Post-Effective Amendment No. 19 to
SEC File No. 70-7727
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
APPLICATION UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
GPU, INC. ("GPU")
100 Interpace Parkway
Parsippany, New Jersey 07054
GPU INTERNATIONAL, INC.("GPU International")
One Upper Pond Road, Parsippany, New Jersey 07054
(Names of companies filing this statement
and addresses of principal offices)
GPU, INC
(Name of top registered holding company
parent of the applicants)
M.A. Nalewako, Secretary Douglas E. Davidson, Esq.
M. J. Connolly, Esq., Berlack, Israels & Liberman LLP
Assistant General Counsel 120 West 45th Street
GPU Service Corporation New York, New York 10036
100 Interpace Parkway
Parsippany, New Jersey 07054
W. S. Greengrove, Secretary
GPU International, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
______________________________________________
(Names and addresses of agents for service)
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GPU and GPU International hereby post-effectively amend
their Application on Form U-1, docketed in SEC File No. 70-7727,
as heretofore amended, as follows:
A. By Orders dated November 16, 1995 (HCAR No. 35-26409),
June 14, 1995 (HCAR No. 35-26307), December 28, 1994 (HCAR No.
35-26205), September 12, 1994 (HCAR No. 35-26123), December 18,
1992 (HCAR No. 35-25715) and June 26, 1990 (HCAR No. 35-25108) in
SEC File No. 70-7727 (collectively, the "Orders"), the
Commission, among other things, authorized GPU International to
engage in preliminary project development and administrative
activities ("Project Activities") in connection with its
investments in (i) qualifying facilities ("QFs"), as defined in
the Public Utility Regulatory Policies Act of 1978 ("PURPA"),
(ii) exempt wholesale generators ("EWGs"), as defined in Section
32 of the Act, and (iii) foreign utility companies ("FUCOs"), as
defined in Section 33 of the Act.
B. The Orders also authorized GPU from time to time
through December 31, 1997 to (i) enter into letter of credit
reimbursement agreements and guarantees or similar obligations
(collectively, "Guarantees") to secure GPU International's
agreement with any person (including without limitation project
lenders) in connection with Project Activities and the
acquisition of ownership or participation interests in projects;
(ii) guarantee the securities or other obligations of EWGs and
FUCOs; and (iii) assume liabilities of EWGs and FUCOs, in an
aggregate amount of up to $500 million. In addition, the Orders
authorized GPU International from time to time through December
31, 1997 to enter into Guarantees, and to assume liabilities of
EWGs and FUCOs, in an aggregate amount of up to $50 million.
<PAGE>
C. By orders dated December 1, 1994 (HCAR No. 35-26179)
and September 15, 1995 (HCAR No. 35-26374), GPU International was
authorized to enter into a loan agreement with a group of lenders
for which Citibank N.A. acts as agent, which permits revolving
credit borrowings of up to $30 million outstanding at any time,
of which up to $15 million may be utilized to obtain letters of
credit. The orders also authorized GPU to deliver a support
agreement to the lenders on behalf of GPU International. This
loan agreement permits new borrowings through December 12, 1997,
and GPU International is in the process of discussing with the
lenders an extension and increase in such borrowing arrangements.
D. At June 30, 1997, GPU's committed equity investment in
all such QFs, EWGs and FUCOs, including amounts represented by
equity contribution obligations, and Guarantee obligations and
the like, amounted to approximately $1,031 million, of which $954
million represented GPU's "aggregate investment", as defined in
Rule 53, in EWGs and FUCOs. In addition, at August 31, 1997, no
revolving credit borrowings and approximately $1.8 million in
face amount of letters of credit was outstanding under the
Citibank loan agreement.
E. GPU and GPUI now propose as follows: (a) to increase
the aggregate principal amount of Guarantees (including which GPU
may have outstanding hereunder) to $500 million and expand the
purposes for which GPU may enter into Guarantees (including
support instruments) to include Guarantees issued in favor of lenders
which enter into a loan agreement with GPU International (which loan
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<PAGE>
agreement may include a letter of credit facility);(1) (b) to
increase to $100 million the aggregate principal amount of
Guarantees which GPU International may have outstanding
hereunder; and (c) to extend until December 31, 2000 the period
during which they may enter into Guarantees.(2)
F. The term of each Guarantee and any letter of
credit ("L/C") reimbursement agreement, would not exceed 35
years. Drawings under each L/C would bear interest at not more
than 5% above the prime rate as in effect from time to time, and
L/C fees would not exceed 1% annually of the face amount of the
L/C. The interest rate on GPU International indebtedness which
is guaranteed by GPU, and fees payable, would not exceed rates
and fees which are generally obtainable for indebtedness bearing
similar terms, conditions and features and which is issued by
companies of the same or reasonably comparable credit quality.
G. GPU submits that all of the criteria of Rules 53
and 54 under the Act with respect to the proposed transactions
are satisfied:
(i) The average consolidated retained earnings for GPU
and its subsidiaries, as reported for the four most recent
quarterly periods in GPU's Annual Report on Form 10-K for
the
______________________
1 It is contemplated that borrowings by GPU International
under any such loan agreement would be exempt from prior
Commission authorization pursuant to Rule 52(b).
2 GPU is authorized in SEC File No. 70-8593 to guarantee,
and assume obligations of, EWGs and FUCOs. Accordingly, upon
receipt of the authorization herein requested, GPU would
relinquish its authorization in this docket to guarantee and
assume obligations of EWGs and FUCOs, since such authorization
has been superseded by SEC File No. 70-8593.
3
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year ended December 31, 1996 and Quarterly Reports on Form 10-Q
for the quarters ended June 30, 1997, and March 31, 1997 as filed
under the Securities Exchange Act of 1934, was approximately
$2,142 million. As of June 30, 1997, GPU had invested, or
committed to invest, directly or indirectly, an aggregate of
approximately $954 million in EWGs and FUCOs. GPU's aggregate
investment in EWGs and FUCOs, pursuant to all outstanding or
pending authorizations to make investments in EWGs or FUCOs will
not at any time exceed the "safe harbor" limitation imposed by
Rule 53 without prior Commission authorization.(3)
(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 subsidiaries
undertakes to provide the Commission access to such books
_____________________
3 GPU has filed with the Commission Post-Effective
Amendments to its Application on Form U-1 in SEC File No. 70-8593
requesting authorization to increase this limitation to 100% of
GPU's consolidated returned earnings.
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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 subsidiaries
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, GPU will provide the Commission on request
copies of such materials as are made available to GPU and
its subsidiaries. If and to the extent that such entity's
books, records or financial statements are not maintained
in accordance with GAAP, GPU will, upon request of the
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<PAGE>
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
subsidiary employees will render any services, directly or
indirectly, to any EWG and FUCO in which GPU directly or
indirectly holds an interest.
(iv) Copies of this Post-Effective Amendment are being
provided to the New Jersey Board of Public Utilities and the
Pennsylvania Public Utility Commission, the only federal,
state or local regulatory agencies having jurisdiction over
the retail rates of GPU's electric utility subsidiaries.(4)
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 H and I
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.
(A) Neither GPU nor any subsidiary of GPU is the
subject of any pending bankruptcy or similar proceeding.
______________________
4 Pennsylvania Electric Company ("Penelec") is also
subject to retail rate regulation by the New York Public Service
Commission with respect to retail service to approximately 11,300
customers in Waverly, New York served by Waverly Electric Power &
Light Company, a Penelec subsidiary. Waverly Electric's revenues
are immaterial, accounting for less than 1% of Penelec's total
operating revenues.
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<PAGE>
(B) GPU's average consolidated retained earnings
for the four most recent quarterly periods (approximately
$2,142 million) represented an increase of approximately $28
million in the average consolidated retained earnings for
the previous four quarterly periods (approximately $2,114
million).
(C) GPU did not incur operating losses from direct
or indirect investments in EWGs and FUCOs in 1996 in excess
of 5% of GPU's December 31, 1996 consolidated retained
earnings.
(vi) In accordance with Rule 54, the requirements of
Rule 53(a), (b) and (c) are fulfilled.
H. The estimated fees, commissions and expenses to be
incurred by GPU in connection with the proposed transactions will
be filed by amendment.
I. GPU believes that Sections 6(a), 7, 9(a), 10, 12, 32,
and 33 of the Act and Rules 45, 53 and 54 are applicable to the
proposed transactions.
J. No Federal or State Commission, other than your
Commission, has jurisdiction with respect to the proposed
transactions.
K. It is requested that the Commission issue an order with
respect to the transactions proposed herein at the earliest
practicable date but, in any event, not later than December 1,
1997. 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
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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.
L. The following exhibits and financial statements are
filed in Item 6 thereof:
(a) Exhibits.
F-1 - Opinion of Berlack, Israels & Liberman
LLP -- to be filed by amendment.
F-2 - Opinion of Ballard Spahr Andrews &
Ingersoll -- to be filed by amendment.
G - Financial Data Schedule -- to be filed
by amendment.
H - Proposed form of public notice.
(b) Financial Statements.
1-A - GPU and Subsidiary Companies
Consolidated Balance Sheets, actual and
pro forma, as at June 30, 1997 and
Consolidated Statements of Income and
Retained Earnings, actual and pro forma,
for the twelve months ended June 30,
1997; pro forma journal entries to be
filed by amendment.
1-B - GPU (Corporate) Balance Sheets, actual
and pro forma, as at June 30, 1997 and
Statements of Income and Retained
Earnings, actual and pro forma, for the
twelve months ended June 30, 1997; pro
forma journal entries to be filed by
amendment.
1-C - GPU International (Corporate) Balance
Sheets, actual and pro forma, as at June
30, 1997 and Statements of Income and
Retained Earnings, actual and pro forma,
for the twelve months ended June 30,
1997; pro forma journal entries -- to be
filed by amendment.
2 - Reference is made to 1-A above.
4 - None, except as set forth in Notes to the
Financial Statements.
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M. The proposed transaction will be carried out for the
purpose of financing GPU's and GPU International's business
activities. As such, the issuance of an order by your Commission
with respect thereto is not a major Federal action significantly
affecting the quality of the human environment.
N. No Federal agency has prepared or is preparing an
environmental impact statement with respect to the various
proposed transactions which are the subject hereof. Reference is
made to Item 4 hereof regarding regulatory approvals with respect
to the proposed transactions.
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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 statement to be signed on their behalf by the undersigned
thereunto duly authorized.
Dated: September 24, 1997
GPU, INC.
By:
T.G. Howson
Vice President and Treasurer
GPU INTERNATIONAL, INC.
By:
B.L. Levy
President
<PAGE>
EXHIBITS TO BE FILED BY EDGAR
(a) Exhibits.
H - Proposed form of public notice.
<PAGE>
Exhibit H
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35 - ________; 70-7727)
GPU, Inc., et al.
GPU, Inc. ("GPU"), 100 Interpace Parkway, Parsippany, New
Jersey 07054, a registered holding company, and GPU
International, Inc. ("GPU International"), 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,
9(a), 10, 12 and 33 of the Act and Rules 45, 52, 53 and 54
thereunder.
By Orders dated November 16, 1995 (HCAR No. 35-26409), June
14, 1995 (HCAR No. 35-26307), December 28, 1994 (HCAR No. 35-
26205), September 12, 1994 (HCAR No. 35-26123), December 18, 1992
(HCAR No. 35-25715) and June 26, 1990 (HCAR No. 35-25108) in SEC
File No. 70-7727 (collectively, the "Orders"), the Commission,
among other things, authorized GPU International to engage in
preliminary project development and administrative activities
( Project Activities ) in connection with its investments in (i)
qualifying facilities ( QFs ), as defined in the Public Utility
Regulatory Policies Act of 1978 ("PURPA"), (ii) exempt wholesale
generators ("EWGs"), as defined in Section 32 of the Act, and
(iii) foreign utility companies ("FUCOs"), as defined in Section
33 of the Act.
The Orders also authorized GPU from time to time through
December 31, 1997 to (i) enter into letter of credit reimbursement
agreements and guarantees or similar obligations (collectively,
"Guarantees") to secure GPU International's agreement with any
1
<PAGE>
person (including without limitation project lenders) in connection
with Project Activities and the acquisition of ownership or
participation interests in projects; (ii) guarantee the securities
or other obligations of EWGs and FUCOs; and (iii) assume liabilities
of EWGs and FUCOs, in an aggregate amount of up to $500 million.
In addition, the Orders authorized GPU International from time to
time through December 31, 1997 to enter into Guarantees, and to
assume liabilities of EWGs and FUCOs, in an aggregate amount of up
to $50 million.
By orders dated December 1, 1994 (HCAR No. 35-26179) and
September 15, 1995 (HCAR No. 35-26374), GPU International was
authorized to enter into a loan agreement with a group of lenders
for which Citibank N.A. acts as agent, which permits revolving
credit borrowings of up to $30 million outstanding at any time,
of which up to $15 million may be utilized to obtain letters of
credit. The orders also authorized GPU to deliver a support
agreement to the lenders on behalf of GPU International. This
loan agreement permits new borrowings through December 12, 1997,
and GPU International is in the process of discussing with the
lenders an extension and increase in such borrowing arrangements.
At June 30, 1997, GPU's committed equity investment in all
such QFs, EWGs and FUCOs, including amounts represented by equity
contribution obligations, and Guarantee obligations and the like,
amounted to approximately $1,031 million, of which $954 million
represented GPU s "aggregate investment", as defined in Rule 53,
in EWGs and FUCOs. In addition, at August 31, 1997, no revolving
credit borrowings and approximately $1.8 million in face amount
of letters of credit was outstanding under the Citibank loan
2
<PAGE>
agreement.
GPU and GPUI now propose as follows: (a) to increase the
aggregate principal amount of Guarantees to $500 million and
expand the purposes for which GPU may enter into Guarantees
(including support instruments) to include Guarantees issued in
favor of lenders which enter into a loan agreement with GPU
International (which loan agreement may include a letter of
credit facility);(1) (b) to increase to $100 million the
aggregate principal amount of Guarantees which GPU International
may have outstanding hereunder; and (c) to extend until December
31, 2000 the period during which they may enter into Guarantees.
The term of each Guarantee and any letter of credit ("L/C")
reimbursement agreement, would not exceed 35 years. Drawings
under each L/C would bear interest at not more than 5% above the
prime rate as in effect from time to time, and L/C fees would not
exceed 1% annually of the face amount of the L/C. The interest
rate on GPU International indebtedness which is guaranteed by
GPU, and fees payable, would not exceed rates and fees which are
generally obtainable for indebtedness bearing similar terms,
conditions and features and which is issued by companies of the
same or reasonably comparable credit quality.
GPU submits that all of the criteria of Rules 53 and 54
under the Act with respect to the proposed transactions are
satisfied.
The post-effective amendment and any amendments thereto are
available for public inspection through the Commission's Office of
_________________________
1 It is contemplated that borrowings by GPU International
under any such loan agreement would be exempt from prior
Commission authorization pursuant to Rule 52(b).
3
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Public Reference. Interested persons wishing to comment or
request a hearing should submit their views in writing by
_________, 1997, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the
applicants at the addresses above. Proof of service (by
affidavit, or in case of an attorney at law, by certificate)
should be filed with the request. Any request for a 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 this matter. After said date, the post-effective
amendment, as it may be amended, may be granted.
Jonathan G. Katz
Secretary
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