SEC File No. 70-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 07960
METROPOLITAN EDISON COMPANY ("MET-ED")
PENNSYLVANIA ELECTRIC COMPANY ("PENELEC")
P.O. Box 16001, Reading, Pennsylvania 19640
ENERGY INITIATIVES, INC. ("EI")
One Upper Pond Road
Parsippany, New Jersey 07054
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
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. C. Matthews, Secretary
and Treasurer Metropolitan Edison Company
M. A. Nalewako, Secretary Pennsylvania Electric Company
M. J. Connolly, Esq., Director P.O. Box 16001
of Legal Services Reading, Pennsylvania 19640
GPU Service Corporation
100 Interpace Parkway B. L. Levy, President
Parsippany, New Jersey 07054 K. A. Tomblin, Secretary
Energy Initiatives, Inc.
R. S. Cohen, Secretary One Upper Pond Road
Jersey Central Power & Light Parsippany, New Jersey 07054
Company
300 Madison Avenue
Morristown, New Jersey 07960
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>
Item 1. Description of Proposed Transaction.
A. GPU, JCP&L, Met-Ed, Penelec and EI (each, an "EIM
Applicant") believe that there are business opportunities that
they may wish to pursue which involve energy information and
management ("EIM") systems. EIM systems employ interactive
technology which, among other things, enables customers to
automatically and remotely control HVAC and other appliance usage
in response to variable energy pricing, thus providing customers
with more control over their electric usage and costs. EIM
systems also allow utilities to implement various demand-side
management and load-control programs, and to remotely read the
customers' meters. EIM systems also store customer load profile
data and allow utilities to remotely access such data for
forecasting and marketing purposes. EIM systems may also provide
opportunities for real-time inter-active communications with
customers with respect to a wide variety of information, products
and services that are not exclusively energy-related. Such
communications may be effectuated through, but not limited to,
fiber optics, radio, paging or personal communications systems.
B. One or more of the EIM Applicants have been
engaged in discussions with non-affiliated EIM system companies
(each, an "EIMCo") which design, manufacture, fabricate,
integrate, market and distribute EIM systems, components thereof,
or the enabling technology for such EIM systems, which are in
various stages of development, testing and deployment. These
discussions, to date, have addressed two different approaches to
possible involvement with EIM systems. First, JCP&L, Met-Ed and
Penelec have discussed limited deployment of EIM systems to their
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respective electric utility customers within their respective
service territories as part of a pilot program, looking towards
possible broad-based deployment among their respective electric
utility customers. In addition, one or more of the EIM
Applicants may acquire an interest in the business of designing,
manufacturing, fabricating, integrating, marketing and
distributing EIM systems to non-customers both within and beyond
the boundaries of the service territories of JCP&L, Met-Ed and
Penelec (collectively, the "EIM Business"), either directly,
through the acquisition of securities of an EIMCo or otherwise,
or, alternatively, through new wholly-owned or partly-owned
subsidiary compan(ies) thereof, to be formed (each, an "EIM
Subsidiary"), or, subject to negotiation of acceptable commercial
terms with an EIMCo, through a joint venture involving any of the
foregoing and an EIMCo or an EIMCo affiliate (each, an "EIM JV").
Notwithstanding the foregoing, GPU will not acquire a direct
interest in the EIM Business other than through the acquisition
of securities of an EIMCo.
C. The EIM Applicants therefore propose to (1) engage
in the EIM Business as aforesaid, and (2) acquire the securities
of an EIMCo or one or more EIM Subsidiaries or, directly or
indirectly, one or more EIM JVs.
D. It is also requested that the Commission authorize
the provision of goods and services relating to the EIM Business
(1) to JCP&L, Met-Ed and Penelec by EI or any EIM Subsidiaries or
EIM JVs and (2) to any EIM Subsidiaries and EIM JVs by GPUSC, all
of which goods and services will be provided at cost in
compliance with Rules 90 and 91 under the Act. For this purpose,
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each EIM Applicant, EIM Subsidiary and EIM JV will maintain
separate financial records relating to the EIM Business.
E. It is presently expected that the aggregate amount
of the EIM Applicants' investment in the EIM Business will not
exceed $50 million through December 31, 1998.
F. The EIM Applicants or any EIM Subsidiaries or EIM
JVs may provide financing to utility customers within the
respective service territories of JCP&L, Met-Ed or Penelec
through direct loan and operating or finance lease arrangements
in connection with, for example, a customer's purchase of EIM
systems either from an EIM Applicant or affiliate thereof or a
third party. The ability to make such loans would include
participation in or facilitating customer access to government
energy-related loan programs. Interest on loans and imputed
interest on lease payments will range from zero percent to the
then prevailing market rate. The obligations may either be
secured or unsecured, will generally be evidenced by promissory
notes and will have maturities not exceeding five years. The
aggregate amount of such outstanding obligations at any one time
will not exceed $20 million.
G. The authorization requested herein with respect to
the acquisition of securities of an EIMCo or any EIM Subsidiaries
or EIM JVs shall expire upon the first to occur of (i) December
31, 1998 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. The authorization
requested herein with respect to financing transactions pursuant
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to paragraph F of this Item 1 shall, upon the enactment of Rule
58, extend to any energy-related company (as defined in Rule 58)
which is a subsidiary company of GPU and engaged in the EIM
Business.
Item 2. Fees, Commissions and Expenses.
The estimated fees, commissions and expenses to be
incurred in connection herewith will be filed by amendment.
Item 3. Applicable Statutory Provisions.
Sections 9(a), 10 and 12 of the Act and Rules 90 and 91
thereunder are applicable to the transactions proposed herein.
It is requested that Certificates Pursuant to Rule 24
under the Act be required to be filed hereunder quarterly within
60 days of the end of each calendar quarter. Such certificates
will (a) identify each investment made in connection with the EIM
Business or by an EIM Applicant in any EIM Subsidiary or EIM JV
in the previous quarter; (b) describe generally the activities
relating to the EIM Business of all EIM Applicants and their EIM
Subsidiaries or EIM JVs in the previous quarter; (c) identify on
an aggregate basis the amount of financing provided pursuant to
paragraph F of Item 1 hereof in connection with the EIM Business
and the terms thereof (i.e., maturities, security and interest
rates); and (d) report the revenues and expenses in connection
with the EIM Business during the previous quarter. To the extent
such certificates contain confidential or proprietary business or
commercial information, confidential treatment under Rule 104 may
be sought.
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Item 4. Regulatory Approval.
No state commission has jurisdiction with respect to
the subject transactions, except as set forth below, and,
assuming that your Commission authorizes and approves all aspects
of the subject transactions (including the accounting therefor),
no other Federal commission has jurisdiction with respect
thereto. In the case of JCP&L, Met-Ed and Penelec, participation
in the EIM Business would not constitute utility services under
the respective public utility codes of Pennsylvania and New
Jersey and, as such, would not be subject to the jurisdiction of
the New Jersey Board of Public Utilities ("NJBPU") and
Pennsylvania Public Utility Commission ("PaPUC"). Nonetheless,
the NJBPU and PaPUC will be notified of the proposed
participation by JCP&L and by Met-Ed and Penelec, respectively.
In the case of Met-Ed and Penelec, however, to the extent the
proposed transactions would involve the acquisition by either of
5% or more of the voting interest in any entity, such aspect of
the transaction would be subject to the jurisdiction of the PaPUC
under Section 1102 of the Pennsylvania Public Utility Code. In
addition, to the extent that either Met-Ed or Penelec enters into
a service agreement with an affiliated entity (other than a
wholly owned subsidiary), such agreement would be subject to the
jurisdiction of the PaPUC under Section 2102 of the Pennsylvania
Public Utility Code.
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 May 15, 1996.
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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:
A-1 Form of Certificate of Incorporation of
EIM Subsidiary - to be filed by
amendment.
A-2 Form of By-Laws of EIM Subsidiary - to
be filed by amendment.
A-3 Form of EIM Subsidiary stock certificate
-- to be filed by amendment.
B Not applicable.
C Not applicable.
D-1 Copy of notices to the NJBPU and PaPUC -
- to be filed by amendment.
D-2 Copy of PaPUC Order, if any, relating to
acquisition of 5% or more of the voting
interest in any entity or a service
agreement with an affiliated entity --
to be filed by amendment.
E Not applicable.
F-1 Opinion of Berlack, Israels & Liberman
LLP -- to be filed by amendment.
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F-2 Opinion of Richard S. Cohen, Esq. -- to
be filed by amendment.
F-3 Opinion of Ryan, Russell, Ogden &
Seltzer -- to be filed by amendment.
F-4 Opinion of Ballard Spahr Andrews &
Ingersoll -- to be filed by amendment.
G Proposed form of public notice.
(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.
3 None.
4 None.
Item 7. Information as to Environmental Effects.
The proposed transactions are for the purpose of
carrying out the EIM Applicants' business activities.
Consequently, the issuance of an order by your Commission with
respect to the subject transactions is not a major Federal action
significantly affecting the quality of the human environment.
No Federal agency has prepared or is preparing an
environmental impact statement with respect to the subject
transactions. Reference is made to Item 4 hereof regarding
regulatory approvals 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 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
ENERGY INITIATIVES, INC.
By:
B. L. Levy, President
Date: April 1, 1996<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
G Proposed form of public notice.<PAGE>
EXHIBIT G
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- ; 70- )
GENERAL PUBLIC UTILITIES CORPORATION, et al.
GENERAL PUBLIC UTILITIES CORPORATION, 100 Interpace
Parkway, Parsippany, New Jersey 07054, a Pennsylvania corporation
and registered holding company ("GPU"), and its subsidiaries,
JERSEY CENTRAL POWER & LIGHT COMPANY, 300 Madison Avenue,
Morristown, New Jersey 07962 ("JCP&L"), METROPOLITAN EDISON
COMPANY, P.O. Box 16001, Reading, Pennsylvania 19640 ("Met-Ed"),
and PENNSYLVANIA ELECTRIC COMPANY, P.O. Box 16001, Reading,
Pennsylvania 19640 ("Penelec") and ENERGY INITIATIVES, INC., One
Upper Pond Road, Parsippany, New Jersey 07054 ("EI"; together
with GPU, JCP&L, Met-Ed and Penelec, the "EIM Applicants"), and
GPU SERVICE CORPORATION, 100 Interpace Parkway, Parsippany, New
Jersey 07054 ("GPUSC"), have filed an Application pursuant to
Sections 9(a), 10 and 12 of the Public Utility Holding Company
Act of 1935 (the "Act") and Rules 90 and 91 thereunder.
The EIM Applicants believe that there are business
opportunities that they may wish to pursue which involve energy
information and management ("EIM") systems. EIM systems employ
interactive technology which, among other things, enables
customers to automatically and remotely control HVAC and other
appliance usage in response to variable energy pricing, thus
providing customers with more control over their electric usage
and costs. EIM systems also allow utilities to implement various
-1-<PAGE>
demand-side management and load-control programs, and to remotely
read the customers' meters. EIM systems also store customer load
profile data and allow utilities to remotely access such data for
forecasting and marketing purposes. EIM systems may also provide
opportunities for real-time inter-active communications with
customers with respect to a wide variety of information, products
and services that are not exclusively energy-related.
Communications may be effectuated through, but not limited to,
fiber optics, radio, paging or personal communications systems.
One or more of the EIM Applicants have been engaged in
discussions with non-affiliated EIM system companies (each, an
"EIMCo") which design, manufacture, fabricate, integrate, market
and distribute EIM systems, components thereof, or the enabling
technology for such EIM systems, which are in various stages of
development, testing and deployment. These discussions, to date,
have addressed two different approaches to possible involvement
with EIM systems. First, JCP&L, Met-Ed and Penelec have
discussed limited deployment of EIM systems to their respective
electric utility customers within their respective service
territories as part of a pilot program, looking towards possible
broad-based deployment among their respective electric utility
customers. In addition, one or more of the EIM Applicants may
acquire an interest in the business of designing, manufacturing,
fabricating, integrating, marketing and distributing EIM systems
to non-customers both within and beyond the boundaries of the
service territories of JCP&L, Met-Ed and Penelec (collectively,
the "EIM Business"), either directly, through the acquisition of
securities of an EIMCo or otherwise, or, alternatively, through
-2-<PAGE>
new wholly-owned or partly-owned subsidiary compan(ies) thereof,
to be formed (each, an "EIM Subsidiary"), or, subject to
negotiation of acceptable commercial terms with an EIMCo, through
a joint venture involving any of the foregoing and an EIMCo or an
EIMCo affiliate (each, an "EIM JV"). Notwithstanding the
foregoing, GPU will not acquire a direct interest in the EIM
Business other than through the acquisition of securities of an
EIMCo.
The EIM Applicants therefore propose to (1) engage in
the EIM Business as aforesaid, and (2) acquire the securities of
an EIMCo or one or more EIM Subsidiaries or, directly or
indirectly, one or more EIM JVs.
It is also requested that the Commission authorize the
provision of goods and services relating to the EIM Business (1)
to JCP&L, Met-Ed and Penelec by EI or any EIM Subsidiaries or EIM
JVs and (2) to any EIM Subsidiaries and EIM JVs by GPUSC, all of
which goods and services will be provided at cost in compliance
with Rules 90 and 91 under the Act. For this purpose, each EIM
Applicant, EIM Subsidiary and EIM JV will maintain separate
financial records relating to the EIM Business.
It is presently expected that the aggregate amount of
the EIM Applicants' investment in the EIM Business will not
exceed $50 million through December 31, 1998.
The EIM Applicants or any EIM Subsidiaries or EIM JVs
may provide financing to utility customers within the respective
service territories of JCP&L, Met-Ed or Penelec through direct
loan and operating or finance lease arrangements in connection
with, for example, a customer's purchase of EIM systems either
-3-<PAGE>
from an EIM Applicant or affiliate thereof or a third party. The
ability to make such loans would include participation in or
facilitating customer access to government energy-related loan
programs. Interest on loans and imputed interest on lease
payments will range from zero percent to the then prevailing
market rate. The obligations may either be secured or unsecured,
will generally be evidenced by promissory notes and will have
maturities not exceeding five years. The aggregate amount of
such outstanding obligations at any one time will not exceed $20
million.
The authorization requested with respect to the
acquisition of securities of an EIMCo or any EIM Subsidiaries or
EIM JVs shall expire upon the first to occur of (i) December 31,
1998 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 proposed from
Section 9(a) of the Act. The authorization requested with
respect to financing transactions pursuant to paragraph F of this
Item 1 shall, upon the enactment of Rule 58, extend to any
energy-related company (as defined in Rule 58) which is a
subsidiary company of GPU and engaged in the EIM Business.
The Application 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
_________, 1996 to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the
applicants at the addresses specified above. Proof of service
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(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 Declaration,
as amended or as it may be further amended, may be granted.
For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
Jonathan G. Katz
Secretary
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