Amendment No. 5 to
SEC File No. 70-8369
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GENERAL PUBLIC UTILITIES CORPORATION ("GPU")
100 Interpace Parkway
Parsippany, New Jersey 07054
GENERAL PORTFOLIOS CORPORATION ("GPC")
Mellon Bank Center
Tenth and Market Streets
Wilmington, Delaware 19801
ENERGY INITIATIVES, INC. ("EI")
One Upper Pond Road
Parsippany, New Jersey 07054
(Names of companies filing this statement and addresses
of principal executive offices)
GENERAL PUBLIC UTILITIES CORPORATION
(Name of top registered holding company parent of applicants)
Don W. Myers, Vice President Douglas E. Davidson, Esq.
and Treasurer Berlack, Israels & Liberman
M. A. Nalewako, Secretary 120 West 45th Street
GPU Service Corporation New York, New York 10036
100 Interpace Parkway
Parsippany, NJ 07054
B. L. Levy, President
K. A. Tomblin, Secretary
Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
_________________________________________________________________
(Names and addresses of agents for service)
<PAGE>
GPU, GPC and EI hereby amend their Application on Form
U-1, as heretofore amended, docketed in SEC File No. 70-8369 as
follows:
1. By amending paragraph B of Item 1 thereof to read
in its entirety as follows:
"B. EI now proposes to acquire all of the 1,000, no
par value, shares of issued and outstanding common stock
("Stock") of North Canadian Power, Inc., a non-affiliated,
privately-held California corporation ("Cogen Corp.") which
is engaged exclusively in the business of owning or leasing
and operating five operating QFs (each, a "Project" and
collectively, the "Projects") and developing other QFs and
EWGs. Cogen Corp. is the wholly-owned subsidiary of North
Canadian Resources, Inc., a California corporation, which,
in turn, is a wholly-owned subsidiary of North Canadian Oils
Limited, a publicly held Canadian corporation which is
engaged in oil and gas exploration, development, production
and sales (collectively, the "Sellers"). A description of
Cogen's Corp.'s Projects is set forth in paragraphs F and G
below."
2. By amending subparagraphs (i), (ii) and (iii) of
Paragraph C of Item 1 thereof to read in their entirety as
follows:
"C. (i) In order to purchase the Stock, EI has
entered into a stock purchase agreement dated March 31, 1994
("Stock Purchase Agreement") with the Sellers under which
(ii) EI has agreed to purchase the Stock for a total cash
consideration which would not exceed $72 million, subject to
adjustment under certain circumstances (the "Purchase
Price"), and (iii) GPU and/or EI would enter into one or
more Assumption Agreements under which they would agree to
assume certain contingent obligations undertaken by Cogen
Corp.'s Canadian parent ("Parent") with respect to three of
Cogen Corp.'s projects, as described below, and indemnify
the Parent against any liabilities arising thereunder.
(ii) Upon execution of the Stock Purchase
Agreement, GPU deposited into escrow cash in an amount equal
to the maximum estimated Purchase Price (including any
possible "Deferred Consideration" and working capital
adjustments as described below) ("Escrow Cash") and Cogen
Corp.'s direct parent deposited the Stock and other
documents into escrow under an Escrow Agreement between the
parties and Harris Trust and Savings Bank as escrow agent
("Escrow Agent"). Distribution of the Escrow Cash to
1
<PAGE>
Sellers and the Stock and documents to EI by the Escrow
Agent (the "Closing") expressly conditioned upon:
(1) receipt of a Commission order
authorizing the transaction,
(2) satisfaction of the requirements of the
Hart-Scott-Rodino Act,
(3) receipt of the required number of
necessary third-party consents to the transaction, and
(4) certain other specified conditions.
(iii) If the Closing conditions are not satisfied
by May 31, 1994, the Purchase Price is subject to increase
by $15,000 per day ("Deferred Consideration") for each day
the Closing or the termination of the Escrow Agreement is
thereafter delayed; provided, however, that either EI or
Sellers may terminate the Escrow Agreement if all such
conditions are not satisfied by August 15, 1994, in which
case the Escrow Agent will refund the Escrow Cash to GPU and
return the Stock to Parent, subject, however to payment to
Sellers of any required Deferred Consideration and a
"stipulated damage payment" (as described in paragraph C
(vii), below), under certain circumstances. In the event
the Closing is delayed until August 15, 1994 (and assuming
the parties do not otherwise agree to extend the Closing),
the Purchase Price could be increased by (a) $1,350,000 in
respect of Deferred Consideration payments and (b) an
estimated $1,834,000 in respect of certain Cogen Corp.
Working Capital adjustments EI has agreed to pay to Sellers,
or by a total of $3,184,000. Since "stipulated damage
payments" and other penalties are not payable if the Closing
does occur, payment by EI of any such damage amounts would
not be made in addition to any Purchase Price payments. If
the third party consents with respect to at least three
Projects (including one of either Project No. 1 or No. 2
which are generally described in paragraph F below) are not
received by May 31, 1994, EI or the Sellers may, at their
option, terminate the Escrow Agreement, and the Escrow Agent
would thereupon refund the Escrow Cash to GPU and return the
Stock to Parent without further liability to either party."
3. By amending the first paragraph of subparagraph
(iv) of Paragraph F of Item 1 thereof to read in its entirety as
follows:
"(iv) Project No. 4 is a 29.4 MW (net) qualifying
cogeneration facility located in Michigan. The Project is
owned by a Michigan limited partnership in which Cogen Corp.
holds, indirectly through a wholly-owned subsidiary, a 1%
general partnership interest and of which Cogen Corp. is the
managing general partner. The balance of the partnership
2
<PAGE>
interests is held indirectly by the local gas distribution
company ("Investor 4") which, through a separate subsidiary,
is the Project's gas supplier. Cogen Corp. also leases the
project site from the Project's steam host and, through a
subsidiary, subleases the site to the partnership, for which
it receives sublease payments from the Partnership under a
sublease designed to provide the Cogen Corp. partnership
with an additional 49% of the Project No. 4 net cash flows.
Through its acquisition of Cogen Corp., EI will be acquiring
this subleasor subsidiary. EI expects that since it will
indirectly be receiving payments under the sublease, such
sublease payments will be required to be included in the
calculation of EI's ownership interest in Project No. 4 for
purposes of determining its QF status under PURPA.
The Project sells its entire net capacity and energy to
a Michigan utility and sells steam for process use to an
industrial corporation under a long-term steam sales
contract."
4. By amending the first paragraph of subparagraph
(v) of Paragraph F of Item 1 thereof to read in its entirety as
follows:
"(v) Project No. 5 is a 26 MW (net) qualifying
cogeneration facility located in California. The Project is
owned by a California limited partnership in which Cogen
Corp. owns, through a wholly-owned subsidiary, a 30% general
partnership interest. The balance of the general
partnership (10%) and limited partnership (60%) interests is
owned by an unaffiliated energy project developer and the
financing subsidiary of a large industrial corporation.
Under the related partnership agreement, Cogen Corp.'s
general partnership interest will decline to 20%, 30% and
ultimately 12% over time as specified rates of return are
achieved by the various parties."
5. By amending Paragraph G of Item 1 thereof to read
in its entirety as follows:
"G. Cogen Corp. also has projects under active
development ("Development Projects"), principally:
(i) a 28.5 MW gas-fired qualifying cogeneration
facility located in New York ("Development Project No. 1")
for which a power purchase contract with a New York electric
and gas utility has been executed and a steam sales
agreement is being negotiated; and
(ii) a number of other natural gas-fired
qualifying cogeneration facilities or EWGs, totalling
approximately 275 MW, with respect to which proposals to
3
<PAGE>
supply electric power have been submitted in response to
utility requests for proposals.
(iii) Neither GPU, GPC nor EI presently propose
to engage in any preliminary project development,
administrative or other activities in connection with QF's,
small power production facilities or EWG's through Cogen
Corp. other than those described herein or as described in
other filings with the Commission."
6. By completing 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:
Filing Fees:
Securities and Exchange Commission $ 2,000
Federal Trade Commission 25,000
Legal Fees:
Berlack, Israels & Liberman 375,000
Carter, Ledyard & Milburn 100,000
Accounting Fees:
Coopers & Lybrand 100,000
Miscellaneous 123,000
Total $725,000"
7. By adding the following paragraph at the end of
Item 3 thereof:
"EI will report quarterly to the Commission in a
Certificate Pursuant to Rule 24 the information with respect
to Cogen Corp.'s projects and activities that may be
generally required pursuant to the Commission's order issued
in SEC File. No. 70-7727."
8. By adding the following paragraph at the end of
Item 4 thereof:
"It is requested that the Commission reserve
jurisdiction over the issuance and sale by EI of unsecured
promissory notes to banks in the principal amount of $2.5
million and the entering into by GPU of guarantees or
supporting agreements with respect to the pending completion
of the record regarding such proposed transaction."
4
<PAGE>
9. By filing the following exhibits in Item 6
thereof:
(a) Exhibits:
"F - Opinion of Berlack, Israels & Liberman.
K - Project Participant Diagrams - filed
under request for confidential treatment
pursuant to Rule 104.
L - Project Projections - filed under
request for confidential treatment
pursuant to Rule 104.
M - Letter from the Federal Trade Commission
notifying GPU of early termination of
Hart-Scott-Rodino Act waiting period."
5
<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.
GENERAL PUBLIC UTILITIES CORPORATION
GENERAL PORTFOLIOS CORPORATION
By:______________________________
Don W. Myers
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By:______________________________
Bruce L. Levy
President
Date: April 29, 1994
<PAGE>
EXHIBITS TO BE FILED BY EDGAR
Exhibits:
F - Opinion of Berlack, Israels & Liberman.
M - Letter from the Federal Trade Commission
notifying GPU of early termination of Hart-
Scott-Rodino Act waiting period.
<PAGE>
(LETTERHEAD OF BERLACK, ISRAELS & LIBERMAN)
Exhibit F
April 29, 1994
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
Re: General Public Utilities Corporation
General Portfolios Corporation
Energy Initiatives, Inc.
Application on Form U-1
SEC File No. 70-8369
Dear Sirs:
We have examined the Application on Form U-1, dated
March 4, 1994, under the Public Utility Holding Company Act of
1935 ("Act"), filed by General Public Utilities Corporation
("GPU"), General Portfolios Corporation ("GPC") and Energy
Initiatives, Inc. ("EI") with the Securities and Exchange
Commission ("Commission"), and docketed by the Commission in SEC
File No. 70-8369, as amended by Amendment No. 1 thereto, dated
March 8, 1994, Amendment No. 2 thereto, dated March 22, 1994,
Amendment No. 3 thereto, dated April 14, 1994, Amendment No. 4
thereto, dated April 14, 1994, and as to amended by Amendment No.
5 thereto, dated this date, of which this opinion is to be a
part. (The Application, as amended and as thus to be amended, is
hereinafter referred to as the "Application").
The Application contemplates, among other things, the
acquisition by EI, pursuant to the terms and conditions of a
Stock Purchase and Sale Agreement, of all of the common stock
("Cogen Corp. Stock") of a non-affiliated, privately held
California corporation ("Cogen Corp.") engaged in the business of
developing, owning and operating non-utility power generation
projects which are either "qualifying facilities" ("QF") under
the Public Utility Regulatory Policies Act of 1978 and the
regulations of the Federal Energy Regulatory Commission ("FERC")
thereunder, or "exempt wholesale generators" as defined under the
Act and the applicable regulations of the Commission and the
FERC, for an aggregate purchase price of up to $80 million and
the making by GPU and GPC of cash capital contributions to EI
from time to time through December 31, 1995 to pay the purchase
price. Cogen Corp. owns interests in five operating QF projects
and has additional projects under development as described in the
Application.
<PAGE>
Securities and Exchange Commission
April 29, 1994
Page 2
The Application further contemplates that GPU would
unconditionally guarantee ("Guarantees") certain outstanding
obligations of Cogen Corp.'s indirect parent given in connection
with the financing of three of Cogen Corp.'s operating QF
projects in an aggregate amount not to exceed $25 million. In
addition, the Application contemplates that EI may from time to
time through December 31, 1995, acquire the stock and/or assets
of any of Cogen Corp.'s operating projects ("Excluded
Subsidiaries") which EI is unable initially to acquire at the
time EI purchases the Cogen Corp. Stock.
Finally, the Application contemplates that EI may issue
and sell its unsecured promissory notes ("EI Notes") to
commercial banks from time to time through December 31, 2004 in
an aggregate principal amount of up to $25 million outstanding at
any one time. The payment of principal, interest and any other
amounts due on the EI Notes under the related loan agreements may
be unconditionally guaranteed by GPU ("EI Note Guaranty"), or GPU
may enter into support agreements with the lending banks with
respect thereto.
We have examined copies, signed, certified or otherwise
proven to our satisfaction the charter documents and by-laws of
GPU, GPC and EI. We have also examined such other documents,
including the Stock Purchase and Sale Agreement and the various
other agreements related thereto, instrument and agreements and
have made such further investigation as we have deemed necessary
as a basis for this opinion.
We have been counsel to GPU and to its subsidiaries,
including GPC and EI, 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.
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 forthwith granting the
Application and the required waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act shall have expired,
(a) all State laws applicable to the
proposed transactions will have been complied
with,
(b) GPU and EI are each validly
organized and duly existing in their
respective states of incorporation,
<PAGE>
Securities and Exchange Commission
April 29, 1994
Page 3
(c) the GPU Guarantees, the EI Notes
and the EI Note Guaranty will each be valid
and binding obligations of GPU and EI, as the
case may be, in accordance with their
respective terms, subject in each case to
bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting
creditors' rights generally and to general
principles of equity,
(d) EI will legally acquire the Cogen
Corp. Stock and the Excluded Subsidiaries
stock, and
(e) the consummation of the
transactions proposed in the Application will
not violate the legal rights of the holders
of any securities issued by GPU, GPC, EI 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>
Exhibit M
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Bureau of Competition
4/29/1994
Gerald A. Lee, Esquire
Berlack, Israels & Liberman
120 West 45th Street
New York, New York 10036
Re: Premerger Notification Requirements Under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976
Transaction Identification Number 94-1138
Dear Mr. Lee:
Confirming our telephone conversation of 04/26/94, a request
for early termination of the waiting period provided by Section
7A(b)(1) of the Clayton Act and Section 803.10(b) of the
premerger notification rules with respect to the proposed
acquisition by General Public Utilities Corporation of certain
voting securities of North Canadian Power Incorporated from North
Canadian Oils Limited has been granted. Termination of the
waiting period became effective upon communication.
Notice of this termination will be published in the Federal
Register in accordance with Section 7a(b)(2) of the Clayton Act
and Section 803.11(c) of the premerger notification rules.
Sincerely,
Sandra Peay
Contact Representative
Premerger Notification Office
Bureau of Competition
(202) 326-3100
<PAGE>
