U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58 OF
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
For the quarterly period ended December 31, 1997
GPU, Inc. (File No. 074-00023)
(Name of Registered Holding Company)
300 Madison Avenue, Morristown, NJ 07962-1911
(Address of Principal Executive Offices)
<PAGE>
GPU, Inc.
Quarterly Report Pursuant to Rule 58 of
the Public Utility Holding Company Act of 1935
For the quarterly period ended December 31, 1997
Table of Contents
Item
No. Title Page
1 Organization Chart 1
2 Issuances and Renewals of Securities and
Capital Contributions 3
3 Associate Transactions 4
4 Summary of Aggregate Investment 7
5 Other Investments 8
6 Financial Statements and Exhibits:
A - Financial Statements 9
B - Exhibits 10
C - Certificate of GPU, Inc. 11
Signature 12
Note: All dollar amounts shown in this Form U-9C-3 are expressed in
thousands except for the amounts presented in the financial
statements (Exhibit A), which are expressed in whole dollars.
<PAGE>
<TABLE>
ITEM 1 - ORGANIZATION CHART
<CAPTION>
Energy (ERC)
or Gas (GRC) Date of State of Percentage of Voting Nature of
Name of Reporting Company Related Company Organization Organization Securities Held ** Business
- --------------------------------- --------------- ------------ ------------ -------------------- ---------
<S> <C> <C> <C> <C> <C>
GPU, Inc. (a)
GPU Advanced Resources, Inc. ERC 09/13/96 Delaware 100.0% (b)
GPU International, Inc. (a)
Elmwood Energy Corporation ERC 02/13/87 New Jersey 100.0 (c),(d)
Prime Energy Limited Partnership ERC 05/08/86 New Jersey 50.0 (d)
Camchino Energy Corporation ERC 04/26/89 Delaware 100.0 (c),(d)
OLS Power Limited Partnership ERC 08/02/89 Delaware 1.0 (c)
OLS Acquisition Corporation ERC 05/03/89 Delaware 100.0 (c)
OLS Energy - Chino ERC 08/08/84 California 100.0 (d)
OLS Energy - Camarillo ERC 08/08/84 California 100.0 (d)
OLS Energy - Berkeley ERC 09/05/85 California 100.0 *
Geddes Cogeneration Corporation ERC 03/23/89 New York 100.0 (c),(d)
Onondaga Cogeneration
Limited Partnership ERC 06/08/88 New York 50.0 (d)
EI Selkirk, Inc. ERC 10/31/94 Delaware 100.0 (c)
Selkirk Cogeneration Partners
Limited Partnership ERC 06/06/90 Delaware 19.2 (d)
NCP Energy, Inc. ERC 11/21/89 California 100.0 (c),(d)
Syracuse Orange Partners L.P. ERC 04/02/91 Delaware 4.9 (c)
Project Orange Associates L.P. ERC 05/12/88 Delaware 4.4 (d)
New Lake Corporation ERC 01/02/97 Florida - (g) (c)
NCP Lake Power, Inc. ERC 05/23/91 Delaware 100.0 (c),(d)
NCP New York, Inc. ERC 07/09/93 Delaware 100.0 *
NCP Brooklyn Power, Inc. ERC 07/09/93 Delaware 100.0 *
NCP Gem, Inc. ERC 05/23/91 Delaware 100.0 (c)
Lake Investment, L.P. ERC 05/23/91 Delaware 100.0 (c)
Lake Cogen, Ltd. ERC 03/13/91 Florida 49.9 (d)
NCP Pasco, Inc. ERC 05/23/91 Delaware 100.0 (c)
NCP Dade Power, Inc. ERC 05/23/91 Delaware 100.0 (c),(d)
Dade Investment, L.P. ERC 05/23/91 Delaware 100.0 (c)
Pasco Cogen, Ltd. ERC 03/13/91 Florida 49.9 (d)
NCP Houston Power, Inc. ERC 12/02/93 Delaware 100.0 (c),(d)
NCP Perry, Inc. ERC 12/02/93 Delaware 100.0 (c)
Mid-Georgia Cogen, L.P. ERC 12/03/93 Delaware 50.0 (d)
New Mid-Georgia Corp. ERC 08/12/97 Delaware - (h) (c)
EI Services, Inc. ERC 10/07/93 Delaware 100.0 (d)
NCP Ada Power, Inc. ERC 07/31/93 California 100.0 *
Umatilla Groves, Inc. ERC 06/17/92 Delaware 100.0 *
Armstrong Energy Corporation ERC 07/14/88 New Jersey 100.0 *
AEC/REF Fuel, Limited Partnership ERC 12/22/89 Pennsylvania 100.0 *
EI Fuels Corporation ERC 08/09/90 Delaware 100.0 (e)
GPU Solar, L.L.C. ERC 07/09/97 New Jersey 50.0 (f)
1
<PAGE>
ITEM 1 - ORGANIZATION CHART (Continued)
<FN>
* Inactive.
** Sets forth the percentage of voting securities held directly or
indirectly by GPU, Inc. or GPU International, Inc., as applicable.
(a) These GPU system companies hold securities directly or indirectly in the
energy-related companies set below their names. GPU International, Inc.
is a wholly owned subsidiary of GPU, Inc.
(b) This subsidiary was formed to engage in energy services and retail energy
sales.
(c) These energy-related companies hold securities in other energy-related
companies.
(d) These subsidiaries participate in some or all aspects of promoting,
developing, owning, managing and/or operating qualifying facilities, as
defined in the Public Utility Regulatory Policies Act of 1978.
(e) This subsidiary provides fuel management services.
(f) This subsidiary is involved in the development and commercialization of
photovoltaics.
(g) In June 1997, GPU International, Inc. (GPUI) sold to New Lake Corporation
an option, which GPUI held, to acquire a 50% limited partnership interest
in Lake Cogen, Ltd. in consideration of a $10 million promissory note
issued to GPUI. New Lake Corporation subsequently exercised that option.
(h) In October 1997, GPUI sold to New Mid-Georgia Corp. a 50% limited
partnership interest in Mid-Georgia Cogen, L.P. in consideration of a $24
million promissory note issued to GPUI.
Narrative Description of Activities for Reporting Period
GPU Advanced Resources, Inc. - In the fourth quarter of 1997, GPU, Inc. made
additional capital contributions to GPU Advanced Resources (GPU AR) totaling
$2.9 million.
New Mid-Georgia Corp. - In October 1997, GPUI sold to New Mid-Georgia Corp. a
50% limited partnership interest in Mid-Georgia Cogen, L.P. in consideration of
a $24 million promissory note issued to GPUI.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
<CAPTION>
Type of Principal Company to Collateral Consideration
Security Amount of Issue or Cost of whom Security Given with Received
Company Issuing Security Issued Security Renewal Capital was Issued Security for Each Security
- ------------------------ -------- --------- -------- ------- --------------------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
New Mid-Georgia Corp. Note $24,000 Issue N/A GPU International, Inc. N/A 50% interest in
Mid- Georgia
Cogen, L.P.
<CAPTION>
Company Contributing Company Receiving Amount of Capital
Capital Capital Contribution
-------------------- ----------------- -----------------
<S> <C> <C>
GPU, Inc. GPU Advanced Resources, Inc. $2,900
<FN>
* Annualized rate.
Note: The information provided in Item 2 presents the activities of the reporting period only.
</FN>
</TABLE>
3
<PAGE>
ITEM 3 - ASSOCIATE TRANSACTIONS
<TABLE>
Part I - Transactions Performed by Reporting Companies on Behalf of Associate Companies
<CAPTION>
Total
Reporting Company Associate Company Amount
Rendering Services Receiving Services Types of Services Rendered Billed
<S> <C> <C> <C>
EI Services, Inc. Mid-Georgia Cogen, L.P. Construction and operations $ xxx (1)
management
NCP Houston Power, Inc. Mid-Georgia Cogen, L.P. Accounting and administration xxx (1)
NCP Lake Power, Inc. Lake Cogen, Ltd. Accounting, administration and xxx (1)
operations and maintenance (O&M)
management
NCP Dade Power, Inc. Pasco Cogen, Ltd. Administration and O&M management xxx (1)
Geddes Cogeneration Corporation Onondaga Cogeneration Accounting, administration and xxx (1)
Limited Partnership O&M management
Camchino Energy Corporation OLS Energy - Chino Accounting, administration and xxx (1)
O&M management
Camchino Energy Corporation OLS Energy - Camarillo Accounting, administration and xxx (1)
O&M management
Elmwood Energy Corporation Prime Energy Limited Partnership Accounting and administration xxx (1)
<FN>
Notes: The information provided in Item 3 presents the activities of the reporting period
only. The amounts required under the caption "Total Amount Billed" are being filed
pursuant to request for confidential treatment.
(1) The amounts shown represent negotiated contractual rates billed in
accordance with the applicable service contracts filed under Item 6.
</FN>
</TABLE>
4
<PAGE>
ITEM 3 - ASSOCIATE TRANSACTIONS (Continued)
<TABLE>
Part II - Transactions Performed by Associate Companies on Behalf of Reporting Companies
<CAPTION>
Total
Associate Company Reporting Company Amount
Rendering Services Receiving Services Types of Services Rendered Billed
<S> <C> <C> <C>
GPU International, Inc. Prime Energy Limited Partnership O&M management $ xxx (1)
GPU International, Inc. EI Services, Inc. Construction and operations xxx (1)
management for Mid-Georgia
Cogen, L.P.
GPU International, Inc. NCP Houston Power, Inc. Accounting and administration for xxx (1)
Mid-Georgia Cogen, L.P.
GPU International, Inc. NCP Lake Power, Inc. Accounting, administration and O&M xxx (1)
management for Lake Cogen, Ltd.
GPU International, Inc. NCP Dade Power, Inc. Administration and O&M management xxx (1)
for Pasco Cogen, Ltd.
GPU International, Inc. Geddes Cogeneration Corporation Accounting and administration for xxx (1)
Onondaga Cogeneration Limited
Partnership
GPU International, Inc. Camchino Energy Corporation Accounting and administration for xxx (1)
OLS Power Limited Partnership
GPU International, Inc. Camchino Energy Corporation Accounting, administration and O&M xxx (1)
management for OLS Energy - Chino
GPU International, Inc. Camchino Energy Corporation Accounting, administration and O&M xxx (1)
management for OLS Energy -
Camarillo
GPU International, Inc. Elmwood Energy Corporation Accounting and administration for xxx (1)
Prime Energy Limited Partnership
5
<PAGE>
ITEM 3 - ASSOCIATE TRANSACTIONS (Continued)
Part II - Transactions Performed by Associate Companies on Behalf of Reporting Companies (Continued)
<CAPTION>
Total
Associate Company Reporting Company Amount
Rendering Services Receiving Services Types of Services Rendered Billed
<S> <C> <C> <C>
GPU International, Inc. NCP Energy, Inc. Accounting and administration for $ xxx (1)
Syracuse Orange Partners L.P. and
Project Orange Associates L.P.
GPU International, Inc. GPU Solar, L.L.C. Management, marketing and technical xxx (1)
expertise for GPU Solar, L.L.C.
GPU International, Inc. GPU Advanced Resources, Inc. Certain general and administrative xxx (1)
services for GPU Advanced Resources, Inc.
Metropolitan Edison Company GPU Advanced Resources, Inc. Certain general and administrative xxx (2)
services for GPU Advanced Resources, Inc.
GPU Service, Inc. GPU Advanced Resources, Inc. Legal and certain general and xxx (3)
administrative services for
GPU Advanced Resources, Inc.
<FN>
Notes: The information provided in Item 3 presents the activities of the
reporting period only. The amounts required under the caption "Total
Amount Billed" are being filed pursuant to request for confidential
treatment.
(1) The amounts shown include overhead charges applied, at a rate of
208%, to employee salaries billed for services rendered, except in
the case of services performed for NCP Energy, Inc. in respect of
Project Orange Associates L.P. (POA), for which a 120% overhead
charge is applied. In addition, a 10% overhead charge is applied to
certain administrative expenses related to POA. No capital costs were
charged.
(2) The amounts shown include overhead charges applied, at a rate of 58%,
to employee salaries billed for services rendered. No capital costs
were charged.
(3) The amounts shown include overhead charges applied, at a rate of
53.4%, to employee salaries billed for services rendered. No capital
costs were charged.
</FN>
</TABLE>
6
<PAGE>
<TABLE>
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
<CAPTION>
Investments in energy-related companies:
<S> <C> <C> <C>
Total average consolidated capitalization as of December 31, 1997 $7,719,917 Line 1
-----------------------
Total capitalization multiplied by 15% (line 1 multiplied by 0.15) 1,157,987 Line 2
Greater of $50 million or line 2 $1,157,987 Line 3
Total current aggregate investment:
(categorized by major line of energy-related business)
Ownership and operation of qualifying facilities (Category VIII) 34,000
Energy services and retail energy sales (Category V) 4,300
Fuel management services (Category IX) -
Operations and maintenance services (Category VII) -
Development and commercialization of photovoltaics (Category II) -
-------
Total current aggregate investment 38,300 Line 4
---------
Difference between the greater of $50 million or 15% of capitalization
and the total aggregate investment of the registered holding
company system (line 3 less line 4) $1,119,687 Line 5
=========
Notes: The caption "Total average consolidated capitalization" includes total
common equity, preferred equity (including amounts due within one
year), long-term debt (including amounts due within one year) and
short-term debt.
The caption "Total current aggregate investment" includes all amounts
invested or committed to be invested in energy-related companies on or
after the date of effectiveness of Rule 58 (March 24, 1997), for which
there is recourse, directly or indirectly, to GPU, Inc. or any
subsidiary company thereof.
</TABLE>
7
<PAGE>
<TABLE>
ITEM 5 - OTHER INVESTMENTS
<CAPTION>
Major Line of Energy- Aggregate Investment as of Change in Investments Reason for Change
Related Business September 30, 1997 During Reporting Period in Investments
- ---------------------------- -------------------------- ----------------------- -----------------------------------
<S> <C> <C> <C>
Ownership and operation
of qualifying facilities
(Category VIII) $139,132 * $24,000 In October 1997, GPUI sold to New
Mid-Georgia Corp. a 50% limited
partnership interest in Mid-Georgia
Cogen, L.P. in consideration of a $24
million promissory note issued to GPUI.
Energy services and retail
energy sales (Category V) 1,400 2,900 In the fourth quarter of 1997, GPU,
Inc. made additional capital
contributions to GPU AR totaling $2.9
million.
Fuel management services
(Category IX) ** - No change.
Operations and maintenance
services (Category VII) ** - No change.
Development and commercialization
of photovoltaics (Category II) Less than $1 - No change.
<FN>
* The caption "Aggregate Investment as of September 30, 1997" includes
$129,132 that was invested or committed to be invested in energy-related
companies, prior to the date of effectiveness of Rule 58 (March 24, 1997),
for which there is recourse, directly or indirectly, to GPU, Inc. or any
subsidiary thereof.
** The amounts invested in such energy-related companies, which are
immaterial, have subsequently been reinvested, and are included in
"Ownership and operation of qualifying facilities (Category VIII)."
</FN>
</TABLE>
8
<PAGE>
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
A. Financial Statements
A-1 Financial statements of GPU Advanced Resources, Inc. - not required
for the last quarterly period of the registered holding company's
fiscal year.
A-2 Financial statements of Elmwood Energy Corporation - not required for
the last quarterly period of the registered holding company's fiscal
year.
A-3 Financial statements of Camchino Energy Corporation - not required for
the last quarterly period of the registered holding company's fiscal
year.
A-4 Financial statements of Prime Energy Limited Partnership - not
required for the last quarterly period of the registered holding
company's fiscal year.
A-5 Financial statements of Geddes Cogeneration Corporation - not required
for the last quarterly period of the registered holding company's
fiscal year.
A-6 Financial statements of Onondaga Cogeneration Limited Partnership not
required for the last quarterly period of the registered holding
company's fiscal year.
A-7 Financial statements of NCP Energy, Inc. - not required for the last
quarterly period of the registered holding company's fiscal year.
A-8 Financial statements of NCP Lake Power, Inc. - not required for the
last quarterly period of the registered holding company's fiscal year.
A-9 Financial statements of NCP Dade Power, Inc. - not required for the
last quarterly period of the registered holding company's fiscal year.
A-10 Financial statements of NCP Houston Power, Inc. - not required for the
last quarterly period of the registered holding company's fiscal year.
A-11 Financial statements of Mid-Georgia Cogen, L.P. - not required for the
last quarterly period of the registered holding company's fiscal year.
A-12 Financial statements of EI Services, Inc. - not required for the last
quarterly period of the registered holding company's fiscal year.
Note: Financial statements of EI Fuels Corporation and GPU Solar, L.L.C. have
been omitted since these subsidiaries do not have any material assets,
liabilities or income.
9
<PAGE>
Exhibits
B. Contracts Required by Item 3
B-1 Contract between EI Services, Inc. and Mid-Georgia Cogen, L.P. to
provide construction and operations management services - incorporated
by reference to Exhibit B-1 to GPU's Quarterly Report on Form U-9C-3
for the period ended June 30, 1997.
B-2 Contract between NCP Houston Power, Inc. and Mid-Georgia Cogen, L.P.
to provide accounting and administrative services (included in
partnership agreement) - incorporated by reference to Exhibit B-2 to
GPU's Quarterly Report on Form U-9C-3 for the period ended June 30,
1997.
B-3 Contract between NCP Lake Power, Inc. and Lake Cogen, Ltd. to provide
accounting, administrative and operations and maintenance (O&M)
management services (included in partnership agreement) - incorporated
by reference to Exhibit B-3 to GPU's Quarterly Report on Form U-9C-3
for the period ended June 30, 1997.
B-4 Contract between NCP Dade Power, Inc. and Pasco Cogen, Ltd. to provide
administrative and O&M management services (included in partnership
agreement) - incorporated by reference to Exhibit B-4 to GPU's
Quarterly Report on Form U-9C-3 for the period ended June 30, 1997.
B-5 Contract between Geddes Cogeneration Corporation and Onondaga
Cogeneration Limited Partnership to provide accounting, administrative
and O&M management services (included in partnership agreement)
incorporated by reference to Exhibit B-5 to GPU's Quarterly Report on
Form U-9C-3 for the period ended June 30, 1997.
B-6 Contract between Camchino Energy Corporation and OLS Power Limited
Partnership to provide accounting and administrative services
(included in partnership agreement) - incorporated by reference to
Exhibit B-6 to GPU's Quarterly Report on Form U-9C-3 for the period
ended June 30, 1997.
B-7 Contract between Camchino Energy Corporation and OLS Energy - Chino to
provide accounting, administrative and O&M management services
incorporated by reference to Exhibit B-7 to GPU's Quarterly Report on
Form U-9C-3 for the period ended June 30, 1997.
B-8 Contract between Camchino Energy Corporation and OLS Energy -
Camarillo to provide accounting, administrative and O&M management
services - incorporated by reference to Exhibit B-8 to GPU's Quarterly
Report on Form U-9C-3 for the period ended June 30, 1997.
B-9 Contract between Elmwood Energy Corporation and Prime Energy Limited
Partnership to provide accounting and administrative services
(included in partnership agreement) - incorporated by reference to
Exhibit B-9 to GPU's Quarterly Report on Form U-9C-3 for the period
ended June 30, 1997.
B-10 Contract between GPU International, Inc. and Prime Energy Limited
Partnership to provide O&M management services - incorporated by
reference to Exhibit B-10 to GPU's Quarterly Report on Form U-9C-3 for
the period ended June 30, 1997.
10
<PAGE>
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS (Continued)
B. Contracts Required by Item 3
B-11 Contract between GPU International, Inc. and Onondaga Cogeneration
Limited Partnership to provide O&M management services - incorporated
by reference to Exhibit B-11 to GPU's Quarterly Report on Form U-9C-3
for the period ended June 30, 1997.
B-12 Contract between GPU International, Inc. and GPU Solar, L.L.C. to
provide management, marketing and technical expertise services
incorporated by reference to Exhibit B-12 to GPU's Quarterly Report on
Form U-9C-3 for the period ended September 30, 1997.
B-13 Contract between GPU Service, Inc. and GPU Advanced Resources, Inc. to
provide legal and certain general and administrative services.
Note:Services rendered by GPU International, Inc. to EI Services, Inc., NCP
Houston Power, Inc., NCP Lake Power, Inc., NCP Dade Power, Inc.,
Geddes Cogeneration Corporation, Camchino Energy Corporation, Elmwood
Energy Corporation, NCP Energy, Inc., GPU Advanced Resources, Inc. and
Metropolitan Edison Company are provided pursuant to oral arrangements
and no written agreements exist.
C. Certificate of GPU, Inc.
11
<PAGE>
SIGNATURE
The undersigned registered holding company has duly caused this quarterly
report to be signed on its behalf by the undersigned officer thereunto duly
authorized pursuant to the requirements of the Public Utility Holding Company
Act of 1935.
GPU, INC.
March 26, 1998
By /s/ F. A. Donofrio
------------------------------
F. A. Donofrio, Vice President,
Comptroller and Chief Accounting Officer
12
Index of Financial Statements and Exhibits to be Filed in EDGAR
B-13 Contract between GPU Service, Inc. and GPU Advanced Resources, Inc. to
provide legal and certain general and administrative services.
C Certificate of GPU, Inc.
Exhibit B-13
GPU SERVICE, INC.
100 Interpace Parkway
Parsippany, New Jersey 07054
SERVICE AGREEMENT
As of June 30, 1997
TO: GPU Advanced Resources, Inc.
2675 Morgantown Road
Suite GH2-3300
Reading, PA 19607
GPU Service, Inc. (hereinafter called "Service Company") is a company
engaged in the rendering of services to companies in the GPU, Inc. holding
company system. The organization, conduct of business and method of cost
allocation of Service Company are designed to meet the requirements of Section
13 under the Public Utility Holding Company Act of 1935 and the rules and
regulations promulgated thereunder to the end that services performed by the
Service Company for said associate companies will be rendered to them at cost,
fairly and equitably allocated. Services will be rendered by Service Company
only upon receipt from time to time of specific or general requests therefor.
Said requests may always be modified or canceled by the serviced company at its
discretion. The parties hereto agree as follows:
1. Service Company agrees to furnish GPU Advanced Resources, Inc., and
any subsidiaries of GPU Advanced Resources, Inc. including those to be formed or
acquired in the future (collectively and individually referred to as "You"),
upon the terms and conditions herein set forth, such of the services described
in Schedule I hereto as You may from time to time request. Service Company will
also furnish, if available, such services which are not described in Schedule I
but which are generally related to such services as You may request.
2. If You so request, Service Company will act as Your agent,
attorney-in-fact and representative to sign such instruments and to do such
things as You may from time to time authorize in connection with the services to
furnished hereunder.
<PAGE>
3. Service Company has and will maintain a staff trained and
experienced in the analysis and evaluation of investment opportunities and their
structure and implementation. In addition to the services of its own staff,
Service Company will, after consultation with You concerning services to be
rendered pursuant to your request, arrange for services of non-affiliated
experts and consultants.
4. All of the services rendered under this agreement will be at the
actual cost thereof, and paid for in accordance with the provisions set forth in
paragraph 5 hereof. Direct charges will be made for services where a direct
allocation of cost is possible. The methods of determining such costs and the
allocation thereof are set forth in Schedule II hereto. These methods are
reviewed periodically as deemed appropriate by You and Service Company. Such
methods may be modified or changed by Service Company without the necessity of
an amendment of this agreement, provided that in each instance all services
rendered hereunder will be at actual cost thereof, fairly and equitably
allocated, and all in accordance with the requirements of the Public Utility
Holding Company Act of 1935 and the rules and regulations and orders thereunder.
You will be advised from time to time of any material changes in such methods.
5. Bills will be rendered as soon as practicable after the close of
each month and will be payable within ten days after receipt. If, however,
Service Company so requests, You will provide it with funds sufficiently in
advance to enable it to pay the actual costs of services provided to You
hereunder. This agreement may be terminated at any time by either party giving
at least thirty days' written notice to the other of such termination as at the
end of any month.
6. This agreement will be subject to termination or modification at any
time if and to the extent its performance may conflict with any federal or state
law or any rule, regulation or order of a federal or state regulatory body
having jurisdiction. This agreement will be subject to approval of any federal
or state regulatory body whose approval is a legal prerequisite to its execution
and delivery of performance.
<PAGE>
GPU SERVICE, INC.
By:____________________________________
Fred D. Hafer
Chairman and Chief Executive Officer
Accepted:
GPU ADVANCED RESOURCES, INC.
By: _____________________________________
Dennis Baldassari
President and Chief Executive Officer
<PAGE>
SCHEDULE I
Description of Services which are available from GPU
SERVICE, INC.
Accounting and Auditing
- -----------------------
The keeping of accounts and collateral activities, including billings,
collections and payments, preparation of reports and preservation of records,
review of internal controls and audits, preparation of statistical data and
reports and analyses.
Corporate and Corporate Records
- -------------------------------
Cooperation with officers and counsel of associate companies on
corporate matters, regulation, contracts, claims, litigation, financial affairs,
and investments, including debt and equity securities, leveraged leases and
private placements. Services in connection with stockholders' and directors'
meetings and keeping of corporate records.
Data Processing
- ---------------
Maintenance and operation of a data processing center and equipment for
accounting, engineering, administration and other functions, and development of
systems therefor.
Executive Administrative
- ------------------------
Consultation and services in management and administration of all
aspects of financial and investment transactions.
Financing
- ---------
Services in connection with interim and permanent financing of
associate companies, determination of capital needs, cooperation with officers
and counsel of associate companies on financing matters, including registration
statements and regulatory applications; cash management; budgeting; preparation
of financial and statistical reports.
<PAGE>
Insurance and Employee Benefit Programs
- ---------------------------------------
Development, placement and administration of insurance coverage and
employee benefit programs, including group insurance, pensions, hospitalization
and similar programs; property inspections and valuations for insurance.
Investment Operations
- ---------------------
Receipt, review, evaluation and analysis of investment opportunities
and ways and means to utilize capital resources, communications with investment,
merchant and commercial bankers, broker-dealers, investment advisors, portfolio
managers, economists and other representatives of investment and financial
institutions and funds; negotiation, structuring and implementation of
investment decisions and the preparation and execution and delivery of
agreements therefor.
Personnel
- ---------
Assistance relating to wage and salary administration, employment
procedures and policies, employee training and safety and recruitment.
Retail Energy Sales and Services
- --------------------------------
Review, evaluation and analysis of opportunities to develop, market and
sell energy and energy-related services, including arrangements with and for
associate companies.
Public Information and Relations
- --------------------------------
Services relating to information to and relations with the public,
including customers, security holders, employees, financial analysts, rating
agencies, investment firms and employees.
Purchasing
- ----------
Services with respect to purchase of materials supplies, equipment and
fuel reference works.
<PAGE>
Research
- --------
Services relating to research of financial and investment opportunities
and ways to utilize capital resources.
Taxes
- -----
Services relating to federal, state and municipal taxes, preparation of
federal returns and handling of federal return audits and claims.
Legal
- -----
Services related to general corporate legal matters and affairs
including supervision of inside and outside counsel legal services.
<PAGE>
SCHEDULE II
Determination of Cost of Service
And Allocation Thereof
Cost of service will be determined in accordance with the Public
Utility Holding Company Act of 1935 and the rules and regulations and orders
thereunder, and will include all costs of doing business incurred by Service
Company.
Records will be maintained for each Department and Division of Service
Company in order to accumulate all costs of doing business and to determine the
cost of service. These costs will include wages and salaries of employees and
related expenses, such as insurance, taxes, pensions and other employee welfare
benefits, and rent, light, heat, telephone, supplies and other housekeeping
costs, and capital charges, properly amortized. In addition, records will be
maintained of general administrative expenses, which will include the costs of
operating Service Company as a corporate entity.
Charges for services rendered and related expenses and non-personnel
expenses (e.g., use of automotive equipment, etc.) will be billed directly to
the serviced companies, either individually or, when the services performed are
for a group of companies, by means of an equitable allocation formula.
Exhibit C
GPU, Inc.
300 Madison Avenue, Morristown, NJ 07962-1911
Certificate
-----------
Pursuant to the requirements of Rule 58 of the Public Utility Holding
Company Act of 1935, the undersigned certifies that:
A conformed copy of the publicly available quarterly report on
Form U-9C-3, for the period ended September 30, 1997, was filed
with the state commissions having jurisdiction over the electric
retail rates of GPU's public utility subsidiary companies. The
names and addresses of these state commissions are as follows:
New Jersey Division of Energy
Board of Public Utilities
Two Gateway Center
Newark, NJ 07102
Commonwealth of Pennsylvania
Public Utility Commission
P.O. Box 3265
Harrisburg, PA 17105-3265
March 26, 1998
By /s/ P. R. Chatman
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P. R. Chatman,
Assistant Comptroller -
GPU Service, Inc.
Note: 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 3,700 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.
