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")
GPU NUCLEAR CORPORATION ("GPUN")
One Upper Pond Road, Parsippany, N.J. 07054
(Name of company or companies filing this statement
and address of principal offices)
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
(Name of top registered holding company
parent of the applicant)
Don W. Myers, J. F. Wilson, Secretary
Vice President & Treasurer GPU Nuclear Corporation
M. A. Nalewako, Secretary One Upper Pond Road
General Public Utilities Corporation Parsippany, N.J. 07054
100 Interpace Parkway
Parsippany, N.J. 07054 M. J. Connolly, Esq.
GPU Service Corporation
100 Interpace Parkway
Parsippany, N.J. 07054
_________________________________________________________________
(Names and addresses of agents for service)
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTIONS
A. Background
(i) GPUN , a wholly-owned subsidiary of GPU, was
organized in accordance with the Commission's Order,
dated September 5, 1980 (SEC File No. 70-6443, HCA
Release No. 21708), for the purpose of the safe
operation, maintenance, rehabilitation, design,
construction, start-up and testing of all nuclear
generating facilities owned by Jersey Central Power
& Light Company ("JCP&L"), Metropolitan Edison
Company ("Met-Ed"), and Pennsylvania Electric Company
("Penelec") (collectively, the "GPU Operating
Companies"), and related research and development.
After obtaining the requisite authorizations from
your Commission, the Nuclear Regulatory Commission
("NRC"), the Pennsylvania Public Utility Commission
and the New Jersey Board of Public Utilities, GPUN
commenced operation on or about January 1, 1982.
(ii) Since that time, GPUN has been responsible for the
operation and maintenance of Three Mile Island Unit
No. 1 ("TMI-1") and Oyster Creek ("OC") generating
units and for the clean-up of Three Mile Island Unit
No. 2 ("TMI-2") which was disabled in an accident
March 28, 1979, and for the monitoring, maintenance
and preparation for ultimate decommissioning of the
Saxton Nuclear Experimental Corporation.
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(iii) Since 1990, GPUN has requested and received
authorization from the Commission to engage in
business activities pursuant to Sections 9(a) and 10
of the Act such as:
(a) By Order dated August 29, 1990, to SEC File
No. 70-7675 (HCAR No. 35-25137) authorizing
the GPU Operating Companies, GPUN, and GPU
Service Corporation ("GPUSC") (collectively
the "GPU Companies" or "GPU System"), to
license computer programs to non-affiliates
and to provide services in connection
therewith.
(b) By Order dated September 14, 1990, to SEC File
No. 70-7720 (HCAR No. 35-25149) authorizing
GPUN to provide GPUSC, JCP&L, Met-Ed and
Penelec with non-nuclear laboratory services.
(c) By Order dated November 6, 1991, to SEC File
No. 70-7847 (HCAR No. 35-25401) authorizing
GPUN to enter into licensing of its Nuclear
Employee Data System ("NEDS") and services in
connection therewith.
(d) By Order dated January 31, 1992, to SEC File
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No. 70-7905 (HCAR No. 35-25464) authorizing
GPUN to provide decommissioning consulting
services to the Ft. St. Vrain nuclear facility
of Public Service of Colorado.
(e) By Order dated May 21, 1993, to SEC File No.
70-8115 (HCAR No. 35-25814) authorizing GPUN
to provide consulting services to the Defense
Nuclear Facilities Safety Board ("DNFSB") with
respect to nuclear safety standards at federal
nuclear facilities through a subcontracting
arrangement with the DNFSB's prime contractor.
(iv) These applications, and your Commission's
authorizations thereof, are examples of instances in
which GPUN has attempted to use its employees'
accumulated skills, expertise, and experience, and
the resources, facilities and assets that it has
developed in and maintains solely for the benefit of
its normal operations as a service company in an
integrated public utility system, in ways that are
functionally related to such operations.
B. The electric utility industry is experiencing dramatic
changes resulting from various forms of deregulation and
restructuring that have unleashed competitive forces in the
energy marketplace. To be competitive in this environment,
a company must be positioned to utilize more fully its
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skills, expertise, experience, resources, facilities and
assets in order to more effectively continue to produce
benefits for investors and consumers. To be so positioned,
a company must have the flexibility to respond promptly and
efficiently to changing and developing market conditions and
opportunities, including, in the case of GPUN, opportunities
to reduce the costs which it charges to the GPU Operating
Companies while, at the same time, maintaining personnel
skill levels needed in its core business activity in
connection with the GPU System nuclear plants.
C. Accordingly, GPUN now proposes to offer and provide to non-
affiliated companies, businesses, institutions, government
agencies and individuals, in the United States and, as
opportunities present, internationally, a broad and varied
range of services, arising from or based upon its employees'
accumulated skills, expertise and experience and the
resources and facilities that it has developed in and
maintains solely for the benefit of its normal core business
operations ("Services"), in ways that are functionally
related to (and not detrimental to the functioning of) such
operations.
D. GPUN believes that the authority to offer and provide the
Services as hereinafter generally described will provide it
with increased flexibility enabling it to operate and
respond more economically and effectively in a changing
environment by (i) allowing it to more fully use and thereby
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maintain the employee skills, expertise and experience and
the resources and facilities that it has developed and which
it continues to require in its operations as the nuclear
service company for the GPU holding company system, and (ii)
enabling GPUN to reduce the cost of maintaining such
resources which are considered necessary to the adequate and
safe operation of the nuclear facilities for which it is
responsible and thereby to reduce the charges to the GPU
Operating Companies which own such facilities.
E. While the dynamic nature of competition and the marketplace
makes it difficult to specifically describe, in advance, the
particular Services that may be offered from time to time,
some examples of the types of Services contemplated in this
Application are as follows:
(i) Engineering and technical services of the type and
nature typically provided by architectural and
engineering firms in connection with the maintenance
and operation of nuclear generation facilities
("Engineering and Technical Services"). GPUN
proposes to provide Engineering and Technical
Services to non-affiliated companies, businesses,
institutions, government agencies, and individuals.
The Engineering and Technical Services may be offered
directly to non-affiliated parties or through
collaboration arrangements with other utilities,
engineering firms or companies which provide
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engineering, consulting, design and related services,
(a) in the case of utilities, for themselves on their
own facilities, or, (b) in the case of engineering
firms and companies, for utility and energy-related
clients, and which from time to time need additional
engineering resources to augment their capabilities.
By way of example, such Engineering and Technical
Services include:
1. Power Plant Inspections and Risk Analysis:
Conducting plant inspections and performing
probabilistic risk assessments of plants and plant
systems including the employment, licensing, leasing
or sale of robotic devices and techniques to conduct
such inspections and analysis.
2. Power Plant Accident Analysis: Analyzing
abnormal system or plant conditions that could affect
the safety, integrity, or proper functional operation
of a system or plant, could produce system or plant
degradation, or affect personnel safety and which
require actions to restore a system or plant to a
known and confirmed safe condition and to mitigate
the consequences of the event.
3. Power Plant Stress Analysis: Assessing the
actual and potential mechanical stresses in plant
systems and providing recommendations for corrective
action.
4. Power Plant Operations Analysis: Analyzing
plant technical performance, including major
equipment failure analysis; reviewing and assessing
the safety significance of operating experience from
NRC notices, bulletins, industry reports, etc., and
providing recommendations for needed actions.
5. Power Plant Life Extension Analysis: Reviewing
nuclear facility structures, systems and components
and performing activities necessary to apply to the
NRC for an extension of a facilities operating
license beyond the current 40 year design life.
6. Nuclear Fuels Cycle Analysis: Providing
overall nuclear core engineering, nuclear fuel
management strategies and basic reactor core physics
capability; directing the specification, selection,
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and management of nuclear fuel material, conversion,
enrichment, and fabrication contractors.
7. Power Plant Modification, Design,
Installation, Evaluation, Testing and Project
Management: Operating nuclear generating stations for
other nuclear utilities; providing guidelines,
criteria, designs, drawings, material selection,
specifications, and analyses in support of plant
modifications; managing (organize, plan and
coordinate) engineering project activities with
regard to technical adequacy, schedule and cost;
performing start-up and test activities to assure new
or modified plants, facilities and systems are
systematically tested to conform with technical
requirements.
8. Power Plant Equipment Corrosion Control and
Failure Analysis: Assessing the potential corrosion
mechanisms in plant systems and provide
recommendations for corrective action; investigating
system and equipment failures and providing
recommendations for corrective action.
9. Chemical and Metallurgical Laboratory
Services: Performing chemical analysis and providing
chemistry requirements and specifications associated
with plant systems and components; providing
metallurgical laboratory services and material
engineering (e.g., analyze the condition, assess the
physical properties and determine the failure
mechanism of specific metal components), including,
ASME - Section XI, ISI, IST welding services.
10. Human Factors Engineering Services: Reviewing
and providing recommendations for the design of
equipment, systems, facilities, and operational
environments to promote safe, efficient and reliable
operator performance by focusing on and promoting
optimum man-machine interface.
11. Commercial Grade Dedication of Equipment:
Performing the necessary actions and providing the
required documentation to allow a commercial grade
equipment item to be designated for use in a Nuclear
Safety Related application.
12. Radioactive Waste Services: Providing
radiological engineering services for ALARA programs;
providing design, engineering, and management
services for low and high radioactive waste,
minimization, storage, volume reduction, shipment and
disposal.
13. Plant Decommissioning Services: Providing
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engineering services to support plant decommissioning
efforts, including project management, site
characterization, development of decommissioning
plans. dismantlement, consulting services, robotics
licensing, safety, radwaste reviews, and final site
acceptance.
14. Mechanical, Electrical and Structural
Engineering Services: Providing services to evaluate
plant conditions, design modifications, provide
consultants for problem solving, including code
interpretation, design verified calculations,
technical reports, engineering evaluations and design
and drafting.
15. Nondestructive Testing and Examination
Services: Employing nondestructive testing and
analysis techniques and technologies to test and
examine plant systems.
16. Instrument Calibration Services: Calibrating
test equipment and other technical equipment or
devices used in power plants.
(ii) Management and consulting services in such areas as
corporate communications, environmental consultation,
nuclear safety review, testing and oversight,
industrial safety and hygiene, and emergency
preparedness, nuclear decontamination and
decommissioning, asbestos abatement and remediation,
environmental testing and analysis, laboratory
testing and analysis, nuclear chemistry, radiological
controls and radioactive waste processing, quality
assurance ("Management and Consulting Services").
GPUN proposes to provide Management and Consulting
Services to non-affiliated companies, businesses,
institutions, government agencies, and individuals.
The activities already authorized under SEC File No.
70-7847, File No. 70-7905 and File No. 70-8115 as set
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forth in Item 1 paragraph A (iii) (c), (d) and (e)
hereof are examples of such Management and Consulting
Services. Additional examples are as follows:
1. Nuclear Plant Decommissioning and
Decontamination Management and Consulting
Services.
2. Nuclear Plant Outage Management and Consulting
Services including procurement and contracting
services in connection therewith.
3. Quality Assurance Audits.
4. Medical Services Management and Consulting
Services.
5. FSAR Licensing Consultation and Operations
Analysis.
6. Management and Consulting Services in connection
with the types of circumstances, needs or
problems requiring Engineering and Technical
Services examples of which are described in
paragraph E(i) above or paragraph E(iii) below.
(iii) Training and education services in such areas as
basic, intermediate and advanced electrical and
utility engineering skills, job re-engineering and
business process analysis skills, disaster recovery
skills, records retention and management skills and
quality assurance skills ("Training and Education
Services"). GPUN proposes to provide Training and
Education Services to non-affiliated companies,
businesses, institutions, government agencies, and
individuals. By way of example, Training and
Education Services and related skills which GPUN has
developed and maintains and which GPUN believes may
be of interest to such non-affiliates include:
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1. Computer-based Training.
2. Instructor Training.
3. Nuclear Plant Operating Room Simulator
Certification and Training.
4. Simulator Maintenance and Modification
Training.
5. Fire Safety and Plant and Facility Security
Training.
6. Diesel Equipment Training.
7. Development of Performance-based training
programs for non-affiliates using GPUN's
copyrighted Training and Education Database
Systems ("TEDS") software system.
(iv) GPUN also proposes to license or lease to non-
affiliates the use of (a) intellectual and
proprietary property developed by or for GPUN for use
in its normal business operations as a nuclear
service company for the GPU holding company system,
(e.g., any process, program, technique, invention,
computer software, work of art, video, sound
recording or written work), including training
manuals, materials and processes in conjunction with
or separate from the Services described above; and
(b) the reserve capacity of Laboratory or other
support facilities ("Reserve Capacity") developed and
maintained by GPUN for use in connection with its
normal business operations as such a nuclear service
company ("Licensing and Leasing Services").
F. GPUN believes that, even though the Services described above
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arise out of its core nuclear business and may be
principally of interest to other nuclear utilities, many of
these Services are or may be transferrable to non-affiliates
owning or operating non-nuclear generation facilities and
may also have other energy-related applications. GPUN
proposes to make the Services available to non-affiliated
parties in connection with such other energy-related
applications as such opportunities arise.
G. GPUN proposes that it be authorized through December 31,
1999 to enter into agreements, having terms not in excess of
10 years, for the Services described herein. Such
agreements for the provision of the Services will be
negotiated and entered into with non-affiliated parties on
an arm's length basis. Revenues received and expenses
incurred in connection with transactions in such Services
will be accounted for under the appropriate accounts as
provided under the Uniform System of Accounts.
H. GPUN does not anticipate making any material increases in
staff nor any material capital investments to provide the
Engineering and Technical Services, the Management and
Consulting Services, the Training and Education Services and
the Licensing and Leasing of intellectual and proprietary
property or of Reserve Capacity. Further, GPUN anticipates
that during the five (5) year period for which authority is
requested hereunder, the aggregate annual revenues from and
expenses associated with the proposed transactions will not
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exceed 5% of its annual total operating expenses. In 1993,
GPUN's total operating expense was $421 million. In
addition, the Licensing and Leasing of the use of Reserve
Capacity shall not exceed 50% of the capacity available to
GPUN for its normal business operations within the GPU
holding company system.
I. GPUN anticipates that the provision of the Services pursuant
to the authorization sought hereunder will enable it to use
more fully its employees accumulated skills, expertise and
experience, and its resources and facilities which it has
developed solely for the benefit of the GPU holding company
system and which, by virtue of the unique nature of the
nuclear utility business may not be readily available to the
public from other sources. In addition, the provision of
the Services will enhance the ability of GPUN to maintain
the high quality of such skills, expertise and experience
and the efficiency of such resources and facilities within
the GPU holding company system in a more cost effective
manner. Furthermore, the authority to provide a range of
Services, as broadly defined herein, will enable GPUN to
respond more efficiently and effectively to competitive
market opportunities.
J. The net revenues received by GPUN from transactions in such
Services will be used to reduce the cost of its service
charges to the GPU Operating Companies.
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K. GPUN anticipates that it may be or may become advantageous
to provide the Services through one or more new wholly-
owned subsidiaries. In such event, GPU proposes to acquire
for $1,000 the capital stock of each of one or more
subsidiary corporations to be formed for such purposes.
L. GPUN 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-13-60 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 estimated fees, commissions and expenses to be paid or
incurred, by GPUN in connection with the proposed transactions
will be filed by amendment.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
GPUN considers that the proposed transactions may be subject to
Sections 9(a) and 10 of the Act.
ITEM 4. REGULATORY APPROVAL.
The proposed transactions are not subject to the jurisdiction of
any state or federal commission, other than your Commission.
ITEM 5. PROCEDURE.
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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 May 1, 1994. 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 - Not applicable.
B - Not applicable.
C - None.
D - None.
E - Not applicable.
F-1- Opinion of I. H. Jolles -- to be filed by
amendment.
F-2- Opinion of Ballard Spahr Andrews & Ingersoll -
to be filed by amendment.
F-3- Opinion of Richard S. Cohen, Esq. -- to be
filed by amendment.
G - Form of proposed public notice.
(b) Financial Statements
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1 -the GPUN actual and pro forma financial
statements have been omitted since the proposed
transactions will have no material effect
thereon.
2 -GPU consolidated financial statements are omitted
since they are not deemed to be relevant to the
proposed transactions.
3 - Not applicable
4 - Statement of material changes since the date
of the balance sheets which are not reflected
in the Notes to the Financial Statements -
None.
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
A. The proposed transactions will result in the
provision of Services, as generally described herein, to non-
affiliates by GPUN 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.
GENERAL PUBLIC UTILITIES CORPORATION
GPU NUCLEAR CORPORATION
By:________________________________
Don W. Myers
Vice President & Treasurer
Date: March 18, 1994
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EXHIBIT TO BE FILED BY EDGAR
Exhibit:
G - Form of proposed public notice.
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EXHIBIT G
Securities And Exchange Commission
(Release No. : 70- )
GENERAL PUBLIC UTILITIES CORPORATION, GPU NUCLEAR CORPORATION
Notice of Proposed Offering by GPU Nuclear Corporation to
provide to non-affiliates Engineering and Technical
Services, Management and Consulting Services, Training and
Educations Services and Licensing and Leasing Services.
GPU Nuclear Corporation, One Upper Pond Road, Parsippany,
New Jersey, 07054, ("GPUN"), a wholly-owned subsidiary of
General Public Utilities Corporation, 100 Interpace Parkway,
Parsippany, New Jersey, 07054, a Pennsylvania corporation
and registered holding company ("GPU") has filed an
application pursuant to Sections 9(a) and 10 of the Public
Utility Holding Company Act of 1935 (the "Act").
GPUN proposes to more fully utilize its employees'
accumulated skills, expertise and experience, and the
resources and facilities which it has developed and which it
maintains solely for the benefit of its normal operations as
a nuclear service company in the GPU holding company system,
by offering a wide range of services ("Services") to non-
affiliated companies, businesses, institutions, government
agencies and individuals, both nationally and, as
opportunities present, internationally. Services are
described, as (a) "Engineering and Technical Services"; (b)
"Management and Consulting Services"; (c) "Training and
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Educational Services" and (d) "Licensing and Leasing
Services." Examples of Engineering and Technical Services
are: Power Plant Inspections and Risk Analysis; Power Plant
Accident Analysis; Power Plant Stress Analysis; Power Plant
Operations Analysis; Power Plant Life Extension Analysis;
Nuclear Fuels Cycle Analysis; Power Plant Modification,
Design, Installation, Evaluation, Testing and Project
Management; Power Plant Equipment Corrosion Control and
Failure Analysis; Chemical and Metallurgical Laboratory
Services; Human Factors Engineering Services; Commercial
Grade Dedication of Equipment; Radioactive Waste Services;
Plant Decommissioning Services; Mechanical, Electrical and
Structural Engineering Services; Nondestructive Testing and
Examination Services.
Examples of Management and Consulting Services include:
Nuclear Plant Decommissioning and Decontamination Management
and Consulting Services; Nuclear Plant Outage Management and
Consulting Services including procurement and contracting
services in connection therewith; Instrument Calibration
Services; Quality Assurance Audits; Medical Services
Management and Consulting Services; FSAR Licensing
Consultation and Operations Analysis;
Training and Educational Services are described, by way of
example, as: Computer-based Training; Instructor Training;
Nuclear Plant Operating Room Simulator Certification;
Simulator Maintenance and Modification Training; Fire Safety
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and Plant and Facility Security Training; Diesel Equipment
Training; Development of Performance-based training programs
for non-affiliates using GPUN's copyrighted Training and
Education Database Systems ("TEDS") software system.
With respect to Licensing and Leasing Services, GPUN
proposes to license or lease to non-affiliates the use of
(a) intellectual and proprietary property developed by or
for GPUN for use in its normal business operations as a
nuclear service company for the GPU holding company system,
(e.g., any process, program, technique, invention, computer
software, work of art, video, sound recording or written
work), including training manuals, materials and processes
in conjunction with or separate from the Services described
above; and (b) the reserve capacity of Laboratory or other
support facilities ("Reserve Capacity") developed and
maintained by GPUN for use in connection with its normal
business operations as a nuclear service company in the GPU
holding company system.
GPUN proposes that it be authorized through December 31,
1999 to enter into agreements, having terms not in excess of
10 years to provide the Services to non-affiliates. Such
agreements will be negotiated and entered into with non-
affiliates on an arm's length basis. Revenues received and
expenses incurred in connection with transactions in such
Services will be accounted for under the appropriate
accounts as provided under the Uniform System of Accounts.
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GPUN does not anticipate making any material increases in
staff nor any material capital investments to provide such
Services. Further, GPUN anticipates that during the five
(5) year period for which authority is requested, aggregate
annual revenues from and expenses associated with the
proposed transactions will not exceed 5% of its annual total
operating expenses. In 1993, GPUN's total operating expense
was $421 million. In addition, the Licensing and Leasing
Services of the use of Reserve Capacity shall not exceed 50%
of the capacity available to GPUN for its normal business
operations within the GPU holding company system.
The net revenues received by GPUN from transactions in such
Services will be used to reduce the cost of its service
charges to the GPU Operating Companies.
GPUN anticipates that the provision of the Services pursuant
to the authorization sought hereunder will enable it to use
more fully its employees' accumulated skills, expertise and
experience, and the resources and facilities that have been
developed by GPUN in furtherance of its operations within
the GPU holding company system and which, by virtue of the
unique nature of the nuclear utility business may not be
readily available to the public from other sources. In
addition, such authorization will assist GPUN in maintaining
the high quality of such skills, expertise and experience
and the efficiency of such resources and facilities within
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the GPU holding company system.
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 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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