SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of
earliest event reported): February 14, 1994
PENNSYLVANIA ELECTRIC COMPANY
(Exact name of registrant as specified in charter)
Pennsylvania 1-3522 25-0718085
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
1001 Broad Street, Johnstown, Pennsylvania 15907
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (814) 533-8111
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ITEM 5. OTHER EVENTS.
On February 14, 1994, General Public Utilities Corpora-
tion ("GPU") announced plans to realign its corporate structure
in response to increasing competition in the electric utility
industry.
The corporate realignment program will involve the
formation of a new subsidiary, GPU Generation Corporation, which
will operate and maintain the fossil-fuel and hydroelectric
generating facilities owned and/or operated by GPU's electric
operating subsidiaries, Jersey Central Power & Light Company,
Metropolitan Edison Company ("Met-Ed") and Pennsylvania Electric
Company ("Penelec"). GPU Generation would also construct the new
generation facilities needed by these subsidiaries in the future.
GPU will continue its involvement in the independent power
generation market through its Energy Initiatives subsidiary. The
second element of the realignment program will combine the
remaining functions of GPU's Pennsylvania electric Subsidiaries,
Met-Ed and Penelec. The combined operation would be accom-
plished without a merger of the corporate entities. GPU will
also review other areas of its business, including the System's
workforce and the role of GPU Service Corporation, as part of the
realignment program.
The program, which in certain respects, is subject to
various regulatory reviews and approvals is, together with other
cost reduction initiatives, expected to result in annual cost
reduction savings of approximately $80 million by the end of
1996.
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A copy of GPU's related news release is annexed as an
exhibit.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(b) Exhibits.
1. GPU News Release, dated February 14, 1994.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE
ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED.
PENNSYLVANIA ELECTRIC COMPANY
By:______________________________
Don W. Myers, Vice President
and Treasurer
Date: February 16, 1994
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EXHIBIT TO BE FILED BY EDGAR
Exhibit:
1. GPU News Release, dated February 14, 1994.
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Exhibit 1
John T. Fidler
201-263-6479 February 14, 1994
94-002
Immediately
GPU ANNOUNCES CORPORATE REALIGNMENT
Parsippany, N.J., February 14, 1994 -- General Public
Utilities Corporation (NYSE:GPU) today announced plans to realign
its corporate structure to position the corporation for the
increasing level of competition in the electric utility industry.
James R. Leva, GPU chairman, president and chief executive
officer, said that the program being announced today and other
cost reduction initiatives are expected to result in annual cost
savings of some $80 million by the end of 1996.
"As the new competitive structure of our industry unfolds,
further actions may well be necessary. We will focus sharply on
our core business: the generation, transmission and distribution
of electric energy, and renew our emphasis on customer service.
"At the heart of our program are three key strategies," Leva
stated. "First, we will substantially improve our competitive
outlook by the end of 1996 under the industry structure we
foresee. We will also substantially increase our effectiveness
through performance improvements and cost reductions, without
adversely affecting service quality, to position GPU as an
industry leader. "Finally, we will work to create a regulatory
climate that is fair to both our customers and our shareholders,"
Leva said.
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To achieve its goals, GPU will form a new subsidiary, GPU
Generation Corporation, which will operate and maintain the
fossil-fueled and hydroelectric generating stations owned and/or
operated by the GPU companies. GPU Generation will also build
new generating facilities as needed in the future. The ownership
of the generating plants will remain with Metropolitan Edison
(Met-Ed), Pennsylvania Electric (Penelec) and Jersey Central
Power and Light (Jersey Central).
"The goal of GPU Generation will be to provide low-cost
energy that will be priced to compete effectively in the changing
generation marketplace," Leva said.
The new subsidiary will be headquartered in Johnstown, Pa.,
and be headed by Robert L. Wise, now president of Penelec.
GPU will continue its involvement in the independent power
generation market through its subsidiary, Energy Initiatives.
The second element of the GPU realignment program will be
the combination of the remaining functions of Met-Ed and
Penelec.
"Focusing on the customer will be a top priority in the new
competitive world. Customers will be looking for lower costs and
services that are attuned to their needs," said Leva.
The combined operation, which will be accomplished without a
merger of the two corporate entities, will be based in Reading,
Pa., and be headed by Fred D. Hafer, who is now president of Met-
Ed.
Some of these actions will be subject to various regulatory
reviews and approvals.
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The third component of GPU's program will be a performance
improvement initiative that will enhance productivity and
effectiveness and focus on cost reduction. Included in this
effort will be a search for parallel opportunities at GPU Nuclear
Corporation and Jersey Central.
"In a competitive marketplace, we must always look for ways
to reduce our costs and improve our performance. This part of
our program will enable us to do that," Leva stated.
Related to the performance improvement effort is the fourth
element of GPU's program, a review of the corporation's "people
needs" in terms of the size, skills and compensation of GPU's
workforce.
"Staffing levels will be based on the needs of the new
organization. I am certain that the employee population will be
lower," said Leva.
The fifth part of the GPU program will be an examination of
the role of GPU Service Corporation, GPU's corporate service
unit. GPU Service currently provides several corporate
administrative and support functions to the GPU System.
"We'll be looking at all services, and deciding which could
best be provided at the local level, and which through greater
consolidation," Leva said.
"This program is a necessary step in changing the direction
and culture at GPU. Our immediate challenge will be to implement
these changes quickly and effectively. At the same time, we will
develop additional long-term strategies for our organization that
will enable us to capitalize on opportunities to expand as the
competitive markets present them to us," Leva stated.
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