SEC File No. __________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
DECLARATION UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GPU INTERNATIONAL, INC.( GPU International )
GPU ELECTRIC, INC. ( GPU Electric )
One Upper Pond Road, Parsippany, New Jersey 07054
(Names of companies filing this statement
and addresses of principal offices)
GPU, INC. ("GPU")
(Name of top registered holding company
parent of the applicants)
W. S. Greengrove, Secretary Douglas E. Davidson, Esq.
GPU International, Inc. Berlack, Israels & Liberman
LLP
GPU Electric, Inc. 120 West 45th Street
One Upper Pond Road New York, New York 10036
Parsippany, New Jersey 07054
___________________________________________
(Names and addresses of agents for service)<PAGE>
Item 1. Description of Proposed Transactions
A. By Orders dated January 19, 1996 (HCAR No. 35-26457)
and July 6, 1995 (HCAR No. 35-26326) in SEC File No. 70-8593, the
Commission, among other things, authorized GPU to acquire the
securities of subsidiary companies (each, a "Subsidiary Company")
which would, in turn, acquire the securities or other interests
of one or more foreign utility companies ("FUCOs") and/or exempt
wholesale generators ("EWGs"; together with FUCOs, "Exempt
Entities"). The Subsidiary Companies would not themselves be
Exempt Entities. The Orders also authorized GPU to make
investments in one or more Subsidiary Companies from time to time
through December 31, 1997 in an aggregate amount of up to 50% of
GPU's consolidated retained earnings at the time the investment
is made.(1) GPU Electric (formerly known as EI Energy, Inc.) is
a Subsidiary Company and wholly-owned subsidiary of GPU organized
pursuant to these orders.
B. In addition, by Orders dated November 16, 1995 (HCAR
No. 35-26409), June 14, 1995 (HCAR No. 35-26307), September 12,
1994 (HCAR No. 35-26205), December 18, 1994 (HCAR No. 35-25715)
and June 26, 1990 (HCAR No. 35-26409) in SEC File No. 70-7727,
the Commission, among other things, authorized GPU International
(formerly known as Energy Initiatives, Inc.) to (i) engage in
preliminary project development activities in connection with its
investments in qualifying facilities as defined in the Public
Utility Regulatory Policies Act of 1978, as amended ("QFs"), and
Exempt Entities (collectively, "Projects"), and (ii) acquire the
securities of Exempt Entities. GPU International and GPU
Electric are referred to as the "GPU Companies".
C. The GPU Companies now propose that Subsidiary Companies
(including without limitation GPU Electric), and GPU
International and subsidiaries of GPU International which are not
Exempt Entities, be authorized to declare and pay dividends out
of capital and unearned surplus from time to time through
December 31, 2001.
D. (1) Rule 46 under the Act prohibits subsidiaries of
registered holding companies from declaring or paying dividends
out of capital or unearned surplus. At September 30, 1996, the
consolidated stockholders equity of GPU International and GPU
Electric was as follows:
___________________
1 GPU has filed a Post-Effective Amendment in SEC File No. 70-
8593 seeking authorization to increase the 50% limitation to 100%
of "consolidated retained earnings" as so defined.<PAGE>
GPU GPU
International Electric
Capital Stock $100,000 $100
Paid in Capital $127,903,914 $48,000,000
CTA(2) $(6,862) $2,853,615
Retained
Earnings $4,634,323 $1,768,830
(2) Accordingly, as of September 30, 1996, Rule 46
would have permitted GPU International and GPU Electric to
declare and pay dividends of approximately $4.6 million and $1.8
million respectively(3). The Delaware General Corporation Law
("DGCL"), however, under which both GPU International and GPU
Electric have been formed, permits corporations to declare
dividends out of "surplus", which is defined as net assets less
capital stock. At September 30, 1996, GPU International and GPU
Electric had surplus of approximately $132 million and $53
million respectively. Accordingly, the DGCL would permit such
companies to declare and pay dividends significantly in excess of
the amount now permitted by Rule 46.
(3) All dividends would be declared and paid only in
compliance with applicable law of the subsidiary's jurisdiction
of organization and loan covenants.
(4) The GPU Companies submit that since the
subsidiaries for which the authorization to declare and pay
dividends is requested are engaged in activities primarily
relating to the development, ownership and/or operation of
Projects, the payment of dividends by such subsidiaries from
capital or unearned surplus will not adversely affect the
financial integrity or working capital of domestic public utility
subsidiaries within the contemplation of Section 12(c).(4)
E. The GPU Companies submit that all of the criteria of
Rule 54 under the Act with respect to the proposed transactions
are satisfied:
(i) The average consolidated retained earnings for GPU and
its subsidiaries, as reported for the four most recent quarterly
periods in GPU's Annual Report on Form 10-K for the year ended
December 31, 1995 and Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996, June 30, 1996, and September 30,
1996, as filed under the Securities Exchange Act of 1934, was
approximately $2.07 billion. As of September 30, 1996, GPU had
invested, or committed to invest, directly or indirectly, an
aggregate of approximately $244 million in EWGs and $679 million
in
____________________
2 Cumulative Foreign Currency Translation Adjustment.
3 Without giving effect to Cumulative Foreign Currency
Translation Adjustment.
4 The Commission has previously granted authorization
substantially the same as that requested herein. See The
Southern Company, HCAR No. 35-26543 (July 17, 1996).<PAGE>
FUCOs. GPU's aggregate investment in EWGs and FUCOs, including
amounts invested pursuant to all outstanding or pending
authorizations to make investments in EWGs or FUCOs, will not at
any time exceed the "safe harbor" limitation imposed by Rule 53
without prior Commission authorization.(5)
(ii) GPU maintains books and records to identify investments
in, and earnings from, each EWG and FUCO in which it directly or
indirectly holds an interest.
(A) For each United States EWG in which GPU directly
or indirectly holds an interest:
(1) the books and records for such EWG will be kept in
conformity with United States generally accepted accounting
principles ("GAAP");
(2) the financial statements will be prepared in
accordance with the GAAP; and
(3) GPU directly or through its subsidiaries
undertakes to provide the Commission access to such books and
records and financial statements as the Commission may request.
(B) For each FUCO or foreign EWG which is a majority owned
subsidiary of GPU:
(1) the books and records for such subsidiary will be
kept in accordance with GAAP;
(2) the financial statements for such subsidiary will
be prepared in accordance with GAAP; and
(3) GPU directly or through its subsidiaries
undertakes to provide the Commission access to such books and
records and financial statements, or copies thereof in English,
as the Commission may request.
(C) For each FUCO or foreign EWG in which GPU owns 50% or
less of the voting securities, GPU directly or through its
subsidiaries will proceed in good faith, to the extent reasonable
under the circumstances, to cause
(1) such entity to maintain books and records in
accordance with GAAP;
(2) the financial statements of such entity to be
prepared in accordance with GAAP; and
(3) access by the Commission to such books and records
and financial statements (or copies thereof) in
________________________
5 As noted above, GPU has filed with the Commission a Post-
Effective Amendment to its Application on Form U-1 in SEC File
No. 70-8593 requesting authorization to increase this limitation
to 100% of GPU's "consolidated returned earnings."<PAGE>
English as the Commission may request and, in any
event, GPU will provide the Commission on request
copies of such materials as are made available to
GPU and its subsidiaries. If and to the extent
that such entity's books, records or financial
statements are not maintained in accordance with
GAAP, GPU will, upon request of the Commission,
describe and quantify each material variation
therefrom as and to the extent required by
subparagraphs (a) (2) (iii) (A) and (a) (2) (iii)
(B) of Rule 53.
(iii) No more than 2% of GPU's domestic public
utility subsidiary employees will render any services,
directly or indirectly, to any EWG and FUCO in which GPU
directly or indirectly holds an interest.
(iv) Copies of this Application on Form U-1 are
being provided to the New Jersey Board of Public Utilities
and the Pennsylvania Public Utility Commission, the only
federal, state or local regulatory agencies having
jurisdiction over the retail rates of GPU's electric utility
subsidiaries.(6) In addition, GPU will submit to each such
commission copies of any Rule 24 certificates required
hereunder, as well as a copy of Item 9 of GPU's Form U5S and
Exhibits H and I thereof (commencing with the Form U5S to be
filed for the calendar year in which the authorization
herein requested is granted).
(v) None of the provisions of paragraph (b) of
Rule 53 render paragraph (a) of that Rule unavailable for
the proposed transactions.
(A) Neither GPU nor any subsidiary of
GPU is the subject of any pending bankruptcy
or similar proceeding.
(B) GPU's average consolidated retained
earnings for the four most recent quarterly
periods (approximately $2.07 billion) represented
an increase of approximately $70 million in the
average consolidated retained earnings for the
previous four quarterly periods (approximately
$2.0 billion).
(C) GPU did not incur operating losses
from direct or indirect investments in EWGs and
FUCOs in 1995 in excess of 5% of GPU's December
31, 1995 consolidated retained earnings.
_____________________
6 Pennsylvania Electric Company ("Penelec") is also subject
to retail rate regulation by the New York Public Service
Commission with respect to retail service to approximately 11,300
customers in Waverly, New York served by Waverly Electric Power &
Light Company, a Penelec subsidiary. Waverly Electric's revenues
are immaterial, accounting for less than 1% of Penelec s total
operating revenues.<PAGE>
(vi) In accordance with Rule 54, the requirements
of Rule 53(a), (b) and (c) are fulfilled.
Item 2. Fees , Commissions and Expenses.
The estimated fees, commissions and expenses to be incurred
by the GPU Companies in connection with the proposed transactions
will be filed by amendment.
Item 3. Applicable Statutory Provisions.
The GPU Companies believe that Section 12 of the Act and
Rules 46 and 54 are applicable to the transactions proposed
herein.
Item 4. Regulatory Approval.
No Federal or State Commission, other than your Commission
has jurisdiction with respect to the proposed transactions.
Item 5. Procedure.
It is requested that the Commission issue an order with
respect to the transactions proposed herein at the earliest
practicable date but, in any event, not later than January 15,
1997. It is further requested that (i) there not be a
recommended decision by an Administrative Law Judge or other
responsible officer of the Commission, (ii) the Office of Public
Utility Regulation be permitted to assist in the preparation of
the Commission's decision, and (iii) there be no waiting period
between the issuance of the Commission's order and the date on
which it is to become effective.
Item 6. Exhibits and Financial Statements.
(a) Exhibits.
F-1(b) - Opinion of Berlack, Israels &
Liberman LLP -- to be filed by
amendment.
G - Financial Data Schedule -- to be
filed by amendment.
H - Proposed form of public notice.
(b) Financial Statements.
1-A - GPU International (Corporate)
Balance Sheets, actual and pro
forma, as at September 30, 1996 and
Statements of Income and Retained
Earnings, actual and pro forma, for
the twelve months ended September
30, 1996; pro forma journal entries
-- to be filed by amendment.<PAGE>
1-B - GPU Electric (Corporate) Balance
Sheets, actual and pro forma, as at
September 30, 1996 and Statements
of Income and Retained Earnings,
actual and pro forma, for the
twelve months ended September 30,
1996; pro forma journal entries --
to be filed by amendment.
2 - GPU Consolidated Financial
Statements have been omitted as the
proposed transactions will not have
a material effect thereto.
3 - Not Applicable.
4 - Statement of Material Changes since
the date of the balance sheets
which are not reflected in the
notes to the financial statements -
None.
Item 7. Information as to Environmental Effects.
(a) The proposed transaction will be carried out for the
purpose of financing the GPU Companies' business activities. As
such, the issuance of an order by your Commission with respect
thereto is not a major Federal action significantly affecting the
quality of the human environment.
(b) No Federal agency has prepared or is preparing an
environmental impact statement with respect to the various
proposed transactions which are the subject hereof. Reference is
made to Item 4 hereof regarding regulatory approvals with respect
to the proposed transactions.<PAGE>
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.
GPU INTERNATIONAL, INC.
GPU ENERGY, INC.
By:
Bruce L. Levy
President
Dated: December 2, 1996<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Item 6. Exhibit
(a) Exhibits.
H - Proposed form of public notice.<PAGE>
EXHIBIT H
SECURITIES AND EXCHANGE COMMISSION
(RELEASE NO. 35-__________; 70-__________)
GPU INTERNATIONAL, INC. AND GPU ELECTRIC, INC.
GPU International, Inc., One Upper Pond Road, Parsippany,
New Jersey 07054 ("GPU International") and GPU Electric, Inc.,
One Upper Pond Road, Parsippany, New Jersey 07054 ("GPU
Electric"), both non-utility subsidiaries of GPU, Inc. ("GPU"), a
registered holding company, have filed a declaration with the
Commission pursuant to Section 12 of the Public Utility Holding
Company Act of 1935 (the "Act") and Rules 46 and 54 thereunder.
By Orders dated January 19, 1996 (HCAR No. 35-26457) and
July 6, 1995 (HCAR No. 35-26326) in SEC File No. 70-8593, the
Commission, among other things, authorized GPU to acquire the
securities of subsidiary companies (each, a "Subsidiary Company")
which would, in turn, acquire the securities or other interests
of one or more foreign utility companies ("FUCOs") and/or exempt
wholesale generators ("EWGs"; together with FUCOs, "Exempt
Entities"). The Subsidiary Companies would not themselves be
Exempt Entities. The Orders also authorized GPU to make
investments in one or more Subsidiary Companies from time to time
through December 31, 1997 in an aggregate amount of up to 50% of
GPU's consolidated retained earnings at the time the investment
is made.(1) GPU Electric (formerly known as EI Energy, Inc.) is
a
_______________________
1 GPU has filed a Post-Effective Amendment in SEC File No. 70-
8593 seeking authorization to increase the 50% limitation to 100%
of "consolidated retained earnings" as so defined.<PAGE>
Subsidiary Company and wholly-owned subsidiary of GPU organized
pursuant to these orders.
In addition, by Orders dated November 16, 1995 (HCAR No. 35-
26409), June 14, 1995 (HCAR No. 35-26307), September 12, 1994
(HCAR No. 35-26205), December 18, 1994 (HCAR No. 35-25715) and
June 26, 1990 (HCAR No. 35-26409) in SEC File No. 70-7727, the
Commission, among other things, authorized GPU International
(formerly known as Energy Initiatives, Inc.) to (i) engage in
preliminary project development activities in connection with its
investments in qualifying facilities as defined in the Public
Utility Regulatory Policies Act of 1978, as amended ("QFs"), and
Exempt Entities (collectively, "Projects"), and (ii) acquire the
securities of Exempt Entities. GPU International and GPU
Electric are referred to as the "GPU Companies".
The GPU Companies now propose that Subsidiary Companies
(including without limitation GPU Electric), and GPU
International and subsidiaries of GPU International which are not
Exempt Entities, be authorized to declare and pay dividends out
of capital and unearned surplus from time to time through
December 31, 2001.
All dividends would be declared and paid only in compliance
with applicable law of the subsidiary's jurisdiction of
organization and loan covenants.
The GPU Companies submit that since the subsidiaries for
2<PAGE>
which the authorization to declare and pay dividends is requested
are engaged in activities primarily relating to the development,
ownership and/or operation of Projects, the payment of dividends
by such subsidiaries from capital or unearned surplus will not
adversely affect the financial integrity or working capital of
domestic public utility subsidiaries within the contemplation of
Section 12(c).
The Declaration and any amendments thereto are available for
public inspection through the Commission's Office of Public
Reference. Interested persons wishing to comment or request a
hearing should submit their views in writing by ________________,
199_ to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the applicant at the
address specified above. Proof of service (by affidavit, or in
case of an attorney at law, by certificate) should be filed with
the request. Any request for a hearing shall identify
specifically the issues of fact or law that are disputed. A
person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in
this matter. After said date, the Commission may permit the
Declaration, as it may be amended to become effective.
3<PAGE>
