Amendment No. 1 to
SEC File No. 70-8913
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GPU INTERNATIONAL, INC. ("GPUI")
One Upper Pond Road
Parsippany, New Jersey 07054
(Name of company filing this statement and
address of principal executive offices)
GPU, INC. ("GPU")
(Name of top registered holding company parent of applicant)
M. A. Nalewako, Secretary W. S. Greengrove, Secretary
M. J. Connolly, Esq., Assistant GPU International, Inc.
General Counsel One Upper Pond Road
GPU Service, Inc. Parsippany, New Jersey 07054
100 Interpace Parkway
Parsippany, New Jersey 07054
Douglas E. Davidson, Esq.
Berlack, Israels & Liberman LLP
120 West 45th Street
New York, New York 10036
(Names and addresses of agents for service)<PAGE>
GPUI hereby amends its Application on Form U-1,
docketed in SEC File No. 70-8913, as follows:
1. By revising paragraphs A through G of Item 1
thereof to read in their entirety as follows:
A. GPUI (formerly known as Energy Initiatives, Inc.),
a direct wholly owned subsidiary of GPU, is primarily engaged in
the business of developing, owning and operating generation,
transmission and distribution facilities in the United States and
in foreign countries and related activities. GPUI proposes,
directly or through a direct or indirect wholly owned subsidiary
("Subsidiary"), to enter into a joint venture ("JV") with one or
more unaffiliated entities for the purposes of developing,
manufacturing and marketing stationary electrical power systems
employing fuel cell technology.
A fuel cell is an electrochemical device that produces
electricity directly without combustion, cleanly and with high
efficiency. In a fuel cell, hydrogen fuel (in pure form or
obtained from natural gas or methanol) and oxygen (from the air)
are combined to produce electricity, heat and water. Unlike a
battery, a fuel cell does not require recharging, as it provides
power as long as fuel is supplied. By contrast, combustion
engines operate by burning fuel to create heat, turn heat into
mechanical energy and convert this mechanical energy into
electric power. These multiple processes, however, result in
lower efficiency and create more pollution.<PAGE>
GPUI thus believes that fuel cell stationary power
plants can become an attractive low emission source of power, for
both utility and non-utility applications. As such, fuel cell
power plants could be utilized by electric distribution
companies, such as the GPU Energy companies, and their
commercialization could generate additional revenues and earnings
for the GPU System.
B. GPUI has been holding discussions with
representatives of a company (the "JV Partner")(1) which has been
engaged for several years in the business of developing and
marketing fuel cell-based power systems with a primary focus on
certain limited applications. The JV Partner and GPUI have also
determined that there exists an accessible market for stationary
fuel cell-based systems, i.e., systems having a more or less
fixed situs. This market would include, among other things, so-
called "remote" or "distributed generation". "Distributed
generation" is commonly considered to include electrical power
generating systems which are smaller than the typical utility-
owned central generating station and are used as stand-alone
systems at the point of use to power a particular residential
commercial or industrial site or to address a specific, localized
utility need by providing supplemental power to the utility grid.
Use of distributed generation can defer expansion of transmission
and distribution systems, reduce line losses and improve
reliability and power _______________________
1 Additional information about the JV Partner is set forth in
Exhibit H hereto which is being filed separately under a request
for confidential treatment pursuant to Rule 104(b) under the Act.
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quality. It is expected that power systems of 1 kw or more would
be within the business of the JV, although smaller systems might
also be included if they are otherwise consistent with the
concept of "stationary" systems.
C. The JV Partner and GPUI are in the process of
negotiating the definitive terms, conditions and structure of the
proposed joint venture. It is anticipated, however, that the JV
will take the form of a corporation, partnership (general,
limited or limited liability) or limited liability company
organized under the laws of a State of the United States or other
appropriate jurisdiction. At the outset, the JV Partner is
expected to own a majority interest in the JV, and GPUI (and
possibly other JV participants) will be accorded certain minority
shareholder protective rights, to be agreed upon. In any event,
however, GPUI expects that its voting interest in the JV will not
exceed 9.9% and, accordingly, the JV will not become a
"subsidiary company" of GPU as defined in Section 2(a)(8) of the
Act. The JV Partner will license the relevant technology to the
JV and provide technical and administrative support.
D. GPUI therefore requests authority (1) to acquire
an interest in the stationary fuel cell-based power system
business as aforesaid and (2) to acquire the securities of a
Subsidiary and/or, directly or indirectly, the securities of the
JV. The JV will not own or operate any facilities for the
generation, transmission or distribution of electric energy.
Therefore, neither any Subsidiary nor the JV will become an
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"electric utility company" as defined in Section 2(a)(3) of the
Act. GPUI's aggregate investment in the JV will not exceed $30
million, which is expected to be funded through capital
contributions from GPU, internally generated sources at GPUI or
drawdowns by GPUI under existing lines of credit, or any
combination of the foregoing.
E. As part of the transaction, GPUI may also receive
warrants, options or other similar rights to acquire securities
of the JV Partner, in such amount and on such terms as may be
agreed upon. GPUI may also be accorded a right and/or
opportunity to acquire securities of other joint venture entities
to be formed by the JV Partner. It is requested that the
Commission authorize the acquisition of any such rights, but that
it reserve jurisdiction over the exercise of any such rights,
either to acquire securities of the JV Partner or to acquire
securities of any joint venture entity (other than the JV) formed
by the JV Partner.
F. The authorization requested herein with respect to
the acquisition of securities of a Subsidiary and/or the JV shall
expire upon the first to occur of (i) December 31, 2000 and
(ii) the adoption by the Commission of proposed Rule 58 (HCAR No.
35-26313, June 20, 1995) or such other rule, regulation or order
as shall exempt the transactions as herein proposed from Section
9(a) of the Act.
G. Certain personnel of GPUI familiar with the market
for, and marketing of, distributed generation may provide
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consulting or other marketing-related services to the JV. These
services may include analysis of specific user requirements and
of the applications and size ranges of stationary systems that
will have the broadest market appeal. GPUI personnel will also
participate in development of the JV's business and marketing
plans and monitor their implementation. Any such services
provided to the JV at a time when the JV is a "subsidiary
company" of GPU will be provided at cost in compliance with Rules
90 and 91 under the Act, unless otherwise authorized by the
Commission.
2. By separately filing the following exhibit in Item
6(a) thereof under a request for confidential treatment pursuant
to Rule 104(b) under the Act:
H. Description of the JV Partner.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANY HAS DULY
CAUSED THIS STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GPU INTERNATIONAL, INC.
By:
B. L. Levy, President
Date: October 21, 1996<PAGE>
