SEC File No. 70-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-l
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
Jersey Central Power & Light Company ("JCP&L")
2800 Pottsville Pike
Reading, Pennsylvania 19605
(Name of company filing this statement and address of principal
executive office)
GPU, INC. ("GPU")
(Name of top registered holding company parent of applicant)
Terrance G. Howson, Douglas E. Davidson, Esq.
Vice President and Treasurer Berlack, Israels & Liberman LLP
Mary A. Nalewako, Secretary 120 West 45th Street
Michael J. Connolly, Esq. New York, New York 10036
Vice President - Law
GPU Service, Inc.
300 Madison Avenue
Morristown, New Jersey 07962
Scott L. Guibord, Secretary
Jersey Central Power & Light
Company
2800 Pottsville Pike
Reading, Pennsylvania 19605
(Names and addresses of agents for service)
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Item 1. DESCRIPTION OF PROPOSED TRANSACTIONS
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A. JCP&L, a public utility subsidiary of GPU, a registered holding
company, hereby requests authority through December 31, 2001: (1) to form a new
wholly-owned subsidiary ("Special Purpose Issuer") which will be any one of the
following -- a trust, corporation, limited liability company or partnership; (2)
to acquire all of the common equity interests in the Special Purpose Issuer; (3)
to transfer to the Special Purpose Issuer bondable transition property ("BTP")
in exchange for the net proceeds from the sale of the transition bonds; (4) for
the Special Purpose Issuer to issue and sell transition bonds from time to time
through December 31, 2001; and (5) to enter into the Servicing Agreement and
administration agreement discussed below. Such transaction is commonly referred
to as "securitization."
B. On February 9, 1999, New Jersey enacted the Electric Discount and
Energy Competition Act, P.L. 1999, c. 23 (N.J.S.A. 48:3-49 et seq.) (the
"Competition Act") to restructure the electric utility and natural gas
industries in New Jersey. The Competition Act requires New Jersey electric
utilities, including JCP&L, to unbundle electric services into separate charges
for, among other things, customer account services (metering and billing),
distribution, transmission and generation. While the New Jersey electric
generation market will be opened to competition effective August 1, 1999,
electric distribution and, at least initially, customer account services
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will continue to be regulated by the New Jersey Board of Public Utilities (the
"BPU" or the "Board"). Transmission services will be provided by the New Jersey
electric utilities pursuant to an open access transmission tariff filed with the
Federal Energy Regulatory Commission ("FERC"). Under the Competition Act, New
Jersey's electric utilities must reduce rates by at least 10% over three years.
The Competition Act requires utilities to submit restructuring plans to the BPU,
which include claims for each utility's "stranded costs" -- i.e., costs relating
to utility investments and power purchase commitments that would have been
recoverable in a regulated environment but are not expected to be recoverable as
a result of the introduction of competition in the generation market. The
Competition Act expressly recognizes the following potential sources of stranded
costs: utility-owned generation; power purchase agreements ("PPAs") with other
utilities; and PPAs with non-utility generators ("NUGs"). Utilities may recover
these stranded costs from their distribution customers through a non-bypassable
market transition charge ("MTC"), subject to approval by the BPU based upon,
among other things, the Board's findings as to the utility's use of all
reasonably available mitigation measures and an assessment of the full market
value of the subject generation assets or PPAs. The MTC recovery is generally
limited to eight years except that the BPU may permit: (1) stranded costs
associated with NUG PPAs to be recovered over the term of each contract; (2)
stranded costs related to certain generation assets
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to be recovered over eleven years; and (3) the MTC recovery period to be
extended to achieve the mandatory rate reductions.
C. The Competition Act provides for the use of securitization to
facilitate utility restructurings by empowering the BPU, at the request of a
utility to authorize such utility, directly or indirectly, to issue transition
bonds in order to recover and/or finance a portion of its stranded costs and
assist in achieving compliance with the rate reduction requirements of the
Competition Act. Utilities must apply to the BPU for a bondable stranded costs
rate order authorizing the issuance of transition bonds and approving the amount
of the initial transition bond charge ("TBC") to be imposed on all retail
electric distribution customers.
D. Under the Competition Act, the BPU may authorize the issuance of
transition bonds if (1) the utility has taken reasonable measures to mitigate
stranded costs and has the appropriate incentives or plans to do so in the
future; (2) the utility will not otherwise be able to achieve the level of rate
reduction deemed by the BPU to be necessary and appropriate, absent the issuance
of the transition bonds; (3) the issuance of the transition bonds will provide
tangible and quantifiable benefits for ratepayers; and (4) the structuring and
pricing of the transition bonds assure that ratepayers will pay the lowest
possible TBC consistent with market conditions and the terms of the related
bondable stranded costs rate order. In general, a utility may issue transition
bonds in an amount of up to 75% of
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the total amount of eligible stranded costs attributable to its owned generation
assets. However, up to the full amount of the stranded costs attributable to any
remaining generation assets may be securitized if the utility divests a majority
of its generation assets and has established the stranded cost amount
attributable to such remaining assets with certainty.(1)
E. Further, under the Competition Act, the transition bonds may have
a scheduled amortization upon issuance of up to 15 years with respect to
stranded costs related to utility-owned generation assets and up to the
remaining term of a PPA with respect to stranded costs related to a buyout or
buydown of such PPA. In general, the TBC is a separate, non-bypassable charge
that will be assessed against all retail electric distribution customers,
regardless of whether they continue to purchase electricity from the
distribution utility. The TBC will be a usage-based charge that will be
sufficient to recover the principal of and interest on the transition bonds and
all other costs associated with the issuance of the transition bonds, including
costs of credit enhancements, costs of retiring existing debt and preferred
equity, costs of defeasance, servicing fees and certain other related fees and
expenses. The relationship between collections of the TBC and the debt service
and expense requirements on the transition bonds will likely be dependent upon,
among other things, the utility's ability to
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1 This provision generally applies to the Company's Oyster Creek Nuclear
Generating Station ("Oyster Creek").
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forecast: (1) sales; (2) delinquencies and charge-offs; and (3) payment lags.
F. In July 1997, at the direction of the Board in anticipation of
the adoption of the Competition Act, JCP&L filed its restructuring plan with the
Board which, among other things, unbundled generation from transmission and
distribution. The restructuring plan was the subject of extensive hearings and
negotiations, which resulted in a settlement which the BPU approved with some
modification. The Board issued a Summary Order with respect to such approval on
May 24, 1999, and a detailed Final Order is expected shortly. Among other
things, the Board's Summary Order authorizes JCP&L to effect the securitization
transaction described in paragraph G.
G. JCP&L intends to file a petition with the BPU seeking a bondable
stranded costs rate order to authorize securitization of the stranded costs
attributable to JCP&L's projected net investment in Oyster Creek at September 1,
2000, net of deferred income taxes and investment credits attributable to the
plant in the amount of approximately $125 million.(2) Such amounts relating to
Oyster Creek, which would otherwise be recoverable from JCP&L's ratepayers
through the MTC commencing August 1, 1999, will be collected via the TBC once
JCP&L has
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2 JCP&L will seek a ruling from the Internal Revenue Service (the "IRS") to the
effect that the proposed treatment of such deferred income taxes and investment
tax credits as an offset to the amounts otherwise treated as stranded costs
attributable to the plant is in compliance with the "normalization" requirements
of the Internal Revenue Code.
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securitized such amounts.(3) Accordingly, JCP&L will seek BPU authorization to
issue approximately $422 million of transition bonds representing approximately
$400 million of the projected Oyster Creek net investment (gross plant, less
accumulated depreciation and accumulated deferred income taxes, including the
additional deferred income taxes resulting from the retirement of Oyster Creek)
at September 1, 2000 and an estimated $22 million of transaction costs,
including related fees and expenses of issuance and sale of the transition
bonds, and to refinance or retire its debt and preferred equity.(4)
Alternatively, if the IRS does not issue the tax ruling discussed in note 2,
JCP&L may also securitize the amount of its projected net investment in Oyster
Creek that, because of the IRS's failure to issue such ruling, cannot be offset
by the deferred income taxes and investment tax credits attributable to the
plant of approximately $125 million.
H. The TBC will remain in effect until all principal, interest and
other costs on the related transition bonds are paid in full, and will be
adjusted at least annually, in accordance with the Competition Act, to insure
full payment of debt service
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3 JCP&L has announced that it is seeking a buyer for Oyster Creek. If JCP&L
sells Oyster Creek prior to securitization, the principal amount of the
transition bonds will be adjusted to reflect the terms of the sale.
4 The BPU has also authorized JCP&L to defer certain costs on its books and to
securitize the resulting deferred balances, if any. JCP&L is not seeking
Commission authority to securitize such balances now, but will request such
authority if and when JPC&L files a separate petition with the BPY with respect
thereto.
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and expenses. Under the Competition Act, neither the BPU nor any other
governmental entity may rescind, alter, repeal, modify or amend a bondable
stranded costs rate order, and the State may not limit, alter or impair any
BTP(5) or associated rights. The transition bonds will not constitute a debt or
liability of the State or of JCP&L, but only of the Special Purpose Issuer.
I. The BTP and the related TBC revenue stream are isolated from any
credit risk associated with the utility because the utility will have
transferred them to the Special Purpose Issuer, which will be structured to be a
"bankruptcy remote" assignee. The Special Purpose Issuer, which is anticipated
to be a Delaware limited liability company, will issue transition bonds secured
by the BTP and the TBC revenue stream. The securitization will be structured so
that the transfer of the BTP will be treated as an absolute transfer of all of
the JCP&L's right, title and interest in the BTP as in a true sale, and not as a
pledge or other financing, other than for Federal and State income and franchise
tax purposes and for certain financial reporting purposes.
J. As the TBC is imposed upon and collected from ratepayers, such
amounts will be used to pay principal and interest on the transition bonds, as
well as fees and expenses
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5 Under the Competition Act, Bondable Transition Property (BTP), the statutory
and regulatory right to collect the TBC, is defined as "the property consisting
of the irrevocable right to charge, collect and receive, and be paid from
collections of, transition bond charges in the amount necessary to provide for
the full recovery of bondable stranded costs which are determined to be
recoverable in a bondable stranded costs rate order . . ." N.J.S.A. 48:3-51.
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related to the securitization transaction.
K. The securitization structure outlined above will enhance the
creditworthiness of the transition bonds because the underlying securitized
assets (the BTP and its associated TBC revenue stream) are isolated from the
risks associated with the other assets of JCP&L, once transferred to the Special
Purpose Issuer. Moreover, as discussed above, the State under the Competition
Act may not reduce the value of the BTP or TBC until the transition bonds are
fully discharged, and the BPU's bondable stranded costs rate order is
irrevocable under the Competition Act. These aspects of the securitization
transaction will enable the transition bonds to obtain a higher credit rating
than the existing debt instruments of JCP&L. JCP&L understands that all other
utility securitization bonds have received the highest possible credit rating
from the principal rating agencies and, accordingly, believes that it is
reasonable to expect that its transition bonds will receive such credit rating,
although JCP&L has received no such assurances from any of such rating agencies.
L. Pursuant to a "Sale Agreement", JCP&L will transfer the BTP
created by the irrevocable bondable stranded costs rate order to the Special
Purpose Issuer in exchange for the net proceeds from the sale of the transition
bonds. Such transfer will be treated as a true sale, and not as a secured
financing, for bankruptcy purposes. The Special Purpose Issuer initially will be
capitalized (at least 0.5% of the total principal amount of the transition
bonds) through a capital
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contribution by JCP&L. The Special Purpose Issuer will deposit the capital
contribution amount into a "Capital Subaccount."
M. The actual amount of the TBC will be sized to provide for
collection of an amount beyond that needed to pay expected costs and debt
service on the transition bonds (the "Overcollateralization Amount"). The
Overcollateralization Amount, which will be collected ratably over the expected
term of the transition bonds, will enhance the creditworthiness of the
transition bonds and will be deposited into a subaccount (the
"Overcollateralization Subaccount").
N. JCP&L, as the servicer of the TBC revenue stream, will remit
monthly (or more frequently) all amounts collected in respect of the TBC to a
collection account maintained by the indenture trustee for the benefit of the
holders of the transition bonds (the "Collection Account"). The Special Purpose
Issuer will periodically pay out of the Collection Account, among other amounts
authorized by the BPU, trustee fees, servicing fees, administrative fees,
operating expenses, accrued but unpaid interest on all classes of the transition
bonds, and principal (to the extent scheduled) on transition bonds. Any
remaining balance in the Collection Account will be used to restore the Capital
Subaccount, fund and replenish the Overcollateralization Subaccount (to the
required scheduled level), and then be added to reserves (the "Reserve
Subaccount").
O. JCP&L requests authority for the Special Purpose Issuer to issue
up to $548 million in transition bonds, which
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amount includes approximately $125 million of additional transition bonds that
might be issued if the tax ruling discussed in note 2 is not issued. The Special
Purpose Issuer may issue transition bonds in one or more series, and each such
series may be issued in one or more classes. Different series may have different
maturities and interest rates and each series may have classes with such
maturities, interest rates and other terms as JCP&L shall determine from time to
time in the future. The TBC for each series will be structured to provide for
the recovery of the principal amount of the related transition bonds and the
related interest, fees and expenses. There will be a date on which each of the
transition bonds is expected to be repaid and a legal final maturity date by
which the transition bonds must be repaid. Neither the expected final maturity
nor the legal final maturity will be later than 15 years and 17 years,
respectively, from the date of issuance of the related transition bonds. The
expected final maturity date must be earlier than the legal final maturity date
to meet rating agency requirements because the TBC is calculated by taking into
account projections of such variables as the anticipated level of charge-offs,
delinquencies, and usage, which may differ from the amounts actually
experienced.
P. Pursuant to a Servicing Agreement between JCP&L and the Special
Purpose Issuer, JCP&L will act as a servicer of the TBC revenue stream. In this
capacity, JCP&L will, among other things: (1) bill customers and make
collections on behalf
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of the Special Purpose Issuer and (2) file with the BPU for periodic adjustments
to the TBC to achieve a level which allows for payment of all debt service and
full recovery of amounts authorized by the Board to be collected through the TBC
in accordance with the expected amortization schedule for each series and class
of transition bonds. JCP&L may, subject to certain conditions, subcontract with
other companies to carry out some of its servicing responsibilities.
Q. JCP&L will be entitled to receive a servicing fee for its
servicing activities and reimbursement for certain of its expenses in the manner
set forth in the Servicing Agreement. The servicing fee must be comparable to
one negotiated at arms-length, which would be reasonable and sufficient for a
similar, unaffiliated entity performing similar services. This rating agency
requirement is meant to assure that the Special Purpose Issuer would be able to
operate independently and, accordingly, the fee must be increased to retain a
third party servicer if for any reason JCP&L could not continue to perform these
services. As a result, the servicing fee will be set at an annual level of not
more than 0.15% of the initial principal amount of the transition bonds if JCP&L
is the servicer and 1.25% if a third party, that is not concurrently billing for
other charges, is acting as servicer.
R. Any successor to JCP&L pursuant to any merger, consolidation,
bankruptcy, reorganization or other insolvency proceeding will be required to
assume JCP&L's obligations under
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the Sale Agreement and the Servicing Agreement and under the Competition Act.
S. Personnel employed by GPU Service, Inc. ("GPUS") will provide
ministerial services on an as-needed basis to the Special Purpose Issuer
pursuant to an administration agreement ("AA") to be entered into between the
Special Purpose Issuer and GPUS. The services to be provided will consist
primarily of internal administrative matters relating to the Special Purpose
Issuer such as providing notices required under its transition bond
documentation, maintaining its books and records and maintaining authority to do
business in appropriate jurisdictions. Under the AA, the Special Purpose Issuer
will reimburse GPUS for the cost of the services provided, computed in
accordance with Rules 90 and 91 under the Act, as well as other applicable rules
and regulations. As described above, JCP&L will be retained under the Servicing
Agreement to collect and manage the BTP and associated TBC revenues and to make
appropriate filings with the BPU.
T. JCP&L will use the net proceeds from the sale of the transition
bonds to reduce eligible stranded costs through the retirement of debt or
equity, or both, as permitted by the Competition Act. JCP&L's unbundled rates
being implemented in connection with its restructuring filing provide for the
savings from the transition bonds to be passed through to customers.
U. The specific steps to be taken by JCP&L to reduce its
capitalization will depend, in large part, on the date on
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which the proceeds from the sale of transition bonds become available, the then
prevailing market conditions, and the circumstances at that time.
V. Rule 53 Analysis.
(a) As described below, GPU meets all of the conditions of Rule 53
under the Act, except for Rule 53(a)(1). By Order dated November 5, 1997 (HCAR
No. 35-26773) (the "November 5 Order"), the Commission authorized GPU to
increase to 100% of its average "consolidated retained earnings," as defined in
Rule 53, the aggregate amount which it may invest in EWGs and FUCOs. At March
31, 1999, GPU's average consolidated retained earnings was approximately $2.219
billion, and GPU's aggregate investment in EWGs and FUCOs was approximately
$1.597 billion. Accordingly, under the November 5 Order, GPU may invest up to an
additional $622 million in EWGs and FUCOs as of March 31, 1999.
(i) 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 GAAP; and
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(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
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thereof) in English as the Commission may request and,
in any event, 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.
(ii) No more than 2% of GPU's domestic public utility subsidiary
employees will render any services, directly or indirectly, to any EWG or
FUCO in which GPU directly or indirectly holds an interest.
(iii) Copies of this Application are being provided to the BPU 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 amendments to this Application and
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6 Pennsylvania Electric Company ("Penelec"), a public utility subsidiary of GPU,
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.
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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).
(iv) None of the provisions of paragraph (b) of Rule 53 render
paragraph (a) of that Rule unavailable for the proposed transaction.
(A) Neither GPU nor any subsidiary of GPU having a book value
exceeding 10% of GPU's consolidated retained earnings 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 $2.219
billion) represented an increase of approximately $36.7
million (or approximately 1.7%) in the average consolidated
retained earnings for the previous four quarterly periods
(approximately $2.183 billion).
(C) GPU did not incur operating losses from direct or indirect
investments in EWGs and FUCOs in 1998 in excess of 5% of
GPU's March 31, 1999 consolidated retained earnings.
As described above, GPU meets all the conditions of Rule 53(a),
except for clause (1). With respect to clause (1), the Commission determined in
the November 5 Order that GPU's financing of investments in EWGs and FUCOs in an
amount greater
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than 50% of GPU's average consolidated retained earnings as otherwise permitted
by Rule 53(a)(1) would not have either of the adverse effects set forth in Rule
53(c).
Moreover, even if the effect of the capitalization and earnings of
subsidiary EWGs and FUCOs were considered, there is no basis for the Commission
to withhold or deny approval for the transactions proposed in this Declaration.
The transactions would not, by themselves, or even when considered in
conjunction with the effect of the capitalization and earnings of GPU's
subsidiary EWGs and FUCOs, have a material adverse effect on the financial
integrity of the GPU system, or an adverse impact on GPU's public utility
subsidiaries, their customers, or the ability of State commissions to protect
such public utility customers.
The November 5 Order was predicated, in part, upon the assessment of
GPU's overall financial condition which took into account, among other factors,
GPU's consolidated capitalization ratio and the recent growth trend in GPU's
retained earnings. As of June 30, 1997, the most recent quarterly period for
which financial statement information was evaluated in the November 5 Order,
GPU's consolidated capitalization consisted of 49.2% equity and 50.8% debt. As
stated in the November 5 Order, GPU's June 30, 1997 pro forma capitalization,
reflecting the November 6, 1997 acquisition of PowerNet Victoria, was 39.3%
equity and 60.7% debt.
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GPU's March 31, 1999 consolidated capitalization consists of 44.7%
equity and 55.3% debt. Thus, since the date of the November 5 Order, there has
been no adverse change in GPU's consolidated capitalization ratio, which remains
within acceptable ranges and limits as evidenced by the credit ratings of GPU's
electric utility subsidiaries.(7)
GPU's consolidated retained earnings grew on average approximately
4.5% per year from 1992 through 1998. Earnings attributable to GPU's investments
in EWGs and FUCOs have contributed positively to consolidated earnings,
excluding the impact of the windfall profits tax on the Midlands Electricity plc
investment.(8)
Accordingly, since the date of the November 5 Order, the
capitalization and earnings attributable to GPU's investments in EWGs and FUCOs
have not had any adverse impact on GPU's financial integrity.
Reference is made to Exhibit G filed herewith which sets forth GPU's
consolidated capitalization at March 31, 1999 and after giving effect to the
transactions proposed herein. As set forth in such exhibit, the proposed
transactions will not have a material impact on GPU's capitalization or
earnings.
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7 The first mortgage bonds of GPU's public utility subsidiaries -- Penelec,
JCP&L and Metroplitan Edison Company -- are rated A+ by Standard & Poors
Corporation, and A2, Baa1 and A3, respectively, by Moody's Investor Services,
Inc.
8 As discussed in the November 5 Order, GPU incurred a loss for 1997 from its
investments in EWGs and FUCOs as a result of the windfall profits tax imposed on
Midlands Electricity, plc.
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Item 2. fees, commissions and expenses
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The estimated fees, commission and expenses to be incurred in
connection herewith will be filed by amendment.
Item 3. APPLICABLE STATUTORY PROVISIONS
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The proposed transactions are subject to Sections 6(a), 7, 9,
10, 12(b) and 12(f) of the Act and Rules 90 and 91 thereunder.
Item 4. REGULATORY APPROVAL
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No Federal or State commission, other than your commission and the
BPU, has jurisdiction with respect to the proposed transactions.
Item 5. PROCEDURE
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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 October 15, 1999. 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.
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Item 6. EXHIBITS AND FINANCIAL STATEMENTS
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(a) Exhibits
A-1 - Charter documents of Special Purpose Issuer --
to be filed by amendment.
A-2 - Form of Transition Bond -- to be filed by amendment.
B-1 - Form of Sale Agreement -- to be filed by amendment.
B-2 - Form of Servicing Agreement -- to be filed by
amendment.
B-3 - Form of AA with GPUS -- to be filed by amendment.
C - Not Applicable.
D-1 - Petition of JCP&L to the BPU seeking authority
to issue the transition bonds -- to be filed by
amendment.
D-2 - Order of the BPU authorizing the transition
bonds -- to be filed by amendment.
E - Not Applicable.
F - Opinion of Berlack, Israels & Liberman LLP --
to be filed by amendment.
G - Financial Data Schedule -- to be filed by amendment.
(b) Financial Statements:
1 - JCP&L Consolidated Balance Sheets, actual and pro
forma, as at March 31, 1999, and consolidated
Statements of Income, actual and pro forma, and
Statement of Retained Earnings, for the quarter
ended March 31, 1999; pro forma journal entries --
to be filed by amendment.
2 - GPU Consolidated Balance Sheets, actual and pro
forma, as at March 31, 1999, and consolidated
Statements of Income, actual and pro forma, and
Statement of
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Retained Earnings, for the quarter ended March 31,
1999; pro forma journal entries -- to be filed by
amendment.
3 - None.
4 - None, except as disclosed in the notes to the
Financial Statements.
Item 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
---------------------------------------
The proposed transactions are for the purpose of carrying out the
Applicant's business activities. Consequently, the issuance of an order by your
Commission with respect to the proposed 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 transaction. Reference is made to
Item 4 hereof regarding regulatory approvals with respect to the proposed
transactions.
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SIGNATURE
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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.
Jersey Central Power & Light Company
By:/s/ T. G. Howson
--------------------------
T. G. Howson
Vice President and Treasurer
Date: July 15, 1999
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