SEC File No. 70-____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L")
300 Madison Avenue
Morristown, New Jersey 19640
METROPOLITAN EDISON COMPANY ("Met-Ed")
PENNSYLVANIA ELECTRIC COMPANY ("Penelec")
2800 Pottsville Pike
Reading, Pennsylvania 19640
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 19601
(Names and addresses of agents for service)
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS
A. Jersey Central Power & Light Company ("JCP&L"), Metropolitan
Edison Company ("Met-Ed") and Pennsylvania Electric Company
("Penelec") are operating electric public utility companies
and wholly-owned subsidiaries of General Public Utilities
Corporation ("GPU"), a registered holding company under the
Act. GPU Service Corporation ("GPUSC")is a service company
under the Act and is also a wholly-owned subsidiary of GPU.
Collectively, GPU, JCP&L, Met-Ed, Penelec and GPUSC are
hereinafter referred to as the "GPU Companies" or
"Applicants."
B. The GPU Companies recognize that they have an accumulation
of management, technical, training, computer, operations and
maintenance skills, expertise, experience and resources
which have and will continue to evolve from its normal
operations as an integrated public utility system and which
must be utilized for continuous business development and
growth.
C. The electric utility industry is experiencing dramatic
changes resulting from various forms of deregulation and
industry restructuring that have unleashed competitive<PAGE>
forces in the energy and energy service marketplace. This
changing industry environment has created a demand for
utility companies to provide new and additional value-added
products and services which may not be considered to be or
constitute traditional utility service. To be competitive
in this environment, public utility companies must be
positioned to more fully utilize existing expertise and
resources in order to more effectively produce these new
products and services and to produce benefits for investors
and consumers.
D. The Applicants propose to provide (i) meter reading, billing
and collection services, and customer call-center services
("Services") for non-affiliated water and gas utility
entities including the utility agencies of cities,
municipalities, counties and governmental entities ("Non-
Affiliated Utilities"), (ii) billing and collection and call
center services ("Billing and Marketing Services") to other
businesses such as commercial service providers and
retailers ("Non-Utility Businesses") and (iii) consolidated
electric, water and gas bills, consolidated remittance
processing of electric, water and gas utility accounts and
consolidated account services ("Consolidated Services") for
both Non-Affiliated Utilities and Non-Utility Businesses.
E. SERVICES
The Services would be nearly identical to the meter reading,
billing and collection services and customer call center
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services that the GPU Companies provide with respect to
their own utility customers and could be provided without a
material increase in staff or equipment by the GPU
Companies.
(i) By way of example, Penelec has been approached
by and is currently engaged in discussions with a
municipality which has requested that Penelec
provide water meter reading services for it. As
contemplated, Penelec meter readers would read the
municipality's water meters at the same time that
they are reading Penelec customer electric meters.
This proposal would involve approximately 6,000
meters.
(ii) The GPU Companies also have been approached
from time to time by Non-Affiliated Utilities with
expressions of interests about the GPU Companies'
interest in providing and their ability to provide
the Services. Thus, the GPU Companies believe
that there are opportunities to increase and/or
improve the efficient utilization of the resources
that they have devoted to meter reading, billing
and collections.
(iii) While the GPU Companies anticipate that
many opportunities to provide such Services to
Non-Affiliated Utilities may arise in or near the
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service territories of JCP&L, Met-Ed and Penelec,
the GPU Companies believe that the opportunities
will also arise outside of those territories. The
GPU Companies desire to position themselves, and
therefore request authorization, to respond to
such opportunities to provide Services wherever
they arise.
(iv) The GPU Companies believe that in a
highly competitive and changing utility industry
environment that they must have the flexibility to
respond quickly to appropriate opportunities to
provide Services. The time necessary to secure
authority to engage in these types of activities
when individual opportunities arise places the GPU
Companies at a competitive disadvantage relative
to exempt and stand alone utility systems that can
provide similar services without prior Commission
authorization. Moreover, the Applicants also
anticipate that many Non-Affiliated Utilities will
find it more efficient, economical and
environmentally beneficial to out-source Services
to providers like the GPU Companies which have the
extensive networked manpower, automation and
information systems necessary to provide the
Services in a low cost, highly reliable and
efficient manner. The provision of the Services
allows the Non-Affiliated Utilities to take
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advantage of these resources especially where one
of the GPU Operating Companies is already reading
meters at many, if not all, of the same customer
locations as those of the Non-Affiliated
Utilities. The Non-Affiliated Utilities could
thus avoid operational and capital costs
associated with reading meters, purchasing,
leasing and operation of vehicles used in
connection with meter reading, hand-held meter
reading equipment and other automated equipment as
well as information systems for billing and
collections on customer accounts.
F. SERVICES TO NON-UTILITY BUSINESSES
While the GPU Companies expect that Non-Affiliated Utilities
may be the primary customer for Services (particularly in
connection with the meter reading services), they also
believe that there are opportunities to provide billing and
collection, and customer call-center services to Non-Utility
Businesses and, therefore, they wish to be positioned to do
so. Accordingly, the Applicants also request authority to
provide Billing and Marketing Services to both Non-
Affiliated Utilities and Non-Utility Businesses.
G. CONSOLIDATED SERVICES
The Applicants anticipate opportunities to provide
Consolidated Services for both Non-Affiliated Utilities and
Non-Utility Businesses. Therefore, the Applicants also
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request authority to engage in the provision of these
Consolidated Services when and if the opportunity arises and
where the GPU Companies determine that it is economically
beneficial to do so.
H. As described above, the GPU Companies propose to provide the
Services, Billing & Marketing Services, and the Consolidated
Services (collectively, the "Proposed New Services") whether
or not the Non-Utility Businesses or the customers of the
Non-Affiliated Utilities are also customers of JCP&L, Met-Ed
or Penelec. The GPU Companies believe that providing the
Proposed New Services will not interfere with the provision
of services for utility customers of JCP&L, Met-Ed or
Penelec. Moreover, provision of the Proposed New Services
will enable the GPU Companies to use the accumulated
expertise of their personnel in these areas resulting in the
optimal utilization of such capabilities and resources.
I. Agreements for the provision of the Proposed New Services
will be negotiated and entered into on an arm's length
basis. The GPU Companies propose to offer the Proposed New
Services described herein from time to time through
December 31, 2001; however, it is proposed that the term of
any contracts to provide such services which are entered
into before that date may extend beyond that date in
accordance with the terms of such contracts.
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J. The GPU Companies anticipate no material increase in staff
nor any material capital investment to provide the Services
described herein. The GPU Companies anticipate that during
the period for which authority is requested hereunder,
annual expenditures in connection with transactions
undertaken in connection herewith will not exceed $5 million
and revenues will not exceed $10 million.
K. The Applicants will account for expenses, including an
allocation of capital and other costs, and the revenue
derived therefrom in accordance with the FERC Uniform System
of accounts (FERC Account No. 421 - "Miscellaneous Non-
Operating Income"). GPUSC, when it is not providing a
Proposed New Service directly to a Non-Affiliated Utility or
Non-Utility Business, may provide support to the GPU
Operating Companies in connection with any such services
provided by them and will document its expenses in separate
work orders which, with the usual and customary overheads,
will be charged to the appropriate accounts of JCP&L, Met-Ed
and Penelec in proportion to the interest of each such
company, if any, in the particular transaction.
L. The GPU Companies will, on or before May 1 of each year,
report to the Commission any transactions entered into
pursuant to the authorization requested hereunder as well as
the revenues derived therefrom and the expenses associated
therewith, in an appendix to the U-5-S (with respect to
JCP&L, Met-Ed and Penelec) or the U-13-60 (in the case of
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GPUSC) filed annually pursuant to the Act and in lieu of any
reports otherwise required by Rule 24 under the Act.
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
The fees, commissions and expenses to be paid or incurred,
directly or indirectly, in connection with the proposed
transactions will be filed by amendment.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
The GPU Companies consider that the proposed transactions may be
subject to Sections 9(a) and 10 of the Act.
ITEM 4. REGULATORY APPROVAL.
Except as described in the following paragraph, the proposed
transactions are not believed to be subject to the jurisdiction
of any state commission.
The Applicants believe that the component of Consolidated
Services which contemplates a GPU Company's consolidation of its
utility bills with those of other utility companies into a single
bill may be subject to State regulatory jurisdiction.
Accordingly, JCP&L will seek authority and/or disclaimer of
jurisdiction from the New Jersey Board of Public Utilities, and
Met-Ed and Penelec will seek authority and/or disclaimer of
jurisdiction from the Pennsylvania Public Utility Commission
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before utilizing a consolidated billing arrangement with their
respective utility customers. Applicants thus hereby request
that the Commission reserve jurisdiction pending the completion
of the record over the performance of consolidated billing
services.
The proposed transactions are not subject to the jurisdiction of
any federal commission other than the Commission.
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ITEM 5. PROCEDURE.
It is requested that the Commission issue an order with
respect to the transaction proposed herein at the earliest
practicable date, but, in any event, not later than April 1,
1996. 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 Regulations 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
A - Not applicable.
B - Not applicable.
C - None.
D - None.
E - Not applicable.
F-1 - Opinion of M. J. Connolly, Esq. -- to be
filed by amendment.
F-2 - Opinion of Ryan, Russell, Ogden & Seltzer --
to be filed by amendment.
F-3 - Opinion of Ballard Spahr Andrews & Ingersoll
-- to be filed by amendment.
F-4 - Opinion of Richard S. Cohen, Esq. -- to be
filed by amendment.
G - Financial Data Schedule -- to be filed by
amendment.
H - Form of proposed public notice.
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(b) Financial Statements
1 - None
Note: GPU Corporate and consolidated actual and pro
forma financial statements are omitted since
they are not deemed to be material or
relevant or necessary for a proper
disposition of the proposed transactions.
2 - None
4 - None.
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
A. The proposed transactions will result in the provision
of the Proposed New Services and the payment of consideration
therefor. The issuance of an order by your Commission with
respect thereto will not, therefore, be 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 proposed
transactions.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY CAUSED
THIS APPLICATION TO BE SIGNED ON THEIR BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED.
GPU SERVICE CORPORATION
JERSEY CENTER POWER & LIGHT COMPANY
METROPOLITAN EDISON COMPANY
PENNSYLVANIA ELECTRIC COMPANY
By:________________________________
T. G. Howson, Treasurer
Date: February 22, 1996<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
H - Form of proposed public notice.<PAGE>
EXHIBIT H
Securities And Exchange Commission
(Release No. : 70- )
GPU SERVICE CORPORATION, JERSEY CENTRAL POWER & LIGHT COMPANY,
METROPOLITAN EDISON COMPANY AND PENNSYLVANIA ELECTRIC COMPANY.
Notice of Proposed Offering by GPU Service Corporation, Jersey
Central Power & Light Company, Metropolitan Edison Company and
Pennsylvania Electric Company, wholly-owned subsidiaries of
General Public Utilities Corporation, to provide Meter Reading
and related Services to non-affiliates.
Jersey Central Power & Light Company ("JCP&L"), Metropolitan
Edison Company ("Met-Ed") and Pennsylvania Electric Company
("Penelec") are operating electric public utility companies and
wholly-owned subsidiaries of General Public Utilities Corporation
("GPU"), a registered holding company under the Act. GPU Service
Corporation ("GPUSC")is a service company under the Act and is
also a wholly-owned subsidiary of GPU. Collectively, GPU, JCP&L,
Met-Ed, Penelec and GPUSC are hereinafter referred to as the
"GPU Companies" or "Applicants."
The Applicants propose to provide (i)meter reading, billing and
collection services, and customer call-center services
("Services") for non-affiliated water and gas utility entities
including the utility agencies of cities, municipalities,
counties and governmental entities ("Non-Affiliated Utilities"),
(ii) billing and collection and call center services ("Billing
and Marketing Services") to other businesses such as commercial
service providers and retailers ("Non-Utility Businesses") and
(iii) consolidated electric, water and gas bills, consolidated
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remittance processing of electric, water and gas utility accounts
and consolidated account services ("Consolidated Services") for
both Non-Affiliated Utilities and Non-Utility Businesses.
The GPU Companies propose to provide the Services, Billing &
Marketing Services, and the Consolidated Services (collectively,
the "Proposed New Services") whether or not the Non-Utility
Businesses or the customers of the Non-Affiliated Utilities are
also customers of JCP&L, Met-Ed or Penelec. The GPU Companies
believe that providing the Proposed New Services will not
interfere with the provision of the same such services for
utility customers of JCP&L, Met-Ed or Penelec. Moreover,
provision of the Proposed New Services will enable the GPU
Companies to use the accumulated expertise of their personnel in
these areas resulting in the optimal utilization of such
capabilities and resources.
Agreements for the provision of the Proposed New Services will
be negotiated and entered into on an arm's length basis. The GPU
Companies propose to offer the Proposed New Services described
herein from time to time through December 31, 2001; however, it
is proposed that the term of any contracts to provide such
services which are entered into before that date may extend
beyond that date in accordance with the terms of such contracts.
The GPU Companies anticipate that during the period for which
authority is requested hereunder, annual expenditures in
connection with transactions undertaken in connection herewith
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will not exceed $10 million and revenues will not exceed $20
million.
The Applicants will account for expenses, including an allocation
of capital and other costs, and the revenue derived therefrom in
accordance with the FERC Uniform System of accounts (FERC Account
No. 421 - "Miscellaneous Non-Operating Income"). GPUSC, when it
is not providing a Proposed New Service directly to a Non-
Affiliated Utility or Non-Utility Business, may provide support
to the GPU Operating Companies in connection with any such
services provided by them and will document its expenses in
separate work orders which, with the usual and customary
overheads, will be charged to the appropriate accounts of JCP&L,
Met-Ed and Penelec in proportion to the interest of each such
company, if any, in the particular transaction.
The GPU Companies will, on or before May 1 of each year, report
to the Commission any transactions entered into pursuant to the
authorization requested hereunder as well as the revenues derived
therefrom and the expenses associated therewith, in an appendix
to the U-5-S (with respect to JCP&L, Met-Ed and Penelec) or the
U-13-60 (in the case of GPUSC) filed annually pursuant to the Act
and in lieu of any reports otherwise required by Rule 24 under
the Act.
The application is 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
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in writing to the Secretary, Securities and Exchange Commission,
Washington, D.C. 20549, and serve a copy on the applicants at the
address specified above. Proof of service (by affidavit or, in
the 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 application as filed or as it
may be amended, may be granted and permitted to become effective.
For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
Secretary
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