SEC FILE NO. 70-7727
and
SEC FILE NO. 70-8593
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CERTIFICATE PURSUANT TO
RULE 24
OF PARTIAL COMPLETION OF
TRANSACTIONS
GPU, Inc.
GPU International, Inc.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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- - - - - - - - - - - - - - - - - - - - - -
:
In the matter of :
GPU. INC. : Certificate Pursuant
GPU INTERNATIONAL, INC. : to Rule 24 of Partial
: Completion of
SEC File No. 70-7727 : Transactions
SEC File No. 70-8593 :
(Public Utility Holding Company Act :
of 1935) :
:
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TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
The undersigned, GPU, Inc. ("GPU") (formerly General Public Utilities
Corporation) and GPU International, Inc. ("GPU International") (formerly
Energy Initiatives, Inc.) hereby certify pursuant to Rule 24 of the Rules and
Regulations under the Public Utility Holding Company Act of 1935 (the "Act"),
that certain of the transactions proposed in the Applications, as amended,
filed in SEC file No. 70-7727 and SEC File No. 70-8593, respectively, have
been carried out in accordance with the Commission's Orders dated November 16,
1995, June 14, 1995, December 28, 1994, September 12, 1994, December 18, 1992,
and June 26, 1990 with respect to the transactions proposed in the
Application, as amended, in SEC File No. 70-7727, and the Commission's Orders
dated, March 6, 1996, January 19, 1996 and July 6, 1995 with respect to the
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transactions proposed in the Application, as amended, in SEC File No. 70-8593,
as follows:
The following is reported in accordance with Supplemental Order dated
November 16, 1995 for SEC File No. 70-7727:
1. Financial Statements
A copy of GPU International's audited Consolidated Balance Sheets
as of December 31, 1996 and 1995 and audited Consolidated Statements of
Operations for the years ended December 31, 1996 and 1995 will be filed
separately under a request for confidential treatment pursuant to Rule 104(b).
2. Business Activities
Project Development
GPU International signed a partnership agreement in December 1995
with Societe Nationale d'Electricite du Senegal (SENELEC), the national
utility of Senegal, to assist the African utility with enhancing its electric
generation and distribution operations. It is the first such agreement
between a U.S. electric utility and a utility from Africa.
In December 1996, GPU International and Ballard Power Systems (BPS)
entered into an agreement for the commercialization of stationary fuel cell
power plants. Under the terms of the agreement, BPS created a new subsidiary,
Ballard Generation Systems, Inc. (BGS) which will develop, manufacture and
market stationary fuel cell power plants worldwide and will be based in
British Columbia, Canada. BPS will supply the fuel cells for these power
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plants. GPU International has committed to invest $23.25 million over the
next two years in BGS for up to a 19.3% equity interest in BGS, two 250 KW
fuel cell power plants for field trials, and non-transferable warrants to
purchase 100,000 common shares in BPS. See Order dated December 17, 1996
(HCAR No. 35-26631) and Supplemental Order dated December 26, 1996 (HCAR No.
35-26635).
GPU International announced plans to expand its efforts to identify
and develop sustainable energy projects in Latin America by establishing a
representative office in San Jose, Costa Rica. Such projects will include the
commercialization of emerging technologies, the establishment and operation of
rural and remote electrification business, and the development of projects
qualified under the Joint Implementation mechanism established through the
Framework Convention on Climate Change.
GPU International, through its Technology Ventures group, has been
pursuing several projects in Costa Rica. Among its activities are consulting
services to Guanacaste Conservation Area in the development of an Energy
Master Plan and consulting services to a national power and light company with
respect to the development and implementation of a pilot program for electric
vehicles in Costa Rica.
In May 1996, GPU International completed a $150 million financing
for the construction of a 300 megawatt ( MW ) gas-fired cogeneration facility
with energy and capacity to be sold to Georgia Power Company. Construction of
the facility which will be located in Houston County, Georgia, began in
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November 1996 and commercial operation is scheduled for February 1998.
GPU International also continued to engage in other project
development activities both domestically and internationally (including in
Europe, Asia, Philippines, and South America).
Project Related Services
GPU International continued to provide management, administrative
and/or operating services to the following projects (either directly or
through subsidiaries), in which GPU International has a direct or indirect
ownership interest:
Project Project Owner Location
Marcal Prime Energy L.P. NJ
Berkeley OLS Acquisition Corp. CA*
Chino OLS Acquisition Corp. CA
Camarillo OLS Acquisition Corp. CA
Onondaga Onondaga Cogeneration L.P. NY
Lake Lake Cogen L.P. FL
Pasco Pasco Cogen L.P. FL
Syracuse Project Orange Associates L.P. NY
Ada Ada Cogeneration L.P. MI**
Brooklyn Brooklyn Energy L.P. Canada
Mid-Georgia Mid-Georgia Cogen, L.P. GA
* GPU International s interest in this project was sold in January 1997.
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** GPU International s interest in this project was sold in November 1996.
3. Guarantees which GPU has Agreed to Grant
No matters to be reported.
4. Guarantees Issued
GPU International or GPU, for the benefit of GPU International, has
obtained the following standby letters of credit which were effective during
the period October 1, 1996 through December 31, 1996:
(a) On February 26, 1996, a letter of credit in the face amount
of $30,000 was issued by Citibank pursuant to its credit
agreement with GPU International ("Citibank Credit
Agreement") to support a bid for a 500 MW coal-fired
generating plant in Punjab State, India. The letter of
credit carries a fee equal to 0.5 of 1 percent per annum of
the face amount, plus a .10 percent fronting fee, and expires
on May 26, 1997.
(b) On December 8, 1996, a letter of credit in the face amount of
$1,788,850, issued on December 8, 1995 and scheduled to
expire on December 8, 1996, was extended to December 8, 1997.
The letter of credit was issued by Citibank pursuant to the
Citibank Credit Agreement in favor of Wisconsin Public
Service Company to support Polsky Energy Corp's (PEC)
commitment to construct a 236 MW cogeneration facility
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pursuant to its Power Sales Agreement with Wisconsin Public
Service Company. The letter of credit carries a fee equal to
0.5 of 1 percent per annum of the face amount, plus a .10
percent fronting fee.
(c) On June 16, 1994, a letter of credit in the face amount of $5
million was issued by Chase Manhattan Bank in favor of Mellon
Bank to support debt service coverage on the Onondaga
Project. The letter of credit carries a fee equal to 0.7 of
1 percent per annum of the face amount, and expires on June
16, 1997. GPU entered into the related reimbursement
agreement.
(d) On December 11, 1996, a letter of credit in the face amount
of $9.7 million issued on March 11, 1994 and scheduled to
expire on December 11, 1996, was extended to June 11, 1997.
The letter of credit was issued by Canadian Imperial Bank of
Commerce, in favor of The Mutual Life Assurance Company of
Canada to support GPU International's equity commitment to
Brooklyn Energy Limited Partnership, an exempt wholesale
generator ("EWG"). The letter of credit carries a fee equal
to 0.625 of 1 percent per annum of the face amount. GPU
entered into the related reimbursement agreement.
In addition, the following guarantees were outstanding during the
period October 1, 1996 through December 31, 1996:
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(a) As of October 18, 1995, a guarantee of amounts up to
$122,750,000 was made by GPU for the benefit of the Bankers
Trust Company as collateral agent on behalf of the Equity
Bridge Lenders and the Secured Parties in connection with the
Termobarranquilla project in Colombia.
(b) GPU International has guaranteed the obligations of GPU
Power, Inc. ("GPU Power") (formerly EI Power, Inc.), GPU
International Latin America, Ltda. (formerly EI Services
Colombia, Ltda.) and International Power Advisors, Inc. (the
Operators), under the operations and maintenance agreement in
the Colombia project. Pursuant to the guarantee, GPU
International has guaranteed the performance of the
Operators, of which the limit of liability is $5 million.
(c) GPU has guaranteed payments to General Electric Capital
Corporation of amounts up to the lesser of six months average
rent (approximately $7,026,000) or $10 million, to the extent
Lake Cogen, Ltd. fails to pay rent when due under the terms
of the project lease or chooses not to renew the lease after
its initial 11-year term. In addition, GPU has guaranteed to
pay any documentary stamp taxes and intangible personal
property taxes should these taxes become due and payable in
connection with the lease.
(d) GPU International has guaranteed the obligations of its
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wholly owned subsidiary, EI Fuels Corporation ("EI Fuels"),
under the Natural Gas Facilities Agreement ("Facilities
Agreement"), dated as of November 30, 1995. Pursuant to the
guarantee, GPU International has guaranteed the payments of
EI Fuels to the City of Warner Robins (the "City") for (a)
Fixed Monthly Lease Charge (as defined in the Facilities
Agreement) and (b) any and all extensions, renewals,
modifications, amendments or substitutions of the foregoing.
The Fixed Monthly Lease Charge is $24,000, payable commencing
on the in service date, subject to reduction in certain
circumstances, for a term of 31 years.
(e) GPU has guaranteed up to $32 million for the purpose of
funding, on an interim basis, the equity investment in Mid-
Georgia Cogen L.P., which will be used to finance the
construction of the facility. GPU has also guaranteed up to
an additional $9 million in letter of credit obligations on
behalf of Mid-Georgia.
5. Services obtained from associated companies
Services obtained from GPU Service, Inc. (formerly GPU Service
Corporation) consisted of (i) administrative, internal auditing, accounting
and risk management services; (ii) information services and telecommunications
services, and (iii) pension administration services. The total dollar value of
such services provided during the period October 1, 1996 through December 31,
1996 was $154,622.
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6. Services provided to associated companies
A description of services provided by GPU International to
associate companies during the period October 1, 1996 through December 31,
1996 will be filed separately under a request for confidential treatment under
Rule 104(b).
7. Investments by GPU in Qualifying Facilities, Exempt Wholesale
Generators and Foreign Utility Companies, Percentage of Equity Ownership
Set forth below is a summary of the direct or indirect investments
by GPU, as of December 31, 1996 in qualifying facilities (QFs), EWGs and
foreign utility companies (FUCOs), as well as the percentage of equity
ownership.
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Book Value
FUCO, of GPU GPU's% Owners not affiliated with GPU
QF Investment Equity
Associate or at 12/31/96 Owner- Type of
Company EWG ($000) ship Name of Entity Entity
Prime Energy, LP QF $ 5,748 50% Prudential Insurance Domestic
Company of America
OLS Power, LP QF - 1% Prudential Insurance Domestic
Company of America
Onondaga QF 18,183 50% New York Cogenco, Inc. Domestic
Cogen, LP
Lake Cogen, Ltd QF 3,354 49.9% Lake Interest Holding, Domestic
Inc.
Project Orange QF 29 4% G.A.S.Orange Partners,LP Domestic
Associates, LP NCP Syracuse Inc. "
Syracuse Investment Inc. "
Stewart & Stevenson "
Operations, Inc.
Met Life Capital Corporation "
Ada Cogenera- QF - - Cogen Development Co.
Domestic
tion, LP(1) Coenergy Ventures, Inc. "
MCNIC Ada GP, Inc. "
Pasco Cogen, QF 15,468 49.9% PAS Power Company Domestic
Ltd. Pasco Int. Holding, Inc. "
FPB Cogenera- QF - 30% FPB Cogen, Inc. Domestic
tion Partners, FPB California "
LP Cogeneration Corp.
Selkirk Cogen EWG & 14,343 19% JMC Selkirk, Inc. Domestic
Partners, LP QF Cogen Technologies "
Selkirk GP, Inc.
Cogen Technologies "
Selkirk, LP
JMCS I Investors, LP "
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Empresa EWG 50,518 50% Cititrust (Bahamas) Foreign
Guaracachi S.A. Limited
Guaracachi EWG 34,559* 100% Not Applicable N/A
America, Inc.
GPU Power, Inc. EWG 33,570* 100% Not Applicable N/A
Book Value
FUCO, of GPU GPU's% Owners not affiliated with GPU
QF Investment Equity
Associate or at 12/31/96 Owner- Type of
Company EWG ($000) ship Name of Entity Entity
EI International EWG $ (51) 100% Not Applicable N/A
GPU International EWG (39)* 100% Not Applicable N/A
Latin America,
Ltda
Solaris Power FUCO 124,742 50% Australian Gas Light, Foreign
Co.
Victoria Electric FUCO 123,450* 100% Not Applicable N/A
Inc.
Midlands FUCO 601,055 50% Cinergy Corp.
Domestic
Electricity plc
Termobarranquilla EWG (52) 28.545% ABB Energy Ventures, Foreign
S.A. Inc.
Lancaster Distral Group "
Corporacion Electrica "
De la Costa Atlantica
EI Barranquilla, EWG (271)* 100% Not Applicable N/A
Inc.
Barranquilla EWG 59 100% Not Applicable N/A
Lease Holdings, Inc.
Los Amigos Leas- EWG 51* 100% Not Applicable N/A
ing Company, Ltd.
EI Services EWG 87 100% Not Applicable N/A
Canada, Ltd.
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EI Canada EWG (340)* 100% Not Applicable N/A
Holding, Ltd.
EI Brooklyn EWG (411)* 100% Not Applicable N/A
Investment, Ltd.
EI Brooklyn EWG (428)* 100% Not Applicable N/A
Power, Ltd.
Book Value
FUCO, of GPU GPU's% Owners not affiliated with GPU
QF Investment Equity
Associate or at 12/31/96 Owner- Type of
Company EWG ($000) ship Name of Entity Entity
Brooklyn Energy, EWG $ (420) 75% Polsky Energy Corp. Foreign
LP of Brooklyn
_______ Brooklyn CoGen Limited Foreign
GPU's Aggregate
Investment* $833,063
(*) GPU's aggregate investment does not include the items shown with
asterisks in order to avoid duplication.
(1) GPU International sold its 1 percent general partnerhsip interest
in Ada Cogeneration, L.P. on November 1, 1996
As of December 31, 1996, GPU also owned, directly or indirectly,
interests in the following EWGs, in which its aggregate investment did not
exceed $10,000: International Power Advisors, Inc.; Austin Cogeneration
Corporation; Austin Cogeneration Partners, L.P.; Hanover Energy Corporation;
EI Power (China), Inc.; China Power Partners, L.P.; EI Power (China)I, Inc.;
Ming Jiang Power Partners, L.P.; EI Power (China)II, Inc.; Nanjing Power
Partners, L.P.; EI Power (China) III, Inc.; and Zhuang He Power Partners, L.P.
GPU owns a 50% interest in China Power Partners, L.P., Ming Jiang Power
Partners, L.P., Nanjing Power Partners, L.P., and Zhuang He Power Partners,
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L.P. The remaining interests are owned by Intesol International, Ltd., a
Hawaii corporation. GPU owns a 100% interest in each of the other EWGs.
8. During the period October 1, 1996 through December 31, 1996 there was
no intellectual property provided to GPU International by any associate
company, or provided by GPU International to any associate company.
_______________________________________
In accordance with Orders dated July 6, 1995 and March 6, 1996 in SEC File
No. 70-8593, and in addition to the reimbursement agreements described in
items 4 above, the following is reported:
1. Financial Statements
A copy of GPU Electric, Inc.'s ( GPU Electric ) audited Consolidated
Balance Sheets as of December 31, 1996 and 1995 and audited Consolidated
Statements of Operations for the years ended December 31, 1996 and 1995 will
be filed separately under a request for confidential treatment pursuant to
Rule 104(b).
2. Investments in Exempt Entities
In connection with the acquisition of Midlands Electricity plc
("Midlands") discussed in Item 3 below, EI UK Holdings, Inc. ("EI UK") entered
into a term loan agreement (the "Term Loan") dated as of May 6, 1996, with a
syndicate of banks, the Chase Manhattan Bank, N.A., as administrative agent,
Citibank, N.A., as syndication agent, Citicorp Securities, Inc. and Chase
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Securities Inc., as arrangers. The Term Loan provides, among other things,
for EI UK borrowings from time to time of up to pounds sterling 350 million,
or approximately U.S. $599 million, through a GPU guaranteed five-year bank
term loan facility terminating on May 6, 2001.
The borrowing interest rate is based on the LIBOR plus an applicable margin
as defined in the Term Loan corresponding to the debt ratings of GPU. As of
December 31, 1996, EI UK had aggregate borrowings of pounds sterling 342
million, or approximately U.S. $585.7 million, outstanding under the Term
Loan. EI UK invested such funds in Midlands through Avon Energy Partners
Holdings ("Holdings"). The borrowings bear interest at 6.7125 percent per
annum, which was based on the LIBOR at December 9, 1996, plus a .525 percent
margin.
On November 22, 1995, GPU acquired all of the capital stock of GPU
Electric and made capital contributions of $48 million. The capital
contributions were used by GPU Electric to acquire Solaris Power ("Solaris")
(through Victoria Electric, Inc.). During August 1996, Victoria Electric
Holdings, Inc., a wholly owned subsidiary of GPU Electric, was established to
hold the investment in Victoria Electric, Inc.
On November 20, 1995, GPU Electric entered into a credit agreement,
dated as of November 20, 1995, (the "Credit Agreement"), with Citibank Limited
as the Participant and Arranger, for which Citisecurities Limited is the
Agent. The Credit Agreement provides, among other things, for revolving credit
borrowings by GPU Electric from time to time through November 20, 1998,
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subject to extensions for two years at the sole discretion of the Participant,
in amounts not to exceed an aggregate of Australian $95 million outstanding at
any one time. In August 1996, the Credit Agreement was transferred to Victoria
Electric Holdings, Inc. Borrowings are guaranteed by GPU. The proceeds of
such borrowings were used to fund, in part, GPU s investment in Solaris.
Notes issued under the Credit Agreement bear interest at the Bill
Discount Rate which is equal to the mean "bid rate" quoted on the page
entitled "BBSY" on the Reuters Monitor System at or about 10:00am (Sydney
time) on the Funding Date. As of December 31, 1996, the remaining outstanding
balance of the borrowing amounted to Australian $90.1 million, or
approximately U.S. $71.6 million.
Other investments in exempt entities are described in items 2 and 4
above under 70-7727.
3. Description of Exempt Entities in Which There are Funds Invested
Selkirk Cogen Partners, L.P. (Selkirk)
Selkirk owns and operates two natural gas-fired combined-cycle
cogeneration facilities located in Bethlehem, New York. The facilities are
79.9 and 265 megawatts (MW) each with a combined average net capacity of 344.9
MW producing steam and electricity.
Brooklyn Energy, L.P. (Brooklyn)
GPU International has agreed to contribute Canadian $12.944 million,
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or approximately U.S. $9.7 million, in equity and an additional Canadian $1
million, or approximately U.S. $0.7 million, in subordinated debt to Brooklyn,
which owns a 24 MW wood and oil-fired cogeneration facility located in
Brooklyn, Nova Scotia, Canada. Commercial operation of the facility commenced
in April 1996.
Empresa Guaracachi, S.A.
In July 1995, GPU Power, through Guaracachi America, Inc., acquired
from the Bolivian Government a 50% interest in Empresa Guaracachi, S.A., an
electric generating company having an aggregate capacity of 216 MW of natural
gas-fired and oil-fired generation for approximately $47 million. The
facilities are located in Bolivia in and around the cities of Santa Cruz,
Sucre and Potosi with their total capacity representing one-third of Bolivia's
generation capacity. GPU Power's investment of $47 million will be used by
the year 2002 to expand the generating facilities to meet Bolivia's growing
demand.
Solaris Power ("Solaris")
In November 1995, GPU Electric, through Victoria Electric, Inc.,
together with the Australian Gas Light Company, acquired Solaris for a total
purchase price of approximately $712 million, of which GPU Electric's 50%
share is $356 million. GPU Electric has made an equity investment in Solaris
of approximately $112 million; the balance of the purchase price was provided
through non-recourse borrowings by Solaris from an Australian bank syndicate.
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Solaris, which provides electric service to more than 230,000 customers in and
around Melbourne, Australia, was sold by the government of Victoria through a
competitive bid as part of that state's privatization of the electric
industry.
Termobarranquilla, S.A.
In October 1995, GPU Power, through EI Barranquilla, Inc., completed
the financing for and acquired a 28.545% interest in Termobarranquilla, S.A.,
Empresa de Servicios Publicos ("TEBSA"), a 240 MW gas-fired generating plant
in Barranquilla, Colombia and began the construction of a new 750 MW gas-fired
plant adjacent to the existing plant (the "Barranquilla Project").
Electricity generated by these plants will be sold to Corporacion Electrica de
la Costa Atlantica under a 20-year contract. Total project costs, including
the acquisition of the existing plant, are approximately $750 million, of
which GPU Power's equity contribution is expected to be approximately $65
million.
Barranquilla Lease Holdings, Inc.
Barranquilla Lease Holdings, Inc., a subsidiary of GPU Power, through
its wholly-owned subsidiary Los Amigos Leasing Company, Ltd. ("Leaseco"), has
begun to procure equipment to be used by and leased to TEBSA. Pursuant to a
lease agreement, Leaseco will deliver certain non-Colombian equipment related
to TEBSA, and TEBSA will make lease payments equal to the interest and
principal payments on senior bank debt and certain other expenses incurred by
Leaseco.
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GPU International Australia Pty, Ltd. ("GPU International Australia")
GPU International Australia (formerly EI Australia Services Pty.,
Ltd.), a subsidiary of GPU Electric, provides operations and management
services to Solaris.
Midlands Electricity plc
In May, 1996, GPU and Cinergy Corporation ("Cinergy") formed Avon
Energy Partners plc ("Avon"), a wholly-owned subsidiary of Holdings. Holdings
is a 50/50 joint venture which acquired Midlands, an English regional electric
company ("REC"). GPU's 50 percent interest in Holdings is held by EI UK, a
wholly-owned subsidiary of GPU Electric.
EI UK and Cinergy have each invested approximately $585.7 million in
Holdings. EI UK has borrowed approximately $585.7 million through a GPU
guaranteed five-year bank term loan facility to fund its investment in
Holdings. Holdings has borrowed approximately $1.6 billion through a non-
recourse term loan and revolving credit facility to provide for the balance of
the acquisition price.
Midlands, one of 12 RECs in the United Kingdom, distributes and
supplies electricity to 2.2 million customers in England in an area with a
population of five million. Midlands also owns a generation business that
produces electricity domestically and internationally and a gas supply company
that provides natural gas service to 8,000 customers in England.
4. Services Obtained From Associated Companies
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GPU Energy provided consulting services to GPU International Australia
in the amount of $16,106, for the three months ended December 31, 1996, in
support of the development and management of Solaris' operations.
GPU Service, Inc. provided consulting services to GPU Power in the
amount of $72,255 related to the oversight and management of GPU Power's
operations.
GPU Service, Inc. provided consulting services to GPU Electric in the
amount of $99,500 related to the oversight and management of GPU Electric's
operations.
5. Services Provided to Associated Companies
A description of services provided by GPU Electric to associate
companies during the period October 1, 1996 through December 31, 1996 will be
filed separately under a request for confidential treatment under Rule 104(b).
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY HOLDING COMPANY ACT
OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY CAUSED THIS CERTIFICATE TO BE
SIGNED ON THEIR BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GPU, Inc.
By:/s/ T. G. Howson
T. G. Howson
Vice President and Treasurer
GPU International, Inc.
By:/s/ B. L. Levy
B. L. Levy, President
Date: April 4, 1997
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