Post-Effective Amendment No. 1 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
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)
T.G. Howson, 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 and EI hereby amend their Application on Form U-1,
docketed in SEC File No. 70-8369, as follows:
A. By Order dated May 17, 1994 (HCAR No. 35-
26053)(the "Order") in this docket, the Commission, among other
things, authorized EI to acquire all of the common stock of North
Canadian Power Incorporated ("NCP"). In the Order, the
Commission reserved jurisdiction pending completion of the record
over, among other things, (i) EI's request to issue, sell and
renew from time to time through December 31, 2004 its promissory
notes ("Notes") in the aggregate principal amount of up to $25
million, the proceeds of which were to be used by EI, together
with a capital contribution from GPU, to fund the purchase price
of the NCP stock, and (ii) GPU's request to guarantee repayment
of the principal and interest on the Notes ("Guarantee
Agreement"), together with EI's other obligations under the
related loan agreement, or enter into a support agreement with
the lenders in respect thereof ("Support Agreement").
B. On June 13, 1994, EI acquired the common stock of
NCP pursuant to the Order. As previously reported, at the
closing, GPU made a cash capital contribution to EI in order to
fund the amount of the purchase price then being paid
($53,517,590). The balance of the purchase price (approximately
$20 million) remains deposited in escrow pending receipt of
required third party consents. Since the acquisition, EI and GPU
have reached an agreement in principal on the terms and
conditions of a loan agreement with a group of lenders for whom
Citibank, N.A. would initially act as agent ("Loan Agreement").
Accordingly, GPU and EI now seek a supplemental order with
1<PAGE>
respect to the Loan Agreement and Support Agreement as described
below.
C. The Loan Agreement would permit borrowings by EI
in an aggregate amount not to exceed $30 million. Notes issued
under the Loan Agreement would bear interest at either (a) the
Alternate Base Rate; or (b) the Eurodollar Rate plus 50 basis
points. The Alternate Base Rate would be defined as the higher
of Citibank, N.A.'s prime rate and the Federal Funds Rate plus 50
basis points. The Eurodollar Rate would be defined as the
interest rate per annum at which deposits in U.S. dollars are
offered by the principal office of the reference bank (initially,
Citibank, N.A.) in London, England to prime banks in the London
interbank market, plus additional costs for reserves, if
applicable.
D. Issuance of the Notes would be subject to certain
conditions, and the Notes would be subject to acceleration under
certain circumstances. Borrowings bearing interest at the
Alternate Base Rate would be prepayable at any time without
penalty; borrowings bearing interest at the Eurodollar Rate would
also be prepayable, subject to payment of certain costs incurred
by the lenders in connection with the prepayment.
E. EI would agree to pay the lenders under the Loan
Agreement a facility fee of 37.5 basis points per annum and a
one-time commitment fee payable at the initial closing of five
basis points.
F. It is also anticipated that the Loan Agreement
would include a letter of credit ("L/C") facility. Pursuant to
this facility, EI would be able to request any lender which is a
2<PAGE>
party to the Loan Agreement to issue an L/C, in a maximum
aggregate face amount for all L/Cs outstanding of up to $15
million. The lender would, however, have the discretion not to
issue an L/C. The aggregate amount that EI may borrow under the
Loan Agreement will be reduced by the face amount of outstanding
L/Cs. Drawings on an L/C would initially bear interest at the
Alternate Base Rate; if EI elected not to immediately reimburse
the issuing bank, the drawing would be treated as a borrowing
under the Loan Agreement. EI would be required to pay the
issuing bank a letter of credit fee of .50% per annum on the face
amount of the L/C.
G. The Loan Agreement would have an initial term of
three years, subject to extension for one year in the sole
discretion of the lenders. Upon termination, EI would be
permitted to repay any then outstanding loans over a two year
period in quarterly installments, but EI would not be permitted
to re-borrow during such period.
H. To induce the lenders to enter into the Loan
Agreement, GPU proposes to deliver to the lenders a Support
Agreement. Among other things, that agreement would provide that
GPU would maintain 100% ownership of EI and would use its best
efforts to arrange for repayment of the Notes when they become
due and payable.
I. Since substantially all of the NCP purchase price
has heretofore been funded with a cash capital contribution from
GPU, EI now proposes to use the proceeds of the sale of the Notes
from time to time in its general business activities, and, in
particular:
3<PAGE>
(i) to fund preliminary project development and
administrative activities in connection with EI's
investments in qualifying cogeneration and small power
production facilities, as defined in the Public Utility
Regulatory Policies Act of 1978, and exempt wholesale
generators ("EWGs") and foreign utility companies
("FUCOs"), as defined in Sections 32 and 33 of the Act,
respectively,
(ii) to acquire securities or other interests in
EWGs or FUCOs, and
(iii) to reimburse GPU for a portion of its
funding of the NCP purchase price.
EI would not, however, acquire interests or securities
in any QFs, EWGs or FUCOs except as may be permitted by separate
Commission authorization or rule.
J. It is requested that the filing of Certificates
Pursuant to Rule 24 under the Act required to be filed hereunder
be filed quarterly within ten days of the end of each calendar
quarter beginning with the quarter in which the authorization
herein requested is granted. Such certificates will include the
principal amount of indebtedness and face amount of L/Cs that EI
has outstanding under the Loan Agreement.
K. GPU and EI submit that all of the criteria of
Rules 53 and 54 under the Act with respect to the issuance of
Notes by EI, and the issuance of the Support Agreement by GPU,
are satisfied.
(i) The average consolidated retained earnings
for GPU and its subsidiaries, as reported for the four
4<PAGE>
most recent quarterly periods in GPU's Annual Report on
Form 10-K for the year ended December 31, 1993 and
Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1993, March 31, 1994 and June 30, 1994,
as filed under the Securities Exchange Act of 1934, was
approximately $1.84 billion. At the date hereof, GPU
had invested, or committed to invest, directly or
indirectly, an aggregate of approximately $12.5 million
in EWGs and $0 in FUCOs. (GPU does not own any direct
or indirect interest in a FUCO). Accordingly, assuming
the entire proceeds of the sale of the Notes ($30
million) and entire authorization in SEC File No. 70-
7727 ($60 million) and SEC File No. 70-7926 ($200
million) were invested in EWGs and FUCOs, GPU's
investment in EWGs and FUCOs would equal approximately
16.4% of such average consolidated retained earnings.
(ii) GPU maintains books and records to identify
investments in, and earnings from, each EWG and FUCO in
which it directly or indirectly holds an interest. (A)
For each United States EWG in which GPU directly or
indirectly holds an interest:
(1) the books and records for such EWG
will be kept in conformity with United States
generally accepted accounting principles ("GAAP");
(2) the financial statements will be
prepared in accordance with the GAAP; and
(3) GPU directly or through its subsid-
iaries undertakes to provide the Commission access
5<PAGE>
to such books and records and financial statements
as the Commission may request.
(B) For each FUCO or foreign EWG which is a
majority-owned subsidiary of GPU:
(1) the books and records for such
subsidiary will be kept in accordance with GAAP;
(2) the financial statements for such
subsidiary will be prepared in accordance with
GAAP; and
(3) GPU directly or through its subsid-
iaries undertakes to provide the Commission access
to such books and records and financial
statements, or copies thereof in English, as the
Commission may request.
(C) For each FUCO or foreign EWG in which
GPU owns 50% or less of the voting securities, GPU directly
or through its subsidiaries will proceed in good faith, to
the extent reasonable under the circumstances, to cause
(1) such entity to maintain books and
records in accordance with GAAP;
(2) the financial statements of such entity
to be prepared in accordance with GAAP; and
(3) access by the Commission to such books
and records and financial statements (or copies
thereof) in English as the Commission may request
and, in any event, will provide the Commission on
request copies of such materials as are made
6<PAGE>
available to GPU and its subsidiaries. If and to
the extent that such entity's books, records or
financial statements are not maintained in accor-
dance with GAAP, GPU will, upon request of the
Commission, describe and quantify each material
variation therefrom as and to the extent required
by subparagraphs (a) (2) (iii) (A) and (a) (2)
(iii) (B) of Rule 53.
(iii) No more than 2% of GPU's domestic public
utility subsidiaries will render any services, directly or
indirectly, to any EWG or FUCO in which GPU directly or
indirectly holds an interest.
(iv) Copies of this Application on Form U-1 are
being provided to the New Jersey Board of Public Utilities,
the Pennsylvania Public Utility Commission and the New York
Public Service Commission, the only federal, state or local
regulatory agencies having jurisdiction over the retail
rates of GPU's electric utility subsidiaries. In addition,
GPU will submit to each such commission copies of any Rule
24 certificates required hereunder, as well as a copy of
Item 9 of GPU's Form U5S and Exhibits G and H thereof
(commencing with the Form U5S to be filed for the calendar
year in which the authorization herein requested is
granted).
(v) None of the provisions of paragraph (b) of
Rule 53 render paragraph (a) of that Rule unavailable for
the proposed transactions.
7<PAGE>
(A) Neither GPU nor any subsidiary of GPU is
the subject of any pending bankruptcy or similar
proceeding.
(B) GPU's average consolidated retained
earnings for the four most recent quarterly
periods (approximately $1.84 billion) represented
an increase of approximately $80 million in the
average consolidated retained earnings for the
previous four quarterly periods (approximately
$1.76 billion).
(C) GPU incurred no losses from direct or
indirect investments in EWGs and FUCOs in 1993.
L. The estimated fees, commissions and expenses to be
incurred by the applicants in connection with the proposed
transactions will be supplied by further post-effective
amendment.
M. It is believed that Sections 6(a), 7, and 12(b) of
the Act and Rules 45, 53 and 54 thereunder are applicable to the
transactions proposed herein.
N. No state commission has jurisdiction with respect
to any aspect of the proposed transactions and, assuming your
Commission authorizes and approves all aspects of the
transactions (including the accounting therefor), no Federal
commission other than your Commission has jurisdiction with
respect to any aspect thereof.
O. It is requested that the Commission issue a
supplemental order with respect to the proposed transactions at
the earliest practicable date, but in any event not later than
8<PAGE>
November 11, 1994. It is further requested that (i) there not be
a recommended decision by an Administrative Law Judge or other
responsible officer of the Commission, (ii) the Office of Public
Utility Regulation be permitted to assist in the preparation of
the Commission's decision, and (iii) there be no waiting period
between the issuance of the Commission's order and the date on
which it is to become effective.
P. The following exhibits are filed herewith:
B-10 Form of Loan Agreement--to be filed by
Amendment.
B-11 Form of EI Note--included in Exhibit B-10.
B-14 Form of GPU Support Agreement with respect to
EI Notes--to be filed by amendment.
B-15 Form of LC Reimbursement Agreement--included
in exhibit B-10.
F-1 Opinion of Berlack, Israels & Liberman--to be
filed by amendment.
G Proposed form of public notice.
Q. The proposed transactions are for the purpose of
carrying out and financing EI's business activities. As such,
the issuance of an order by your Commission with respect to the
proposed transactions which are the subject hereof is not a major
Federal action significantly affecting the quality of the human
environment.
R. No federal agency has prepared or is preparing an
environmental impact statement with respect to the proposed
transactions which are the subject hereof. Reference is made to
paragraph M hereof regarding regulatory approvals with respect to
the proposed transactions.
9<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
By:______________________________
T. G. Howson
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By:______________________________
Bruce L. Levy
President
Date: September 28, 1994<PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibit:
G - Proposed form of public notice<PAGE>
EXHIBIT G
General Public Utilities Corporation, et. al. (70-8369)
General Public Utilities Corporation ("GPU"), 100 Interpace
Parkway, Parsippany, New Jersey 07054, a registered holding
company, and Energy Initiatives, Inc., One Upper Pond Road,
Parsippany, New Jersey 07054, a non-utility subsidiary of GPU,
have filed a post-effective amendment under Sections 6(a), 7 and
12(b) of the Act and Rules 45, 53 and 54 thereunder to their
Application on Form U-1.
By Order dated May 17, 1994 (HCAR No. 35-26053)(the
"Order"), the Commission, among other things, authorized EI to
acquire all of the common stock of North Canadian Power
Incorporated ("NCP"). In the Order, the Commission reserved
jurisdiction pending completion of the record over, among other
things, (i) EI's request to issue, sell and renew from time to
time through December 31, 2004 its promissory notes ("Notes") in
the aggregate principal amount of up to $25 million, the proceeds
of which were to be used by EI, together with a capital
contribution from GPU, to fund the purchase price of the NCP
stock, and (ii) GPU's request to guarantee repayment of the
principal and interest on the Notes ("Guarantee Agreement"),
together with EI's other obligations under the related loan
agreement, or enter into a support agreement with the lenders in
respect thereof ("Support Agreement").
On June 13, 1994, EI acquired the common stock of NCP
pursuant to the Order. As previously reported, at the closing,
GPU made a cash capital contribution to EI in order to fund the
1<PAGE>
amount of the purchase price then being paid ($53,517,590). The
balance of the purchase price (approximately $20 million) remains
deposited in escrow pending receipt of required third party
consents. Since the acquisition, EI and GPU have reached an
agreement in principal on the terms and conditions of a loan
agreement with a group of lenders for whom Citibank, N.A. would
initially act as agent ("Loan Agreement"). Accordingly, GPU and
EI now seek a supplemental order with respect to the Loan
Agreement and Support Agreement as described below.
The Loan Agreement would permit borrowings by EI in an
aggregate amount not to exceed $30 million. Notes issued under
the Loan Agreement would bear interest at either (a) the
Alternate Base Rate; or (b) the Eurodollar Rate plus 50 basis
points. The Alternate Base Rate would be defined as the higher
of Citibank, N.A.'s prime rate and the Federal Funds Rate plus 50
basis points. The Eurodollar Rate would be defined as the
interest rate per annum at which deposits in U.S. dollars are
offered by the principal office of the reference bank (initially,
Citibank, N.A.) in London, England to prime banks in the London
interbank market, plus additional costs for reserves, if
applicable.
Issuance of the Notes would be subject to certain
conditions, and the Notes would be subject to acceleration under
certain circumstances. Borrowings bearing interest at the
Alternate Base Rate would be prepayable at any time without
penalty; borrowings bearing interest at the Eurodollar Rate would
also be prepayable, subject to payment of certain costs incurred
by the lenders in connection with the prepayment.
2<PAGE>
EI would agree to pay the lenders under the Loan
Agreement a facility fee of 37.5 basis points per annum and a
one-time commitment fee payable at the initial closing of five
basis points.
It is also anticipated that the Loan Agreement would
include a letter of credit ("L/C") facility. Pursuant to this
facility, EI would be able to request any lender which is a party
to the Loan Agreement to issue an L/C, in a maximum aggregate
face amount for all L/Cs outstanding of up to $15 million. The
lender would, however, have the discretion not to issue an L/C.
The aggregate amount that EI may borrow under the Loan Agreement
will be reduced by the face amount of outstanding L/Cs. Drawings
on an L/C would initially bear interest at the Alternate Base
Rate; if EI elected not to immediately reimburse the issuing
bank, the drawing would be treated as a borrowing under the Loan
Agreement. EI would be required to pay the issuing bank a letter
of credit fee of .50% per annum on the face amount of the L/C.
The Loan Agreement would have an initial term of three
years, subject to extension for one year in the sole discretion
of the lenders. Upon termination, EI would be permitted to repay
any then outstanding loans over a two year period in quarterly
installments, but EI would not be permitted to re-borrow during
such period.
To induce the lenders to enter into the Loan Agreement,
GPU proposes to deliver to the lenders a Support Agreement.
Among other things, that agreement would provide that GPU would
maintain 100% ownership of EI and would use its best efforts to
arrange forrepayment of theNotes when they becomedue and payable.
3<PAGE>
Since substantially all of the NCP purchase price has
heretofore been funded with a cash capital contribution from GPU,
EI now proposes to use the proceeds of the sale of the Notes from
time to time in its general business activities, and, in
particular:
(i) to fund preliminary project development and
administrative activities in connection with EI's
investments in qualifying cogeneration and small power
production facilities, as defined in the Public Utility
Regulatory Policies Act of 1978, and exempt wholesale
generators ("EWGs") and foreign utility companies
("FUCOs"), as defined in Sections 32 and 33 of the Act,
respectively,
(ii) to acquire securities or other interests in
EWGs or FUCOs, and
(iii) to reimburse GPU for a portion of its
funding of the NCP purchase price.
EI would not, however, acquire interests or securities
in any QFs, EWGs or FUCOs except pursuant to separate Commission
authorization or rule.
GPU and EI submit that all of the criteria of Rules 53
and 54 under the Act with respect to the issuance of Notes by EI,
and the issuance of the Support Agreement by GPU, are satisfied.
Interested persons wishing to comment or request a
hearing on the post-effective amendment should submit their views
in writing by ____________, 1994 to the Secretary, Securities and
Exchange Commission, Washington, D.C. 20549, and serve a copy on
the applicants at the addresses specified below. Proof of
4<PAGE>
service (by affidavit or, in the case of an attorney at law, by
certificate) should be filed with the request. Any request for
hearing shall identify specifically the issues of fact or law
that are disputed. A person who so requests will be notified of
any hearing, if ordered, and will receive a copy of any notice or
order issued in the matter. After said date, the post-effective
amendment, as filed or as amended, may be granted.
5<PAGE>
