Amendment No. 4 to
SEC File No. 70-8409
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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")
PENNSYLVANIA ELECTRIC COMPANY ("Penelec")
2800 Pottsville Pike
Reading, Pennsylvania 19605
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
100 Interpace Parkway
Parsippany, New Jersey 07054
GPU SERVICE CORPORATION ("GPUSC")
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 President W. Edwin Ogden, Esq.
and Treasurer Ryan, Russell Ogden & Seltzer
M. A. Nalewako, Secretary 1100 Berkshire Boulevard
M. J. Connolly, Esq. P.O. Box 6219
GPU Service Corporation Reading, Pennsylvania 19610
100 Interpace Parkway
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, Pennsylvania 19103
William C. Matthews Douglas E. Davidson, Esq.
Secretary Berlack, Israels & Liberman LLP
Metropolitan Edison Company 120 W. 45th Street
Pennsylvania Electric Company New York, New York 10036
2800 Pottsville Pike
Reading, Pennsylvania 19605
(Names and addresses of agents for service)<PAGE>
GPU, JCP&L, Met-Ed and Penelec hereby amend their
Declaration on Form U-1, as heretofore amended, docketed in SEC
File No. 70-8409, as follows:
1. By adding GPU Service Corporation ("GPUSC") as a
party to this amendment.
2. By adding a new paragraph M to Item 1 thereof to
read as follows:
M. (1) JCP&L, Met-Ed and Penelec (the "GPU
Companies") will employ a number of procedures to authorize,
monitor and control the rendering of services and related
charges by GPU Generation Corporation ("GPUGC") in order to
enable management of the GPU Companies to control the cost,
quality and level of services received from GPUGC. Such
procedures will include the following:
(a) The Presidents of each of the GPU
Companies will be members of the GPUGC Board of Direc-
tors. As such, they will be informed of and will
directly participate in all material decisions of
GPUGC.
(b) As provided in Section 1.2(g) of the
Operating Agreement, GPUGC is required to prepare and
furnish to the GPU Companies annual budgets and
forecasts of operation and maintenance expenses,
including the anticipated costs for repair,
modification, rehabilitation and capital expenditures
relating to the GPU Companies' generating facilities.
Such budgets, including any material modification
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thereto, must be approved in advance by each GPU
Operating Company. Consequently, no material
expenditures (other than those necessary to prevent
hazardous conditions) may be made by GPUGC without
prior review and approval by the GPU Company involved.
Functional work orders for budgeted items
will be provided by GPUGC for billing GPUGC costs to
the GPU Companies. Items not provided for in the
approved budget will require prior approval of the GPU
Company involved to assure proper account
classification and controls at the GPU Company level.
(c) Individual work orders and invoices
rendered by GPUGC to the GPU Companies will be reviewed
by and will be subject to approval by the GPU Companies
in the ordinary course. Such review and approval will
be conducted by the comptroller departments at each GPU
Company or on their behalf by GPU Service Corporation
("GPUSC") comptrollers. This is consistent with the
procedures which have been in place for many years with
respect to services provided to the GPU Companies by
GPU Nuclear Corporation and by GPUSC. Consistent with
those procedures, the GPU Companies will receive
monthly reports from GPUGC summarizing all services
provided by GPUGC during the prior month. The report
will identify the GPUGC work orders charged and provide
a detailed listing of all current charges. Such
charges will be subject to review by the GPU Companies
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for reasonableness before approval of payment.
(d) Additionally, further internal controls
and safeguards will be provided through periodic
internal audits of GPUGC's services and charges to the
GPU Companies. Such audits will be performed by
GPUSC's internal auditing department from time to time
but not less frequently than every two years.
2. Article 3.1 of the Operating Agreement
provides that a working capital account will be established
pursuant to which each GPU Company will provide necessary
funds to GPUGC from time to time. The GPU Companies do not
intend to pre-fund the Working Capital Account, but GPUGC
would make periodic cash calls to the GPU Companies as and
to the extent cash needs arise. Accordingly, it is not
expected that balances, if any, in the working capital
account would be material in amount. This is consistent
with the procedures employed by GPUSC and GPU Nuclear.
3. In accordance with Rule 91 under the Act, to
the extent that GPU provides capital to GPUGC, it would
charge GPUGC for the reasonable cost of such capital. The
cost of capital would be charged at a rate equal to the GPU
System's consolidated average weighted cost of long and
short term debt from time to time, but in no event at a rate
greater than the GPU System's average cost of equity. If
and to the extent that there is such a cost of capital
charge, GPUGC would allocate and charge such cost to the GPU
Companies. GPU does not, however, expect that given the
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nature of the activities in which GPUGC is authorized to
engage, it will be necessary to make significant capital
contributions to GPUGC and, in any event, not more than $1
million. Such debt and equity rates are currently 6.5% and
12.5%, respectively.
3. By adding a new paragraph N to Item 1 thereof to
read as follows:
N. By order dated December 28, 1994, the New Jersey
Board of Public Utilities ("NJBPU") granted JCP&L's Petition
to enter into the proposed Operating Agreement with GPUGC.
In its order, as supplemented by a subsequent Clarifying
Order, dated February 8, 1995, the NJBPU included a number
of stipulations and conditions based upon the terms and
conditions of the Revised Stipulation, dated November 9,
1994, entered into by JCP&L, the NJBPU Staff and the NJ
Division of Ratepayer Advocate.
The document was styled as a "Revised Stipulation"
in order to distinguish it from the form of stipulation
which was originally negotiated by the parties but not fully
executed as a result of the need to include certain
additional provisions. These provisions were incorporated
into the "Revised Stipulation" which was, in turn, submitted
to the NJBPU. A copy of the Revised Stipulation is being
filed herewith as Exhibit D-1(b).
4. The applicants agree that no change in the
organization of GPUGC, the type and character of the companies to
be serviced, the methods of allocating costs to JCP&L, Met-Ed and
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Penelec, or in the scope of character of the services to be
rendered subject to Section 13 of the Act, or any rule,
regulation or order thereunder, shall be made unless and until
GPUGC shall first have given the Commission written notice of the
proposed change not less than 60 days prior to the proposed
effectiveness of any such change. Any proposal by GPUGC to
render services with respect to non-nuclear facilities, or to
change its organizational structure or services to be rendered in
furtherance of either of the foregoing, would require the filing
of an application-declaration, as appropriate, and the further
authorization by the Commission. If, upon the receipt of any
such notice by the 60-day letter procedure, the Commission shall
notify GPUGC within the 60-day period that a question exists as
to whether the proposed change is consistent with the provisions
of Section 13 of the Act, or if any rule, regulation or order
thereunder, then the proposed change shall not become effective
unless and until GPUGC shall have filed with the Commission an
appropriate application or declaration regarding such proposed
change and the Commission shall have issued an order, declaring
such application or declaration effective under the Act.
5. By filing the following exhibit in Item 6 thereof:
D - 1(b) - Copy of Revised Stipulation filed
by JCP&L with the NJBPU.
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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
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
GPU SERVICE CORPORATION
JERSEY CENTRAL POWER & LIGHT COMPANY
METROPOLITAN EDISON COMPANY
PENNSYLVANIA ELECTRIC COMPANY
By:__________________________________
T. G. Howson, Vice President
and Treasurer
Date: December 18, 1995<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
D - 1(b) - Copy of Revised Stipulation filed
by JCP&L with the NJBPU.<PAGE>
Exhibit D-1(b)
STATE OF NEW JERSEY
BOARD OF PUBLIC UTILITIES
----------------------------------------X
: Docket No. EE94030079
In the Matter of the Petition of :
JERSEY CENTRAL POWER & LIGHT COMPANY :
For Approval, Pursuant to N.J.S.A. : REVISED
48:3-7.1, Of An Operating Agreement : STIPULATION
With GPU Generation Corporation :
:
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To the Honorable Commissioners of the New Jersey Board
of Public Utilities:
The Petitioner, Jersey Central Power & Light Company
("JCP&L"), the Staff ("Staff") of the Board of Public Utilities
(the "Board"), and the Division of the Ratepayer Advocate
("Ratepayer Advocate") (collectively, "the Parties") do hereby
enter into this Stipulation resolving all outstanding issues
regarding the above-captioned matter upon the following terms and
conditions:
1. On or about March 24, 1994, JCP&L filed its formal
Verified Petition in this matter seeking the Board's approval,
pursuant to N.J.S.A. 48:3-7.1, of a proposed Generating Station
Operating Agreement (the "Operating Agreement") by and among
JCP&L, its affiliated or sister electric utilities in
Pennsylvania (namely, Metropolitan Edison Company ("Met-Ed") and
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Pennsylvania Electric Company ("Penelec") (collectively, the "GPU
Companies")) and GPU Generation Corporation ("GPUGC"), all of
which are (or, in the case of GPUGC, will be) wholly-owned
subsidiaries of General Public Utilities Corporation ("GPU").
Pursuant to the proposed Operating Agreement, a draft of which
was attached to the Petition, GPUGC would undertake
responsibility for the unified management, operation and
maintenance of all the GPU Companies' non-nuclear generation
facilities, in a manner similar to the existing arrangement under
which GPU Nuclear Corporation ("GPUNC") has (with prior Board
approval) undertaken responsibility for the unified management,
operation and maintenance of all of the GPU Companies' nuclear
generation facilities.
2. Following extensive written discovery and
conferences with JCP&L, Staff and the Ratepayer Advocate have
concluded that, subject to the conditions set forth below,
JCP&L's execution of and participation in the proposed Operating
Agreement with GPUGC satisfies the criteria for approval set
forth in N.J.S.A. 48:3-7.1. Accordingly, Staff and the Ratepayer
Advocate hereby recommend that the Board issue a final Order
approving the proposed Operating Agreement pursuant to N.J.S.A.
48:3-7.1, subject to and incorporating the conditions set forth
below.
3. Staff's and the Ratepayer Advocate's joint
recommendation that the Board approve the Operating Agreement is
conditioned upon the following stipulations, understandings and
agreements which have been accepted and agreed to by JCP&L and
which shall become part of the Board's Order herein:
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- The Staff recommends approval of this
Operating Agreement.
- 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 they
shall not assert, in any
administrative, regulatory,
judicial or quasi-judicial forum,
that such filing in any way pre-
empts 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.
- JCP&L shall submit to the Board, on
behalf of JCP&L, a written certification
executed by an authorized officer of JCP&L
which states that it is JCP&L's intention
that the letter immediately referenced above
will be enforceable in future regulatory
proceedings.
- 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.
- The Board of Directors of GPUGC shall
agree in writing to the terms and conditions
of this Order.
- 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.
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- 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
the 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.
- The Operating Agreement will not affect
the Board's jurisdiction over all plant
activities and safety.
- 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.
- GPUGC shall maintain books and records
in accordance with the appropriate Uniform
System of Accounts as prescribed by this
Board reflecting all costs, expenditures and
charges made to or for the account of JCP&L,
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.
- 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.
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- 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 agreements at least fifteen days
prior to their proposed effective date.
- 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.
- 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.
- Once the Operating Agreement is in
effect, JCP&L shall file with this Board a
GPUGC quarterly 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.
- 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.
- 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
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individual employees, where applicable.
- 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.
- 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 SEC, or
other changes to the GPUGC Operating
Agreement affecting JCP&L, shall be submitted
to the Board or its successors at least 45
days prior to the proposed effective date
thereof as set forth in the filing to the SEC
and/or the FERC, but in no event later than
the date of the filing thereof with the SEC
and/or the FERC. JCP&L shall also submit to
the Board or its successors, any workpapers
associated with such SEC and FERC filing at
least 45 days prior to such proposed
effective date as set forth in the formal SEC
and FERC filing, but in no event later than
the date of the filing thereof with the SEC
and/or the FERC. Copies of all annual,
periodic or other reports filed by GPUGC with
the SEC or FERC shall be contemporaneously
submitted to the Board.
- There shall be a willingness on the part
of GPUGC and JCP&L to prepare data as
requested by the NJBPU or its successors.
- 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.
- The Board's or its successors' approval
of this Operating Agreement does not reduce
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or constrain any existing authority the Board
or its successors currently has to review the
capital costs and operating and maintenance
expenses of the generating facilities.
- 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.
- JCP&L will not seek to recover from New
Jersey ratepayers any costs, either direct or
indirect, associated with 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.
- 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 or its successor
concerning the allocation of costs and
liabilities, if any, from such plants to the
GPU Companies including JCP&L.
- 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.
- 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.
- 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.
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- 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 generation
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.
- 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.
WHEREFORE, the Parties hereto have caused this
Stipulation to be duly executed by their authorized
representatives as of this 9th day of November, 1994.
Hon. Deborah T. Poritz, Berlack, Israels & Liberman
Attorney General of New Jersey Attorneys for Petitioner,
Attorney for Staff of the Jersey Central Power & Light
Board of Public Utilities Company
By: /s/ Gregory Eisenstark By: /s/ Gerald W. Conway
Gregory Eisenstark Gerald W. Conway
Deputy Attorney General Of Counsel
Frances I. Sundheim, Acting Director
Division of the Ratepayer Advocate
By: /s/ Menasha J. Tausner
Menasha J. Tausner
Deputy Ratepayer Advocate
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