Amendment No 2 to
SEC File No. 70-8409
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)
T. G. Howson, Vice W. Edwin Ogden, Esq.
President 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 Ballard Spahr Andrews &
Company Ingersoll
300 Madison Avenue 1735 Market Street
Morristown, New Jersey 07960 Philadelphia, Pennsylvania 19103
Douglas E. Davidson, Esq.
Berlack, Israels & Liberman
120 West 45th Street
New York, New York 10036
(Names and addresses of agents for service)<PAGE>
GPU, JCP&L, Met-Ed and Penelec amend their Declaration on
Form U-1, as heretofore amended, docketed in SEC File No. 70-
8409, as follows:
1. By amending paragraph J of Item 1 thereof to read in its
entirety as follows:
J. The GPU Companies believe that the combined
operation of the GPU System's non-nuclear generation
facilities will result in future efficiencies and cost
reductions. Among other things, it is expected that the
formation of GPUGC will lead to a reduction of more than
150 jobs by the end of 1996, resulting in projected
annual savings in excess of $10 million. The GPU
Companies also estimate that up to approximately $10
million in additional annual savings will be achieved
through economies of scale, improved interaction with
suppliers, the implementation of new procedures for
procuring fuels, materials, supplies and services, and
improvements in station production, availability, heat
rates, environmental matters and safety. Other savings,
which cannot be quantified at this time, are expected to
be realized from other operating initiatives to be
implemented by GPUGC, such as performance improvements,
operation of plants as individual profit centers and
improved utilization of the work force through training,
restructuring and revised job descriptions. As noted in
paragraph E of Item 1, to the extent practicable, costs
will be determined and accumulated and allocated to the
GPU Company owner of the particular generation facility
1<PAGE>
to which the services relate. 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 proportion as the direct costs
(less fuel) are allocated, except that a relatively
minor portion of such costs may be allocated in
accordance with one of the allocation formulae listed on
Exhibit I hereto, if one of such formulae is deemed more
appropriate for a particular cost.
2. By amending Item 2 thereof to read in its entirety as
follows:
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
The estimated fees, commissions and expenses expected to
be incurred in connection with the proposed transactions are as
follows:
Filing fees - Securities and Exchange
Commission $ 2,000
Legal fees:
Berlack, Israels & Liberman 70,000
Richard S. Cohen, Esq. 2,000
Ryan, Russell, Ogden & Seltzer 8,500
Ballard Spahr Andrews & Ingersoll 7,500
Miscellaneous 10,000
Total $100,000
3. By filing the following exhibits in Item 6(a) thereof:
(a) Exhibits:
D-1(a) Copy of Order and clarifying Order,
dated December 28, 1994 and February 8,
1995, respectively, of New Jersey Board
of Public Utilities.
2<PAGE>
D-2(a) Copy of Opinion and Order, dated
September 1, 1994, of PAPUC.
F-1 Opinion of Berlack, Israels & Liberman.
F-2 Opinion of Richard S. Cohen, Esq.
F-3 Opinion of Ryan, Russell, Ogden &
Seltzer.
F-4 Opinion of Ballard Spahr Andrews &
Ingersoll.
I Alternative Allocation Formulae
3<PAGE>
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:
T. G. Howson, Vice President and
Treasurer
Date: February 14, 1995<PAGE>
EXHIBITS TO BE FILED BY EDGAR
Exhibits:
D-1(a) Copy of Order and clarifying Order,
dated December 28, 1994 and February 8,
1995, respectively, of New Jersey Board
of Public Utilities.
D-2(a) Copy of Opinion and Order, dated
September 1, 1994, of PAPUC.
F-1 Opinion of Berlack, Israels & Liberman.
F-2 Opinion of Richard S. Cohen, Esq.
F-3 Opinion of Ryan, Russell, Ogden &
Seltzer.
F-4 Opinion of Ballard Spahr Andrews &
Ingersoll.
I Alternative Allocation Formulae<PAGE>
Exhibit D-1(a)
Agenda Date: 11/21/94
State of New Jersey
Board of Public Utilities
Two Gateway Center
Newark, N.J. 07102
Electric
IN THE MATTER OF THE PETITION OF )
JERSEY CENTRAL POWER AND LIGHT ) DECISION AND ORDER
COMPANY FOR APPROVAL OF AN )
OPERATING AGREEMENT WITH GPU ) DOCKET NO. EE94030079
GENERATION CORPORATION. )
(SERVICE LIST ATTACHED)
BY THE BOARD:
Jersey Central Power and Light Company (JCP&L, Company, or
Petitioner) is a wholly owned subsidiary of General Public
Utilities Corporation (GPU) which provides electric service to
various portions of the State of New Jersey. Metropolitan Edison
Corporation (Met-Ed) and Pennsylvania Electric Company (Penelec)
are also wholly owned subsidiaries of GPU and provide electric
service to certain portions of the Commonwealth of Pennsylvania.
On March 24, 1994, JCP&L filed a petition requesting
approval to combine the operations of all of the GPU systems
fossil fuel (e.g., coal, oil, and natural gas) and hydroelectric
generation facilities into a single unified management structure
know as GPU Generation Corporation (GPUGC). GPUGC will also be a
wholly owned subsidiary of GPU.
JCP&L owns all or part of seven (7) fossil fuel and one (1)
hydroelectric generating facilities. Those facilities are
located in certain localities in the State of New Jersey and the
Commonwealth of Pennsylvania and have a net summer capacity of
1,959 megawatts (MW). Met-Ed owns all or part of twelve (12)
fossil fuel and one (1) hydroelectric generating facilities.
Those facilities are also located in certain localities in the
State of New Jersey and the Commonwealth of Pennsylvania and have
a net summer capacity of 1,209 MW. Penelec owns all or part of
nine (9) fossil fuel and three (3) hydroelectric generating
facilities in certain localities in the States of New Jersey and
Maryland and in the Commonwealth of Pennsylvania. Those
facilities have a net summer capacity of 2,091 MW. With one
exception, all of the<PAGE>
foregoing generating stations are currently operated by either
JCP&L, Met-Ed, or Penelec.(1)
JCP&L, Met-Ed, and Penelec jointly own the 786 MW Three Mile
Island (TMI) nuclear generating station in Middletown,
Pennsylvania. JCP&L owns the 610 MW Oyster Creek (Oyster Creek)
nuclear generating station that is located in Lacey Township,
Ocean County, New Jersey. By order dated October 14, 1981, in
Docket No. 804-254, the Board approved the formation of GPU
Nuclear Corporation (GPUNC). GPUNC is a wholly owned subsidiary
of GPU and currently operates and maintains both Oyster Creek and
TMI pursuant to the terms of an operating agreement that was
approved by the Board in the foregoing Order. The petition for
the instant matter requests authorization to reorganize the
Company's non-nuclear generating facilities in a comparable
fashion.
N.J.S.A 48:3-7.1 provides in pertinent part that
"no management, advisory service, construction or
engineering contract ... made by any public utility
with any person or corporation owning, holding or
controlling separately, or in affiliation with another
person or corporation, five percent or more of the
capital stock or such public utility ... shall be valid
or effective until approved in writing by the Board."
The foregoing Statute also provides 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
fair 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 Board shall approve such contract."
The Petitioner maintains that the basic objective of
establishing GPUGC is to enable the customers of the three
GPU utilities to have long-term, reliable access to the
lowest cost energy and capacity reasonably achievable. The
Company believes that the combination of the GPU System's
non-nuclear generation operations will enable the GPU
companies to increase efficiency, improve productivity,
enhance performance and compete more effectively in the
emerging competitive environment, ultimately benefiting
JCP&L's customers by the resulting cost controls, improved
quality, efficiency and competitive pricing of electric
energy and customer service.
1. York Haven Power Company, which is a wholly owned subsidiary
of Met-Ed, owns and operates one (1) hydroelectric facility
in the Commonwealth of Pennsylvania. Its operating
statistics are included in Met-Ed's net summer capacity.
<PAGE>
GPU, JCP&L, Met-Ed and Penelec propose to enter into an
operating agreement ("Operating Agreement") with GPUGC, wherein
GPUGC would undertake the operation and maintenance of all of the
GPU Companies' non-nuclear generation facilities, with ownership
of the facilities to be retained by the individual operating
companies.(2) This arrangement is similar to the one previously
approved by the Board with respect to GPUNC and the GPU systems'
nuclear generating facilities. GPUGC's main offices will be
maintained in Johnstown, Pennsylvania.
JCP&L, Met-Ed and Penelec will maintain existing oversight
of their respective companies' generation and operations, GPUGC's
capital and operating budgets and expenses will be subject to the
companies' each individual company's review and approval. GPUGC
will not procure title to or ownership interest in the GPU
companies' generation facilities or their electrical output.
Under the terms of the Operating Agreement, GPUGC will be
responsible for the:
a) Safe and economical operation and maintenance of the
existing non-nuclear generation facilities;
b) The design, construction and start-up of any new non-
nuclear generation facilities;
c) Budgeting, accounting and other data collection;
d) Customary generation support activities such as
procurement of materials, supplies, outside services,
fuel purchasing and fuel supplies as requested.
Following an extensive discovery process and conferences
between JCP&L, Electric Division Staff and the Division of
Ratepayer Advocate, the parties entered into a Stipulation
recommending approval of the Operating Agreement between JCP&L,
GPU, Met-Ed, Penelec and GPUGC.
Staff believes that the Stipulation represents a reasonable
resolution of the issues in this proceeding and recommends its
approval subject to the conditions set forth therein.
Based upon a complete review of the Company's filing, and
its correspondence and responses to discovery requests, the Board
FINDS that the Operating Agreement is not unreasonable and not
contrary to the public interest and is in accordance with the
law. Moreover, we believe that with the consolidated management
structure, JCP&L has the opportunity to realize the benefits of
enhanced efficiencies and thereby ultimately reduce its cost to
ratepayers. Further, we believe that the conditions embodied in
2. As indicated in the previous footnote, York Haven Power
Company (YHP) is a wholly owned subsidiary of Met-Ed. Met-Ed
will execute the Operating Agreement on behalf of YHP.
3
<PAGE>
the Stipulation provide important ratepayer protections and
continued regulatory oversight. Accordingly, the Board concurs
with Staff's recommendation and HEREBY APPROVES the Operating
Agreement between JCP&L, GPU, Met-Ed, Penelec and GPUGC, subject
to the terms and conditions set forth in the attached Stipulation
of the parties as well as those set forth herein below. In so
doing, we note that the proposed Operating Agreement with GPUGC
will not alter the level of existing plant ownership by JCP&L and
JCP&L will continue to have a voice in the management of its
fossil fuel and hydroelectric generating stations. We expect
that all charges by GPUGC under the terms of the Operating
Agreement will be at actual cost, fairly and equitably charged
and allocated and will not exceed the fair price or fair
compensation for the property and services rendered. We believe
that the actual attainment of cost efficiencies and the ability
to compete aggressively in today's competitive generation
environment holds the potential for greater financial stability
for the Company and lower rates for JCP&L ratepayers.
This Order is issued subject to the following provisions as
specifically provided for in the Stipulation:
1. JCP&L shall file with the New Jersey Board of Public
Utilities (Board) a letter stating the following:
Notwithstanding the filing with the Securities and
Exchange Commission (SEC), and/or the Federal
Energy Regulatory Commission (FERC), if
applicable, or approval by the SEC and/or the FERC
of the operating agreement between GPUGC and the
GPU Companies, JCP&L agrees that is shall not
assert, in any administrative, regulatory,
judicial or quasi-judicial forum, that such filing
in any way preempts the New Jersey Board of Public
Utilities' ability to review and rule upon the
prudence, reasonableness, and the utility's right
to recovery in its retail rates of costs incurred
by JCP&L under the Operating Agreement.
2. JCP&L shall submit to the Board, a written
certification executed by an authorized officer of
JCP&L stating that it is JCP&L's intention that the
letter immediately referenced above will be enforceable
in future regulatory proceedings.
3. This order shall not affect or in any way limit the
exercise of the authority of the Board or of the State
in any future petition or in any proceeding with
respect to rates, franchises, services, financing
capitalization, depreciation, accounting, maintenance,
operations or any other matter affecting GPUGC, JCP&L,
and the BPU.
4. The Board of Directors of GPUGC shall agree in writing
to the terms and conditions of this Order.
4
<PAGE>
5. Approval of the Operating Agreement does not preclude
the Board from investigating during any formal
proceeding, or from conducting an inquiry into, the
reasonableness of charges incurred under the Operating
Agreement.
6. It should be emphasized that this Board has ample
statutory authority to regulate all utility activities
in this State, and if required by then existing facts
or circumstances, to take reasonable and appropriate
action. Approval of the formation of GPUGC cannot
alter or diminish Board's pervasive regulation of and
jurisdiction over all New Jersey utility operations,
including rates, service and assets. In order to
assure the continuation of safe, adequate and proper
service, the activities of the Company will continue to
be subject to ongoing surveillance by this Board
pursuant to Title 48 of the New Jersey Statutes
Annotated, including, but not limited to N.J.S.A. 48:2-
13, N.J.S.A. 48:2-29.1, N.J.S.A. 48:2-29.2,
N.J.S.A. 48:3-7, N.J.S.A. 48:3-7.1, N.J.S.A. 48:3-
7.2, N.J.S.A. 48:3-9 and N.J.S.A. 48:3-10.
7. The Operating Agreement will not affect the Board's
jurisdiction over all plant activities and safety.
8. Full access shall be provided to the BPU to any books
and records and other information of any kind,
documentary or otherwise, of GPUGC or any of its
divisions or subsidiaries.
9. GPUGC shall maintain its books and records in
accordance with the appropriate Uniform System of
Accounts as prescribed by this Board, provided that in
the event of any conflict in connection with the
accounting rules prescribed by the Pennsylvania Public
Utility Commission (PaPUC) with those required by this
Board. JCP&L or GPUGC shall notify the Board Staff of
the conflict in accounting rules as soon as JCP&L or
GPUGC becomes aware of the conflict in the accounting
rules of the New Jersey Board of Public Utilities and
the PaPUC. The Board's Staff shall coordinate with the
PaPUC's Staff to reconcile such conflicts so as to
reach a consistent system of accounting for GPUGC.
10. JCP&L shall file with the Board a signed copy of the
executed Operating Agreement between GPUGC, JCP&L, Met-
Ed and Penelec within ten working days of its effective
date.
11. JCP&L shall also file a copy of all amendments made to
the original Operating Agreement and copies of all
subsequent Operating Agreements and the Board shall be
in receipt of the amendments or subsequent Operating
5
<PAGE>
Agreements at least fifteen days prior to their
proposed effective date.
12. The terms and conditions of the Operating Agreement as
actually executed by and between GPUGC, JCP&L, Met-Ed
and Penelec shall not be changed substantively from the
draft Operating Agreement currently on file with the
Board.
13. JCP&L shall file with this Board, and the Board shall
be in receipt of, a copy of the final SEC approval with
respect to this Operating Agreement within ten working
days of receipt of the approvals by JCP&L. JCP&L shall
also file with this Board copies of all future SEC and
FERC approvals received by GPUGC that affect JCP&L in
any way, within ten working days of JCP&L's receipt of
same.
14. Once the Operating Agreement is in effect, JCP&L shall
file with this Board a GPUGC quarterly operating report
containing the same type of information and in
substantially the same format as is currently being
filed by JCP&L, covering its existing generation
facilities and including data on generation,
transmission and energy purchases, actual and estimated
fuel consumption and fuel inventory levels for each
JCP&L generation unit or station, unless and until the
Board directs otherwise.
15. GPUGC shall record costs and, to the extent applicable,
all allocations of costs billed to JCP&L through the
Operating Agreement on a per generating plant basis by
type (steam, hydraulic and other) and in sufficient
detail to allow the Board to analyze, evaluate and
render a determination as to their fairness and
reasonableness for ratemaking purposes.
16. Salaries for GPUGC operations charged to JCP&L shall
continue to be subject to ongoing review by this Board
as to their reasonableness for ratemaking purposes,
subject to the confidentiality procedures previously
approved and followed by the Board with respect to
personal data relating to individual employees, where
applicable.
17. Information regarding total salary of GPUGC employees
and, where available, employees of contractors hired by
GPUGC, as well as allocations of the employees' or
contractors employees' total salary for which JCP&L is
being billed shall be maintained and made available to
the Board during each rate proceeding and upon request.
18. All SEC and FERC filings relating to changes in the
GPUGC Operating Agreement cost allocation formulas as
well as the initial filing of such formulas with the
6
<PAGE>
SEC or other such matters affecting JCP&L shall be
submitted to the Board or its successors at least 45
days prior to submitting the filing to the SEC and/or
FERC. JCP&L shall also submit to the Board or its
successors, the workpapers associated with such SEC and
FERC filing at least 45 days prior to the formal SEC
and FERC filing. Copies of all annual, periodic or
other reports filed by GPUGC with the SEC or FERC shall
be contemporaneously submitted to the Board.
19. GPUGC and JCP&L shall prepare data as requested by the
NJBPU or its successors.
20. JCP&L shall seek to prioritize and protect the
interests of JCP&L and its ratepayers just as if JCP&L
were operating its generating units on a stand-alone
basis. JCP&L shall exercise diligent oversight over
GPUGC to insure that JCP&L's facilities are operated
and maintained in accordance with the Operating
Agreement's terms. During regulatory proceedings
before the Board or its successors, JCP&L/GPUGC shall,
upon request, provide information showing the benefits
to JCP&L and JCP&L ratepayers of establishing GPUGC and
maintaining operations under the GPUGC Operating
Agreement.
21. The Board's or its successors' approval of this
Operating Agreement does not reduce or constrain any
existing authority the Board or its successors
currently have to review the capital costs and
operating and maintenance expenses of the generating
facilities.
22. While it is understood that most of the current JCP&L
generation personnel will be transferred to GPUGC,
Board approval of this Operating Agreement is not to be
construed as Board approval to erode the JCP&L talent
pool through an inappropriate transfer of knowledge and
personnel to GPUGC.
23. JCP&L will not seek to recover from New Jersey
ratepayers any costs, either direct or indirect,
associated with utility operations for generating units
in which JCP&L does not have an ownership interest,
except for power production costs related to energy
purchased or transferred to JCP&L in the normal course
of GPU System operations as is currently the case.
24. GPUGC will not obtain and JCP&L will not give GPUGC any
portion of JCP&L's ownership interest in any generating
station without prior approval of the Board or its
successors. Likewise, GPUGC will not obtain an
ownership interest in any generating station without
prior notification by JCP&L to the BPU or its
successor, and JCP&L will also promptly advise the BPU
7
<PAGE>
or its successor concerning the allocation of costs and
liabilities, if any, from such plants to the GPU
Companies including JCP&L.
25. The level of insurance protection provided to JCP&L and
its ratepayers under JCP&L's existing insurance program
with respect to the non-nuclear generating stations to
be operated by GPUGC shall not decrease as a result of
JCP&L entering into this Operating Agreement.
26. JCP&L's anticipated liability with respect to the non-
nuclear generating stations to be operated by GPUGC
shall not increase as a result of JCP&L entering into
this Operating Agreement.
27. JCP&L will maintain a full accounting, on a per
generating plant basis by type (steam, hydraulic and
other) where applicable, of any and all services
provided by JCP&L to GPUGC.
28. JCP&L agrees that it will not seek or be permitted to
receive ratemaking recovery from New Jersey retail
ratepayers of any liability, costs or expenses it might
incur by reason of the activities undertaken by GPUGC
in connection with the operation or maintenance of non-
nuclear generations facilities in which JCP&L does not
have any ownership interest. With respect to any
expenses, capital costs, or other costs of any type
relating to any liabilities that may result from
GPUGC's operation of facilities in which JCP&L has a
partial ownership interest, JCP&L agrees that it will
not seek or be permitted to recover, through rates from
its customers, an amount that would be greater (on a
percentage basis) than JCP&L's percentage ownership of
the specific facility.
29. In addition to providing identified data, documents,
reports and notifications to the Board as set forth
above. JCP&L agrees that all such information will
likewise be submitted simultaneously to the New Jersey
Division of the Ratepayer Advocate.
DATED: December 28, 1994 BOARD OF PUBLIC UTILITIES
BY:
/s/ Herbert H. Tate
HERBERT H. TATE
PRESIDENT
(SEAL) /s/ Carmen J. Armenti
CARMEN J. ARMENTI
COMMISSIONER
8
<PAGE>
/s/ Edward H. Salmon
EDWARD H. SALMON
COMMISSIONER
ATTEST:
/s/ Blossom A. Peretz
BLOSSOM A. PERETZ
SECRETARY
I HEREBY CERTIFY that the
within document is a true
copy of the original in
the files of the Board of
Public Utilities.
/s/ Blossom A. Peretz
BLOSSOM A. PERETZ, ESQ.
SECRETARY
9
<PAGE>
Agenda Date: 11/21/94
State of New Jersey
Board of Public Utilities
Two Gateway Center
Newark, N.J. 07102
Electric
IN THE MATTER OF THE PETITION OF ) ORDER CLARIFYING FINAL
JERSEY CENTRAL POWER AND LIGHT ) DECISION AND ORDER
COMPANY FOR APPROVAL OF AN )
OPERATING AGREEMENT WITH GPU ) DOCKET NO. EE94030079
GENERATION CORPORATION. )
(SERVICE LIST ATTACHED)
BY THE BOARD:
This Board, by Order dated December 28, 1994, approved the
March 24, 1994 petition of Jersey Central Power & Light Company
(JCP&L) to combine the operations of all the GPU systems fossil
fuel and hydroelectric generation facilities into a single
unified management structure known as General Public Utilities
Generation Corporation (GPUGC). GPUGC is a wholly owned
subsidiary of General Public Utilities. The Board's December 28,
1994 Order adopted the Revised Stipulation (attached), signed by
representatives of JCP&L, Board Staff and the Office of the
Ratepayer Advocate which set forth a number of recommended
conditions for Board approval of the Petition.
By letter dated January 5, 1995, Petitioner states that the
Board's Order dated December 28, 1994 in this docket does not
accurately reflect the Revised Stipulation signed by all the
parties and is seeking an Order of Clarification adopting the
terms of the Revised Stipulation as specifically set forth in the
Revised Stipulation signed by all parties to this proceeding.
This Order is written to clarify the fact that 1) it was and
is the Board's intent to approve without modification the terms
and conditions of the Revised Stipulation in this docket as
specifically set forth in the Revised Stipulation in this docket
and signed by representatives of JCP&L, Board Staff and the
Office of the Ratepayer Advocate; 2) any divergence in verbiage
as contained in our December 28, 1994 Order versus the specific
language set forth in the Revised Stipulation were for
descriptive purposes only, and it neither was nor is the Board's
intent to modify, in any way, the terms of the Revised
Stipulation; and 3) the Board APPROVES the Revised Stipulation in
its entirety and incorporates same specifically by reference into
its Order of Approval.<PAGE>
DATED: February 8, 1995 BOARD OF PUBLIC UTILITIES
BY:
/s/ Herbert H. Tate
HERBERT H. TATE
PRESIDENT
(SEAL) /s/ Carmen J. Armenti
CARMEN J. ARMENTI
COMMISSIONER
/s/ Edward H. Salmon
EDWARD H. SALMON
COMMISSIONER
ATTEST: /s/ Blossom A. Peretz
BLOSSOM A. PERETZ
SECRETARY
I HEREBY CERTIFY that the
within document is a true
copy of the original in
the files of the Board of
Public Utilities.
/s/ Blossom A. Peretz
BLOSSOM A. PERETZ, ESQ.
SECRETARY
2<PAGE>
Exhibit D-2(a)
PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA. 17103-3265
Public Meeting, held September 1, 1994
Commissioners Present:
David W. Rolka, Chairman
Joseph Rhodes, Jr., Vice-Chairman
John M. Quain
Lisa Crutchfield
John Kanger
Affiliated Interest Agreement between Docket No.
Metropolitan Edison Company, G009403687
Pennsylvania Electric Company, Jersey
Central Power and Light Company and
GPU Generation Corporation
OPINION AND ORDER
BY THE COMMISSION:
On March 25, 1994, an Affiliated Interest Agreement
("Agreement") between Metropolitan Edison Company ("Met-Ed"),
Pennsylvania Electric Company ("Penelec"), Jersey Central Power
and Light ("JCP&L") and GPU Generation Corporation ("GPUGC") was
filed to become effective April 24, 1994. On April 14, 1994, the
period for consideration of this Agreement was extended until
June 23, 1994. As a result of negotiations between the office of
Consumer Advocate ("OCA") and Respondent, on June 16, 1994, the
Commission extended the period for consideration of this
Agreement to September 23, 1994.
This Agreement provides for the operation, maintenance and
rehabilitation by GPUGC of various non-nuclear electric
generation facilities which are owned and/or operated by Met-Ed,
Penelec and JCP&L. 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
affect the Commission's jurisdiction over all plant activities
and safety.
As a result of negations between Respondent and OCA with
regards to certain language in the Agreement, the parties have
agreed to the following stipulation:<PAGE>
"Notwithstanding the filing the SEC, or
approval, by the SEC, of the operating
agreement between GPUGC and the GPU
Companies, Met-Ed and Penelec agree that they
shall not raise such filing for the purpose
of preempting the Pennsylvania Public Utility
Commission's ability to review and rule upon
the prudence, reasonableness, and utility's
right to recovery in its retail rates of
costs incurred by the utility under the
operating agreement."
All charges between and among the GPU Companies, with
respect to services to be performed by GPUGC, will be at cost.
A question has arisen as to any potential conflict between
the instant agreement and the Commission's upcoming revisions to
its competitive bidding regulations at Section 1 Pa. Code Section
57.31-87.28. This issue is addressed in ordering paragraph No.
2.
The Agreement is filed in accordance with the requirements
of Section 2102(b) of the Public Utility Code, 66 Pa. C.S.
2102(b).
We have examined the Agreement and have determined that it
appears to be reasonable and consistent with the public interest;
however, approval of the Agreement does not preclude us from
investigating during any formal proceeding, the reasonableness of
charges incurred under the Agreement; THEREFORE,
IT IS ORDERED:
1. That the Affiliated Interest Agreement between
Met-Ed, Penelec, JCP&L and GPUGC be, and hereby is, approved.
2. That if there is any conflict between the instant
Affiliated Interest Agreement and upcoming revisions to the
Commission's competitive bidding regulations at Section 2 Pa.
Code Section 57.31-57.39, the revised Commission regulations
shall prevail.
3. That acceptance does not preclude the Commission
from investigating during any formal proceeding the
reasonableness of charges incurred under the Agreement.
BY THE COMMISSION
John G. Alford,
Secretary
(SEAL)
ORDER ADOPTED: September 1, 1994
2<PAGE>
ORDER ENTERED: SEP 1 1994
3<PAGE>
Exhibit F-1
February 14, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: General Public Utilities Corporation
Jersey Central Power & Light Company
Metropolitan Edison Company
Pennsylvania Electric Company
Declaration on Form U-1
SEC File No. 70-8409
Gentlemen:
We have examined the Declaration on Form U-1, dated
April 5, 1994, under the Public Utility Holding Company Act of
1935 (the "Act"), filed by General Public Utilities Corporation
("GPU"), Jersey Central Power & Light Company ("JCP&L"),
Metropolitan Edison Company ("Met-Ed") and Pennsylvania Electric
Company ("Penelec" and, together with JCP&L and Met-Ed, the "GPU
Companies") with the Securities and Exchange Commission (the
"Commission") and docketed in SEC File No. 70-8409, as amended by
Amendment No. 1 thereto, dated May 10, 1994, and Amendment No. 2
thereto, dated this date, of which this opinion is to be a part.
(The Declaration, as so amended and as thus to be amended, is
hereinafter referred to as the "Declaration".)
The Declaration contemplates, among other things, the
organization by GPU of GPU Generation Corporation ("GPUGC") as a
new, wholly-owned subsidiary company, which will undertake
responsibility, among other things, for the operation,
maintenance and rehabilitation of all non-nuclear generation
facilities owned and/or operated by the GPU Companies pursuant to
an operating agreement (the "Operating Agreement") between GPUGC
and the GPU Companies. GPUGC may also construct any new non-
nuclear generation facilities which the GPU Companies may require
in the future. The Declaration further contemplates that GPU
would acquire for cash all of the 2,500 authorized shares of
GPUGC's common stock, par value $20 per share (the "GPUGC Common
Stock"), for a price of $20 per share or an aggregate
consideration of $50,000 and would also be authorized to make
open account advances to GPUGC from time to time up to an amount
outstanding at any time of not more than $1 million.<PAGE>
Securities and Exchange Commission
February 14, 1995
Page 2
For many years, we have participated in various
proceedings related to the issuance and sale of securities by GPU
and the GPU Companies, and we are familiar with the terms of the
outstanding securities of the corporations comprising the General
Public Utilities holding company system.
We have examined copies, signed, certified or otherwise
proven to our satisfaction, of the Articles of Incorporation and
By-Laws of GPUGC, the Restated Certificate of Incorporation and
By-Laws of JCP&L and the Restated Articles of Incorporation and
By-Laws of each of Met-Ed and Penelec, and of the form of
Operating Agreement. We have also examined the filing made with
the Pennsylvania Public Utility Commission ("PaPUC") with respect
to the Operating Agreement and the Opinion and Order of the
PaPUC, dated September 1, 1994, with respect thereto, as well as
the Petition filed by JCP&L with the New Jersey Board of
Regulatory Commissioners (now the New Jersey Board of Public
Utilities (the "Board")) with respect to the transactions
contemplated by the Declaration and the Board's Order and
clarifying Order, dated December 28, 1994 and February 8, 1995,
respectively, with respect thereto. In addition, we have
examined such other instruments, agreements and documents and
made such further investigation as we have deemed necessary as a
basis for this opinion.
With respect to all matters of Pennsylvania law
involving GPU, GPUGC, Penelec and JCP&L, we have relied upon the
opinion of Ballard Spahr Andrews & Ingersoll, with respect to all
matters of Pennsylvania law involving Met-Ed, we have relied upon
the opinion of Ryan, Russell, Ogden & Seltzer, and with respect
to all matters of New Jersey law involving JCP&L, we have relied
upon the opinion of Richard S. Cohen, Esq., which are being filed
as Exhibits F-2, F-3 and F-4, respectively, to the Declaration.
Based upon the foregoing, and assuming that the
transactions therein proposed are carried out in accordance with
the Declaration, we are of the opinion that when (i) the
Commission shall have entered an order forthwith granting the
Declaration, (ii) all necessary corporate action required on the
part of GPU, the GPU Companies and GPUGC shall have been duly
taken, and (iii) GPU shall have acquired the GPUGC Common Stock
for an aggregate consideration of $50,000 in cash,
(a) all State laws applicable to the proposed
transactions will have been complied with;
(b) GPUGC is validly organized and duly existing;
(c) the GPUGC Common Stock will be validly
issued, fully paid and non-assessable, and GPU will be
entitled to the rights and privileges appertaining
thereto set forth in GPUGC's Articles of Incorporation;<PAGE>
Securities and Exchange Commission
February, 14, 1995
Page 3
(d) GPU will legally acquire the GPUGC Common
Stock; and
(e) the consummation of the proposed transactions
will not violate the legal rights of the holders of any
securities issued by GPU, the GPU Companies or GPUGC or
any "associate company" thereof, as defined in the Act.
We hereby consent to the filing of this opinion as an
exhibit to the Declaration and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN<PAGE>
Exhibit F-2
February 14, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: General Public Utilities Corporation
Jersey Central Power & Light Company
Metropolitan Edison Company
Pennsylvania Electric Company
Declaration on Form U-1
SEC File No. 70-8409
Gentlemen:
I have examined the Declaration on Form U-1, dated April 5,
1994, under the Public Utility Holding Company Act of 1935 (the
"Act"), filed by General Public Utilities Corporation ("GPU"),
Jersey Central Power & Light Company ("JCP&L"), Metropolitan
Edison Company ("Met-Ed") and Pennsylvania Electric Company
("Penelec" and, together with JCP&L and Met-Ed, the "GPU
Companies") with the Securities and Exchange Commission (the
"Commission") and docketed in SEC File No. 70-8409, as amended by
Amendment No. 1 thereto, dated May 10, 1994, and Amendment No. 2
thereto, dated this date, of which this opinion is to be a part.
(The Declaration, as so amended and as thus to be amended, is
hereinafter referred to as the "Declaration".)
The Declaration contemplates, among other things, the
organization by GPU of GPU Generation Corporation ("GPUGC") as a
new, wholly-owned subsidiary company, which will undertake
responsibility, among other things, for the operation,
maintenance and rehabilitation of all non-nuclear generation
facilities owned and/or operated by the GPU Companies pursuant to
an operating agreement (the "Operating Agreement") between GPUGC
and the GPU Companies. GPUGC may also construct any new non-
nuclear generation facilities which the GPU Companies may require
in the future. The Declaration further contemplates that GPU
would acquire for cash all of the 2,500 authorized shares of
GPUGC's common stock, par value $20 per share (the "GPUGC Common
Stock"), for a price of $20 per share or an aggregate
consideration of $50,000 and would also be authorized to make
open account advances to GPUGC from time to time up to an amount
outstanding at any time of not more than $1 million.
For many years, I have participated in various proceedings
related to the issuance and sale of securities by JCP&L, and I am
familiar with the terms of the outstanding securities of JCP&L.
I have examined copies, signed, certified or otherwise
proven to my satisfaction, of the Restated Certificate of<PAGE>
Incorporation and By-Laws of JCP&L, each as amended to date, and
the form of the
Securities and Exchange Commission
February 14, 1995
Page 2
Operating Agreement. I have also examined the Petition filed by
JCP&L with the New Jersey Board of Regulatory Commissioners (now
the New Jersey Board of Public Utilities (the "Board")) with
respect to the transactions contemplated by the Declaration, and
the Board's Order and clarifying Order, dated December 28, 1994
and February 8, 1995, respectively, with respect thereto. In
addition, I have examined such other instruments, agreements and
documents and made such further investigation as I have deemed
necessary as a basis for this opinion.
Based upon the foregoing, and assuming that the transactions
therein proposed are carried out in accordance with the
Declaration, I am of the opinion, insofar as matters governed by
the laws of the State of New Jersey are concerned, that when (i)
the Commission shall have entered an order forthwith granting the
Declaration, (ii) all necessary corporate action required on the
part of GPU, the GPU Companies and GPUGC shall have been duly
taken, and (iii) GPU shall have acquired the GPUGC Common Stock
for an aggregate consideration of $50,000 in cash,
(a) all laws of the State of New Jersey applicable to
the proposed transactions will have been complied with; and
(b) the consummation of the proposed transactions will
not violate the legal rights of holders of any securities
issued by JCP&L.
I hereby consent to the filing of this opinion as an exhibit
to the Declaration and in any proceedings before the Commission
that may be held in connection therewith.
Very truly yours,
Richard S. Cohen, Esquire<PAGE>
Exhibit F-3
February 14, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: General Public Utilities Corporation
Jersey Central Power & Light Company
Metropolitan Edison Company
Pennsylvania Electric Company
Declaration on Form U-1
SEC File No. 70-8409
Gentlemen:
We have examined the Declaration on Form U-1, dated
April 5, 1994, under the Public Utility Holding Company Act of
1935 (the "Act"), filed by General Public Utilities Corporation
("GPU"), Jersey Central Power & Light Company ("JCP&L"),
Metropolitan Edison Company ("Met-Ed") and Pennsylvania Electric
Company ("Penelec" and, together with JCP&L and Met-Ed, the "GPU
Companies") with the Securities and Exchange Commission (the
"Commission") and docketed in SEC File No. 70-8409, as amended by
Amendment No. 1 thereto, dated May 10, 1994, and Amendment No. 2
thereto, dated this date, of which this opinion is to be a part.
(The Declaration, as so amended and as thus to be amended, is
hereinafter referred to as the "Declaration".)
The Declaration contemplates, among other things, the
organization by GPU of GPU Generation Corporation ("GPUGC") as a
new, wholly-owned subsidiary company, which will undertake
responsibility, among other things, for the operation,
maintenance and rehabilitation of all non-nuclear generation
facilities owned and/or operated by the GPU Companies pursuant to
an operating agreement (the "Operating Agreement") between GPUGC
and the GPU Companies. GPUGC may also construct any new non-
nuclear generation facilities which the GPU Companies may require
in the future. The Declaration further contemplated that GPU
would acquire for cash all of the 2,500 authorized shares of
GPUGC's common stock, par value $20 per share (the "GPUGC Common
Stock"), for a price of $20 per share or an aggregate
consideration of $50,000 and would also be authorized to make
open account advances to GPUGC from time to time up to an amount
outstanding at any time of not more than $1 million.<PAGE>
Securities and Exchange Commission
February 14, 1995
Page 2
We have examined copies, signed, certified or otherwise
proven to our satisfaction, of the Restated Articles of
Incorporation and By-Laws of Met-Ed, and of the form of Operating
Agreement. We have also participated in the preparation of the
filing made with the Pennsylvania Public Utility Commission
("PaPUC") with respect to the Operating Agreement. We have
examined the Opinion and Order of the PaPUC, dated September 1,
1994, with respect thereto. We are familiar with the corporate
history of Met-Ed. In addition, we have examined such other
instruments, agreements and documents and made such further
investigation as we have deemed necessary as a basis for this
opinion.
Based upon the foregoing, and assuming that the
transactions therein proposed are carried out in accordance with
the Declaration, we are of the opinion that when (i) the
Commission shall have entered an order forthwith granting the
Declaration, (ii) all necessary corporate action required on the
part of GPU, the GPU Companies and GPUGC shall have been duly
taken, and (iii) GPU shall have acquired the GPUGC Common Stock
for an aggregate consideration of $50,000 in cash,
(a) all Pennsylvania laws applicable to Met-Ed's
participation in the proposed transactions will have been
complied with; and
(b) the consummation of the proposed transactions will
not violate the legal rights of the holders of any
securities issued by Met-Ed.
We hereby consent to the filing of this opinion as an
exhibit to the Declaration and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
RYAN, RUSSELL, OGDEN & SELTZER<PAGE>
Exhibit F-4
February 14, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: General Public Utilities Corporation
Jersey Central Power & Light Company
Metropolitan Edison Company
Pennsylvania Electric Company
Declaration on Form U-1
SEC File No. 70-8409
Gentlemen:
We have examined the Declaration on Form U-1, dated
April 5, 1994, under the Public Utility Holding Company Act of
1935 (the "Act"), filed by General Public Utilities Corporation
("GPU"), Jersey Central Power & Light Company ("JCP&L"),
Metropolitan Edison Company ("Met-Ed") and Pennsylvania Electric
Company ("Penelec" and, together with JCP&L and Met-Ed, the "GPU
Companies") with the Securities and Exchange Commission (the
"Commission") and docketed in SEC File No. 70-8409, as amended by
Amendment No. 1 thereto, dated May 10, 1994, and Amendment No. 2
thereto, dated this date, of which this opinion is to be a part.
(The Declaration, as so amended and as thus to be amended, is
hereinafter referred to as the "Declaration").
The Declaration contemplates, among other things, the
organization by GPU of GPU Generation Corporation ("GPUGC") as a
new, wholly-owned subsidiary company, which will undertake
responsibility, among other things, for the operation,
maintenance and rehabilitation of all non-nuclear generation
facilities owned and/or operated by the GPU Companies pursuant to
an operating agreement (the "Operating Agreement") between GPUGC
and the GPU Companies. GPUGC may also construct any new non-
nuclear generation facilities which the GPU Companies may require
in the future. The Declaration further contemplates that GPU
would acquire for cash all of the 2,500 authorized shares of
GPUGC's common stock, par value $20 per share (the "GPUGC Common
Stock"), for a price of $20 per share or an aggregate
consideration of $50,000 and would also be authorized to make
open account advances to GPUGC from time to time up to an amount
outstanding at any time of not more than $1 million.<PAGE>
Securities and Exchange Commission
February 14, 1995
Page 2
We have been counsel to Penelec and Pennsylvania
counsel to GPU and JCP&L for many years. In such capacity, we
have examined copies, signed, certified or otherwise proven to
our satisfaction, of the Articles of Incorporation and By-Laws of
GPUGC and the Restated Articles of Incorporation and By-Laws of
Penelec, and of the form of Operating Agreement. We have also
examined the filing made with the Pennsylvania Public Utility
Commission ("PaPUC") with respect to the Operating Agreement and
the Opinion and Order of the PaPUC, dated September 1, 1994, with
respect to the transactions contemplated by the Declaration. In
addition, we have examined such other instruments, agreements and
documents and made such further investigation as we have deemed
necessary as a basis for this opinion.
Based upon the foregoing, and assuming that the
transactions therein proposed are carried out in accordance with
the Declaration, we are of the opinion, insofar as matters are
governed by the laws of the Commonwealth of Pennsylvania, that
when (i) the Commission shall have entered an order forthwith
granting the Declaration, (ii) all necessary corporate action
required on the part of GPU, the GPU Companies and GPUGC shall
have been duly taken, and (iii) GPU shall have acquired the GPUGC
Common Stock for an aggregate consideration of $50,000 in cash,
(a) all Pennsylvania laws applicable to the
proposed transactions by Penelec, GPU, GPUGC and JCP&L will
have been complied with;
(b) GPUGC is validly organized and duly existing;
(c) the GPUGC Common Stock will be validly
issued, fully paid and non-assessable, and GPU will be
entitled to the rights and privileges appertaining thereto
set forth in GPUGC's Articles of Incorporation;
(d) GPU will legally acquire the GPUGC Common
Stock; and
(e) the consummation of the proposed transactions
will not violate the legal rights of the holders of any
securities issued by GPU, GPUGC, Penelec or Penelec's
wholly-owned subsidiary, Nineveh Water Company.
We hereby consent to the filing of this opinion as an
exhibit to the Declaration and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
BALLARD SPAHR ANDREWS & INGERSOLL<PAGE>
EXHIBIT I
ALTERNATIVE ALLOCATION FORMULAE
Direct Labor Basis
Under this allocation method, each plant would be charged an amount
based upon the percentage of direct labor billings by plant for the
preceding year.
Employee Basis
Under this allocation method, each plant would be charged an amount
based upon the percentage of average number of plant employees for the
preceding year.
Fuel Expense Basis
Under this allocation method, each plant would be charged an amount
based upon the percentage of fuel expense by plant for the preceding
year.
Installed Capacity Rating (MW) Basis
Under this allocation method, each plant would be charged an amount
based upon the percentage of installed capacity rating by plant for
the preceding year.<PAGE>
