Post-Effective Amendment No. 3 to
SEC File No. 70-8593
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
APPLICATION UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
100 Interpace Parkway
Parsippany, New Jersey 07054
ENERGY INITIATIVES, INC. ("EI")
One Upper Pond Road, Parsippany, New Jersey 07054
JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L")
300 Madison Avenue, Morristown, New Jersey 07960
METROPOLITAN EDISON COMPANY ("Met-Ed")
P.O. Box 16001, Reading, Pennsylvania 19640
PENNSYLVANIA ELECTRIC COMPANY ("Penelec")
1001 Broad Street, Johnstown, Pennsylvania 15907
GPU SERVICE CORPORATION ("GPUSC")
100 Interpace Parkway, Parsippany, New Jersey 07054
(Names of companies filing this statement
and addresses of principal offices)
GENERAL PUBLIC UTILITIES CORPORATION
(Name of top registered holding company parent of the applicants)
T. G. Howson, Vice President Michael J. Connolly, Esq.
and Treasurer Assistant General Counsel
M.A. Nalewako, Secretary GPU Service Corporation
GPU Service Corporation 100 Interpace Parkway
100 Interpace Parkway Parsippany, New Jersey 07054
Parsippany, New Jersey 07054
R. S. Cohen, Secretary W. A. Boquist, II, Vice Presi-
Jersey Central Power & Light dent - Legal Services
Company Metropolitan Edison Company
300 Madison Avenue Pennsylvania Electric Company
Morristown, New Jersey 07960 P.O. Box 16001
Reading, Pennsylvania 19640
B. L. Levy, President Douglas E. Davidson, Esq.
K. A. Tomblin, Secretary Berlack, Israels & Liberman
Energy Initiatives, Inc. LLP
One Upper Pond Road 120 West 45th Street
Parsippany, New Jersey 07054 New York, New York 10036
_________________________________________________________________
(Names and addresses of agents for service)<PAGE>
GPU, EI, JCP&L, Met-Ed, Penelec and GPUSC hereby post-
effectively amend the Application on Form U-1, docketed in SEC
File No. 70-8593, as heretofore amended, as follows:
1. By adding the following new paragraph H(1)
following paragraph H of Post-Effective Amendment No. 1 thereof:
H(1). To provide operational flexibility, it is also
proposed that the Subsidiary Companies provide other Subsidiary
Companies and Exempt Entities with all services necessary or
desirable for their operations, including, without limitation,
management, operations, administrative, employment, tax, account-
ing, engineering, consulting, utility performance, and electronic
data processing services, and software development and support
services in connection therewith. The Subsidiary Companies
propose to provide such services and to sell goods to other
associated Subsidiary Companies and Exempt Entities at fair
market prices, and request an exemption pursuant to Section 13(b)
from the requirements of Rules 90 and 91 applicable to such
transactions in any case in which one or more of the following
circumstances are present:
1. Such associate is a FUCO or an EWG which derives
no part of its income, directly or indirectly, from the
generation, transmission, or distribution of electric energy
for sale within the United States; or
2. Such associate is an EWG which sells electricity
at market-based rates which have been approved by the FERC
or the appropriate state public utility commission, provided
the purchaser of such electricity is not an associate of GPU
within the GPU System; or
3. Such associate is an EWG that sells electricity at
rates based upon its cost of service, as approved by the
FERC or any state public utility commission, provided that
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the purchaser of such electricity is not an associate of GPU
within the GPU System; or
4. Such associate is a Subsidiary Company, the sole
business of which is developing, owning and/or operating
FUCOs or EWGs described in clauses 1, 2 or 3 above.
In addition, the Commission has heretofore authorized Energy
Initiatives, Inc., either directly or through its subsidiary EI
Services, Inc. (collectively, "EI"), to provide services and sell
goods to associate EWGs and FUCOs who satisfy one of the require-
ments in clauses 1, 2 or 3 above under an exemption from the cost
standard. Accordingly, it is also proposed that EI be exempt
under Section 13(b) from the requirements of Rules 90 and 91 with
respect to the rendering of services or sale of goods to Subsid-
iary Companies that satisfy the requirements of clause 4 above.
The Subsidiary Companies and EI will provide services and
goods to associates that do not satisfy any of the above circum-
stances at cost in accordance with Section 13(b) of the Act and
Rules 90 and 91.
GPU acknowledges that the Commission's authorization for
Subsidiary Companies and EI to provide services or sell goods at
prices that are not based on cost (as determined in accordance
with Rules 90 and 91) to any such associate shall not be binding
upon the FERC or any state public utility commission having
jurisdiction over the rates charged by any such associate, and
agrees that neither the Subsidiary Companies nor EI will assert
or take any position to the contrary in any administrative or
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judicial proceeding involving the determination of rates that may
be charged by any such associate. GPU also states that neither
the Subsidiary Companies nor EI will provide services or sell
goods to any associate which, in turn, provides such services or
sells such goods, directly or indirectly, to any other associate
which does not fall within any of the preceding enumerated
categories, except pursuant to the requirements of the Commissio-
n's rules and regulations under Section 13(b) or an exemption
therefrom obtained in a separate filing.
It is also contemplated that GPU Service Corporation
("GPUSC"), a subsidiary service company, would provide certain
services to Subsidiary Companies or Exempt Entities in which GPU
owns an interest. For example, there are certain activities such
as financial reporting, tax services, pension and benefit
administration, risk management, treasury, corporate, financial
and legal which may be most cost effectively performed by GPUSC
to meet the mutual needs of GPU and all of its associates. All
such services provided by GPUSC will be performed at cost in
accordance with Rules 90 and 91.
There may also be instances where it is desirable for
employees of Jersey Central Power & Light Company, Metropolitan
Edison Company and Pennsylvania Electric Company ("Operating
Companies") to perform services for Subsidiary Companies and
Exempt Entities in which GPU directly or indirectly owns an
interest. For example, employees of the Operating Companies may
have expertise regarding the operation and maintenance of
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electric generation, transmission or distribution facilities
owned or operated by the Subsidiary Company or Exempt Entity, and
it may be more efficient and/or economic to utilize existing
system personnel rather than hiring new employees for this
purpose. In addition, it may be desirable to utilize certain
Operating Company personnel to assist in due diligence evalua-
tions, audits, assessments and the like of potential Exempt
Entity acquisitions. Accordingly, authorization is requested for
the Operating Companies to provide such services to Subsidiary
Companies and Exempt Entities in which GPU directly or indirectly
owns an interest. Pursuant to Rule 53(a)(3), no more than 2% of
the employees of the Operating Companies will render services, at
any one time, directly or indirectly, to Subsidiary Companies or
Exempt Entities in which GPU directly or indirectly holds an
interest. All such services will be provided at cost in accor-
dance with Rules 90 and 91.
There will be no diversion of GPU System personnel or
resources (either by the Operating Companies or GPUSC) that will
adversely affect any Operating Subsidiary's domestic customers or
GPU's shareholders. Moreover, in no case will GPUSC or the
Operating Company be obligated to render services, if in the sole
judgment of GPUSC or the Operating Company, the personnel and
resources needed to fill the request are not available. The
provision of such services will enable the Subsidiary Companies,
and Exempt Entities in which GPU directly or indirectly holds an
interest, to employ economies of scale while not adversely
affecting the GPU System.
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2. The July 6, 1995 Order authorized, among other
things, GPU to guaranty the indebtedness of Subsidiary Companies
and Exempt Entities, and stated that the interest rate of such
indebtedness would not exceed the greater of:
(A) if such note, bond or other indebtedness is U.S.
dollar denominated, the greater of (i) 250 basis points
above the greater of (a) the lending bank's or other
recognized prime rate and (b) 50 basis points above the
federal funds rate, (ii) 400 basis points above the speci-
fied London Interbank Offered Rate plus any applicable
reserve requirement, or (iii) a negotiated fixed rate which,
in any event, would not exceed 500 basis points above the 30
year "current coupon" treasury bond rate; and
(B) if such note, bond or other indebtedness is
denominated in the currency of a country other than the
United States, at a fixed or floating rate which, when
adjusted (i.e., reduced) for the prevailing rate of infla-
tion in such country, as reported in official indices
published by such country, would be equivalent to a rate on
a U.S. dollar denominated borrowing of identical average
life that does not exceed 10% over the highest rate set
forth in clause (A) above.
GPU now believes that it may be impractical to provide, in a loan
facility denominated in a foreign currency, for an interest rate
that adjusts based on the inflation rate. Accordingly, GPU
proposes that the interest rate on indebtedness of a Subsidiary
Company or Exempt Entity for which GPU may issue a guaranty not
exceed the rates set forth in clause (A) above, whether the
indebtedness is denominated in a U.S. or foreign currency. GPU
also proposes adding a fourth interest rate to clause (A) as
follows:
"or (iv) the specified "BBSY" discount rate
quoted on the Reuters Monitor System or, if
unavailable, as may be determined by the agent
bank in accordance with the procedures set forth
in the applicable loan facility."
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3. By amending paragraph K of Post-Effective Amend-
ment No. 1 to read in its entirety as follows:
K. Sections 6(a), 7, 9(a), 10, 12(b), and 13(b)
of the Act and Rules 42, 52, 53, 54, 83, 86, 87, 90 and 91
thereunder are applicable to the transactions proposed herein.
4. GPU agrees that it will include the following
additional information in each Certificate Pursuant to Rule 24
filed on a quarterly basis pursuant to the Order dated July 6,
1995 in this docket (HCAR No. 35-26326):
(i) A description of services obtained by Subsid-
iary Companies or Exempt Entities from GPUSC or the
Operating Companies, specifying the type of service,
the number of personnel from each associate providing
services during the quarter (to the extent practicable)
and the total dollar value of such services; and
(ii) A description of services provided by Subsid-
iary Companies or EI to associates which identifies the
recipient company, the service, the charge to the
associate and whether the charge was computed at cost,
market or pursuant to another method, which method
shall be specified.
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SIGNATURE
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 UNDER-
SIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
JERSEY CENTRAL POWER & LIGHT COMPANY
METROPOLITAN EDISON COMPANY
PENNSYLVANIA ELECTRIC COMPANY
GPU SERVICE CORPORATION
By: ________________________________
T.G. Howson
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By: ________________________________
B.L. Levy
President
Date: December 6, 1995<PAGE>
