC's obligations under
Section 1.2(l) above.
(b) A summary statement of the operation of the Working
Capital Account during the quarter, showing beginning
balance, receipts, from whom received, disbursements, to
whom made, the purpose thereof, and closing balance.
4.2 All of the services and materials provided or rendered
hereunder to an Owner by GPUGC shall be charged to an Owner
at the actual cost thereof. Direct charges shall be made
for services and materials whenever a direct allocation of
such costs to a particular Owner or Generation Facility is
practicable. The costs incurred or accrued from all sources
during each calendar quarter in operating, maintaining,
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<PAGE>
repairing, rehabilitating, modifying, and making additions
to and retirements from the Generation Facilities shall
become liabilities when incurred or accrued and shall be
borne by the respective Owners thereof. All such costs
shall be determined in accordance with sound accounting
practices, and shall include reasonable and appropriate
indirect costs including overheads. The determination of
all other costs and the allocation thereof are set forth in
Schedule 2 hereto. Schedule 2 may, from time to time, be
modified or changed by mutual agreement of GPUGC and the
Owners without the necessity of an amendment to this
Agreement, provided that in each instance all materials and
services provided or rendered hereunder shall be at actual
cost thereof, fairly and equitably allocated, and that all
such modifications or changes shall otherwise be in
accordance with the requirements of the 1935 Act and the
applicable rules, regulations and orders thereunder.
4.3 It is the intent of each Owner that so far as possible each
Owner shall separately report, file returns with respect to,
be responsible for and pay all real property, franchise,
business or other taxes, except payroll and sales or use
taxes, arising out of or relating to its respective
ownership of the Generation Facilities, and that such taxes
shall be separately levied and assessed against each such
Owner. However, to the extent that any such taxes may be
12
<PAGE>
levied on or assessed against any or all of the Generation
Facilities, or their operation, or GPUGC or any Owner in
such a manner as, in the opinion of the Owner, to make
impossible or inequitable the carrying out of said intent,
then such taxes shall be deemed a part of the costs of
operating and maintaining such Generation Facility or
Facilities and shall be apportioned among each Owner under
this Agreement in accordance with such Owner's ownership
thereof.
4.4 Each Owner shall have the right, during the term of this
Agreement and thereafter as long as the books, records and
memoranda referred to in Section 1.2(l) shall be preserved,
to inspect all such items and to make reasonable audits
thereof at its own cost as it may deem necessary to protect
its interests.
4.5 In the event any Owner shall question any statement rendered
by GPUGC in accordance with the provisions of Section 4.1
hereof, such Owner shall nevertheless promptly pay amounts
called for by GPUGC under Section 3.1 hereof but such
payment shall not be deemed to prevent such Owner from
claiming an adjustment of any statement rendered.
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<PAGE>
ARTICLE 5
Compliance with Provisions of Permits
and Requirements of Governmental Agencies
5.1 Each Owner and GPUGC shall cooperate in taking whatever
action may be necessary to comply with the terms and
provisions of all permits and licenses for its Generation
Facilities and with all applicable lawful requirements of
any federal, state or local agency or regulatory body
having jurisdiction in or over its Generation Facilities.
ARTICLE 6
Damage to Persons or Property; Penalties; Fines
6.1 Since GPUGC is undertaking its responsibilities hereunder
(i) at cost and (ii) in order to assist each Owner in
meeting its responsibilities with respect to its
Generation Facilities, the following provisions shall be
applicable to loss or damage to the property of any or all
the parties hereto (including Generation Facilities
property) or of third parties, or injuries to or loss of
life by any person, including employees of the parties
hereto, and to penalties or fines assessed with respect to
the Generation Facilities:
(a) Each Owner and GPUGC shall procure and maintain such
physical damage and loss, public liability, workers'
compensation and other insurance as it may deem
appropriate with respect to all losses, damages,
liability and claims arising out of each Owner's
ownership of its Generation Facilities and GPUGC's
14
<PAGE>
operation thereof and the provision of services
hereunder. In the alternative upon concurrence of each
party hereto, the Owner and GPUGC shall jointly procure
and maintain such insurance and the premium costs thereof
shall be Generation Facilities costs under Section 4.2.
All such insurance policies shall identify GPUGC, each
respective Owner and, if applicable, the mortgage
indenture trustee, as additional insureds thereunder as
their interests may appear, and shall contain a waiver of
subrogation clause in favor of the other parties hereto
to the extent of the applicable limits of such policies.
(b) Claims cognizable under workers' compensation acts or
temporary disability benefits laws or any other benefits
under workers' compensation or analogous statutes and the
expenses of defending or disposing of the same,
attributable to the ownership or operation of the
Generation Facilities, and which are not covered in full
by insurance procured in accordance with the preceding
paragraph shall, if attributable to particular
Generation Facilities and to the extent not covered by
such insurance, be treated as Generation Facilities costs
under Section 4.2.
(c) All losses, damages, expenses, penalties, liabilities,
fines and claims (including those in respect of property
damage and personal injury) asserted by third parties and
the expenses of defending or disposing of the same,
15
<PAGE>
attributable to the ownership or operation of the
Generation Facilities and which are not covered in full
by insurance procured in accordance with the second
preceding paragraph shall, if attributable to particular
Generation Facilities and to the extent not covered by
such insurance, be treated as Generation Facilities costs
under Section 4.2.
(d) Each of the parties hereto hereby expressly waives,
relinquishes and releases any claim or right it may have
to recover from any of the other parties hereto for any
losses, damages, penalties, liabilities, fines, claims or
expenses (including damage to property of the Generation
Facilities) for any cause including the negligence of
any of the other parties hereto, and its or their
employees and agents, in connection with the operation,
maintenance, repair, rehabilitation, and modification of
the Generation Facilities and the provision of any
services hereunder.
ARTICLE 7
Miscellaneous
7.1 Nothing in this Agreement shall be deemed to create or
constitute a partnership, joint venture or association among
the parties hereto or any of them, the sole purpose of this
Agreement being limited to providing for the orderly and
efficient operation, maintenance, repair, modification,
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<PAGE>
rehabilitation, renewal, replacement, additions and
construction of the Generation Facilities.
7.2 Each Owner hereby designates its President as its
Representative, who shall receive notices and communications
from GPUGC under the provisions of this Agreement and who
shall send to the designated Representative of GPUGC all
notices and communications under the provisions of this
Agreement.
7.3 GPUGC hereby designates its President as the GPUGC
Representative, who shall receive notices and communications
from each Owner's Representative under the provisions of
this Agreement and who shall send to each Owner's
Representative all notices and communications concerning the
provisions of this Agreement.
7.4 Each Owner shall determine the basis and method it will use
for purposes of depreciation and other matters where
investment in Generation Facilities property is relevant.
7.5 In performing services under this Agreement on behalf of
each Owner, GPUGC shall act as an independent contractor
responsible for the result to be attained, consistent with
such guidelines as may be jointly developed with such
Owner.
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<PAGE>
7.6 To the extent that any Owner may, from time to time, provide
goods or services to GPUGC, GPUGC shall pay for such goods
and services at such providing Owner's cost determined as
herein provided, which payments shall thereupon be treated
as Generation Facilities costs under Section 4.2. With the
agreement of GPUGC, any Owner may, from time to time,
provide goods or services to another Owner's Generation
Facilities and GPUGC shall pay for such goods and services
as set forth in the preceding sentence of this paragraph.
ARTICLE 8
Effective Date and Termination
8.1 Subject to any applicable rules and regulations and
associated approvals of any regulatory authority, this
Agreement shall become effective as of the date first above
written and shall remain in full force and effect unless and
until terminated.
8.2 This Agreement may be terminated by any Owner , with
respect to such Owner and to the Generation Facilities owned
by such Owner, upon reasonable written notice to the other
parties hereto.
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<PAGE>
ARTICLE 9
Successors and Assigns
9.1 This Agreement and all of the terms and conditions hereof
shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns,
provided, however, that neither this Agreement nor any of
GPUGC's obligations hereunder shall be assignable by GPUGC,
in whole or in part, without the express written consent of
each affected Owner. Any mortgage indenture trustee
which shall foreclose on substantially all of the electric
utility properties of any Owner may, at such trustee's
own election, be deemed to be a successor and assign of said
Owner under this Agreement.
ARTICLE 10
Governing Law
10.1 This Agreement shall be construed in accordance with, and to
be governed by, the laws of Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the day and year
first above written.
JERSEY CENTRAL POWER & LIGHT COMPANY
By__________________________________
President
METROPOLITAN EDISON COMPANY, for itself and for
and on behalf of York Haven Power Company.
By__________________________________
President
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PENNSYLVANIA ELECTRIC COMPANY
By__________________________________
President
GPU GENERATION CORPORATION
By__________________________________
President
20
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SCHEDULE 1
GPU SYSTEM NON-NUCLEAR GENERATION FACILITIES
Jersey Central
Fossil-Fueled
Sayreville (Steam/CTs)
Gilbert (Steam/CC/CTs)
Glen Gardner (CTs)
Forked River (CTs)
Werner (Steam CTs)
Keystone (undivided 16.67% interest)
Pumped Storage
Yards Creek (undivided 50% interest)
Met-Ed
Fossil-Fueled
Portland
Titus
Shawnee (CT)
Hunterstown (CTs)
Hamilton (CT)
Mountain (CTs)
Ortanna (CT)
Portland (CT)
Titus (CT)
Tolna (CTs)
Conemaugh (undivided 16.45% interest)
Hydro-electric
York Haven*
Penelec
Fossil-Fueled
Homer City (undivided 50% interest)
Shawville
Seward
Warren
Benton
Wayne (CT)
Warren (CT)
Hydro-electric
Piney
Deep Creek
Pumped Storage
Seneca (undivided 20% interest)
_______________________
* York Haven hydro-electric generating station is owned by
York Haven Power Company, a wholly-owned subsidiary of Met-
Ed.
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SCHEDULE 2
Determination of Cost of Service
and Allocation Thereof
Cost of service will be determined in accordance with the
Public Utility Holding Company Act of 1935 and the rules and
regulations and orders thereunder, and will include all costs of
doing business incurred by GPUGC.
Records will be maintained by each Department and Division
of GPUGC in order to accumulate all costs of doing business and
to determine the cost of service. These costs will include wages
and salaries of employees and related expenses such as insurance,
taxes, pensions and other employee welfare expenses, and rent or
other applicable costs of facility utilization, including but not
limited to light, heat, telephone, supplies and other
housekeeping costs. In addition, records will be maintained of
general administrative expenses, which will include the costs of
operating GPUGC as a corporate entity.
Where appropriate, charges for services of personnel
rendered to a particular Generation Facility and related expenses
and non-personnel expenses (e.g., use of automotive equipment,
etc.) relating to a particular Generation Facility will be billed
directly to the Owner of such Generation Facility ("Direct
Charges"). Direct Charges will include the charges for services
22
<PAGE>
of GPUGC personnel assigned exclusively to the Generation
Facilities.
In general, expenses not directly attributable to a
particular Generation Facility ("Indirect Charges") will be
allocated among the Owners in the same proportion as the Direct
Charges are allocated among the Owners pursuant to the preceding
paragraph.
All other costs will be fairly and equitably allocated in
accordance with Rules 90 and 91 of the Public Utlity Holding
Company Act of 1935. Calculations under these allocation
formulae will be reviewed periodically and revised as appropriate
to fully allocate all costs by each year-end.
Charges for services will be determined, where appropriate,
from the time records of employees (other than some secretaries,
clerical and similar employees, the cost of whose services will
be treated as a part of general administrative expenses).
Records of such related expenses and general administrative
expenses will be maintained and subjected to periodic review.
Out-of-pocket expenses which are incurred for an Owner will
be billed at cost. Charges for non-personnel expenses, such as
for use of automobiles not assigned exclusively to the Generation
Facilities, will normally be computed on the basis of costs per
hour.
23
<PAGE>
Exhibit D-1
STATE OF NEW JERSEY
BOARD OF REGULATORY COMMISSIONERS
-------------------------------------X
: Docket No._________
In the Matter of the Petition of :
JERSEY CENTRAL POWER & LIGHT COMPANY :
For Approval, Pursuant to N.J.S.A. : VERIFIED PETITION
48:3-7.1, Of An Operating Agreement :
With GPU Generation Corporation :
:
-------------------------------------X
To the Honorable Commissioners of the New Jersey Board of
Regulatory Commissioners:
The Petitioner, Jersey Central Power & Light Company
("Petitioner" or "JCP&L"), a New Jersey public utility
corporation subject to the jurisdiction of the New Jersey Board
of Regulatory Commissioners (the "Board"), and having its
principal offices at 300 Madison Avenue, Morristown, New Jersey
07960, respectfully shows:
1. JCP&L is engaged as a New Jersey public utility in the
production, generation, purchase, transmission, distribution and
sale of electric energy and related utility services to more than
900,000 residential, commercial and industrial customers located
within 13 counties and 236 municipalities of the State of New
Jersey.
2. Metropolitan Edison Company ("Met-Ed") is a public
utility company of the Commonwealth of Pennsylvania engaged in
the production, generation, purchase, transmission, distribution
1
<PAGE>
and sale of electric energy and related utility services to more
than 450,000 residential, commercial and industrial customers
within the Commonwealth of Pennsylvania, and is subject to the
regulatory jurisdiction of the Pennsylvania Public Utility
Commission (the "PaPUC").
3. Pennsylvania Electric Company ("Penelec") is a public
utility company of the Commonwealth of Pennsylvania engaged in
the production, generation, purchase, transmission, distribution
and sale of electric energy and related utility services to more
than 560,000 residential, commercial and industrial customers
within the Commonwealth of Pennsylvania, and is also subject to
the regulatory jurisdiction of the PaPUC.
4. JCP&L, Met-Ed and Penelec (collectively, the "GPU
Companies") are wholly-owned subsidiaries of General Public
Utilities Corporation ("GPU"), a registered holding company under
the Public Utility Holding Company Act of 1935 (the "1935 Act").
The respective electric generation and transmission facilities of
the GPU Companies are physically interconnected and operated as a
single integrated and coordinated "GPU System". The GPU
Companies are each signatories to, and participate as a group in,
the Pennsylvania-New Jersey-Maryland Interconnection ("PJM")
Agreement which, among other things, provides for the
coordination and direction of the operation of all the generation
resources of the GPU Companies along with those of all the other
PJM member companies.
2
<PAGE>
5. The GPU Companies currently own the following fossil
fuel and hydroelectric generation facilities (as of February 1,
1994):
JCP&L
Net MW Summer
Name of Station Location Fuel Capacity
Sayreville (Steam/CTs) NJ Gas/Oil 453
Gilbert (Steam/CC/CTs) NJ Gas/Oil 533
Glen Gardner (CTs) NJ Gas/Oil 160
Forked River (CTs) NJ Gas/Oil 68
Werner (Steam/CTs) NJ Oil 270
Keystone (Steam) PA Coal 283(a)
Keystone (Diesel) PA Oil 2
Yards Creek (Hydro) NJ Pumped Storage 190(b)
JCP&L Total 1,959
Met-Ed
Net MW Summer
Name of Station Location Fuel Capacity
Portland (Steam) PA Coal 401
Titus (Steam) PA Coal 241
Conemaugh (Steam) PA Coal 280(c)
York Haven (Hydro) PA Impoundment 19(d)
Shawnee (CT) PA Oil 20
Hunterstown (CTs) PA Oil/Gas 60
Hamilton (CT) PA Oil 20
Mountain (CTs) PA Oil/Gas 40
Ortanna (CT) PA Oil 20
Portland (CTs) PA Oil/Gas 35
Titus (CTs) PA Oil/Gas 31
Conemaugh (Diesel) PA Oil 2
Tolna (CTs) PA Oil 40
Met-Ed Total 1,209
Penelec
Net MW Summer
Name of Station Location Fuel Capacity
Homer City (Steam) PA Coal 942 (e)
Shawville (Steam) PA Coal 597
Seward (Steam) PA Coal 196
Warren (Steam) PA Coal 82
Shawville (Diesel) PA Oil 6
Benton (Diesel) PA Oil 4
3
<PAGE>
Wayne (CT) PA Oil 56
Warren (CT) PA Oil/Gas 57
Blossburg (CT) PA Gas 19
Piney (Hydro) PA Impoundment 27
Deep Creek (Hydro) MD Impoundment 18
Seneca (Hydro) PA Pumped Storage 87(f)
Penelec Total 2,091
GPU System Total 5,259
(a) Represents JCP&L's undivided 16.67% interest in this
station, which is operated by Penelec on behalf of the joint
owners, which are not affiliated with JCP&L.
(b) Represents JCP&L's undivided 50% interest in this station,
which is a net user rather than a net producer of electric
energy. The station is operated by JCP&L on behalf of
itself and the other joint owner, which is not affiliated
with JCP&L.
(c) Represents Met-Ed's undivided 16.45% interest in this
station, which is operated by Penelec on behalf of the joint
owners, which are not affiliated with Met-Ed.
(d) Owned and operated by York Haven Power Company ("YHP"), a
wholly-owned subsidiary of Met-Ed, which will execute the
GPUGC Operating Agreement on behalf of YHP.
(e) Represents Penelec's undivided 50% interest in this station,
which is operated by Penelec on behalf of itself and the
other joint owner, which is not affiliated with Penelec.
(f) Represents Penelec's undivided 20% interest in this station,
which is a net user rather than a net producer of electric
energy. The station is operated by Penelec on behalf of
itself and the other joint owner, which is not affiliated
with Penelec.
6. The GPU System's nuclear generation facilities, the
610 MW Oyster Creek Station wholly-owned by JCP&L and the 786 MW
Three Mile Island Unit No. 1, in which JCP&L has an undivided 25%
ownership interest, are operated and maintained by GPU Nuclear
Corporation ("GPUNC") which was organized in 1980 as a wholly-
owned subsidiary of GPU to operate and maintain the GPU System's
nuclear facilities. By Order of the New Jersey Board of Public
Utilities, dated October 14, 1981 in Docket No. 804-254, and
4
<PAGE>
pursuant to similar approval by the PaPUC as to Met-Ed and
Penelec, the GPU Companies were authorized to enter into related
operating agreements with GPUNC. The remaining approximately
5,300 MW of fossil fuel and hydroelectric generation facilities
owned by the GPU Companies have continued to be operated and
maintained independently by each respective owner, or under
certain operating agreements with the non-affiliated joint
owners, as noted in the table above.
7. JCP&L, in concert with GPU and the other GPU Companies,
has come to the conclusion that a combination of the operations
of all the GPU System's fossil fuel (i.e., coal, oil and natural
gas) and hydroelectric (including pumped storage) generation
facilities into a single, unified management structure will
permit an increased focus and concentration on the non-nuclear
generation side of the GPU Companies' supply resources. JCP&L
believes that such a realignment and integration of the GPU
System's non-nuclear generation operations will improve the
productivity, enhance the performance and reduce the
construction, operation and maintenance costs of such generation
facilities in the future, thus positioning the GPU Companies more
favorably to meet the challenges of cost efficiency and market-
driven pricing in the emerging competitive environment. Equally
important, the proposed realignment of the non-nuclear generation
operations will also permit the GPU Companies to more closely
focus and dedicate their remaining efforts and resources on their
local distribution and customer service functions. In both
5
<PAGE>
respects, JCP&L believes that its customers will benefit from
more effective cost controls and improved quality, efficiency and
competitive pricing of electric energy and related customer
service.
8. Accordingly, GPU has proposed to form GPU Generation
Corporation ("GPUGC") as a wholly-owned subsidiary of GPU, and
JCP&L and each of the other GPU Companies now intend to enter
into an operating agreement (the "Operating Agreement") with
GPUGC under which GPUGC would undertake the operation and
maintenance of all of the GPU Companies' non-nuclear generation
facilities. Ownership of these facilities, however, would remain
with each of the GPU Companies. Thus, the proposed realignment
will result in substantially the same relationship between the
GPU Companies and the proposed GPUGC for the GPU System's fossil
fuel and hydroelectric plants as now exists with GPUNC with
respect to the nuclear generation facilities.
9. Because a substantial portion of the GPU System's non-
nuclear generation facilities are located in Pennsylvania, GPUGC
will maintain its principal offices in Johnstown, Pennsylvania,
where Penelec is now headquartered. GPUGC's Board of Directors
will include the Presidents of JCP&L and each of the other GPU
Companies, who will thereby maintain their existing oversight of
their respective Company's generation operations, as well as of
GPUGC's annual and other capital and operating budgets and
forecasts and its actual expenditures pursuant thereto which will
be subject to their respective Company's review and approval. As
6
<PAGE>
the ownership of the generation facilities will remain unchanged,
each GPU Company will continue to own the same utility plant
investments as are currently reflected on its respective books,
as well as any capital additions made to its respective
facilities or other new generation investments made at its
request for its own account. The Operating Agreement (the
proposed form of which is annexed as Exhibit A hereto) is subject
to the Board's approval as herein requested by JCP&L and approval
by the PaPUC which is contemporaneously being sought by Met-Ed
and Penelec pursuant to relevant Pennsylvania statutes, certain
approvals by the Securities and Exchange Commission ("SEC")
pursuant to the 1935 Act and certain approvals by or filings to
be made with the Federal Energy Regulatory Commission ("FERC")
under the Federal Power Act.
10. GPUGC's fundamental responsibilities under the
Operating Agreement will include:
(a) the safe and economical operation,
maintenance, repair and rehabilitation of the GPU
Companies' existing non-nuclear generation
facilities (including those facilities owned in
part by non-affiliated entities under existing
joint operating agreements, subject to the
consent or agreement of the other joint owners
thereof to the extent required);
(b) as and to the extent deemed necessary
or appropriate by one or more of the GPU
7
<PAGE>
Companies, the design, construction, start-up and
testing of any new non-nuclear generation
facilities (at existing sites as well as any new
sites) on behalf of such GPU Company;
(c) provide (or arrange for the provision
of) non-nuclear generation budgeting,
forecasting, accounting and other data collection
and dissemination services; and
(d) typical generation support activities
such as the procurement (or arranging for the
procurement) of materials, supplies and outside
services, fuel purchasing and supply (as and when
requested by one or more of the GPU Companies),
inventory, licensing and permitting, and such
other functions as may be deemed by GPUGC and the
GPU Companies to be necessary or appropriate for
GPUGC to effectively meet its goals and
responsibilities under the Operating Agreement.
GPUGC, in turn, will be able to draw upon the resources of GPU
Service Company ("GPUSC") and/or the individual GPU Companies for
certain general and administrative functions and services such as
finance/treasury, accounting, internal auditing, legal, data
processing, taxes, insurance, human resources and environmental,
which will be charged to GPUGC at the provider's cost and will
thereafter be reallocated to the GPU Companies in accordance with
the terms of the Operating Agreement.
8
<PAGE>
11. As more particularly described in the proposed
Operating Agreement, all of the materials supplied and services
rendered by GPUGC will be charged to the GPU Companies at the
actual cost thereof. All materials, labor and other direct or
specific generation facility costs will be identified and
assigned to the respective generation facility and thence to the
appropriate GPU Company as owner of such generation facility.
With respect to those generation facilities which are jointly
owned with non-affiliated entities (i.e., Keystone, Conemaugh,
Homer City, Yards Creek and Seneca), the related plant-specific
costs and other chargeable costs will continue to be allocated in
accordance with the separate joint operating agreements
respecting such facilities, as is done currently. All other
costs that are not directly assignable to a particular generation
facility or otherwise chargeable to the non-affiliated joint
owners will be charged to the GPU Companies under the Operating
Agreement on the basis of a fair and equitable allocation formula
in accordance with the 1935 Act and the rules and regulations
adopted thereunder by the SEC. As noted above, the SEC must
review and approve the Operating Agreement to insure that the
cost allocation methodology for billing the GPU Companies as
provided for therein is fair and equitable. In general, the cost
accounting and allocation procedures under the Operating
Agreement will substantially model the procedures heretofore
adopted and followed by GPUNC with respect to the TMI and Oyster
Creek nuclear generation station operating agreements previously
9
<PAGE>
approved by the Board. The proposed realignment and future
operations conducted under the GPUGC Operating Agreement are not
expected to have any adverse effect on JCP&L's generation costs,
revenue requirements or customer rates. On the contrary, JCP&L
anticipates that the realization of future efficiencies and cost
reductions from GPUGC's operation of JCP&L's non-nuclear
generation facilities will ultimately produce net cost savings to
JCP&L which will enhance JCP&L's competitive position and, over
time, enure to the benefit of JCP&L's customers through more
stable rates and improved service.
12. As noted above, the proposed Operating Agreement
with GPUGC will not change the existing ownership by JCP&L of the
generation facilities in question, nor will it involve the
abandonment or surrender by JCP&L of any utility service or the
merger, consolidation, sale, lease, mortgage or other encumbrance
or disposition of its property, franchises, privileges or rights
relating thereto, all of which will remain vested in JCP&L as the
present owner thereof. In effect, JCP&L and the other GPU
Companies will simply make use of the staff, facilities and other
combined resources of GPUGC (which, at least initially, will be
largely derived from existing GPU System staff, facilities and
resources) to operate and maintain the same generation facilities
devoted to the public service in which the GPU Companies
presently have an interest.
13. N.J.S.A. 48:3-7.1 provides in substance that "no
management, advisory service, construction or engineering
10
<PAGE>
contract" between a utility and an affiliate (GPUGC) of a common
parent holding company (GPU) "shall be valid or effective until
approved in writing by the (B)oard", and that:
"The (B)oard shall disapprove such contract if
it determines that such contract violates the
laws of this state or of the United States, or
that the price or compensation thereby fixed
exceeds the fair price or fair compensation for
the property to be furnished or the work to be
done or the services to be rendered thereunder or
is contrary to the public interest: otherwise
the [B]oard shall approve such contract.
"No order shall be made by the [B]oard
disapproving such a contract except after hearing
upon notice." (Emphasis added.)
14. JCP&L respectfully submits that, assuming that the
proposed Operating Agreement between JCP&L and GPUGC constitutes
a "management, advisory service, construction or engineering
contract" within the meaning of N.J.S.A. 48:3-7.1, such Operating
Agreement meets the foregoing statutory tests in that the
Operating Agreement will not violate the laws of New Jersey or of
the United States, and all charges by GPUGC to JCP&L under the
Operating Agreement will be at actual cost, fairly and equitably
charged or apportioned, which charges will not exceed the fair
price or fair compensation for the property furnished, work done
or services rendered thereunder. Moreover, the Operating
Agreement will not limit or inhibit in any way the exercise of
the existing or future authority and jurisdiction of the Board
over JCP&L with respect to base rates, the levelized energy
adjustment clause, financings, accounting, capitalization,
depreciation, merger, consolidation, divestiture of interests,
11
<PAGE>
the provision of safe, adequate and proper service, or in any
other manner or matter affecting JCP&L, and will not otherwise be
contrary to the public interest.
15. Following the Board's anticipated Order of
Approval as requested herein, JCP&L hereby undertakes that it
will file with the Board true and conformed copies of the
Operating Agreement in the form in which the same is actually
executed (which shall not be inconsistent with such Order of
Approval), promptly following the execution thereof. Pursuant to
the Board's Order of July 1, 1982 in Docket No. 8111-952, and an
earlier Board request dated June 14, 1971, JCP&L will continue to
send to the Board the same quarterly reports as it does
currently, covering all its existing generation facilities and
including data on generation, transmission and energy purchases
and actual and estimated fuel consumption and fuel inventory
levels for each generation unit or station, notwithstanding the
operation of the non-nuclear facilities by GPUGC, unless and
until the Board directs otherwise.
16. All correspondence and other communications
respecting this Petition should be addressed to:
Michael P. Morrell, Vice President -
Materials, Services & Regulatory Affairs
Jersey Central Power & Light Company
310 Madison Avenue
Morristown, NJ 07962
-and-
Gerald W. Conway, Esq.
Marc B. Lasky, Esq.
Berlack, Israels & Liberman
95 Madison Avenue
Morristown, NJ 07960
-and-
12
<PAGE>
Douglas E. Davidson, Esq.
Berlack, Israels & Liberman
120 W. 45th Street
New York, NY 10036
WHEREFORE, the Petitioner, Jersey Central Power & Light
Company, respectfully prays that the Board issue a written Order
approving the proposed Operating Agreement between and among the
Petitioner, Met-Ed, Penelec and GPU Generation Corporation, in
accordance with N.J.S.A. 48:3-7.1, and that the Board grant such
other and further relief as the Board may deem lawful and proper
in the circumstances.
Respectfully submitted,
BERLACK, ISRAELS & LIBERMAN
By:___________________________
Gerald W. Conway
of Counsel
Dated: March 24, 1994 Attorneys for Petitioner, Jersey Central
Power & Light Company
95 Madison Avenue
Morristown, New Jersey 07960
(201) 644-3400
13
<PAGE>
AFFIDAVIT
OF
VERIFICATION
Michael P. Morrell, being duly sworn upon his oath,
deposes and says:
1. I am Vice President - Materials, Services & Regulatory
Affairs of Jersey Central Power & Light Company, the Petitioner
named in the above-captioned matter, and I am duly authorized by
said Petitioner to make this Affidavit of Verification on its
behalf.
2. I have read the contents of the foregoing Petition and
Exhibit A annexed thereto, and I hereby verify that the
statements of fact and other information contained therein are
true and correct to the best of my knowledge, information and
belief.
_____________________________
Michael P. Morrell
Sworn to and subscribed before
me this _______ day of ____________, 19__
_______________________________
(Notary Public)
14
<PAGE>
Exhibit A hereto is not attached. See, Exhibit B to this
Declaration on Form U-1.
15
<PAGE>
Exhibit D-2
March 25, 1994
John G. Alford, Secretary
Pennsylvania Public Utility Commission
North Office Building, Room B-20
Commonwealth Avenue and North Street
Harrisburg, PA 17120
Dear Mr. Alford:
Pursuant to Public Utility Code ("Code") Section 2102,
enclosed herewith in triplicate for filing on behalf of
Metropolitan Edison Company ("Met-Ed"), Pennsylvania Electric
Company ("Penelec"), and Jersey Central Power & Light Company
("JCP&L") is a form of Generating Station Operating Agreement
among Met-Ed, Penelec, JCP&L and GPU Generation Corporation
("GPUGC").
Met-Ed, Penelec and JCP&L are wholly-owned subsidiaries
of General Public Utilities Corporation ("GPU") and,
consequently, are "affiliated interests" within the meaning of
Chapter 21 of the Code. GPUGC, when incorporated, will also be a
GPU subsidiary and an affiliated interest.
The subject agreement provides for the operation,
maintenance and rehabilitation by GPUGC of the various non-
nuclear electric generation facilities which are owned and/or
operated by Met-Ed, Penelec, and JCP&L (collectively, the "GPU
Companies"). It also provides for GPUGC to construct any new
non-nuclear electric generation facilities which the GPU
Companies may require in the future. The agreement will not
change the existing ownership by Met-Ed, Penelec and JCP&L of the
generation facilities in question, nor will it involve the
abandonment or surrender by them of any utility service or the
merger, consolidation, sale, lease, mortgage or other encumbrance
or disposition of any of their respective property, franchises,
privileges or related rights and obligations. Thus, all plant
activities and safety over which this Commission now has
jurisdiction will continue to be subject to the jurisdiction of
this Commission and the applicable provisions of the Code. We
believe the Commission's jurisdiction with respect to activities
of GPUGC insofar as the Pennsylvania public utility subsidiaries
are concerned to be no different from, for example, its
jurisdiction with respect to the activities of GPU Service
Corporation.
All charges between and among the GPU Companies, with
respect to any of the above referenced work or services to be
performed on their behalf by GPUGC, will be at cost, in
1
<PAGE>
accordance with Rules 90 and 91 of the General Rules and
Regulations under the Public Utility Holding Company Act of 1935.
For ease of reference, a copy of these two Rules is attached.
The arrangements embodied in the subject agreement
reflect a further refinement of mutual services and assistance
arrangements between and among the GPU Companies, which were
approved by this Commission in its Order entered October 1, 1982
at Docket No. G-820167, and in its Orders entered on December 17,
1993 at Docket Nos. G-00930355, A-110300F0068 and A-110400F0024.
The arrangements so approved provided for a variety of services
and property to be interchanged between and among GPU system
companies.
If you have any questions, please do not hesitate to
contact me.
Very truly yours,
RYAN, RUSSELL, OGDEN & SELTZER
W. Edwin Ogden
WEO/kh
Attachments
2
<PAGE>
The attachment referred to in this filing is not attached. See,
Exhibit B to this Declaration on Form U-1.
3
<PAGE>
Exhibit G
The non-nuclear generation facilities of the GPU
Companies for which GPUGC will assume operating and maintenance
responsibility are as follows (as of February 1, 1994):
JCP&L
Net MW Summer
Name of Station Location Fuel Capacity
Sayreville (Steam/CTs) NJ Gas/Oil 453
Gilbert (Steam/CC/CTs) NJ Gas/Oil 533
Glen Gardner (CTs) NJ Gas/Oil 160
Forked River (CTs) NJ Gas/Oil 68
Werner (Steam/CTs) NJ Oil 270
Keystone (Steam) PA Coal 283(a)
Keystone (Diesel) PA Oil 2
Yards Creek (Hydro) NJ Pumped Storage 190(b)
JCP&L Total 1,959
Met-Ed
Net MW Summer
Name of Station Location Fuel Capacity
Portland (Steam) PA Coal 401
Titus (Steam) PA Coal 241
Conemaugh (Steam) PA Coal 280(c)
York Haven (Hydro) PA Impoundment 19(d)
Shawnee (CT) PA Oil 20
Hunterstown (CTs) PA Oil/Gas 60
Hamilton (CT) PA Oil 20
Mountain (CTs) PA Oil/Gas 40
Ortanna (CT) PA Oil 20
Portland (CTs) PA Oil/Gas 35
Titus (CTs) PA Oil/Gas 31
Conemaugh (Diesel) PA Oil 2
Tolna (CTs) PA Oil 40
Met-Ed Total 1,209
1
<PAGE>
Penelec
Net MW Summer
Name of Station Location Fuel Capacity
Homer City (Steam) PA Coal 942 (e)
Shawville (Steam) PA Coal 597
Seward (Steam) PA Coal 196
Warren (Steam) PA Coal 82
Shawville (Diesel) PA Oil 6
Benton (Diesel) PA Oil 4
Wayne (CT) PA Oil 56
Warren (CT) PA Oil/Gas 57
Blossburg (CT) PA Gas 19
Piney (Hydro) PA Impoundment 27
Deep Creek (Hydro) MD Impoundment 18
Seneca (Hydro) PA Pumped Storage 87(f)
Penelec Total 2,091
GPU System Total 5,259
(a) Represents JCP&L's undivided 16.67% interest in this
station, which is operated by Penelec on behalf of the joint
owners, which are not affiliated with JCP&L.
(b) Represents JCP&L's undivided 50% interest in this station,
which is a net user rather than a net producer of electric
energy. The station is operated by JCP&L on behalf of
itself and the other joint owner, which is not affiliated
with JCP&L.
(c) Represents Met-Ed's undivided 16.45% interest in this
station, which is operated by Penelec on behalf of the joint
owners, which are not affiliated with Met-Ed.
(d) Owned and operated by York Haven Power Company ("YHP"), a
wholly-owned subsidiary of Met-Ed, which will execute the
GPUGC Operating Agreement on behalf of YHP.
(e) Represents Penelec's undivided 50% interest in this station,
which is operated by Penelec on behalf of itself and the
other joint owner, which is not affiliated with Penelec.
(f) Represents Penelec's undivided 20% interest in this station,
which is a net user rather than a net producer of electric
energy. The station is operated by Penelec on behalf of
itself and the other joint owner, which is not affiliated
with Penelec.
2
<PAGE>
Exhibit H
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- ; 70- )
GENERAL PUBLIC UTILITIES CORPORATION, et al.
GENERAL PUBLIC UTILITIES CORPORATION, 100 Interpace
Parkway, Parsippany, New Jersey 07054, a Pennsylvania corporation
and registered holding company ("GPU"), and its subsidiaries,
JERSEY CENTRAL POWER & LIGHT COMPANY, 300 Madison Avenue,
Morristown, New Jersey 07962 ("JCP&L"), METROPOLITAN EDISON
COMPANY, 2800 Pottsville Pike, Reading, Pennsylvania 19605 ("Met-
Ed"), and PENNSYLVANIA ELECTRIC COMPANY, 1001 Broad Street,
Johnstown, Pennsylvania 15907 ("Penelec"; together with JCP&L and
Met-Ed, the "GPU Subsidiaries"), have filed a Declaration
pursuant to Sections 9(a), 10, 12(b) and 13(b) of the Public
Utility Holding Company Act of 1935 (the "Act") and Rules 45 and
86-95 thereunder.
GPU proposes to organize a new, wholly-owned subsidiary
company to be known as GPU Generation Corporation ("GPUGC").
Promptly upon the obtaining of the requisite regulatory
authorizations, GPUGC will undertake responsibility for the
operation, maintenance and rehabilitation of all non-nuclear
generation facilities owned and/or operated by the GPU
Subsidiaries. GPUGC will also undertake responsibility for the
design, construction, start-up and testing of any new non-nuclear
generation facilities which the GPU Subsidiaries may need in the
future. (Energy Initiatives, Inc. will continue to develop,
1
<PAGE>
construct, own and operate independent power production
facilities for the GPU System.) In addition, GPUGC will assume
(subject to obtaining the requisite consent of the station co-
owners) the responsibilities of Penelec and JCP&L under certain
operating agreements (the "Joint Operating Agreements") under
which they operate and maintain certain fossil fuel and
hydroelectric generation facilities (i.e., the Keystone,
Conemaugh and Homer City coal-fired facilities and the Yards
Creek and Seneca pumped storage hydroelectric facilities) each of
which is jointly owned by a GPU Company with one or more
unaffiliated utilities. In this way, all of the resources of the
GPU Subsidiaries relating to fossil fuel and hydroelectric plants
will be combined in a single organization.
The proposed realignment and combination of the GPU
System's fossil fuel and hydroelectric generation functions is
substantially similar to the combination of the GPU System
nuclear operating functions under GPU Nuclear Corporation, which
the Commission authorized by Order dated September 5, 1980 in SEC
File No. 70-6443 (HCAR No. 35-21708).
The GPU System believes that a combination of the
operations of all the GPU System's fossil fuel and hydroelectric
generation facilities into a single, unified management structure
will permit an increased focus and concentration on the non-
nuclear generation side of the GPU Subsidiaries' supply
resources, resulting in a reduction of the construction,
operation and maintenance costs of such generation facilities in
2
<PAGE>
the future. The realignment of the non-nuclear generation
operations will also permit the GPU Subsidiaries to more closely
focus and dedicate their remaining efforts and resources on their
local distribution and customer service functions. The GPU
Subsidiaries anticipate that the realization of future
efficiencies and cost reductions from the combined operation of
the GPU System's non-nuclear generation facilities will
ultimately produce net cost savings to the GPU Subsidiaries and
their customers which will enhance their respective competitive
positions.
Because a substantial portion of the GPU System's non-
nuclear generation facilities are located in Pennsylvania, GPUGC
will be incorporated in Pennsylvania and will maintain its
principal offices in Johnstown, Pennsylvania, where Penelec is
now headquartered. GPUGC's Board of Directors will include the
Presidents of each of the GPU Subsidiaries. Ownership of the
generation facilities, however, will remain unchanged so that
each GPU Subsidiary will continue to own the utility plant
currently reflected on its respective books, as well as any
capital additions made to its respective facilities or other new
generation investments made at its request for its own account.
To implement this program, the GPU Subsidiaries intend to enter
into an operating agreement (the "Operating Agreement") with
GPUGC.
In effect, the GPU Subsidiaries will simply make use of
the staff, facilities and other combined resources of GPUGC
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(which, at least initially, will be largely derived from existing
GPU System staff, facilities and resources) to operate and
maintain the same generation facilities in which the GPU
Subsidiaries presently have an interest. From time to time,
GPUGC may also employ others (who may or may not be present
employees of the GPU System) and engage consultants and
contractors as needed for the discharge of its functions.
It is also contemplated that certain general and
administrative functions and services, such as finance/treasury,
accounting, internal auditing, legal, data processing, taxes,
insurance, human resources and environmental, will be performed
for GPUGC at cost by GPU Service Corporation ("GPUSC") and/or one
or more of the GPU Subsidiaries.
The Operating Agreement between GPUGC (as operator) and
the GPU Subsidiaries (as owners) will provide that the services
rendered by GPUGC will be furnished at cost. The costs of GPUGC
thus to be taken into account will include all costs of doing
business, including reasonable compensation for necessary capital
as permitted by Rule 91. To the extent practicable, costs will
be determined and accumulated and allocated to the GPU Subsidiary
owner of the particular generation facility to which the services
relate, in the manner provided in the Operating Agreement. To
the extent that costs are not directly allocable to a particular
generation facility, such costs will be allocated among the GPU
Subsidiaries in the same proportions as the direct costs are
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allocated among the GPU Subsidiaries pursuant to the preceding
sentence.
GPU will acquire for cash all of the 2,500 authorized
shares of GPUGC's common stock, at a price of $20 per share or an
aggregate consideration of $50,000. If necessary, GPU will make
open account advances to GPUGC from time to time; the aggregate
amount of such advances by GPU to GPUGC outstanding at any time
will be not more than $1 million. Interest on such open account
advances will accrue at a rate equal to the Citibank, N.A. base
rate as in effect from time to time. It is anticipated that the
maintenance of the Working Capital Accounts provided for in the
proposed Operating Agreement, along with open account advances
made by GPU to GPUGC from time to time, will obviate the need for
GPUGC to raise additional capital. In the event that it becomes
necessary for GPUGC to raise additional capital, however, GPUGC
would seek further authorization from the Commission to do so to
the extent required.
It is not anticipated that GPUGC will take title to any
material amounts of equipment or property nor become obligated
under any material contracts (except for the Operating Agreement
with its affiliates and its assumption of responsibilities under
the Joint Operating Agreements). Rather, GPUGC will employ the
facilities and properties of its affiliates (including GPUSC) in
carrying out its responsibilities, and agreements with
unaffiliated entities will be entered into either directly by the
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owners of the generation facilities involved or by GPUGC as agent
for such owners.
It is not presently contemplated that union employees of
the GPU Subsidiaries (or GPUSC) will be transferred to the
payroll of GPUGC. Rather, until further notice to the
Commission, such employees will continue to perform their
services at and on behalf of the GPU System's non-nuclear
generation facilities as employees of the same entities within
the GPU System with which they are currently associated.
The Declaration and any amendments thereto are available
for public inspection through the Commission's Office of Public
Reference. Interested persons wishing to comment or request a
hearing should submit their views in writing by June 10, 1994 to
the Secretary, Securities and Exchange Commission, Washington,
D.C. 20549, and serve a copy on the declarants at the addresses
specified above. Proof of service (by affidavit or, in case of
an attorney at law, by certificate) should be filed with the
request. Any request for a hearing shall identify specifically
the issues of fact or law that are disputed. A person who so
requests will be notified of any hearing, if ordered, and will
receive a copy of any notice or order issued in this matter.
After said date, the Declaration, as amended or as it may be
further amended, may be granted.
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For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
Jonathan G. Katz
Secretary
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