Amendment No. 1 to
SEC File No. 70-8425
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, New Jersey 07054
ENERGY INITIATIVES, INC. ("EI")
One Upper Pond Road, Parsippany, New Jersey 07054
JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L")
300 Madison Avenue, Morristown, N.J. 07960
METROPOLITAN EDISON COMPANY ("Met-Ed")
P.O. Box 16001, Reading, Pa. 19640
PENNSYLVANIA ELECTRIC COMPANY ("Penelec")
1001 Broad Street, Johnstown, Pa. 15907
GPU SERVICE CORPORATION ("GPUSC")
100 Interpace Parkway, Parsippany, New Jersey 07054
(Name of company or companies filing this statement
and address of principal offices)
GENERAL PUBLIC UTILITIES CORPORATION
(Name of top registered holding company parent of the applicants)
T. G. Howson, Vice President Michael J. Connolly, Esq.
and Treasurer Assistant General Counsel
M. A. Nalewako, Secretary GPU Service Corporation
GPU Service Corporation 100 Interpace Parkway
100 Interpace Parkway Parsippany, New Jersey 07054
Parsippany, New Jersey 07054
W. A. Boquist,II,Vice President
J. F. Wilson, Secretary - Legal Services
GPU Nuclear Corporation Metropolitan Edison Company
One Upper Pond Road Pennsylvania Electric Company
Parsippany, New Jersey 07054 P.O. Box 16001
Reading, Pennsylvania 19640
R. S. Cohen, Secretary
Jersey Central Power & Light Douglas E. Davidson, Esq.
Company Berlack, Israels & Liberman
300 Madison Avenue 120 West 45th Street
Morristown, New Jersey 07960 New York, New York 10036
B. L. Levy, President
Kelly A. Tomblin, Secretary
Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
(Names and addresses of agents for service)<PAGE>
The GPU Companies hereby amend their Application on Form U-
1, docketed in SEC File No. 70-8425, as follows:
1. By amending paragraph G of Item 1 thereof to read in
its entirety as follows:
G. GPUN intends to enter into a Non-Nuclear
Technical, Training, Management and Consulting Services
Agreement ("New Agreement") with one or more of the GPU
Companies to provide the Services as they may request
in connection with their business operations. The New
Agreement will be in substantially the form of Exhibit
B hereto which is substantially in the form of the
Laboratory Service Agreement previously filed as
Exhibit A-4 to SEC File No. 70-7720, HCAR No. 35-25149.
Any Services to be rendered by GPUN will be
charged at cost pursuant to the Act and the
Commission's rules and regulations thereunder. In
addition, GPUN will (a) charge capital costs for
providing Services to the serviced companies, if any,
consistent with generally accepted accounting
principles, and (b) bill the serviced company the costs
of service before they are paid by GPUN, which is
consistent with the practice that was approved by the
Commission Staff in its letter to GPU Service
Corporation dated June 3, 1982. Such costs will be
accounted for and billed to the GPU Companies
substantially as described in the Application and Order
docketed in SEC File No. 70-7720.
Notwithstanding the foregoing, the costs of any
Services provided by GPUN to GPUSC or GPUGC will be
billed by GPUN directly to the GPU Operating Companies
to which such Services relate. Accordingly, no GPUSC
or GPUGC capital costs will be charged to the GPU
Operating Companies for such Services.
2. By amending paragraph H of Item 1 thereof to read in
its entirety as follows:
H. (i) The GPU Companies believe that the
technical, analytical and related expertise of GPUN's
staff (described generally in paragraph F above) can be
usefully applied in support of their business
activities.
(ii) With respect to GPUSC, it is expected
that the Services provided by GPUN would consist
primarily of Training Programs (such as computer-based
training and management and supervisory training, as
described in paragraph F (11) above).
1<PAGE>
(iii) The GPU Companies do not anticipate
that the Services to be provided by GPUN will duplicate
the Services provided to the GPU Operating Companies by
GPUSC. This is due to the fact that the GPU Operating
Companies anticipate that, in general, they will only
request those Services from GPUN which are not being
provided by GPUSC and are of such a technical,
analytical or specialized nature that GPUSC is unable
to provide or GPUN is believed better positioned to
provide.(1)
3. By adding the following new paragraph to Item 3
thereof:
C. The GPU Companies request that the Commission
reserve jurisdiction over GPUN's request to provide
Services to JCP&L, pending completion of the record.
4. By amending Item 2 thereof to read in its entirety as
follows:
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
The estimated fees, commissions and expenses expected
to be incurred in connection with the proposed transactions
are as follows:
SEC Filing Fee $ 2,000
Legal Fees:
Ballard Spahr Andrews & Ingersoll 1,000
Berlack, Israels & Liberman 2,000
Ryan, Russell, Ogden & Seltzer 1,000
Richard S. Cohen, Esq. 4,500
Miscellaneous 5,500
$16,000
___________________________
(1) Similarly, the GPU Companies do not believe that GPUN
will render Services to the GPU Operating Companies that are
duplicative of the Services to be provided by GPUGC. As
described in SEC File No. 70-8409, GPUGC will be responsible for
the operation, maintenance and rehabilitation of all non-nuclear
generation facilities owned and operated by the GPU Operating
Companies. It is anticipated that GPUGC will solicit Services
from GPUN in discrete cases where its duties require the
expertise or capabilities of a third party contractor. GPUN will
not, however, supersede or replace GPUGC as the party responsible
to the GPU Operating Companies for the non-nuclear generation
facilities.
2<PAGE>
5. By filing the following exhibits in Item 6 thereof:
(a) Exhibits:
B - Revised Form of Services Agreement.
D-3(a) - Order, dated December 17, 1993, of the PaPUC
with respect to Met-Ed.
D-3(b) - Order, dated December 17, 1993, of the PaPUC
with respect to Penelec.
D-3(c) - Order, dated December 17, 1993, of the PaPUC
with respect to Met-Ed and Penelec.
D-4 - Met-Ed Application to the PaPUC.
D-5 - Penelec Application to the PaPUC.
D-6(a) - Affiliated Interest filing with the PaPUC by
Met-Ed and Penelec.
D-6(b) - Supplemental affiliated interest filing with
the PaPUC by Met-Ed and Penelec.
F-1 - Opinion of R. S. Cohen, Esq.
F-2 - Opinion of Ballard Spahr Andrews &
Ingersoll.
F-3 - Opinion of Ryan, Russell, Ogden & Seltzer.
F-4 - Opinion of Berlack, Israels & Liberman
3<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS STATEMENT TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GPU NUCLEAR CORPORATION
GPU SERVICE CORPORATION
JERSEY CENTRAL POWER & LIGHT COMPANY
METROPOLITAN EDISON COMPANY
PENNSYLVANIA ELECTRIC COMPANY
By: /s/ T. G. Howson
T. G. Howson, Vice President
and Treasurer
ENERGY INITIATIVES, INC.
By: /s/ B. L. Levy
B. L. Levy, President
Date: March 27, 1995<PAGE>
EXHIBITS TO BE FILED BY EDGAR
Exhibits:
B - Revised Form of Services Agreement.
D-3(a) - Order, dated December 17, 1993, of the PaPUC
with respect to Met-Ed.
D-3(b) - Order, dated December 17, 1993, of the PaPUC
with respect to Penelec.
D-3(c) - Order, dated December 17, 1993, of the PaPUC
with respect to Met-Ed and Penelec.
D-4 - Met-Ed Application to the PaPUC.
D-5 - Penelec Application to the PaPUC.
D-6(a) - Affiliated Interest filing with the PaPUC by
Met-Ed and Penelec.
D-6(b) - Supplemental affiliated interest filing with
the PaPUC by Met-Ed and Penelec.
F-1 - Opinion of R. S. Cohen, Esq.
F-2 - Opinion of Ballard Spahr Andrews &
Ingersoll.
F-3 - Opinion of Ryan, Russell, Ogden & Seltzer.
F-4 - Opinion of Berlack, Israels & Liberman <PAGE>
Exhibit B
GPU NUCLEAR CORPORATION
One Upper Pond Road
Parsippany, New Jersey 07054
NON-NUCLEAR TECHNICAL, TRAINING, MANAGEMENT
AND CONSULTING SERVICES AGREEMENT
To: [Insert name of recipient of services] ("Company")
GPU Nuclear Corporation ("GPUNC") is a company engaged,
among other things, in rendering 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 in providing the GPU Operating
Companies and GPU Service Corporation ("GPUSC") (collectively the
GPU Operating Companies and GPUSC are referred to as the
"Associate Companies") with certain non-nuclear laboratory
services. In addition to these services, GPUNC now offers to
provide additional non-nuclear services as described and set
forth herein [as contemplated by that certain Mutual Assistance
Agreement, dated as of October 28, 1993, among GPUNC, GPUSC,
JCP&L, Penelec and Met-Ed](1).
The organization, conduct of business, and method of cost
allocation of GPUNC are designed to meet the requirements of
Section 13 under the Public Utility Holding Company Act of 1935
("PUHCA") and the rules and regulations promulgated thereunder to
the end that services performed by GPUNC for Associate Companies
___________________________
1 Insert if applicable<PAGE>
will be rendered to them at cost, fairly and equitably allocated.
Services will be rendered by GPUNC upon receipt from time to
time of specific or general requests therefore or as otherwise
agreed upon. Such requests or agreements may always be modified
or cancelled by the serviced company at its discretion.
Accordingly, the parties hereto agree as follows:
1. GPUNC agrees to furnish to the Company and its
subsidiaries, 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 ("Services") hereto as You may from time
to time request or as we may otherwise agree. GPUNC 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, GPUNC 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 be furnished hereunder.
3. GPUNC has and will maintain an experienced and trained
staff in order to enable it to render the Services described in
Schedule I hereto. In addition to the services of its own staff,
GPUNC will, after consultation with You concerning the Services
to be rendered pursuant to Your request, arrange for services of
2<PAGE>
nonaffiliated experts and consultants.
4. All of the Services rendered under this agreement will
be at the actual cost thereof, and paid 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 to You
and GPUNC. Such methods may be modified or changed by GPUNC
without the necessity of an amendment to this agreement, provided
that in each instance all services rendered hereunder will be at
the actual cost thereof, fairly and equitable allocated, and all
in accordance with the requirements of PUHCA and the rules,
regulations and orders promulgated 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 (10) days
after receipt. If, however, GPUNC so requests, You will provide
it with funds sufficiently in advance to enable it to pay the
actual costs of the Services provided You hereunder. This
agreement may be terminated at any time by either party giving at
least thirty (30) days' written notice to the other of such
termination as at the end of any month.
6. This agreement will be subject to termination of
3<PAGE>
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 or performance.
GPU NUCLEAR CORPORATION
By: ______________________________
P.R. Clark, President
Accepted as of _______________, 1994
[Company]
By: ______________________________
4<PAGE>
SCHEDULE I
Description of Non-Nuclear Technical, Training,
Management and Consulting Services which are available from
GPU NUCLEAR CORPORATION
The Non-Nuclear Technical, Training, Management and
Consulting Services include, but are not limited to, the
following types of services:
1. Plant Operations and Maintenance:
Providing services, as available, for scheduled and
non-scheduled maintenance functions for the non-nuclear
plants of the GPU Companies. Such Services shall
include, but not be limited to: plant operations;
management and supervision; written work instructions
and planning; craft coordination and supervision;
estimating and scheduling; contracting and purchasing;
non-nuclear engineering assistance; building
maintenance; grounds maintenance; mechanical
maintenance; electrical main-tenance and equipment
maintenance.
2. Plant Inspections and Risk Analysis:
Conducting plant inspections and performing
probabilistic risk assessments of the GPU Companies'
non-nuclear plants and plant systems including the use
of robotic devices and techniques to conduct such
inspections and analysis.
1<PAGE>
3. Plant Equipment Corrosion Control and Failure Analysis:
Assessing the potential corrosion risks and processes
in the GPU Companies' non-nuclear plant systems and
providing recommendations for corrective action;
invest-igating system and equipment failures and
providing recommendations for corrective action; and
using ultrasonic and other inspection techniques to
monitor and assess plant systems and equipment for
possible degradation from erosion or corrosion.
4. Engineering and Design Services:
Providing technical design and engineering services for
the GPU Companies' non-nuclear plant modifications and
for the resolution of operating and maintenance issues.
5. Plant Life Extension Analysis:
Reviewing the GPU Companies' non-nuclear plant facility
structures, systems and components and performing
technical procedures and processes that may be
necessary to extend the useful life of such plant
facilities.
6. Project and Construction Management:
Providing to the GPU Companies' non-nuclear project and
construction management and supervision; projects
controls (from project design to project completion),
such as planning, estimating, cost engineering,
scheduling and procurement; craft coordination and
2<PAGE>
supervision; construction compliance and review
assistance; design and engineering assistance; project
permitting; and contract and procurement assistance in
connection with a variety of projects, including, but
not limited to: construction of buildings, underground
piping and utilities, major concrete foundations,
mechanical piping and equipment, roofing and
renovations, disposal and shutdown.
7. Plant Modification, Design, Installation, Evaluation &
Testing:
Providing to the GPU Companies guidelines, criteria,
designs, drawings, material selection, specifications,
and analyses in support of non-nuclear plant
modifications; organizing, planning and coordinating
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. Environmental Protection Services:
Providing to the GPU Companies EPA and State-required
environmental sampling and analysis; environmental
impact statements; hazardous waste management;
bioremediation of petroleum contaminated soil; and
regulatory affairs and rulemaking review assistance.
3<PAGE>
9. Emergency Preparedness Training and Services:
Providing the GPU Companies with general emergency
preparedness support; emergency preparedness training
and consultation and assisting in emergency
preparedness communications with state and local
government authorities.
10. Quality Assurance Service:
Providing quality assurance supervisory services for
contractors performing inspections or construction
activities at the GPU Companies' non-nuclear
facilities.
11. Training Programs:
Providing non-nuclear training services and programs to
the GPU Companies such as computer-based training;
instructor training; management and supervisory
training, fire protection training; facility security
training; mechanical maintenance training; chemistry
training; electrical, instrument & control training;
safety and environmental training; and development of
Performance Based Training Programs using GPUNC's
Training and Education Data Base systems (TEDS)
Software System.
12. Plant Management Consulting and Operation Analysis:
Providing the GPU Companies with situational expertise
and guidance to aid the management decision-making
4<PAGE>
process and provide assistance and expertise in
developing reliability centered maintenance programs
and on-line maintenance scheduling programs. Provide
job and work process re-engineering consultation and
analysis to identify potential for improvement of
existing job and work process methods.
13. Industrial Safety and Hygiene Services:
Provide the GPU Companies with OSHA Compliance
assistance; plant safety analysis; asbestos sampling
and analysis; noise surveillance and analysis; heat
stress assessment; and policy and procedure writing.
14. Medical Services.
Provide fitness-for-duty medical services and other
medical services related to the GPU Companies' needs to
comply with state, federal or local laws or
regulations.
5<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,
regulations and orders promulgated thereunder, and will include
all costs associated with the Services incurred by GPUNC.
Records will be maintained and periodically reviewed by
GPUNC in order to accumulate and charge the actual costs of the
Services. These costs will include wages and salaries of
employees and related expenses, such as insurance, taxes,
pensions and other employee welfare benefits, and all other
related costs including general administration expenses and
capital charges, if any, properly amortized and equitably
allocated.
Charges for the Services will be determined from the
timesheets of employees (other than some secretaries, clerical
and similar employees, the cost of whose services will be treated
as a part of general administrative expenses).
Charges for the Services rendered and related employee
expenses and costs and non-personnel expenses (e.g., use of
automotive equipment) 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
1<PAGE>
formula.
Out-of-pocket expenses which are incurred for the serviced
companies will be billed at cost. Such expense may be billed
either upon the receipt by GPUNC of invoices for such expenses
and before their payment by GPUNC or after their payment by
GPUNC. Charges for non-personnel expenses, such as for use of
automobiles, will normally be computed on the basis of costs per
hour or per mile.
Capital charges, if any, will be billed, as incurred, in
accordance with generally accepted accounting principles, to the
serviced company by means of an equitable allocation formula.
2<PAGE>
Exhibit D-3(a)
PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA. 17105-3265
Public Meeting held December 15, 1993
Commissioners Present:
David W. Rolka, Chairman
Joseph Rhodes, Jr., Vice Chairman
John M. Quain
Lisa Crutchfield
John Hanger
Application of Metropolitan Edison Company Docket No.
A-110300F0063
OPINION AND ORDER
BY THE COMMISSION:
On September 30, 1993, Metropolitan Edison Company
filed an Application for authorization, in advance, to engage in
(1) various transactions in goods and services with its
affiliates and (2) semi-annual reporting of all said transactions
reflecting information ordinarily found in financial statements.
The Application is filed in accordance with the
requirements of Section 1102 (a) of the Public Utility Code, 66
Pa. C.S. Section 1102(a).
This Application is related to the Affiliated Interest
Agreement ("Agreement") filed at G-00930355 which is an update of
an Agreement which was approved in an Order entered October 1,
1982 at Docket No. G-820167. The proposed Agreement reflects the
GPU System Companies understanding and agreement with respect to
additional goods and services.
Examples of additional goods are electric generating,
other production, transmission, distribution, office,
administrative and general plant materials, supplies and
equipment not "in place" or "installed". With respect to
services, examples include, but are not limited to, reprographic
services, restoration, maintenance and repair services for
generation, transmission and distribution facilities, remittance
processing services, treasury services, accounts payable
services, use of office, warehouse, storage and other space and
facilities, data processing and other computer services and legal
services.
Consideration for the transfer of goods and services
among the GPU System Companies will be at cost. The transfer of<PAGE>
goods and services will not result in any interruption or
curtailment of existing services to the public, nor will they
result in any adverse impact on the rates for service to Met-Ed
customers.
The Commission has examined the Application and has
determined that it appears to be reasonable and consistent with
the public interest; however, approval of the Application does
not preclude the Commission from investigating during any formal
proceeding, the reasonableness of charges incurred under the
Agreement; THEREFORE,
IT IS ORDERED:
1. That the Application of Metropolitan Edison
Company be and hereby is approved.
2. That approval does not preclude the Commission
from investigating during any formal proceeding the
reasonableness of charges incurred under the Agreement.
BY THE COMMISSION
John G. Alford,
Secretary
(SEAL)
ORDER ADOPTED: December 15, 1993
ORDER ENTERED: December 17, 1993<PAGE>
Exhibit D-3(b)
PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA. 17105-3265
Public Meeting held December 15, 1993
Commissioners Present:
David W. Rolka, Chairman
Joseph Rhodes, Jr., Vice Chairman
John M. Quain
Lisa Crutchfield
John Hanger
Application of Pennsylvania Electric Company Docket No.
A-110400F0024
OPINION AND ORDER
BY THE COMMISSION:
On September 30, 1993, Pennsylvania Electric Company
("Penelec") filed an Application for authorization, in advance,
to engage in (1) various transactions in goods and services with
its affiliates and (2) semi-annual reporting of all said
transactions reflecting information ordinarily found in financial
statements.
The Application is filed in accordance with the
requirements of Section 1102 (a) of the Public Utility Code, 66
Pa. C.S. Section 1102(a).
This Application is related to the Affiliated Interest
Agreement ("Agreement") filed at G-00930355 which is an update of
an Agreement which was approved in an Order entered October 1,
1982 at Docket No. G-820167. The proposed Agreement reflects the
GPU System Companies understanding and agreement with respect to
additional goods and services.
Examples of additional goods are electric generating,
other production, transmission, distribution, office,
administrative and general plant materials, supplies and
equipment not "in place" or "installed". With respect to
services, examples include, but are not limited to, reprographic
services, restoration, maintenance and repair services for
generation, transmission and distribution facilities, remittance
processing services, treasury services, accounts payable
services, use of office, warehouse, storage and other space and
facilities, data processing and other computer services and legal
services.<PAGE>
Consideration for the transfer of goods and services
among the GPU System Companies will be at cost. The transfer of
goods and services will not result in any interruption or
curtailment of existing services to the public, nor will they
result in any adverse impact on the rates for service to Penelec
customers.
The Commission has examined the Application and has
determined that it appears to be reasonable and consistent with
the public interest; however, approval of the Application does
not preclude the Commission from investigating during any formal
proceeding, the reasonableness of charges incurred under the
Agreement; THEREFORE,
IT IS ORDERED:
1. That the Application of Pennsylvania Electric
Company be and hereby is approved.
2. That approval does not preclude the Commission
from investigating during any formal proceeding the
reasonableness of charges incurred under the Agreement.
BY THE COMMISSION
John G. Alford,
Secretary
(SEAL)
ORDER ADOPTED: December 15, 1993
ORDER ENTERED: December 17, 1993<PAGE>
Exhibit D-3(c)
PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA. 17105-3265
Public Meeting held December 15, 1993
Commissioners Present:
David W. Rolka, Chairman
Joseph Rhodes, Jr., Vice Chairman
John M. Quain
Lisa Crutchfield
John Hanger
Affiliated Interest Agreement Between Docket No.
Metropolitan Edison Company, Pennsylvania G-00930355
Electric Company, Jersey Central Power & Light
Company, GPU Service Corporation and GPU
Nuclear Corporation
OPINION AND ORDER
BY THE COMMISSION:
On September 30, 1993, an Affiliated Interest Agreement
("Agreement") between Metropolitan Edison Company ("Met-Ed"),
Pennsylvania Electric Company ("Penelec"), Jersey Central Power &
Light Company ("JCP&L"), GPU Service Corporation ("GPUSC") and
GPU Nuclear Corporation ("GPUNC") was filed to become effective
October 30, 1993, setting forth the terms and conditions whereby
GPUSC and GPUNC would furnish management, supervisory and
engineering services to Met-Ed, Penelec and JCP&L ("GPU System
Companies"). On October 28, 1993, the Commission extended the
period for consideration of this Agreement to December 31, 1993.
The Agreement is filed in accordance with the
requirements of Section 2102 (b) of the Public Utility Code, 66
Pa. C.S. Section 2102(b).
This Agreement is an update of an Agreement which was
approved in an Order entered October 1, 1982 at Docket No. G-
820167. The proposed Agreement reflects the GPU System Companies
understanding and agreement with respect to additional goods and
services.
Examples of additional goods are electric generating,
other production, transmission, distribution, office,
administrative and general plant materials, supplies and
equipment not "in place" or "installed". With respect to
services, examples include, but are not limited to, reprographic
services, restoration, maintenance and repair services for<PAGE>
generation, transmission and distribution facilities, remittance
processing services, treasury services, accounts payable
services, use of office, warehouse, storage and other space and
facilities, data processing and other computer services and legal
services.
Consideration for the transfer of goods and services
among the GPU System Companies will be at cost. The transfer of
goods and services will not result in any interruption or
curtailment of existing services to the public, nor will they
result in any adverse impact on the rates for service to Met-Ed
and Penelec customers.
The Commission has examined the Agreement and has
determined that the contract appears to be reasonable and
consistent with the public interest; however, approval of the
Application does not preclude the Commission from investigating
during any formal proceeding, the reasonableness of charges
incurred under the Agreement; THEREFORE,
IT IS ORDERED:
1. That the Affiliated Interest Agreement between
Met-Ed, Penelec, JCP&L, GPUSC and GPUNC be and hereby is
approved.
2. That approval does not preclude the Commission
from investigating during any formal proceeding the
reasonableness of charges incurred under the Agreement.
BY THE COMMISSION
John G. Alford,
Secretary
(SEAL)
ORDER ADOPTED: December 15, 1993
ORDER ENTERED: December 17, 1993<PAGE>
Exhibit D-4
BEFORE THE
PENNSYLVANIA PUBLIC UTILITY COMMISSION
IN RE: APPLICATION OF METROPOLITAN :
EDISON COMPANY FOR APPROVAL OF : APPLICATION DOCKET
MUTUAL ASSISTANCE AGREEMENT : No.: A-110300F0068
TO THE PENNSYLVANIA PUBLIC UTILITY COMMISSION:
1. The name and address of the public utility filing
this Application is:
Metropolitan Edison Company (hereinafter "Met-Ed")
2800 Pottsville Pike (P.O. Box 16001)
Reading, Pennsylvania 19640-0001
2. The name and address of counsel for Met-Ed with
respect to this Application are:
W. Edwin Ogden, Esquire
Ryan, Russell, Ogden & Seltzer
1100 Berkshire Boulevard
P.O. Box 6219
Reading, Pennsylvania 19610-0219
3. Met-Ed is a public utility as defined in the
Pennsylvania Public Utility Code (the "Code"). Met-Ed has
corporate power and authority to render electric service to the
public in numerous municipalities in fourteen counties in eastern
and central Pennsylvania, and furnishes electric service to over
400,000 customers in a 3,274 square mile area.
4. As of December 31, 1992, Met-Ed served 444,758
retail customers who receive electric service under rate
schedules RS, RT, GS, GST, GP, TP and MS. The number of
customers receiving service under these rate schedules as of
December 31, 1992, is as follows:
Rate RS 327,009
Rate RT 66,969
Rate GS 48,504<PAGE>
Rate GST 402
Rate GP 367
Rate TP 18
Rate MS 404
5. In an Order entered October 1, 1982 at Docket No.
G-820167, this Commission approved a proposed agreement between
Met-Ed, Pennsylvania Electric Company ("Penelec"), Jersey Central
Power & Light Company ("JCP&L"), General Public Utilities
Corporation ("GPU"), GPU Service Corporation ("GPUSC") and GPU
Nuclear Corporation ("GPUNC") to provide inter-company operating,
purchasing and construction services and the inter-company
transfer of goods incidental thereto. Met-Ed, Penelec and JCP&L
are operating public utility subsidiary companies of GPU. JCP&L
is engaged in the production, generation, transmission,
distribution and sale of electricity to and for the public in New
Jersey. GPUSC and GPUNC are mutual service companies under
Section 13 of the Public Utility Holding Company Act of 1935,
providing services pursuant to service agreements with their
affiliates within the GPU System. All of these companies are
referred to collectively for purposes of this Application as the
"GPU System Companies". 6. The agreement
approved in the October 1, 1982 Commission Order provided
examples of the services contemplated thereunder, such as: a)
design, engineering, construction, operation, maintenance and
fuel procurement for coal-fired generating stations; b) other
fossil fuel generation services; c) laboratory testing, research
and development, engineering and support services for generation,
transmission and distribution, construction and maintenance; d)
microfilming; e) records retention and storage; and f) the
2<PAGE>
transfer of goods incidental to such services, subject to semi-
annual reporting to the Commission. The Commission found that
the agreement permitted the GPU System Companies "to achieve a
better utilization of available resources on an inter-company
basis, thereby eliminating duplicative staffing and facilities
and reducing the dependency on unaffiliated independent
contractors." (Order, page 1).
7. The GPU System Companies propose to enter into a
further mutual assistance agreement (the "Agreement") to reflect
their understanding and agreement with respect to additional
goods and services. Examples of such additional goods are
electric generating, other production, transmission,
distribution, office, administrative and general plant materials,
supplies and equipment not "in place" or "installed". With
respect to services, examples include, but are not limited to,
reprographic services, restoration, maintenance and repair
services for generation, transmission and distribution
facilities, remittance processing services, treasury services,
accounts payable services, use of office, warehouse, storage and
other space and facilities, data processing and other computer
services and legal services.
8. The form of Agreement is attached hereto as
Exhibit 1 and made a part hereof, and sets forth the terms and
conditions governing all such transfers of property and services
by and between the GPU System Companies as well as the accounting
therefore, in accordance with rules 90 and 91 under the Public
Utility Holding Company Act of 1935.
9. All the annual reports, tariffs, certificates of
3<PAGE>
public convenience and securities certificates, heretofore filed
with this Commission by Met-Ed and by its predecessors, are made
a part hereof by reference.
10. Pursuant to the Agreement, Met-Ed intends to
engage from time to time and as circumstances may warrant in a
series of transfers of goods and services by, between and among
itself and its affiliated companies in the GPU System, which
property consists of materials and supplies included by the
companies under the Federal Energy Regulatory Commission ("FERC")
system of accounts, Account No. 154 and goods included under the
FERC system of accounts, Account No. 101.
11. The consideration for such ongoing transfers of
services and property which is not in place or installed will be
in the case of services, the cost thereof (including all
applicable direct or indirect costs of the furnishing company),
and in the case of property, its original cost less accumulated
depreciation (including all applicable direct or indirect costs
of the furnishing company).
12. Since 1982, Met-Ed inventory levels have grown
from approximately $28 million to the 1992 level of approximately
$54 million, as shown on Exhibit 2 hereto. Met-Ed, and the GPU
System as a whole, anticipate that under the proposed Agreement
the cumulative volume of goods to be transferred will reach $1
million in the first year and approximately $3 - $6 million per
year within three years of the approval of this Application. It
is believed that the process of interchanging inventory will
initially contribute to the efforts of the GPU System Companies
to stabilize inventory levels and will, over time, contribute
4<PAGE>
significantly to efforts to reduce system-wide inventory levels.
Some examples of the other efforts which the GPU System is
undertaking in this regard include increased standardization of
inventory categories and types, system-wide assessment of
inventory needs and system-wide procurements, through the
continued better utilization of available resources on an
inter-company basis. The projected cumulative GPU System
reduction in inventory levels resulting from the process of
inter-company transfers is expected to reach at least $10 million
in about 5 years.
13. Met-Ed has not attached a statement of fixed
capital, a pro-forma balance sheet giving effect to any transfers
or a pro-forma consolidated income statement, since such
information is not available in the context of this Application.
As described below, Met-Ed (a) is seeking, in advance,
authorization to engage in various transactions in goods and
services with its affiliates and (b) proposes to engage in
semi-annual reporting of all such transactions reflecting the
kind of information which would ordinarily be found in such
financial statements.
14. The transfers of such goods and services will not
result in any interruption or curtailment of existing services to
the public, nor will they result in any adverse impact on the
rates for service to Met-Ed customers.
15. Met-Ed anticipates that the transfers of goods or
property contemplated by the Agreement with its affiliates will
be the types of transfers which would require the approval of
this Commission pursuant to Code Section 1102(a)(3). In the
5<PAGE>
interest of efficiency and the avoidance of administrative
burdens, Met-Ed requests authorization to engage in such
transfers, subject to the filing of semi-annual reports beginning
one month after each six month period ending March 31 and
September 30, summarizing the cost of all nonexempt transactions
carried out during the previous six months. Such reporting will
allow the Commission to appropriately monitor the transfers, to
assure itself that such transfers are in compliance with Code
Section 1102.
16. Code Section 2102 requires that all contracts or
arrangements providing for the furnishing of management,
supervisory, construction, engineering, accounting, legal,
financial or similar services between a public utility and its
affiliated interests must receive the written approval of the
Commission. Under Section 2102 (b) the Commission shall approve
such a contract or arrangement if it clearly appears and is
established that it is reasonable and consistent with the public
interest. For the reasons described above in this Application,
Met-Ed believes that the proposed Agreement, together with this
Commission's approval of semi-annual reporting, would satisfy the
standards of Section 2102 (b). Met-Ed has filed concurrently
herewith for this Commission's approval pursuant to Section 2102.
Penelec also has filed concurrently herewith for Commission
approval, pursuant to Sections 1102 and 2102, of its
participation in the Agreement.
WHEREFORE, Met-Ed respectfully requests that your
Honorable Commission approve the various proposed transactions
6<PAGE>
contemplated herein, pursuant to Section 1102(a)(3) of the Public
Utility Code.
Date: September 30, 1993 /s/ W. Edwin Ogden
W. Edwin Ogden
RYAN, RUSSELL, OGDEN & SELTZER
1100 Berkshire Boulevard
P.O. Box 6219
Reading, Pennsylvania 19610-0219
(215) 372-4761
Attorneys for
Metropolitan Edison Company
7<PAGE>
STATE OF NEW JERSEY )
: ss.
COUNTY OF MORRIS )
Don W. Myers, being duly sworn according to law deposes
and says that he is an officer of Metropolitan Edison Company;
that he makes this affidavit on its behalf being familiar with
the facts and having authority to do so; and that all of the
statements set forth in the foregoing document are true and
correct to the best of his knowledge, information and belief.
/s/ Don W. Myers
Vice President and Treasurer
Sworn to and subscribed before me
this 30th day of September, 1993.
/s/ Nancy L. Geyer
NANCY L. GEYER
NOTARY PUBLIC OF NEW JERSEY
MY COMMISSION EXPIRES MAY 27, 1996
8<PAGE>
EXHIBIT 1
MUTUAL ASSISTANCE AGREEMENT
THIS AGREEMENT, dated as of 1993, between
and among JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L"),
METROPOLITAN EDISON COMPANY ("MET-ED"), PENNSYLVANIA ELECTRIC
COMPANY ("PENELEC"), GPU SERVICE CORPORATION ("GPUSC") AND GPU
NUCLEAR CORPORATION ("GPUN") (individually a "Company" and
collectively the "Companies"), each a wholly-owned subsidiary of
General Public Utilities Corporation ("GPU"), a public utility
holding company registered under the Public Utility Holding
Company Act of 1935 (the "Act").
W I T N E S S E T H :
WHEREAS, JCP&L, Met-Ed and Penelec are public utility
companies engaged in the production, generation, transmission,
distribution and sale of electricity to and for the public in
their respective service territories; and
WHEREAS, GPUSC and GPUN are mutual service companies
under Section 13 of the Act providing services pursuant to
service agreements with their affiliates; and
WHEREAS, Met-Ed and Penelec have heretofore filed an
agreement with the Pennsylvania Public Utility Commission
("PaPUC") pursuant to the then Section 701.1 of the Pennsylvania
Public Utility Law -- now Section 2102 of the Pennsylvania Public
Utility Code (the "Code") -- with respect to the exchange of
services and goods by and between them and their affiliated
companies, which agreement was approved by the PaPUC by Order
entered on October 1, 1982 at Docket No. G-820167; and
WHEREAS, the subject of said Order was an agreement
between the Companies which provided examples of the services
contemplated thereunder such as: (a) design, engineering,
construction, operation, maintenance and fuel procurement for
coal-fired generating stations; (b) other fossil fuel generation
services; (c) lab testing, research and development, engineering
and support services for generation, transmission and
distribution, construction and maintenance; (d) microfilming; (e)
records retention and storage; and (f) goods incidental to such
services; and
WHEREAS, from time to time various opportunities arise
for the Companies to effect economies and better utilization of
available resources through transfers of a broader range of goods
and services by, between and among the Companies than
contemplated by the aforementioned regulatory authorization for
Met-Ed and Penelec; and<PAGE>
WHEREAS, the Companies desire to obtain such additional
authorization as is necessary to expand the scope of goods and
services that may, if requested and available, be furnished from
time to time by, between and among the Companies;
NOW, THEREFORE, the Companies, intending to be legally
bound, agree as follows:
1. As used herein "Services" refers, but is not limited,
to (i) reprographics services, (ii) restoration, maintenance and
repair services for generation, transmission and distribution
facilities, (iii) remittance processing services, (iv) treasury
services, (v) accounts payable services, (vi) use of office,
warehouse, storage and other space or facilities, (vii) data
processing and other computer services and (viii) legal services.
The foregoing are examples of the opportunities that have arisen
or may arise for the more efficient use of resources by the
parties hereto and are in addition to those examples of services
set forth in the agreement referred to in the PaPUC Order of
October 1, 1982.
2. As used herein "Goods" refers, but is not limited, to
electric generating, other production, transmission,
distribution, office, administrative and general plant materials,
supplies and equipment not "in place" or "installed". As
contemplated hereunder, transactions in Goods may, but need not
be, incident to the provision of Services. The foregoing are
examples of opportunities that have arisen or may arise for the
more efficient use of resources by the parties hereto.
3. From time to time, each Company, as it in its sole
discretion may determine, upon the request of another Company,
will furnish to such other Company, upon the terms and conditions
set forth herein, one or more of the Goods and Services
(including, but not limited to, in the case of Goods, those which
at the time are inadequate, obsolete, unfit, or unnecessary or
unadapted for use in the operations of the Company to which such
request is made).
4. All transactions carried out pursuant hereto shall be
effected at cost in the case of the performance of Services, or
cost less depreciation in the case of the sale of Goods, in
accordance with the Act and the regulations promulgated
thereunder (including, without limitation, Rules 90 and 91 under
the Act, copies of which are attached hereto as Attachment I).
5. All Services provided hereunder shall be priced at the
cost thereof (including all applicable direct and indirect costs
of the furnishing Company).
6. All Goods provided hereunder shall be priced at the
cost less depreciation thereof (including all applicable direct
and indirect costs of the furnishing Company) in accordance with
the Companies' accepted and usual accounting policies and
2<PAGE>
procedures as follows:
a. Materials and supplies (M&S) included by the Companies
under Inventory Account No. 154.000 (and any successor provision
thereto), will be sold at the average unit price of such goods as
determined by the furnishing party's Material Inventory Control
System plus an appropriate equitable allocation of the furnishing
Company's "stores" and "purchasing" overhead expenses.
(i) Bills will be rendered as soon as practical after the
close of each month and will be payable within thirty days
following receipt; provided, however, that at the election
of the furnishing Company, the requesting Company shall
advance, with its request, funds sufficient to enable the
furnishing Company to pay therewith any significant amount
of out-of-pocket expenses associated with the furnishing of
the requested Goods.
b. Goods included under Capital Account No. 101.000 (and
any successor provision thereto), will be sold at cost less
depreciation as carried on the books of the furnishing Company.
(i) Separate bills for the sale of such Goods will be
rendered, and acceptable documentation of title transfer, if
required, will be provided as soon as practical after the
close of each month and will be payable within thirty days
following receipt; provided, however, that at the election
of the furnishing Company, the requesting Company shall
advance, with its request, funds sufficient to enable the
furnishing Company to pay therewith any significant amount
of out-of-pocket expenses associated with the furnishing of
the requested Goods.
7. In view of the fact that the Goods and Services to be
furnished hereunder are to be furnished at cost less
depreciation, if any, and to facilitate the undertaking of this
Agreement, each Company expressly waives any right it may have to
recover from the other Companies for any losses, damages,
penalties, liabilities, claims or expenses (including damage to
its own property or liabilities to third parties) for any cause
whatsoever including without limitation the negligence of the
other Companies, its employees and agents in connection with the
provision of Goods and Services hereunder.
8. The provision of Goods and Services hereunder by and
for any Company hereto shall be subject to the receipt of any
other regulatory approvals which may pertain to or be necessary
for a particular transaction.
9. This Agreement may be terminated with respect to any
Company, effective as of the end of any calendar month, upon at
least thirty days' prior written notice of such termination by
such Company to the other Companies.
3<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written:
JERSEY CENTRAL POWER & LIGHT COMPANY
By:
METROPOLITAN EDISON COMPANY
By:
PENNSYLVANIA ELECTRIC COMPANY
By:
GPU SERVICE CORPORATION
By:
GPU NUCLEAR CORPORATION
By:
4<PAGE>
ATTACHMENT I
"Rule 90. Transactions Limited to Cost
(a) Except as permitted by this rule, or any other
applicable rule, regulation, or order of the Commission.
(1) No registered holding company shall perform any service
or construction for, or sell any goods to, any associate company
thereof which is a public-utility company, a mutual service
company, or a company engaged in the business of performing
service or construction for, or selling goods to, associate
public-utility companies, or enter into any contract to do so,
and
(2) No subsidiary company of a registered holding company
(including a mutual service company) shall perform any service or
construction for, or sell any goods to, any associate company
thereof, or enter into any contract to do so, at more than cost
as determined pursuant to Rule 91 or any other applicable rule,
regulation, or order of the Commission, or in the absence
thereof, in accordance with sound methods of determining cost.
In the case of a sale of used goods the price shall be not more
than cost less depreciation. Any charges on a basis of estimated
cost shall be readjusted to actual cost at least annually, if for
services or goods, and upon completion of individual projects, in
case of construction.
(b) In the case of construction for an associate company of
a specific project, building, or unit on which substantial
expenses were incurred before August 26, 1935, pursuant to a
contract made before that date, the holding company or subsidiary
performing the construction shall be entitled to the proportion
of its profit or fee earned prior to April 1, 1936.
(c) If a sale of goods is merely incidental to a sale of an
entire business or a substantial portion thereof, or to a sale of
assets other than goods, a lump sum price for the entire
transaction may include such goods without the assignment of a
specific portion of the price to the cost of such goods.
(d) The price of services, construction, or goods need not
be limited to cost although the transaction comes within the
terms of paragraph (a) of this rule if,
(1) Neither the company performing the services or
construction, or selling the goods, nor the associate company
receiving such services or construction, or buying such goods, is
(i) a public utility or holding company, (ii) an investment
company or investment trust, including any company or trust which
is a medium of investment in securities for the benefit of a
registered holding company or its employees or officers, or (iii)
a company engaged in the business of selling goods to associate
companies or performing services or construction, or (iv) a
company controlling, directly or indirectly, any company
1<PAGE>
specified in (i), (ii), or (iii) above; or
(2) Such transaction consists of a sale of goods produced
by the seller."
"Rule 91. Determination of Cost.
(a) Subject to the provisions of this rule and of any other
applicable rule, regulation, or order of the Commission, a
transaction shall be deemed to be performed at not more than cost
if the price (taking into account all charges) does not exceed a
fair and equitable allocation of expenses (including the price
paid for goods) plus reasonable compensation for necessary
capital procured through the issuance of capital stock (or
similar securities of an unincorporated company).
(b) Direct charges shall be made so far as costs can be
identified and related to the particular transactions involved
without excessive effort or expense. Other elements of cost,
including taxes, interest, other overhead, and compensation for
the use of capital procured by the issuance of capital stock (or
similar securities of an unincorporated company) shall be fairly
and equitably allocated. Interest on borrowed capital and
compensation for the use of capital shall represent a reasonable
return only the amount of capital reasonably necessary for the
performance of services or construction for, or the selling of
goods to, customers for whom transactions are required by the
rules of the Commission to be performed at cost. Such amount
shall not include the cost of assignment of, or any
capitalization of, any service, sales, or construction contract.
(c) Any expense (including the price paid for goods)
incurred in a transaction with an associate company of the
performing or selling company (directly or through one or more
other associate companies thereof), to the extent that it exceeds
the cost of such transaction to such associate company, shall not
be included in determining cost to such performing or selling
company.
(d) Any expense (including the price paid for goods)
incurred in a transaction with a person other than an associate
company but not at arm's-length, to the extent that it exceeds
the expense at which the performing or selling company might
reasonably be expected to obtain elsewhere, or to furnish itself,
comparable performance, goods, capital, or other items of expense
involved (giving due regard to quality, quantity, regularity of
supply, and other factors entering into the calculation of a fair
price), shall not be included in determining cost to such
performing or selling company."
2<PAGE>
Exhibit D-5
BEFORE THE
PENNSYLVANIA PUBLIC UTILITY COMMISSION
IN RE: APPLICATION OF PENNSYLVANIA :
ELECTRIC COMPANY FOR APPROVAL OF : APPLICATION DOCKET
A MUTUAL ASSISTANCE AGREEMENT : No. A-110400F0024
TO THE PENNSYLVANIA PUBLIC UTILITY COMMISSION:
1. The name and address of the public utility filing
this Application is:
Pennsylvania Electric Company (hereinafter
"Penelec")
1001 Broad Street
Johnstown, Pennsylvania 15907
2. The name and address of counsel for Penelec with
respect to this Application are:
W. Edwin Ogden, Esquire
Ryan, Russell, Ogden & Seltzer
1100 Berkshire Boulevard
P.O. Box 6219
Reading, Pennsylvania 19610-0219
3. Penelec is a public utility as defined in the
Pennsylvania Public Utility Code (the "Code"). Penelec has
corporate power and authority to render electric service to the
public in numerous municipalities in thirty-one counties in
western, northern and central parts of Pennsylvania. Penelec
furnishes electric service to more than 500,000 customers within
the 17,000 square mile service territory extending from the
Maryland state line northerly to the New York state line.
4. As of December 31, 1992, Penelec served 552,199
retail customers who take service pursuant rate schedules RS, RT
H, GS, GST, GP and LP. The number of customers receiving service
under these rate schedules as of December 31, 1992, is as
follows:<PAGE>
Rate RS 451,128
Rate RT 30,805
Rate H 204
Rate GS 69,296
Rate GST 360
Rate GP 355
Rate LP 51
5. In an Order entered October 1, 1982 at Docket No.
G-820167, this Commission approved a proposed agreement between
Penelec, Metropolitan Edison Company ("Met-Ed"), Jersey Central
Power & Light Company ("JCP&L"), General Public Utilities
Corporation ("GPU"), GPU Service Corporation ("GPUSC") and GPU
Nuclear Corporation ("GPUNC") to provide inter-company operating,
purchasing and construction services and the inter-company
transfer of goods incidental thereto. Penelec, Met-Ed and JCP&L
are operating public utility subsidiary companies of GPU. JCP&L
is engaged in the production, generation, transmission,
distribution and sale of electricity to and for the public in New
Jersey. GPUSC and GPUNC are mutual service companies under
Section 13 of the Public Utility Holding Company Act of 1935,
providing services pursuant to service agreements with their
affiliates within the GPU System. All of these companies are
referred to collectively for purposes of this Application as the
"GPU System Companies".
6. The agreement approved in the October 1, 1982
Commission Order provided examples of the services contemplated
thereunder, such as: a) design, engineering, construction,
operation, maintenance and fuel procurement for coal-fired
generating stations; b) other fossil fuel generation services; c)
laboratory testing, research and development, engineering and
support services for generation, transmission and distribution,
2<PAGE>
construction and maintenance; d) microfilming; e) records
retention and storage; and f) the transfer of goods incidental to
such services, subject to semi-annual reporting to the
Commission. The Commission found that the agreement permitted
the GPU System Companies "to achieve a better utilization of
available resources on an inter-company basis, thereby
eliminating duplicative staffing and facilities and reducing the
dependency on unaffiliated independent contractors." (Order, page
1).
7. The GPU System Companies propose to enter into a
further mutual assistance agreement (the "Agreement") to reflect
their understanding and agreement with respect to additional
goods and services. Examples of such additional goods are
electric generating, other production, transmission,
distribution, office, administrative and general plant materials,
supplies and equipment not "in place" or "installed". With
respect to services, examples include, but are not limited to,
reprographic services, restoration, maintenance and repair
services for generation, transmission and distribution
facilities, remittance processing services, treasury services,
accounts payable services, use of office, warehouse, storage and
other space and facilities, data processing and other computer
services and legal services.
8. The form of Agreement is attached hereto as
Exhibit 1 and made a part hereof, and sets forth the terms and
conditions governing all such transfers of property and services
by and between the GPU System Companies as well as the accounting
therefore, in accordance with rules 90 and 91 under the Public
3<PAGE>
Utility Holding Company Act of 1935.
9. All the annual reports, tariffs, certificates of
public convenience and securities certificates, heretofore filed
with this Commission by Penelec and by its predecessors, are made
a part hereof by reference.
10. Pursuant to the Agreement, Penelec intends to
engage from time to time and as circumstances may warrant in a
series of transfers of goods and services by, between and among
itself and its affiliated companies in the GPU System, which
property consists of materials and supplies included by the
companies under the Federal Energy Regulatory Commission ("FERC")
system of accounts, Account No. 154 and goods included under the
FERC system of accounts, Account No. 101.
11. The consideration for such ongoing transfers of
services and property which is not in place or installed will be
in the case of services, the cost thereof (including all
applicable direct or indirect costs of the furnishing company),
and in the case of property, its original cost less accumulated
depreciation (including all applicable direct or indirect costs
of the furnishing company).
12. Since 1982, Penelec inventory levels have grown
from approximately $43 million to the 1992 level of approximately
$62 million, as shown on Exhibit 2 hereto. Penelec, and the GPU
System as a whole, anticipate that under the proposed Agreement
the cumulative volume of goods to be transferred will reach $1
million in the first year and approximately $3 - $6 million per
year within three years of the approval of this Application. It
is believed that the process of interchanging inventory will
4<PAGE>
initially contribute to the efforts of the GPU System Companies
to stabilize inventory levels and will, over time, contribute
significantly to efforts to reduce system-wide inventory levels.
Some examples of the other efforts which the GPU System is
undertaking in this regard include increased standardization of
inventory categories and types, system-wide assessment of
inventory needs and system-wide procurements, through the
continued better utilization of available resources on an
intercompany basis. The projected cumulative GPU System
reduction in inventory levels resulting from the process of
inter-company transfers is expected to reach at least $10 million
in about 5 years.
13. Penelec has not attached a statement of fixed
capital, a pro-forma balance sheet giving effect to any transfers
or a pro-forma consolidated income statement, since such
information is not available in the context of this Application.
As described below, Penelec (a) is seeking, in advance,
authorization to engage in various transactions in goods and
services with its affiliates and (b) proposes to engage in
semi-annual reporting of all such transactions reflecting the
kind of information which would ordinarily be found in such
financial statements.
14. The transfers of such goods and services will not
result in any interruption or curtailment of existing services to
the public, nor will they result in any adverse impact on the
rates for service to Penelec customers.
15. Penelec anticipates that the transfers of goods or
property contemplated by the Agreement with its affiliates will
5<PAGE>
be the types of transfers which would require the approval of
this Commission pursuant to Code Section 1102(a)(3). In the
interest of efficiency and the avoidance of administrative
burdens, Penelec requests authorization to engage in such
transfers, subject to the filing of semi-annual reports beginning
one month after each six month period ending March 31 and
September 30, summarizing the cost of all nonexempt transactions
carried out during the previous six months. Such reporting will
allow the Commission to appropriately monitor the transfers, to
assure itself that such transfers are in compliance with Code
Section 1102.
16. Code Section 2102 requires that all contracts or
arrangements providing for the furnishing of management,
supervisory, construction, engineering, accounting, legal,
financial or similar services between a public utility and its
affiliated interests must receive the written approval of the
Commission. Under Section 2102 (b) the Commission shall approve
such a contract or arrangement if it clearly appears and is
established that it is reasonable and consistent with the public
interest. For the reasons described above in this Application,
Penelec believes that the proposed Agreement, together with this
Commission's approval of semi-annual reporting, would satisfy the
standards of Section 2102 (b). Penelec has filed concurrently
herewith for this Commission's approval pursuant to Section 2102.
Met-Ed also has filed concurrently herewith for Commission
approval, pursuant to Sections 1102 and 2102, of its
participation in the Agreement.
6<PAGE>
WHEREFORE, Penelec respectfully requests that your
Honorable Commission approve the various proposed transactions
contemplated herein, pursuant to Section 1102(a)(3) of the Public
Utility Code.
Date: September 30, 1993 /s/ W. Edwin Ogden
W. Edwin Ogden
RYAN, RUSSELL, OGDEN & SELTZER
1100 Berkshire Boulevard
P.O. Box 6219
Reading,Pennsylvania 19610-0219
(215) 372-4761
Attorneys for
Pennsylvania Electric Company
7<PAGE>
STATE OF NEW JERSEY )
: ss.
COUNTY OF MORRIS )
Don W. Myers, being duly sworn according to law deposes
and says that he is an officer of Pennsylvania Electric Company;
that he makes this affidavit on its behalf being familiar with
the facts and having authority to do so; and that all of the
statements set forth in the foregoing document are true and
correct to the best of his knowledge, information and belief.
/s/ Don W. Myers
Vice President and Treasurer
Sworn to and subscribed before me
this 30th day of September, 1993
/s/ Nancy L. Geyer
Nancy L. Geyer
Notary Public of New Jersey
My Commission Expires May 27, 1996
8<PAGE>
EXHIBIT 1
MUTUAL ASSISTANCE AGREEMENT
THIS AGREEMENT, dated as of 1993, between
and among JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L"),
METROPOLITAN EDISON COMPANY ("MET-ED"), PENNSYLVANIA ELECTRIC
COMPANY ("PENELEC"), GPU SERVICE CORPORATION ("GPUSC") AND GPU
NUCLEAR CORPORATION ("GPUN") (individually a "Company" and
collectively the "Companies"), each a wholly-owned subsidiary of
General Public Utilities Corporation ("GPU"), a public utility
holding company registered under the Public Utility Holding
Company Act of 1935 (the "Act").
W I T N E S S E T H :
WHEREAS, JCP&L, Met-Ed and Penelec are public utility
companies engaged in the production, generation, transmission,
distribution and sale of electricity to and for the public in
their respective service territories; and
WHEREAS, GPUSC and GPUN are mutual service companies
under Section 13 of the Act providing services pursuant to
service agreements with their affiliates; and
WHEREAS, Met-Ed and Penelec have heretofore filed an
agreement with the Pennsylvania Public Utility Commission
("PaPUC") pursuant to the then Section 701.1 of the Pennsylvania
Public Utility Law -- now Section 2102 of the Pennsylvania Public
Utility Code (the "Code") -- with respect to the exchange of
services and goods by and between them and their affiliated
companies, which agreement was approved by the PaPUC by Order
entered on October 1, 1982 at Docket No. G-820167; and
WHEREAS, the subject of said Order was an agreement
between the Companies which provided examples of the services
contemplated thereunder such as: (a) design, engineering,
construction, operation, maintenance and fuel procurement for
coal-fired generating stations; (b) other fossil fuel generation
services; (c) lab testing, research and development, engineering
and support services for generation, transmission and
distribution, construction and maintenance; (d) microfilming; (e)
records retention and storage; and (f) goods incidental to such
services; and
WHEREAS, from time to time various opportunities arise
for the Companies to effect economies and better utilization of
available resources through transfers of a broader range of goods
and services by, between and among the Companies than
contemplated by the aforementioned regulatory authorization for
Met-Ed and Penelec; and<PAGE>
WHEREAS, the Companies desire to obtain such additional
authorization as is necessary to expand the scope of goods and
services that may, if requested and available, be furnished from
time to time by, between and among the Companies;
NOW, THEREFORE, the Companies, intending to be legally
bound, agree as follows:
1. As used herein "Services" refers, but is not limited,
to (i) reprographics services, (ii) restoration, maintenance and
repair services for generation, transmission and distribution
facilities, (iii) remittance processing services, (iv) treasury
services, (v) accounts payable services, (vi) use of office,
warehouse, storage and other space or facilities, (vii) data
processing and other computer services and (viii) legal services.
The foregoing are examples of the opportunities that have arisen
or may arise for the more efficient use of resources by the
parties hereto and are in addition to those examples of services
set forth in the agreement referred to in the PaPUC Order of
October 1, 1982.
2. As used herein "Goods" refers, but is not limited, to
electric generating, other production, transmission,
distribution, office, administrative and general plant materials,
supplies and equipment not "in place" or "installed". As
contemplated hereunder, transactions in Goods may, but need not
be, incident to the provision of Services. The foregoing are
examples of opportunities that have arisen or may arise for the
more efficient use of resources by the parties hereto.
3. From time to time, each Company, as it in its sole
discretion may determine, upon the request of another Company,
will furnish to such other Company, upon the terms and conditions
set forth herein, one or more of the Goods and Services
(including, but not limited to, in the case of Goods, those which
at the time are inadequate, obsolete, unfit, or unnecessary or
unadapted for use in the operations of the Company to which such
request is made).
4. All transactions carried out pursuant hereto shall be
effected at cost in the case of the performance of Services, or
cost less depreciation in the case of the sale of Goods, in
accordance with the Act and the regulations promulgated
thereunder (including, without limitation, Rules 90 and 91 under
the Act, copies of which are attached hereto as Attachment I).
5. All Services provided hereunder shall be priced at the
cost thereof (including all applicable direct and indirect costs
of the furnishing Company).
6. All Goods provided hereunder shall be priced at the
cost less depreciation thereof (including all applicable direct
and indirect costs of the furnishing Company) in accordance with
2<PAGE>
the Companies' accepted and usual accounting policies and
procedures as follows:
a. Materials and supplies (M&S) included by the Companies
under Inventory Account No. 154.000 (and any successor provision
thereto), will be sold at the average unit price of such goods as
determined by the furnishing party's Material Inventory Control
System plus an appropriate equitable allocation of the furnishing
Company's "stores" and "purchasing" overhead expenses.
(i) Bills will be rendered as soon as practical after the
close of each month and will be payable within thirty days
following receipt; provided, however, that at the election
of the furnishing Company, the requesting Company shall
advance, with its request, funds sufficient to enable the
furnishing Company to pay therewith any significant amount
of out-of-pocket expenses associated with the furnishing of
the requested Goods.
b. Goods included under Capital Account No. 101.000 (and
any successor provision thereto), will be sold at cost less
depreciation as carried on the books of the furnishing Company.
(i) Separate bills for the sale of such Goods will be
rendered, and acceptable documentation of title transfer, if
required, will be provided as soon as practical after the
close of each month and will be payable within thirty days
following receipt; provided, however, that at the election
of the furnishing Company, the requesting Company shall
advance, with its request, funds sufficient to enable the
furnishing Company to pay therewith any significant amount
of out-of-pocket expenses associated with the furnishing of
the requested Goods.
7. In view of the fact that the Goods and Services to be
furnished hereunder are to be furnished at cost less
depreciation, if any, and to facilitate the undertaking of this
Agreement, each Company expressly waives any right it may have to
recover from the other Companies for any losses, damages,
penalties, liabilities, claims or expenses (including damage to
its own property or liabilities to third parties) for any cause
whatsoever including without limitation the negligence of the
other Companies, its employees and agents in connection with the
provision of Goods and Services hereunder.
8. The provision of Goods and Services hereunder by and
for any Company hereto shall be subject to the receipt of any
other regulatory approvals which may pertain to or be necessary
for a particular transaction.
9. This Agreement may be terminated with respect to any
Company, effective as of the end of any calendar month, upon at
least thirty days' prior written notice of such termination by
such Company to the other Companies.
3<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written:
JERSEY CENTRAL POWER & LIGHT COMPANY
By:
METROPOLITAN EDISON COMPANY
By:
PENNSYLVANIA ELECTRIC COMPANY
By:
GPU SERVICE CORPORATION
By:
GPU NUCLEAR CORPORATION
By:
4<PAGE>
ATTACHMENT I
"Rule 90. Transactions Limited to Cost
(a) Except as permitted by this rule, or any other
applicable rule, regulation, or order of the Commission.
(1) No registered holding company shall perform any service
or construction for, or sell any goods to, any associate company
thereof which is a public-utility company, a mutual service
company, or a company engaged in the business of performing
service or construction for, or selling goods to, associate
public-utility companies, or enter into any contract to do so,
and
(2) No subsidiary company of a registered holding company
(including a mutual service company) shall perform any service or
construction for, or sell any goods to, any associate company
thereof, or enter into any contract to do so, at more than cost
as determined pursuant to Rule 91 or any other applicable rule,
regulation, or order of the Commission, or in the absence
thereof, in accordance with sound methods of determining cost.
In the case of a sale of used goods the price shall be not more
than cost less depreciation. Any charges on a basis of estimated
cost shall be readjusted to actual cost at least annually, if for
services or goods, and upon completion of individual projects, in
case of construction.
(b) In the case of construction for an associate company of
a specific project, building, or unit on which substantial
expenses were incurred before August 26, 1935, pursuant to a
contract made before that date, the holding company or subsidiary
performing the construction shall be entitled to the proportion
of its profit or fee earned prior to April 1, 1936.
(c) If a sale of goods is merely incidental to a sale of an
entire business or a substantial portion thereof, or to a sale of
assets other than goods, a lump sum price for the entire
transaction may include such goods without the assignment of a
specific portion of the price to the cost of such goods.
(d) The price of services, construction, or goods need not
be limited to cost although the transaction comes within the
terms of paragraph (a) of this rule if,
(1) Neither the company performing the services or
construction, or selling the goods, nor the associate company
receiving such services or construction, or buying such goods, is
(i) a public utility or holding company, (ii) an investment
company or investment trust, including any company or trust which
is a medium of investment in securities for the benefit of a
registered holding company or its employees or officers, or (iii)
a company engaged in the business of selling goods to associate
companies or performing services or construction, or (iv) a
company controlling, directly or indirectly, any company
1<PAGE>
specified in (i), (ii), or (iii) above; or
(2) Such transaction consists of a sale of goods produced
by the seller."
"Rule 91. Determination of Cost.
(a) Subject to the provisions of this rule and of any other
applicable rule, regulation, or order of the Commission, a
transaction shall be deemed to be performed at not more than cost
if the price (taking into account all charges) does not exceed a
fair and equitable allocation of expenses (including the price
paid for goods) plus reasonable compensation for necessary
capital procured through the issuance of capital stock (or
similar securities of an unincorporated company).
(b) Direct charges shall be made so far as costs can be
identified and related to the particular transactions involved
without excessive effort or expense. Other elements of cost,
including taxes, interest, other overhead, and compensation for
the use of capital procured by the issuance of capital stock (or
similar securities of an unincorporated company) shall be fairly
and equitably allocated. Interest on borrowed capital and
compensation for the use of capital shall represent a reasonable
return only the amount of capital reasonably necessary for the
performance of services or construction for, or the selling of
goods to, customers for whom transactions are required by the
rules of the Commission to be performed at cost. Such amount
shall not include the cost of assignment of, or any
capitalization of, any service, sales, or construction contract.
(c) Any expense (including the price paid for goods)
incurred in a transaction with an associate company of the
performing or selling company (directly or through one or more
other associate companies thereof), to the extent that it exceeds
the cost of such transaction to such associate company, shall not
be included in determining cost to such performing or selling
company.
(d) Any expense (including the price paid for goods)
incurred in a transaction with a person other than an associate
company but not at arm's-length, to the extent that it exceeds
the expense at which the performing or selling company might
reasonably be expected to obtain elsewhere, or to furnish itself,
comparable performance, goods, capital, or other items of expense
involved (giving due regard to quality, quantity, regularity of
supply, and other factors entering into the calculation of a fair
price), shall not be included in determining cost to such
performing or selling company."
2<PAGE>
Exhibit D-6(a)
Law Offices
Ryan, Russell, Ogden & Seltzer
1100 Berkshire Boulevard
P.O. Box 6219
Reading, PA. 19610-0219
(215) 372-4761
FAX (215) 372-4177
September 30, 1993
VIA FEDERAL EXPRESS
John G. Alford, Secretary
Pennsylvania Public Utility Commission
Room G-23, North Office Building
Commonwealth Avenue & North Street
Harrisburg, Pennsylvania 17120
Dear Mr. Alford:
Enclosed herewith for filing in triplicate is a form of
Mutual Assistance Agreement for which we are requesting approval
on behalf of Metropolitan Edison Company and Pennsylvania
Electric Company, pursuant to Section 2102 of the Public Utility
Code. A fully executed copy of this Agreement will be filed by
supplement.
Code Section 2102 requires that all contracts or
arrangements providing for the furnishing of management,
supervisory, construction, engineering, accounting, legal,
financial or similar services between a public utility and its
affiliated interests must receive the written approval of the
Commission. Under Section 2102 (b) the Commission shall approve
such a contract or arrangement if it clearly appears and is
established that it is reasonable and consistent with the public
interest. For the reasons described above in this Application,
Met-Ed and Penelec believe that the proposed Agreement, together
with this Commission's approval of semi-annual reporting, would
satisfy the standards of Section 2102(b).
We have filed separate Applications on behalf of
Metropolitan Edison Company and Pennsylvania Electric Company for
approval of the Mutual Assistance Agreement pursuant to Section
1102 of the Public Utility Code.<PAGE>
We are prepared to provide such notice of this filing
as you may direct.
Very truly yours,
RYAN, RUSSELL, OGDEN & SELTZER
/s/ W. Edwin Ogden
W. Edwin Ogden
WEO/KH
Enclosures
2<PAGE>
Exhibit D-6(b)
Law Offices
Ryan, Russell, Ogden & Seltzer
1100 Berkshire Boulevard
P.O. Box 6219
Reading, PA. 19610-0219
(215) 372-4761
FAX (215) 372-4177
December 8, 1993
VIA FEDERAL EXPRESS
John G. Alford, Secretary
Pennsylvania Public Utility Commission
G-23 North Office Building
Commonwealth Avenue & North Street
Harrisburg, PA 17120
Re: Affiliated Interest Agreement
Docket No. G-00930355
Dear Mr. Alford:
As a supplement to our September 30, 1993 filing at the
above docket pursuant to Section 2102 of the Public Utility Code,
enclosed are an original and two copies of the fully executed
Mutual Assistance Agreement for which we are requesting approval
on behalf of Metropolitan Edison Company and Pennsylvania
Electric Company.
Also enclosed are responses to data requests OSA RE-1
and OSA RE-2.
We are prepared to provide such further assistance as
may be appropriate or required.
Very truly yours,
RYAN, RUSSELL, OGDEN & SELTZER
/s/ W. Edwin Ogden
W. Edwin Ogden
Enclosures
cc: H. Deichmiller, Office of Special Assistants,
Option and Technical Review Division<PAGE>
MUTUAL ASSISTANCE AGREEMENT
THIS AGREEMENT, dated as of October 28, 1993, between
and among JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L"),
METROPOLITAN EDISON COMPANY ("MET-ED"), PENNSYLVANIA ELECTRIC
COMPANY ("PENELEC"), GPU SERVICE CORPORATION ("GPUSC") AND GPU
NUCLEAR CORPORATION ("GPUN") (individually a "Company" and
collectively the "Companies"), each a wholly-owned subsidiary of
General Public Utilities Corporation ("GPU"), a public utility
holding company registered under the Public Utility Holding
Company Act of 1935 (the "Act").
W I T N E S S E T H:
WHEREAS, JCP&L, Met-Ed and Penelec are public utility
companies engaged in the production, generation, transmission,
distribution and sale of electricity to and for the public in
their respective service territories; and
WHEREAS, GPUSC and GPUN are mutual service companies
under Section 13 of the Act providing services pursuant to
service agreements with their affiliates; and
WHEREAS, Met-Ed and Penelec have heretofore filed an
agreement with the Pennsylvania Public Utility Commission
("PaPUC") pursuant to the then Section 701.1 of the Pennsylvania
Public Utility Law -- now Section 2102 of the Pennsylvania Public
Utility Code (the "Code") -- with respect to the exchange of
services and goods by and between them and their affiliated
companies, which agreement was approved by the PaPUC by Order
entered on October l, l982 at Docket No. G-820167; and
WHEREAS, the subject of said Order was an agreement
between the Companies which provided examples of the services
contemplated thereunder such as: (a) design, engineering,
construction, operation, maintenance and fuel procurement for
coal-fired generating stations; (b) other fossil fuel generation
services; (c) lab testing, research and development, engineering
and support services for generation, transmission and
distribution, construction and maintenance; (d) microfilming; (e)
records retention and storage; and (f) goods incidental to such
services; and
WHEREAS, from time to time various opportunities arise
for the Companies to effect economies and better utilization of
available resources through transfers of a broader range of goods
and services by, between and among the Companies than
contemplated by the aforementioned regulatory authorization for
Met-Ed and Penelec; and
WHEREAS, the Companies desire to obtain such additional
authorization as is necessary to expand the scope of goods and
services that may, if requested and available, be furnished from
time to time by, between and among the Companies;<PAGE>
NOW, THEREFORE, the Companies, intending to be legally
bound, agree as follows:
1. As used herein "Services" refers, but is not
limited, to (i) reprographics services, (ii) restoration,
maintenance and repair services for generation, transmission and
distribution facilities, (iii) remittance processing services,
(iv) treasury services, (v) accounts payable services, (vi) use
of office, warehouse, storage and other space or facilities,
(vii) data processing and other computer services and (viii)
legal services. The foregoing are examples of the opportunities
that have arisen or may arise for the more efficient use of
resources by the parties hereto and are in addition to those
examples of services set forth in the agreement referred to in
the PaPUC Order of October 1, 1982.
2. As used herein "Goods" refers, but is not limited,
to electric generating, other production, transmission,
distribution, office, administrative and general plant materials,
supplies and equipment not "in place" or "installed". As
contemplated hereunder, transactions in Goods may, but need not
be, incident to the provision of Services. The foregoing are
examples of opportunities that have arisen or may arise for the
more efficient use of resources by the parties hereto.
3. From time to time, each Company, as it in its sole
discretion may determine, upon the request of another Company,
will furnish to such other Company, upon the terms and conditions
set forth herein, one or more of the Goods and Services
(including, but not limited to, in the case of Goods, those which
at the time are inadequate, obsolete, unfit, or unnecessary or
unadapted for use in the operations of the Company to which such
request is made).
4. All transactions carried out pursuant hereto shall
be effected at cost in the case of the performance of Services,
or cost less depreciation in the case of the sale of Goods, in
accordance with the Act and the regulations promulgated
thereunder (including, without limitation, Rules 90 and 91 under
the Act, copies of which are attached hereto as Attachment I).
5. All Services provided hereunder shall be priced at
the cost thereof (including all applicable direct and indirect
costs of the furnishing Company).
6. All Goods provided hereunder shall be priced at
the cost less depreciation thereof (including all applicable
direct and indirect costs of the furnishing Company) in
accordance with the Companies' accepted and usual accounting
policies and procedures as follows:
a. Materials and supplies (M&S) included by the Companies
under Inventory Account No. 154.000 (and any successor
provision thereto), will be sold at the average unit price
of such goods as determined by the furnishing party's
2<PAGE>
Material Inventory Control System plus an appropriate
equitable allocation of the furnishing Company's "stores"
and "purchasing" overhead expenses.
(i) Bills will be rendered as soon as practical after
the close of each month and will be payable within
thirty days following receipt; provided, however, that
at the election of the furnishing Company, the
requesting Company shall advance, with its request,
funds sufficient to enable the furnishing Company to
pay therewith any significant amount of out-of-pocket
expenses associated with the furnishing of the
requested Goods.
b. Goods included under Capital Account No. 101.000 (and
any successor provision thereto), will be sold at cost less
depreciation as carried on the books of the furnishing
Company.
(i) Separate bills for the sale of such Goods will be
rendered, and acceptable documentation of title
transfer, if required, will be provided as soon as
practical after the close of each month and will be
payable within thirty days following receipt; provided,
however,that at the election of the furnishing Company,
the requesting Company shall advance, with its request,
funds sufficient to enable the furnishing Company to
pay therewith any significant amount of out-of-pocket
expenses associated with the furnishing of the
requested Goods.
7. In view of the fact that the Goods and Services to be
furnished hereunder are to be furnished at cost less
depreciation, if any, and to facilitate the undertaking of this
Agreement, each Company expressly waives any right it may have to
recover from the other Companies for any losses, damages,
penalties, liabilities, claims or expenses (including damage to
its own property or liabilities to third parties) for any cause
whatsoever including without limitation the negligence of the
other Companies, its employees and agents in connection with the
provision of Goods and Services hereunder.
8. The provision of Goods and Services hereunder by and
for any Company hereto shall be subject to the receipt of any
other regulatory approvals which may pertain to or be necessary
for a particular transaction.
9. This Agreement may be terminated with respect to any
Company, effective as of the end of any calendar month, upon at
least thirty days' prior written notice of such termination by
such Company to the other Companies.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written:
3<PAGE>
JERSEY CENTRAL POWER & LIGHT COMPANY
By:/s/
METROPOLITAN EDISON COMPANY
By:/s/
PENNSYLVANIA ELECTRIC COMPANY
By:/s/
GPU SERVICE CORPORATION
By:/s/
GPU NUCLEAR CORPORATION
By:/s/
4<PAGE>
ATTACHMENT I
"Rule 90. Transactions Limited to Cost
(a) Except as permitted by this rule, or any other
applicable rule, regulation, or order of the Commission.
(a) No registered holding company shall perform any service
or construction for, or sell any goods to, any associate company
thereof which is a public-utility company, a mutual service
company, or a company engaged in the business of performing
service of construction for, or selling goods to, associate
public-utility companies, or enter into any contract to do so,
and
(2) No subsidiary company of a registered holding company
(including a mutual service company) shall perform any service or
construction for, or sell any goods to, any associate company
thereof, or enter into any contract to do so, at more than cost
as determined pursuant to Rule 91 or any other applicable rule,
regulation, or order of the Commission, or in the absence
thereof, in accordance with sound methods of determining cost.
In the case of a sale of used goods the price shall be not more
than cost less depreciation. Any charges on a basis of estimated
cost shall be readjusted to actual cost at least annually, if for
services or goods, and upon completion of individual projects, in
case of construction.
(b) In the case of construction for an associate company of
a specific project, building, or unit on which substantial
expenses were incurred before August 26, 1935, pursuant to a
contract made before that date, the holding company or subsidiary
performing the construction shall be entitled to the proportion
of its profit or fee earned prior to April 1, 1936.
(c) If a sale of goods is merely incidental to a sale of an
entire business or a substantial portion thereof, or to a sale of
assets other than goods, a lump sum price for the entire
transaction may include such goods without the assignment of a
specific portion of the price to the cost of such goods.
(d) The price of services, construction, or goods need not
be limited to cost although the transaction comes within the
terms of paragraph (a) of this rule if,
(1) Neither the company performing the services or
construction, or selling the goods, nor the associate company
receiving such services or construction, or buying such goods, is
(i) a public utility or holding company, (ii) an investment
company or investment trust, including any company or trust which
is a medium of investment in securities for the benefit of a
registered holding company or its employees or officers, or (iii)
a company engaged in the business of selling goods to associate
companies or performing services or construction, or (iv) a
company controlling, directly or indirectly, any company
5<PAGE>
specified in (i), (ii), or (iii) above; or
(2) Such transaction consists of a sale of goods produced
by the seller."
"Rule 91. Determination of Cost.
(a) Subject to the provisions of this rule and of any other
applicable rule, regulation, or order of the Commission, a
transaction shall be deemed to be performed at not more than cost
if the price (taking into account all changes) does not exceed a
fair and equitable allocation of expenses (including the price
paid for goods) plus reasonable compensation for necessary
capital procured through the issuance of capital stock (or
similar securities of an unincorporated company).
(b) Direct charges shall be made so far as costs can be
identified and related to the particular transactions involved
without excessive effort or expense. Other elements of cost,
including taxes, interest, other overhead, and compensation for
the use of capital procured by the issuance of capital stock (or
similar securities of an unincorporated company) shall be fairly
and equitably allocated. Interest on borrowed capital and
compensation for the use of capital shall represent a reasonable
return only the amount of capital reasonably necessary for the
performance of services or construction for, or the selling of
goods to, customers for whom transactions are required by the
rules of the Commission to be performed at cost. Such amount
shall not include the cost of assignment of, or any
capitalization of, any service, sales, or construction contract.
(c) Any expense (including the price paid for goods)
incurred in a transaction with an associate company of the
performing or selling company (directly or through one or more
other associate companies thereof), to the extent that it exceeds
the cost of such transaction to such associate company, shall not
be included in determining cost to such performing or selling
company.
(d) Any expense (including the price paid for goods)
incurred in a transaction with a person other than an associate
company but not at arm's-length, to the extent that it exceeds
the expense at which the performing or selling company might
reasonably be expected to obtain elsewhere, or to furnish itself,
comparable performance, goods, capital, or other items of expense
involved (giving due regard to quality, quantity, regularity of
supply, and other factors entering into the calculation of a fair
price), shall not be included in determining cost to such
performing or selling company."
6<PAGE>
(On R. S. Cohen Letterhead)
Exhibit F-1
March 27, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: GPU Nuclear Corporation ("GPUN")
Energy Initiatives, Inc. ("EI")
Jersey Central Power & Light Company ("JCP&L")
Metropolitan Edison Company ("Met-Ed")
Pennsylvania Electric Company ("Penelec")
GPU Service Corporation ("GPUSC")
Application on Form U-1
SEC File No. 70-8425
Dear Sirs:
I have examined the Application on Form U-1, dated May 19,
1994, under the Public Utility Holding Company Act of 1935 (the
"Act"), filed by GPUN, EI, JCP&L, Met-Ed, Penelec and GPUSC
(collectively, the "GPU Companies"), with the Securities and
Exchange Commission ("Commission"), and docketed by the
Commission in SEC File No. 70-8425, as to be amended by Amendment
No. 1 thereto, dated this date, of which this opinion is to be a
part. (The Application, as so to be amended, is hereinafter
referred to as the "Application".)
The Application contemplates, among other things, the
performance by GPUN of non-nuclear technical, training,
management and consulting services for the other GPU Companies
and GPU Generation Corporation. Services to be rendered will be
charged at cost in accordance with the Act and the Commission's
rules and regulations thereunder.
I am an attorney licensed in the State of New Jersey, and do
not purport to be an expert in the laws of any other state or
jurisdiction other than the State of New Jersey. I have examined
copies, signed, certified or otherwise proven to my satisfaction,
of the articles of incorporation and by-laws of GPUN and JCP&L,
each as amended to date. In addition, I have reviewed such other
instruments and agreements and have made such further
investigation as I have deemed necessary as a basis for this
opinion.
For many years, I have participated in various proceedings
related to the issuance and sale of securities by JCP&L, and I am
familiar with the terms of the outstanding securities of JCP&L. <PAGE>
Securities and Exchange Commission
March 27, 1995
Page 2
Based upon and subject to the foregoing, and assuming (i)
that the transactions proposed in the Application are carried out
by GPUN and JCP&L in accordance with the Application, and (ii)
the New Jersey Board of Public Utilities shall have issued an
appropriate order approving the performance of services for
JCP&L, I am of the opinion that when the Commission shall have
entered an order granting the Application,
(a) all laws of the State of New Jersey applicable to
the proposed transactions on the part of GPUN and JCP&L will
have been complied with, and
(b) the consummation of the transactions proposed in
the Application will not violate the legal rights of the
holders of any securities issued by JCP&L.
I hereby consent to the filing of this opinion as an exhibit
to the Application and in any proceedings before the Commission
that may be held in connection therewith.
Very truly yours,
Richard S. Cohen<PAGE>
(LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL)
Exhibit F-2
March 27, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: GPU Nuclear Corporation ("GPUN")
Energy Initiatives, Inc. ("EI")
Jersey Central Power & Light Company ("JCP&L")
Metropolitan Edison Company ("Met-Ed")
Pennsylvania Electric Company ("Penelec")
GPU Service Corporation ("GPUSC")
Application on Form U-1
SEC File No. 70-8425
Dear Sirs:
We have examined the Application on Form U-1, dated
May 19, 1994, under the Public Utility Holding Company Act of
1935 ("Act"), filed by GPUN, EI, JCP&L, Met-Ed, Penelec and GPUSC
(collectively, the "GPU Companies"), with the Securities and
Exchange Commission ("Commission"), and docketed by the
Commission in SEC File No. 70-8425, as amended by Amendment No. 1
thereto, dated this date, of which this opinion is a part. (The
Application, as thus amended, is hereinafter referred to as the
"Application").
The Application contemplates, among other things, the
performance by GPUN of non-nuclear technical, training,
management and consulting services for the other GPU Companies
and GPU Generation Corporation. Services to be rendered will be
charged at cost in accordance with the Act and the Commission's
rules and regulations thereunder.
We have examined the Mutual Assistance Agreement dated
October 28, 1993 among GPUN, JCP&L, Met-Ed, Penelec and GPUSC
(the "Service Agreement") under which such services would be
provided to the other GPU Companies, the Application for
authorization filed by Penelec with the Pennsylvania Public
Utility Commission ("PaPUC") relating to the Service Agreement
and the orders of PaPUC approving the Service Agreement and such
Application. We have also examined copies, signed, certified or
otherwise proven to our satisfaction, of the articles of
incorporation and by-laws of each of GPU, Penelec and GPUSC. In
addition, we have reviewed such other instruments and agreements
and have made such further investigation as we have deemed
necessary as a basis for this opinion.<PAGE>
Securities and Exchange Commission
March 27, 1995
Page 2
We have been counsel to Penelec and Pennsylvania
counsel to General Public Utilities Corporation ("GPU") for many
years. In that connection, we have participated in various
proceedings relating to the issuance of securities by GPU,
Penelec, and GPUSC and we are familiar with the terms of the
outstanding securities of GPU, Penelec and GPUSC.
Based upon and subject to the foregoing, and assuming
that the transactions therein proposed are carried out in
accordance with the Application, we are of the opinion, insofar
as matters are governed by the laws of the Commonwealth of
Pennsylvania, that when the Commission shall have entered an
order granting the Application,
(a) all Pennsylvania laws applicable to the
proposed transactions will have been complied with,
other than laws related to Met-Ed, and
(b) the consummation of the transactions
proposed in the Application will not violate the legal
rights of the holders of any securities issued by GPU,
Penelec, Penelec Preferred Capital, Inc., Penelec
Capital, L.P., GPUSC or Ninevah Water Company.
We hereby consent to the filing of this opinion as an
exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
BALLARD SPAHR ANDREWS & INGERSOLL<PAGE>
(LETTERHEAD OF RYAN, RUSSELL, OGDEN & SELTZER)
Exhibit F-3
March 27, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: GPU Nuclear Corporation ("GPUN")
Energy Initiatives, Inc. ("EI")
Jersey Central Power & Light Company ("JCP&L")
Metropolitan Edison Company ("Met-Ed")
Pennsylvania Electric Company ("Penelec")
GPU Service Corporation ("GPUSC")
Application on Form U-1
SEC File No. 70-8425
Dear Sirs:
We have examined the Application on Form U-1, dated May 19,
1994, under the Public Utility Holding Company Act of 1935 ("Act"),
filed by GPUN, EI, JCP&L, Met-Ed, Penelec and GPUSC (collectively, the
"GPU Companies"), with the Securities and Exchange Commission
("Commission"), and docketed by the Commission in SEC File No. 70-
8425, as to amended by Amendment No. 1 thereto, dated this date, of
which this opinion is to be a part. (The Application, as thus to be
amended, is hereinafter referred to as the "Application").
The Application contemplates, among other things, the
performance by GPUN of non-nuclear technical, training, management and
consulting services for the other GPU Companies and GPU Generation
Corporation. Services to be rendered will be charged at cost in
accordance with the Act and the Commission's rules and regulations
thereunder.
We have been counsel to Met-Ed for many years. In that
connection, we have participated in various proceedings relating to
Met-Ed and are familiar with the terms of the outstanding securities
of that Company.
Based upon and subject to the foregoing, and assuming that
the transactions therein proposed are carried out in accordance with
the Application, we are of the opinion that when the Commission shall
have entered an order granting the Application,<PAGE>
Securities and Exchange Commission
March 27, 1995
Page 2
(a) all Pennsylvania laws applicable to the proposed
transactions insofar as they relate to Met-Ed will have been
complied with, and
(b) the consummation of the transactions proposed in
the Application will not violate the legal rights of the
holders of any securities issued by Met-Ed or any subsidiary
of Met-Ed.
We hereby consent to the filing of this opinion as an
exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
RYAN, RUSSELL, OGDEN & SELTZER<PAGE>
(LETTERHEAD OF BERLACK, ISRAELS & LIBERMAN)
Exhibit F-4
March 27, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: GPU Nuclear Corporation ("GPUN")
Energy Initiatives, Inc. ("EI")
Jersey Central Power & Light Company ("JCP&L")
Metropolitan Edison Company ("Met-Ed")
Pennsylvania Electric Company ("Penelec")
GPU Service Corporation ("GPUSC")
Application on Form U-1
SEC File No. 70-8425
Dear Sirs:
We have examined the Application on Form U-1, dated May 19, 1994,
under the Public Utility Holding Company Act of 1935 ("Act"), filed by
GPUN, EI, JCP&L, Met-Ed, Penelec and GPUSC (collectively, the "GPU
Companies"), with the Securities and Exchange Commission
("Commission"), and docketed by the Commission in SEC File No. 70-
8425, as to amended by Amendment No. 1 thereto, dated this date, of
which this opinion is to be a part. (The Application, as thus to be
amended, is hereinafter referred to as the "Application").
The Application contemplates, among other things, the performance
by GPUN of non-nuclear technical, training, management and consulting
services for the other GPU Companies and GPU Generation Corporation.
Services to be rendered will be charged at cost in accordance with the
Act and the Commission's rules and regulations thereunder.
We have examined (a) the Application filed by Met-Ed with the
Pennsylvania Public Utility Commission ("PaPUC") and the order of the
PaPUC issued in respect thereof, (b) the Application filed by Penelec
with the PaPUC and the order of the PaPUC issued in respect thereof,
and (c) the joint filing by Met-Ed and Penelec with the PaPUC with
respect to a certain mutual assistance agreement and the order of the
PaPUC issued in respect thereof. We have also examined copies,
signed, certified or otherwise proven to our satisfaction, of the
articles of incorporation and by-laws of each of the GPU Companies.
In addition, we have reviewed such other instruments and agreements
and have made such further investigation as we have deemed necessary
as a basis for this opinion.<PAGE>
Securities and Exchange Commission
March 27, 1995
Page 2
We have been counsel to General Public Utilities Corporation
("GPU") and its subsidiaries for many years. In that connection, we
have participated in various proceedings relating to the issuance of
securities by GPU and its subsidiaries, and we are familiar with the
terms of the outstanding securities of the corporations comprising the
GPU holding company system.
As to all matters of New Jersey law, we have relied upon the
opinion of Richard S. Cohen, Esq., which is being filed as Exhibit F-1
to the Application. With respect to certain matters of Pennsylvania
law insofar as it applies to the transactions contemplated by Met-Ed,
we have relied upon the opinion of Ryan, Russell, Ogden & Seltzer,
which is being filed as Exhibit F-3 to the Application. As to all
other matters of Pennsylvania law, we have relied upon the opinion of
Ballard Spahr Andrews & Ingersoll, which is being filed as Exhibit F-2
to the Application.
Based upon and subject to the foregoing, and assuming that (i)
the transactions therein proposed are carried out in accordance with
the Application, and (ii) the New Jersey Board of Public Utilities
shall have issued an appropriate order approving the performance of
services for JCP&L, we are of the opinion that when the Commission
shall have entered an order granting the Application,
(a) all State laws applicable to the proposed
transactions will have been complied with, and
(b) the consummation of the transactions proposed in
the Application will not violate the legal rights of the
holders of any securities issued by any GPU Company or any
"associate company" thereof, as defined in the Act.
We hereby consent to the filing of this opinion as an exhibit to
the Application and in any proceedings before the Commission that may
be held in connection therewith.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN <PAGE>
