Text

Notice of Proposal to Organize General Public Utils Nuclear Corp as Wholly Owned Subsidiary for Mgt & Operation of Nuclear Plants.W/Related Documentation
	ML19341A998
Person / Time
Site:	Crane
Issue date:	06/19/1980
From:	Fitzsimmons G; SECURITIES & EXCHANGE COMMISSION
To:	;
Shared Package
ML19341A995	List: ML19341A994; ML19341A996; ML19341A997; ML19341A998; ML19341A999;
References
	70-6443, NUDOCS 8101290766
	Download: ML19341A998 (85)
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JUN 191980

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V UNITED S*A~T.S OF A*Ci!CA before the SECURITIES AND DCS2EE CCCCSSICN-FUSLIC LTIIJrl III.DDG CCGRU ACT CF 1935 Release No. 21610/ June 9, 1980 m(g gS]l; In the Matter cf

[N hb6~b d GE;I"@.L PCICIC L L '~'IES CORFC % ICN J

100 Interpace Parkeay Parsippery, New Jersey 07054 JERSEY CEGAL POWER & LIGHT C2 GAIN

.Madiscn Avenue at Punch Bowl Road Merristcwn, New Jersey 07960 ME'IROPC'T-eJI EDISCN CGGA!W P.O. Ecx 542 Reading, Pennsylvania 19640 FDD:SYLVANIA :~ rCIRIC CCGA!N 1001'Erced Street Jchnst xn, Pennsylvania 15907 (70-6443)

ICTICE OF PROPOSAL '!O CRGANI'E A K-CLLY CR;ED SUESIDIARY ICR 'IEE

!GIEC.T AND CPITsATICi CF NUCLEAR S~J4I'IGIS

}UI' ICE IS ERE3Y GIVEI that Ceneral Phlic Utilities Corpcratien

("GFJ"), a registered holding co pany, and ita subsidiary c=ganies na.ed aheve have filed an applicatien-declaratien with this Cannissien -

pursuant to the P31ic Utility Holding Ccgany Act of 1935 ("Act"),

desicnating Sections 9 (a), 10,12(b), and 13 (b) thereef and Rules 45, 50(a) (3), and 85-95 prc=ulgated thereunder as applicable to the follcw-ing p:r;csed transacticns. All interested persens are referred to the applicatien-declaratien which is st: rariced belcw for a coglete state-ent of the preposed transactic.s.

G7J prrpcses to crgenice a new wholly cwned subsidiari co pany to be known as GFJ "uclear Ccrporaticn ("NC").

C will issue arx! GFU will purchase for cash 2,500 shares of IC's c= ren stock, at a p.~ ice of $20 per share or an aggregate censideratien of $50,000.

If necessary, GFU vill nahe cpen accetr:t advances to IIC fran tire to tine: the aggregate a. cunt of such advances by G?J to NC cutstanding at any tire will be not : cre than S500,000.

Interest en such cpen acccunt advances will accrue at a rate equal to the current interest cost en G 'J's bank bcrrowings.

Eased en the current' prime rate of 14%,

the hffective ecst of such bank bcrrowings -euld be 14.39t.

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It will be a service cenpany and will net cwn er finance any nuclear cr other utility assets. It is intended that !:0 will becere respcnsible, en behalf cf de cSters and through c= tract with then, as and when necessary regulatery authericatiens are received, fer the safe cperatien, raintenance, rehabilitation, design, ccnstructicn, start-up and testing cf all nuclear generating facilities c red by G?J System ccrpardes and related research and develc rent. The pur-

cse is to censcliiste al rescurces of the G?J czpanies relatirq to nuclear. atters in a single crgr.itaticn. GpC cites the Repcrt of the president's C: rrissica en tM Accident at Three t'.ile Islard and tM. Re;cre of the !aC/ :C Special Irr;uirf which have stated that integratien into c.e crganicatica cf manageme.t and cperatia.g res;cnsibility fer nuclear generating statiens is desirable so that tMre will be a sirgle acccuntable crganicaticn with the requisite expertise to take respc sibility for the integratei cperaticn and rainte ance of such staticns.

C prepcses to apply to the Ibelear Regulatcry Ccrrissien ("!aC")

fer emmting lice.ses fer the Cyster Creek !Mclear Generating Statica ("Cyster Creek") cwned and c;erated by Jersey Central Fe.tr

& Light Cxpany ("JCF&L") and for tne Three Mile Isla-d tNelear pla-.ts, ("OC")

jointly coned, but net prese.tly operated and for which Metrepelitan Edisen Ccq:any (" Met-F4") is the present licensee and the operatcr u-der de existing CC Cperating Agrement re.g JCP&L, ?'et Ed ard.

Fer.nsylvania Electric Ccrpa:rf ("OC Cyerating Agree ent").

Ar. a e.d-rent of the CC Cperating Acreene.t wculd be prepcsed in the IEC proceeding, which wculd, a cng c&er thirgs, rake C a party to the agreenent and tM cperater cf CC.

he 13C has bread jurisdictica ever the cperatien cf nuclear facilities. Ecth tre tiring and the sec;c cf !C's activities will be gcverned by the ter s and conditiens cf any licenses p.ted by the tac a-3 by its c:her regulatcry require-rents. Anv. such lice.se will also be irple-ented by a specific cperating agreenent be* e !C ard the coter er c ners cf the subject facilitf. And lice sing will be for specific plants, so that !C's functic.s may cua.cr.ce in stages.

Shortly after tre March 23, 1979 accident at Unit !b. 2 cf OC, the G?J Systen exbined the tecY.ical staffs fran Met Ed a-d G?J Se eice Cer;cratien (" Service") to fcrm the C C Generatica Grcup cersisting cf apprcxicately 250 professicnals assigned exclusively to activities at Units !bs.1 and 2 of CC.

his s. cp, together with the technical staff cf JC'kL that is presently responsible fer the'cperation a,d raintenance of Cyster Creek, and apprcxirately ECO cf the ncn-prefessic.al c plcyees of the varicus GPU Systen ccr:anies will ultirately be tra.s-ferred to !C, if and when it receives the necessary aut'cricatiens.

2e salaries and cther ecsts of the present G?J System e plcyees in-cluding pensien ard cther ecpicyee tenefits fcr such c ricyees, will te included in !C's c;erating costs. Se agg egate salaries ard ecsts cf such c plcyees to the C?) Systen during 1979 a. cunted to approxirately

$25,.000,000.

C ray also engcge censultants and centracters as needed for the discharge of its functicns.

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n &e case of :C se:.1ces rerdered !=r the

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.#a.- c..'..' a. i,- -.- ~~q *.h. e 4-u.-dertakirq cf any of 94 inten.#ed f.:.ctix.s sera-ized abcve, as its aude-ity to de so is establis' red.

'.'ariaticr.s suuld be repcrted eder de 60 day letter preced=e established for se-.sce c=pa.ies.

-he fees ard e: censes tc te incurred in connecti= vith ee prepcsed transactic.s v:.ll be filed tf a. e.d e.t.

It is stated eat a. erd: ent cf t'e CC Cperati.q Aree e.t is sdject to the jurisdicti= cf 9e pe -.sv.1vania Ptlic Ut:.lity Cr. r.:.ssicn and will re:uire a cri.-e.t cf C; era.. -, 4 ~.scs 4 ee.a s,...%.. u...., e

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("!EC").

.-J-e-e.tati= cf 9e Cyster C eek Cperatir:q Ag ec e. req; ires t.5e issuance of an cperatirq licerse by the !GC. It is also stated eat.

CPC d:es rct believe &at te cperatirq agrec e.ts fer 2C ard Cyster Creek are subject to de jurisdictix. cf the rev Jersey Ecard cf ?.:blic U+ ties ("EFJ") alt' cugh 9e q;estien is before de Ept'.

No ceer state er federal c=rissien, cder than dis C:rrt.ssicr., has jurisdicticn cver t.ne preposec t:?.sactic s.

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stating te nature ci his interest. &c reas=s !cr such req;est, ard de issues ef-fact er law raised tf de filing which Fe desires to centrovert er he ay req;est that he te not:.fied if de Cer-issien s c..'.?

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A v ry of such re:; test s?culd be servef pers:nally er t rail u.cc. 9e applica.ts-decla ants at de abcve-stated addresses, a-d preef cf service

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'I to becare effective as provided in Rule 23 of the General Rules and Regulatiens pratulgated under the Act, or the Camissien may grant exenptien frcrn such rules as provided in Rules 20(a) and 100 thereof Persens who or take such other acticn as it may deen apprcpriate.

request a hearing or advice as to whether a hearing is ordered will receive any notices er orders issued in this matter, including the l

I date of the hearing (if crdered) and any postpone:ents thereof.

l For the Ccmnissien, by the Division of Corporate Regulatico, pursuant to dc.lMated authority.

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UNITD S"A~TS OF N'I3ICA before the SDIURITIF.S RC C<QG1CE CC+CSSICU PUBLIC LTILI?l HOI.DDG COGRTt ACT OF 1935 3

Release ::o. 21610/ June 9, 1980

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l In the t'.atter of GUIIEAL PUE:IC LMITIES CIRFCRATICt1

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100 Interpace Park.2y Parsippany, :ew Jersey 07054 JE:SEY CC IFAL PCGR & LIGHT CUGR,Y i

Madison Avenue at P.:nch Bcwl Road i

i licrristcwn, I;ew Jersey 07960 tCIECFCLIXI DISCtI CCtGRTI P.O. Ecx 542 Reading, Pennsylvarla 19640 PER:5YLVRCA " CIRIC CU G N.Y 1001 Brcad Street Jchnste..n, Pennsylvania 15907 (70-6443) 4

!UTICE CF PROPCSAL 'IO CRGRCZE A KELLY GC:D SUE.SIDIARY ItR THE t'R!AGEC.T RD CPERATICI CF !!UCLFAR STI<I'ICt:S

!UI* ICE IS HIREIrt GIVIII that General Phlic Utilities Corpcratica

("GPU"), a registered holding ccupany, and its subsidiary cc: pardes nared above have filed cn applicatien-declaratica with this C n.ission pursuant to the Pilic Utility Holding Ccepany Act of 1935 ("Act"),

designating Secticns 9 (a), 10, 12 (b), and 13 (b) thereof and Rules 45, 50(a) (3), and 36-95 prcrulgated thereunder as applicable to the follcw-ing prepcsed transactions. All interested persons are referred to the applicatien-decla atien which is st-r.1rized telcw fer a cceplete state ent of the prcpesed transacticas.

GPU prepcses to crganize a new wholly owned subsidiary ccx pany to te kncwn as GPU !?uclear Ccrpcration (" :C"). IC will issue arx! GFU will purchase for cash 2,500 shares of C's cenren stock, at y price of $20 per sham er an aggregate censideratica of S50,000.

If nececsary, GFU will r.ake cpen accet:.t advances to !!C frcm tire to tir:c: the a;gregate arount of such advancos by GPU to !:C cutstanding at any tire vill be not rare than 5500,000.

Interest en such cpen acccunt advanes will accrue at a rate equal to the current interest cost en GFU's tar.k bcrrowings.

Eased en the current prire rate of 14%,

the effcetive ccst of such bar.k borrcwings would be 14.E9.

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c.s d tC will be a service co pany and will not c,.m or finance any nuclear i

er other utility assets. It is intended that t'C will becone jl responsible, en behalf of the outers and thrcugh centract with them, as and when necessary regulatory authorizatia.s are received, for the safe cperatien, raintenance, rehabilitaticn, design, constructicn, start-up and testing of all nuclear generating facilities cwned by GPU System corpanies and related research and developn2nt. The pur-pose is to consolidate all resources of the GPU cc panies relating to nucle.ar ratters in a single organizaticn. GPU cites the Report of the President's Cccrissicn en the Accident at C ree tiile Island and the Report of the !aC/nc Special Inquiry which have stated that integratien into cne c:qanizatica of :ranagenent and operating respcnsibility for nuclear ge.erating stations is desirable so that there will be a single accountable crganizaticn with the requisite expertise to take respcnsibility for the integrated operatien and i

maintenanc2 of such staticns.

!C preposes to apply to the Nuclear Regulatory Cannission ("!aC")

for cperating licenses fer the Cystier Creek Nuclear Generating Station ("Cyster Creek") cuned and cperated by Jersey Central Ecser

& Light Cccpany ("JCP&L") and for t'he'Three Mile Island Nuclear Plants; ("2C")

'l jointly cwned, but not presently operated and for which Metrcpolitan Edisen Cccoany (" Met-Ed") is the present licensee and the cperatcr i

under the existing T E Cperating Agreement areng JCP&L, Met Ed and,

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Pennsylvania Electric Ccrepany ("TC Cperating Agreenent"). An ame:d-ment of the TC Cperating A. reenent would be proposed in the tac i

l preceeding, which would, areng cther things, rake !C a party to the agreement and t'ne cperater cf TC.

The tac has broad jurisdiction l

over th2 cperation cf nuclear facilities. Scth the timing and the secpe cf NC's activities will be governed by the terms and conditiens of any licenses granted by t'ne tac and by its other regulatory require-i ments. Any such license will also be irplemented by a specific cpting agreement between tC and th2 owner er camers of the subject facility. And licensing will be for specific plants, so that IC's functiens ray comence in stages.

Shortly after the March 28, 1979 accident at Unit No. 2 of T E, the GPU Systcn canbined the technical staffs frcm Met Ed and GPU Service Corporaticn (" Service") to fcnn the TC Generaticn Group consisting of apprcximat cly 250 professionals assigned exclu evely to activities at Units 300. 1 and 2 of TC.

This group, toget) e with the technical f

staff of JCP&L that is presently responsible fc. the'cperation and maintenance of Cyster Creek, and approxi.:ately 800 cf the ncn-professional cnployees of the varicus GPU Systen corpanies will ultimately be trans-ferred to NC, if and when it receives the necessary auth2rications.

. The salaries and other ccsts of the present GFJ Systen e plcyees in-clufing pension and other e: plcyee tenefits for such c ployees, vill be included in NC's cparating costs. The aggregate salaries and costs of such enplcyees to the G?J Systen during 1979 a cunted to approxi ately

$25,.000,000.

NC ray also e. gage censultants and centracters as needed for the discharge of its functions.

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.a it will render service at cost, pursuant to Section 13(b) of the Act.

The cbsts will te accounted for andbilled to the ch.ers of the subject facilities as prescribed by Rules 91 and 93 and the system of accounts prescribed thereunder.

In the case of it services rendered for the TE units, these ecsts will be dete:~rined and accu = lated and allocated at:eng the owners of TE in prcportion to ownership interests in TE.

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!j PC's initial functicn will be to seek frcm other regulatory agencies

i the licenses and authoricatiens required. It is proposed that it

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will re;crt its prcgress and activities under Rule 24, including the

j undertaking of any of the intended functions sum-arized abcVe, as its authority to do so is established. Vad aticns sculd be reported under i

'I the 60 day letter phure established _cr service ccr.panies.

The fees and e.w.ses to te incurred in cennecticn with the p:rpcsed

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transactions will be filed by amendment. It is stated that. a. end ent er the TE Cperating Agrement is subject to the jurisdicticn of the 1

Pennsylvania Public Utility Comnissicn and will require amerbent of the TE C;erating licenses issued by the Nuclear Regulatory Ccnmissicn

(" tac").

I.~pleentaticn of the Oyster Creek Cpera'dng Agrement requires the issuance of an cperating license by the IEC.

It is also stated that.

U JCP&L does not believe that the operating agreements for TE and Cyster

!I Creek are subject to the jurisdicticn of the !Gew Jersey Ecard of public j

Utilities ("EPU") although the questien is before the EPU. No other i

state er federal ecmissien, other than this Cer:wission, has jurisdicticn.

cver the pec;csed transac' dens.

o tmICE IS It'RTIER GIVm that any interested persen tray not later than June 30, 1980 request in writing that a hearing be held en such tratter, stating the nature of his interest, the reasons for such request, and the issues of fact cr law raised by the filing which he desires *w d

centrovertr or he r:ny request that he be notified if the Ccmissicn should crder a hearing thereen. Any such request should be addressed:-

Secretary, Securities and D< change Ccrrission, h*ashirgten, D.C.

20549.

p A ccpy of such request should be served perscnally or by trail upon the applicants-declarants at the ateve-stated addresses, and proof of service L

(by affidavit cr, in case of an atterney at law, by certificate) should be filed with tre request. At ar:y time after said date, the applicatien-a L

declaration as filed or as it rray be arrended, tray be granted and per:-itted I

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to tecare effective as provided in Rule 23 of the General Rules and Regulations promigated under the Act, or the Ccmrission ray grant exegtion ~frem such rules as provided in Rules 20(a) and 100 thereof cr take such cther acticn as it may deem apprcpriate.

Persens who

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request a hearing er advice as to whether a haring is crdered will receive any notices er orders issued in this matter, including the date of the hearing (if crdered) and any ;cstponenents thereef.

For the Ccrrissien, by the Divisien of Cc:perate Regulation, pursuant to delegated authority.

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September 5, 1980 Securities and Exchange Commission 500 North Capitol Street Washington, D.C.

20549 Re:

Jersey Central Power & Light Company Metropolitan Edison Company 3

Pennsylvania Electric Company General Public Utilities Corporation SEC File No. 70-6443 Gentlemen:

On behalf of Jersey Central Power & Light Company, Metropolitan Edison Company, Pennsylvania Electric Company and General Public Utilities Corporation, I am enclosing for filing with the Commission three (3) executed copies of Amendment No. 2 to the Application-Declaration on Form U-l (SEC File No. 70-6443) of the above-named companies relating to the organization of a new wholly-owned subsidiary of General Public Utilities Corporation to be known as GPU Nuclear Corpo-ration.

It is requested that the Commission's Order with re-spect hereto to be issued as soon as practicable.

Please acknowledge receipt of this filing on the dupli-cate copy of this letter and return it to me in the stamped, addressed envelope enclosed for that purpose.

Very. truly yours,

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Marc B. Lasky MBL/pr Encs.

cc:

W. Weeden (3 conformed copies) bec: (executed):

Messrs. Graydon, Brokaw, Heist, Simmons, Platt Wilson bec: (conformed):

Messrs. Kuhns, Dieckamp, Cherry, Hafer, Graham, Holcombe, Condon, Bartnoff, Mundrane, Preis, Werts, Russell, Verrochi, Donofrio, Trowbridge, Blake, Hyland

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Amendment No. 2 To File No. 70-6443 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.

C.

20549

'C a U l APPLICAT.sN UNDER a

THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")

J JERSEY CEhTRAL POWER & LIGHT COMPANY ("JCP&L')

Madison Avenue at Punch Bowl Road, Mo rristown, N.

J.

07960 METROPOLITAN EDISON COMPANY ("Me t-Ed")

P.

O. Box 542, Reading, Pennsylvania 19603 PENNSYLVANIA ELECTRIC COMPANY ("Penelec")

1001 Broad Street, Johnstown, Pa.

15907

(

4 GENERAL PUBLIC UTILITIES CORPORATION ("GPU")

100 Interpace Parkway, Parsippany, N.J.

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 the applicant)

John G.

Graham, Treasurer James P,.

Li be rman, Es q.

General Public Utilities Corporation Berlack, Israels & Libe rman 100 Interpace Parkway 26 Broadway Parsippany, New Jersey 07054 New York, New York 10004 i

D.

Baldassari, Secretary and Treasurer R.

O.

Brokaw, Esq.

Jersey Central Power & Light Company Jersey Central Power & Light Company Madison Avenue at Punch Bowl Road Madison Avenue at Punch Bowl Road Mo rristown, New Jersey 0 7960 Morristown, New Jersey 07960 R.

B. Heist, Secretary Samuel B.

Russell, Es q.

Metropolitan Edison Company Ryan, Russell & McConaghy P.O. Bo x 5 4 2 P.O.

Box 6 99 Reading, Pennsylvania 19603 Reading, Pennsylvania 19603 E.

Simmons, Secretary and Treasurer Henry N.

Platt, Jr., Esq.

Pennsylvania Electric Company Ballard, Spahr, Andrevs & Ingersoll 1001 Broad Street 30 South 17th Street Johnstown, Pennsylvania 15907 Philadelphia, Pennsylvania 19103 (Names and addresses of agents for service)

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JCP&L, Met-Ed, Penelec and GPU hereby amend their Application-Declaration on Form U-1, as heretofore J

amended, docketed in SEC File No. 70-6443, as follows:

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By completing Item 2 thereof to read as i

follows:

" Item 2.

Fees, Commissions and Expenses.

The estimated fees, commissions and expenses expected to be incurred in connection with the trans-

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actions which are the subject of the Application-Dec-l laration, as amended, are as follows:

SEC Filing Fees S

2,000 4

l Legal Fees:

1 Berlack, Israels & Liberman....

8,500 Miscellaneous....................

750 Total............S 11,250 i

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By filing the following exhibit in Item 6:

G-1

.9morandum of Services of Messrs.

Berlack, Israels & Liberman.

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,e SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, THE UNDERST.GNED HAVE DULY CAUSED THIS STATEMENT TO BE SIGNED ON THEIR BEHALF BY THE UNDER-SIGNED THEREUNTO DULY AUTHORIZED.

JERSEY CENTRAL POWER & LIGHT COMPANY METROPOLITAN EDISON COMPANY PENNSYLVANIA ELECTRIC COMPANY GENERAL PUBLIC UTILITIES CORPORATION By:

V.

H.

Condon, Vice President of each such company l

l Dated: September 5, 1980 i

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l" EXHIBIT G-1 j.'

6 BERL ACK,lS R A ELS & LIB ER M AN 26 8AoA oWAY s.=t.

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r MEMORANDUM OF LEGAL SERVICES JERSEY CENTRAL POWER & LIGHT COMPANY METROPOLITAN EDISON COMPANY PENNSYLVANIA ELECTRIC COMPANY GENERAL PUBLIC UTILITIES CORPORATION APPLICATION-DECLARATION ON FROM U-1 SEC FILE NO. 70-6443 i

Our services as counsel to the above-named com-panies in connection with (a) the organization of a new I

subsidiary service company of GPU to be known as GPU Nuclear Corporation I"GPUNC"), (b) the execution and delivery by GPUNC and JCP&L, Met-Ed and Penelec of oper-ating agreements concerning GPU System nuclear generating stations and the performance of services by GPUNC there-under, (c) the issuance and sale by GPUNC to GPU for cash of not more than 2,500 shares of Co'nmon Stock of GPUNC at a price of S20 per share, and (d) if necessary, the making of open account tavances by GPU to GPUNC from time to time in amounts not to exceed $500,000 out-standing at any time, such advances to bear interest at a rate equal to the current interest cost of GPU's own bank borrowings, which is the subject of the Application-Declara-i tion on Form U-1 under the Public Utility Holding Company Act of 1935 docketed in SEC File No. 70-6443, have in-cluded participation with the officers of the above-l named companies in the planning of such transactions set forth in such Application-Declaration and in preparation of the following:

The Application-Declaraticn on Form U-1 filed with the Securities and Exchange Com-mission under the Public Utility Holding Company Act of 1935 and Amendments Nos. 1 and 2 thereto.

The forms of proposed operating agree-l l

ments filed as Exhibits to said Application-I Declaration; and The forms of proposed Certificate of In-corpord tion and By-Laws of GPUNC.

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_. _.. _ _ _. - - - _. _ _.,.,, ~ ~.,

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l-We have participated in conferences and have engaged in legal and factual research relating to the foregoing.

We have also conferred and corresponded with members of the Commission's staff with respect thereto.

Our services in connection with this matter to date have I

required in excess of 100 hours0.00116 days <br />0.0278 hours <br />1.653439e-4 weeks <br />3.805e-5 months <br /> and we estimate that the services which we will render from this date to and in-L clucing the consummation of the transactions referred to, including among other things, the preparation and filing i

of the Certificate Pursuant to Rule 24, will require in excess of 25 additional hours.

Our pi-oposed fees for services so rendered and i

i to be rendered is S8,500.00.

We have been advised by the l

above-named companies that such proposed fees are satis-factory to them.

l b

Very truly yours,

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l -t bc BERLACK, ISRAELS & LIBERMAN Date:

September 5, 1980 l

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Us.c.,b-JUNO 6 1980 B E R L AC K, lS R A ELS & LI F3 E R M A N 26 BRoADWA4 m

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f Securities and Exchange Ccanission 500 North Capitol Street Washington, D. C.

20549 Re:

Jersey Central Power & Light C(.mpany Metropolitan Edison Company

~

Pennsylvania Electric Company-General. Public Utilities Corporation GEC File No 70-6443' Gentlemen:

On behalf of Jersey Central Power & Light Company, Metropolitan Edison Company, Pennsylvania Electric Company and General,Public Utilities Corporation, I am enclosing for filing with the Commission three (3) executed copies of Amendment No. 1 to the Application-Declaration on Form U-l (SEC File No. 70-6443) of the above-named companies relating to the organization of a new wholly-owned subsidiary of General Public Utilities Corporation to be known as GPU Nuclear Corpor-ation.

It is requested that the Commission's Order with re-spect hereto be issued as soon as practicable.

Please acknowledge roceipt of this filing on the dupli-cate copy of this letter and return it to me in the stamped, addressed envelope enclosed for that purpose.

o~).'<ytruly yours, Ver 5

7 ftLLch v q' u-Marc B. La' sky MBL/MCS Encs.

cc:

Robert P. Wason (2 conformed copies)

Mary Ann Oliver, Esq. (1 conformed copy)

Express Mail bcc (executed) :

Messrs. Graydon, Brokaw, Heist, Simmons, Platt, Wilson bec (conformed): Messrs. Kuhns, Dieckamp, Cherry, Hafer, Graham, Holcombe, Condon, Bartnoff, Mundrane, Preis, Werts, Russell, Verrochi, Donofrio, Trowbridge, Blake, Hyland

Am2ndmant No. 1

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TO File No. 70-6443 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C.

20549 FORM U-l APPLICATICN-DECLARATION

'i UNDER

.l THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act')

JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L")'

Madison Avenue at Punch Bowl Road, Morristown, N.J.

07S')

METROPOLITAN EDISON COMPANY (" Met-Ed')

P. O. Box 542, Reading, Pa.

19603 PENNSYLVANIA ELECTRIC COMPANY ("Pnelec")

1001 Broad S treet, Johnstown, Pa.

15907 GENERAL PUBLIC UTILITIES CORPORATION ("GPU")

100 Interpace Parkway, Parsippany, N.J.

07054 (Names of Companies filing tnis statement and addresses of principal executive offices)

GENERAL PUBLIC UTILITIES CORPORATION (Name of top registered nolding company parent of the applicant)

John G. Graham, Treasurer James B.

Liberman, Esq.

General Public Utilities Corporation Berlack, Israels & Liberman 100 Interpace Parkway 26 Broadway Parsippany, New Jersey 07054 New York, New York. 10004 D. Baldassari, Secretary and Treasurer R. O. Brokaw, Esq.

Jersey Central Power & Light Company Jersey Central Power & Light Company Madison Avenue at Punch Bowl Road Madison Avenue at Punch Bowl Road Morristown, New Jersey 07960 Morristown, New Jersey 07960 R. B. Heist, Secretary Samuel B. Russell, Esq.

Metropolitan Edison Company Ryan, Russell & McConaghy t

P.O. Box 542 P.O. Box 699 Reading, Pennsylvania 19603 Reading, Pennsylvania 19603 E. Simmons, Secretary and Treasurer Henry N. Platt, Jr., Esq.

Pennsylvania Electric Company Ballard, Spahr, Andrews & Ingersoll I

1001 Broad S treet 30 South 17th Street i

Johnstown, Pennsylvania 15907 Philadelphia, Pennsylvania 19103 (Names and addresses of agents for service)

-~ -

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, s, JCP&L, Met-Ed, Penclec and GPU hereby amend their l

Application-Declaration on Form U-1 (SEC File No. 70-6443) as follows:

1.

Paragraph C of Item 1 is hereby amended to read as follows:

"C.

The initial board of ilirectors of GPUNC will consist of the following persons:

Other Positions With j

Name GPU System Companies W. G. Kuhns Chairman of GPU, JCP&L, Met-Ed, Penelec and GPUSC H. M. Dieckamp President and director of GPU r

and GPUSC; Acting President and director of Met-Ed (will resign as Acting President of Met-Ed when authoriration under the Federal Power Act has been ob-tained for W. A. Verrochi, Pres-l ident of Penelec, to hold the additional position of President of Met-Ed); director of JCP&L and Penelec B. H. Cherry Vice President-Corporate Planning of GPUSC W. A. Verrochi President and director of Penelec; will become President and director of Met-Ed when necessary authoriza-tion under the Federal Power Act has been obtained; director of GPUSC I

S. Bartnoff President and director of JCP&L; director of GPUSC R. C. Arnold Senior Vice President of Met-Ed; I

Vice President-Generation of GPUSC P. R. Clark Executive Vice President of GPUSC Directors of GPUNC will receive no compensation from i

the GPU System for their services in such capacity.

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To the extent presently known, the initial officers of GPUNC will be:

Other Positions With Name Office GPU System Cmpanies H. M. Diedar:p Clairman and Chief See list of directors Executive Officer above R. C. Arnold President and Chief See list of directors Operating Officer above P. R. Clark Executive Vice President See list of directcrs above H. D. Bukill, Jr. Vice President-TMI Unit No.1 Ncne G. K. Hovey Vice President-TMI Unit No. 2 Ncce I. R. Finfrock Vice President-Cyster Creek Vice President-Generaticn of JCP&L R. F. Wilscn Vice President - Tedinical None Functicns J. G. Herbein Vice President - Nuclear Vice President - Generation Assurance of Met-Ed i

F. Glieban Vice President - Adminis-Vice President - Materials tration Management of GPCSC R. W. Heward, Jr. Vice President-Radiological I

and Enviernrental Centrols Ncne Vice President-Carnunicatices J. G. Graham Treasurer Treasurer of GPU and Vice President and Treasurer of GPCSC E. J. Holconte Captroller Captroller of GPU and Vice President and Ccap-i l

troller cf GPUSC 1

H. M. Graydon Secretary Secretarf of GPU and GPUSC GPUNC will not have its own treasury and accounting departments.

Instead, all treasury and accounting functions l

l will be performed for it at cost by GPUSC.

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Messrs. Dieckamp, Graham, Holcombe and Graydon will continue to hold their present positions with other GPU System companies and to be compensated by GPUSC.

All the other officers of GPUNC will resign their positions with other GPU co=panies when GPUNC is fully operational.

In the interim, such other officers and other prospective employees of GPUNC will continue to receive their compensation from their present e=ployers.

Implementation of their transfers from the payrolls of th,eir present employers to that of GPUNC will be effected as the progress of the requisite 1

proceedings before other govern = ental agencies permits.

The remaining officers of GPCNC and the salaries of such officers and the proposed operating budget of GPUNC have not yet been fixed.

Information as to total 1979 com-I pensation for all employees being transferred to GPUNC is t

l set forth in Paragraph I below.

GPCNC's staff will include an operations assess-ment group responsible for quality assurance, nuclear safety assessment and radiation safety assessment.

This group will report the status of such matters directly to the board of directors."

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2.

Paragraph F of Item I is hereby amended by j

adding the following paragraph thereto:

f "As indicated, in the case of ser' vices rendered for TMI, costs will be allocated among the owners of TMI in proportion to their ownership interests as i

provided in the proposed TMI operating agreement

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(Exhibit B-1). Similarly, with respect to services 1

I rendered for any other GPU System nuclear unit, costs will be allocated among the owners of such units in proportion to their ownership. interests.

For example, the costs of services rendered for Oyster Creek will be allocated solely to JCP&L as the sole owner of Oyster Creek as provided in the proposed Oyster Creek l

operating agreement (Exhibit B-2).

To the extent that l

l costs are not directly allocable to a particular nuclear generating unit, such costs will be allocated among JCP&L, Met-Ed and Penelec in proportion to each i

company's nuclear steam generating capacity."

3.

Paragraph H of Item 1-is hereby amended by adding the following paragraph thereto:

"It is anticipated that the maintenance of the Working I

i Fund provided for in the proposed operating agree-ments (e.g., Article 4 of the proposed TMI operating i

n 5

~

agreement), along with the provision for open account advances to GPUNC from GPU will obviate the need for GPUNC to raise additional capital. However, in the event that it becomes necessary for GPUNC to raise additional capital, further authorization will be sought from your Commission prior to any such action."

4.

The following paragraphs are hereby added to Item 1:

"J.

It is anticipated that at the outset and for the foreseeable future, GPUNC will not take title to any =aterial amounts of equipment or property nor become obligated under any material contracts (except for the operating agreements with its affiliates).

Rather, it is expected that GPUNC will use the f acili-ties and properties of its affiliates (including GPUSC) in carrying out its responsibilities and that aaterial* agreements with unaffiliated entities will be entered into in the name and on behalf of the particular owners of the GPU System nuclear generating stations in-i volved or by GPUNC as agent for such companies.

"K.

As noted, employees of GPU System companies will not be transferred to the payroll of GPUNC for an undeter-mined period after the issuance of your Commission's.

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i order authorizing the creation and organization of GPUNC.

Rather, such employees will continue to perform their services at and on behalf of the System's nuclear generating units as employees of the system companies with which they are currently associated.

J Applicants-Declarants hereby undertaka to file Certifi-cates Pursuant to Rule 24 with your Commission at least quarterly reporting on the activities of, and material developments concerning, GPUNC.

In addition, Applicants-Declarants will file with your Commission, at least 60 days before the taking of any such action, written notice of (1) the proposed transfer of employees to GPUNC's payroll, (2) proposed changes in the methods of alloca-tion to be employed by GPUNC, and (3) any other proposed material changes in the conduct and organization of GPUNC's operations, including related financial informa-i tion."

5.

Paragraph D of Item 3 is hereby amended to read as follows:

"D.

GPUNC will be a service company under the Act and, as such, its organization and the conduct of its business are subject to Section 13(b) of the Act and Rules 86-95 thereunder.

In particular, GPUNC will be subject to the Uniform System of Accounts l

l for Mutual Service Companies and Subsidiary Service l

Companies and will be obligated to file annual re-i port on Form U-13-60 pursuant to Rule 94 under the l l t

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Act.

Applicants-Declarants believe that the in-P formation set forth in this Application-Declara-tion, as amended, includes substantially all of the information that would be required by a Form U-13-1 and that this Application-Declaration, as amended, therefore constitutes a sufficient response to the requirements of such Form U-13-1."

i 6.

Paragraph D of Item 4 is hereby amended by adding the following sentence thereto:

"It is anticipated that the amendments of the operating licenses issued by the NRC for TMI-1, TMI-2 and Oyster Creek may not be simultaneous.

2 In that event, it is the present intention of GPUNC to implement the program herein set forth in phases as such amendments are granted and be-come effective."

7.

By filing the following Exhibits in Item 6:

A-2 Proposed By-Laws of GPUNC.

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B-1 Revised ~ form of proposed agreement

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for TMI.

B-2 Form of proposed agreement for Cyster i

Creek.

D-1 Copy of petition to NJBPU.

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l' SIGNATJRES PURSUANT TO THE REQUIREMENTS OF THE PUBLIC (",'ILITY HOLDING CCMPANY ACT OF 1935, THE UNDERSIGNED HAVE DULY CAUSED THIS STATEMENT TO BE SIGNED ON THEIR BEHALF BY THE UNDER-SIGNED THEREUNTO DULY AUTHORIZED.

f JERSEY CENTRAL POWER & LIGHT COMPANY METROPOLITAN EDISON CCMPANY PENNSYLVANIA ELECTRIC COMPANY GENERAL PUBLIC UTILITIES CORPORATION i

By:

V.

H.

Cdnc~on, Vice President of each such company e

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June 3, 1980 b

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EXHIBIT A-2 GPU NUCLEAR CORPORATICN BY-LAWS 1

Cffices I

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1.

The principal ef fice of the Corporation shall be in I

Parsippany, New Jersey.

The Corporation may also have of fices 1

l at such other places as the Board of Directors may from time t

?.

j to time designate or the business of the Corporation may require.

Seal i.

The corporate seal shall have inscr.* 5ed thereon the name f

of the Corporation, the year of its organi:r. tion, and the words

" Corporate Seal" and "New Jers ey".

If authorized by the Board of Directors, the corporate seal may be affixed to any i

certificates of stock, bonds, debentures, notes or other engraved, lithographed or printed ins truments, by engraving, lithographing or printing thereon such seal or a f acsimile therecf, and suen seal or f acsi=ile thereof so engraved, j

lithographed or printed thereen shall have the same force and effect, for all purposes, as if such corporate seal had been affixed thereto by indentation.

Stockholders' Meetings 3.

All meetings of stockholders shall be held at the principal office of the Corporation or at such other place as shall be stated in the notice of the meeting.

Such meetings shall te presided over by the chief executive officer of the Corporation cr, in his absence., Oy such of.her of ficer as shall have been designated for the purpose 9-grc.---9y-

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such meeting, the stockholders entitled to vote thereat, present in person or by proxy, shall have power, by vote of the holders of a majority of the shares of capital stock present or represented at the meeting, to adjourn the meeting from time to time without notice other than announcement at the meeting, until the holders of the amount of stock requisite to constitute a quorum, as aforesaid, shall be i

present in person or by proxy.

At any adjourned meeting at which such quorum shall be present, in person or by proxy, any

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business may be transacted which might have been transacted at the meeting as originally noticed.

6.

At each meeting of stockholders each holder of record of shares of capital stock then entitled to vote shall be entitled to vote in person, or by proxy appoint ed by instrument executed in writing by such stockholder or by his duly authorized attorney; but no proxy shall be valid af ter the expiration of eleven months frem the date of its execution unless the stock-holder executing it shall have specified therein the length of time it is to continue in force, which shall be for some E

specified period not in excess of three years.

At all elections of directors. each holder of record of shares of capital stock then entitled to vote, shall be entitled to vote the number of shares owned by him for as many persons as there'are directors to be elected and for whose election such holder is entitled to vote.

Except;as otherwise provided by law or by the Certificate of Incorporation, as amended, each holdar of record of shares of capital stock entitled to vote at..

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i any meeting of s tockholde rs shall be entitled to one vote for every share cf capital s tock standin-in his name on the books v

of the Corporation.

Shares of capital s tock of the Corporation belonging to the Corporation or to a corporation in which the Corporation holds sharec entitled to cast the plurality of the votes required for the election of directors, shall not be voted and shall not be counted in determining the total nu=cer of outstanding shares for voting purposes at any given time.

All elections shall be determined oy a plurality vote, and, except as otherwise provided by law or by the Certificate of Incorpcration, as amended, all other matters shall be determined by a vote of the holders of a majority of the shares of the capital s tock present or represented at a =eeting and voting on such questions.

7.

A complete list of the s cckholders entitled to vote at any meeting of stockholders, arranged in alphabetical order, with the residence of each, and the number of shares held by each, shall be prepared and certified by the Secretary and shall be available at the time and place of such meeting and cpen to the examination of any stockholder during the whole time of the meeting.

8.

Special meetings of the stockholders for any c. urt. es e or purpos es, unless otherwise prescribed by law, may be called b.v the Chair an er b.v the President, and shall be called b.v the chief executive of ficer or Secretary at the reques t in

_4_

writing of any two members of the scard of Directors, or at the request in writing of holders of record of ten percent of the shares of capital stock of tne Corporation issued and outstanding.

4 Business transacted at all special meetings of the stockholders i

shall be conf ined to the purposes stated in the call.

9.

(a) Notice of every meeting of s tockholde rs, setting I

forth the time and place and briefiv. the curpose or c.ur=.oses thereof, shall ce mailed, not less than ten nor =cre than sixty days prior to such meeting, to each s:cck-holder of record (at his address appearing on the stock books of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that 4

i notices intended for him be mailed to some other address, in which case it shall be mailed to the address designated in such reque s t) as of a date fixed by the scard of Directors pursuant to Section 41 of the By-Laws.

Except as otherwise provided by law, by the Certificate of Incorporation, as anended, or oy the By-Laws, items of business, in addition to these specified in the notice of meeting, may be transacted at the annual meeting.

I (b) Whenever by any c.rovision of law, the vote of stock-holde rs at a meeting thereof is required or permitted to be taken in connection with any corporate action, the meeting and vote of stockholders may be dispensed with, if all the stockholders who i

i would have been entitled to vote upon the action if such I

I neeting were held, shall consent in writing to such corgerate i

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I i

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s action be ing t aken, and all such consents shall be filed. :th,$ne Secretary of the Corporation.

However, this section shall not be construed to alter or modify any provision of law or of the Certificate of Incorporation under which the written consent of the holders of less than all outstanding shares is suf ficient for corporate action.

_D_ ire c to rs l

10.

The business and af f airs of the Corporation shall 1

be managed by its Board of Directors, which shall consist of seven directors.

Each director shall be at least eighteen years of age.

Directors need not be stockholders of the Corporation.

Directors shall be elected at the annual meeting of stockholders, or, if any such election shall not be held, at a stockholders ' meeting called and held in i

accordance with the provisions of the Business Corporation Act of the State of New Jersey.

Each director shall serve until the next annual =eeting of stockholders and thereafter until his successor shall have been elected and shall qualify.

11.

In addition to the powers and authority by the By-Laws expressly conferred upon it, the Board of Directors l

may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation, as amended, or by the By-Laws directed or required to be exercised or done by the s tockho lde rs.

12.

Unless otherwise required by law, in the absence of fraud no contract or transaction between the Corporation and one or more cf its directors or of ficers, or between the.

i Ccrporation and any domes tic or foreign corporation, fir:

or association of any type or kind in which one er more of i

its directors are directors or are otherwise interested, shall be void er voidable sclely by reason of such com=cn directorship or interest, or solely because such director or directors are present at er participate in the meeting of the Board or cc==ittee thereof which authorizes the contract or transaction, er sclely because his or their votes are counted for such purpos es, if:

(a)

The contract or transaction is f air and reason-able as to the Corporation as at the time it is authorized, approved or ratified; or (b)

The fact of th~e c0= mon direc:ceship or interest i

is disclosed or known to the Board or ce==ittee and the Scard or cc==ittee authorizes, approves, or ratifies the contract er transaction by unanimous written consent, provided at least one director so consenting is dis-interested or by affirmative vote of a majority of the disinterested directors, even though the dis-interested directors be less than a cuoru=; or (c)

The fact of the cc= mon directorship c interest is disclosed or known to the stockholders, and they au tho riz e, approve or ratify the contract or transaction.

f The interest of any directer or efficer in any such centrac cr transaction shall be f ully disclosed at such meeting and a director who is se interes ted =ay be counted at any such

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4 meeting for the :;rpose of determining the existence of a c.uo.r_m f

to consider and vote upon any contract or transaction in whien l

he is so interested.

t No director or of ficer shall be liable to account to One r

~

f I

Corporation for any profit realized by hi= f rom or through any such contract on tra.saction ci the Corporation by reason of l

his interes: as afore aid in such contract or transaction if such contract or transact;on shall be ac:horized, approved or ratified i

as aforesaid.

No contract or other transaction between the Corporation i

and any of its af filiates shall in any case be void or voidable

{

or otherwise af fectef because of the f act that directors or i

i of ficers of the Corporation are directors or of ficers of such t

af filiate, nor shall any such director or of ficer, because I

of such relation, be deemed interested in such contract or i

other transaction under any of the provisions of this Section i

,i 12, nor shall anv. such director be liable to account because of t

I such relation.

For the purpose of thi: Section 12, the term i

(

"af filiate" shall mean any corporation which is an "af filiate" i

l of the Corporation within the meaning of the Public Utility l

l l

Holding Company Act of 1935, as said Act shall at the time be t

i 1

in effect.

t 1

Nothing herein shall create liability in.any of the 1

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1, events described in this Section 12 or prevent the authorization, 4

a j

ratification or approval, in any other manner provided by law, i

i of anv. contract or transaction described in this Section 12.

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.mu Meetings of the Board of Directors 13.

The firs t meeting of the Board of Directors, for the purpose cf organitation, the election of officers, and the transaction of any other business which may come before the meeting, shall be held on call of the Chairman within one week af ter the annual meeting of stockholders.

If the Chairman shall f ail to call such meeting, it may be called by the President or by any director.

Notice of such meeting shall be given in the manner prescribed for Special =eetings of the Board of Directors.

14.

Regular meetings of the Board of Directors may be held without notice except for the purpose of taking action on matters as to which notice is in the By-Laws required to be given, at i

such time and place as shall from time to time be designated by the Board, but in any event at intervals of not more than three months.

Special meetings of the Board of Directors may be called by the Chairman or by the President or in the absence or dis-ability of the Chairman and the President, by a Vice President, or by any two directors, and may be held at the time and place designated in the call and notice of the mee-ing.

15. Excep t as otherwise provided by the Sy-Laws, any item or business may be transacted at any meeting of the Board of Directo rs, wnether or not such item of business shall have been specified in the notice of meeting.

Where notice of any meeting of the Board of Directors is required tc be given by the By-Laws, the Secretary or other of ficer performing his duties shall give notice either personally or by telephone or telegraph at least twenty-four hours before the meeting, or by mail at least three days before the meeting.

Meetings may be held a t any time and _ _ _

i es place witncu: notir-if all the d;:sctors are present er

! thos-net cresent waive notice in writing either before er af ter the Ceeting.

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shall ce requir a e for, 1-6 s ha.1 cons titu te, a quorum for the transaction of business, and the act of a ma]crity of the directors present at any meeting at which there is a quoru= shall b'e :.'e act of the Board of Direc:crs, except as may be otherwise specifically provided b.v law cr bv the I

Certificate of Incorporation, as ame nde d, or by the By-Laws.

17.

Any action required oc permi::ed ec te taken bv 4

the - Board -cr any committee Of the Board may be taken without a.eeting if, prior or subsequent to such aciton, all me=ce rs of the Board or the concittee consent in writing Oc the adoption of a resolution authorizing the action.

The resolutien and the written consents thereto by the mesters i

of the Board or ccamittee shall be filed with the minutes of l

I the proceedings of the Board or concittee.

Any re,ular or special meeting may be ad'ourned for no: more than ten days to any clace cv a mai.ority of the direc crs.cresent at the

=eeting whether er not a quorum shall be present at such meeting and no notice of the adjourned meeting shall be required other than anncuncement at the meeting.

Cctaittees 18.

The Board of Directors may, by the vote of a majority of the entire Scard,. create an Executive Ccanittee, j

consisting of twc cr acre me cers, of whc= cne shall ce the chief executive of ficer of the Corecration.

The c:her 1

-lo_

i l

'memoc:s of the Executive Cc=mittee shall be designated by the Board of Directors from their number, shall hold of fice for such period as the Board of Directors shall determine and may be removed at any time by the Board of Directors.

When a member of the Executive Committee ceases to be a director, he shall cease to be a member of the Executive Committee.

The Executive Committee shall have all the powers specifically granted to it by the By-Laws and, between meetings of the Board of Directors, may also exercise all the powers of the Board of Directors except as limited by law or the Certificate of Incorporation.

The Executive Committee shall have no power to amend or repeal any action taken by the Board of Directors which by its terms is amendable or repeal-able only by the Board, and shall be subject to any res triction impos ed by law, by the By-Laws, or by the Board of Directors.

19.

The Executive Committee shall cause to be kept regular

=intues of its proceedings, which may be transcribed in the regular minute book of the Corporation, and all such proceedings shall be reported to the Board of Directors at its next succeed-ing meeting, and the action of the Executive Committee shall be subject to revision or alteration by the Board of Directors, provided that no rights which, in the absence of such revision or alteration, third persons would have had shall be af fected by suen revision or alteration.

A majority of the Executive i

I l

Committee shall constitute a quorum at any meeting.

The Board l

of Directors may by vote of a majority of the entire Board t

t fill any vacancies in the Executive Committee.

The Executive

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and of otherwise performing their duties as members of such Committees.

Officers 23.

The officers of the Corporation shall be chosen by vote of a majority of directors then in office and shall be a President, one or more Vice Presidents, a Secretary, a l

Treasurer, and a Comptroller, and may include a Chairman, one or more Assistant Secretaries, one or more Assistant Treasurers, and one or more Assistant Comptrollers.

The t

President and the Chairman, if one shall be. chosen, shall be chosen from among the directors.

None of the other officers need be a director.

Neither the Chairman nor the President may occupy any other of fice.

With the above exceptions, any two offices may be occupied and the duties thereof may be performed by one. person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity. Ef a Chairman shall be chrsen, the Board of Directors shall designate either tnc Chairman or the President as chief executive officer of the Corporation.

If a chairman shall not be chosen, the President shall be the chief executive officer of the Corporation.

24.

The officers of the Corporation shall receive such salaries as shall be determined f rc= time to time by the Board of Directors.

Pending ac: ion by the Board of Directors, the Executive Committee, or, if there be none, the chief executive officer may choose,- and determine the salaries of, persons who a

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.i may temporari;f fill the offices of Assistant Secretary or Ass is tant Treasurer.

25.

The Board of Directors or the Executive Committee may appoint such other of ficers and such representatives or agents as shall be deemed necessary, who shall bcid of fice for such terms, exe rcise. such powers, perfor= such duties, and receive such salaries or other compensation, as shall be determined from time to time by action of the Board of Directors, or, pending action cf the Board of Directors, by the Executive i

Co==ittee.

I 26.

The salary or other compensation of all other employees shall, in the absence of any action by the Board of Directors, be fixed by the chief executive officer of the Corporation or by I

such other of ficer as shall be designated for that purpose by s

the Board of Directors.

27.

The of ficers of the Corporation shall hold of fice until the first meeting of the Board of Directors af ter the next succeeding annual meeting of stockholders and until

.1 their respective successors are chosen and qualify.

Any of ficer elected pursuant to Section 23 of the By-Laws may 1

be removed at any time, with or without cause, by the vote of a majority of directors then in office.

Any other officer and any representative, employee or agent of the Corporation may be removed at any time, with or without cause, by action of the Board of Directors, or, in the absence of action by the Board of Directors, by the Execu tive Committee,

or the chief executive of ficer of the Corporation, or l m

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s: h c:ner ef ficer as shall have been des i:nated d er :na:

purpos e by the chief executive Officer cf :ne ;crp ration.

The Chairman 28.

(a) If a Chairman shall be chosen by the Board of Directors, he shall preside at all meetings of the Board at which he shall be present.

(b) If a Chairman shall be chosen by the Board of Directors and if he shall be designated oy the Board as chief executive officer of the Corporation, (i) he shall have supervision, direction and control of the conduct of the business of the Corporation, subject, however, to the control of the Board of Directors and the f

Executive Committee if there be one; (ii) he may sign in the name and on behalf of the Cor-poration any and all contracts, agreements or other instruments pertaining to matters which arise in the ordinary course of business of dae Corporation,: and, 'when au thorized oy the Board of Directors-6r the-Executive

Committee,= if.rthere-be obey;my tr. --, _r; sign in the name and on-behalf of-the~ Corporation any and all -

I contracts, agreements of other instruments of any nature per-l l

taining to the business of the Corporation; (iii) he may, unless otherwise directed by the Board of Directors pursuant to Section 38 of the By-Laws, attend in person or by substitute or. proxy appointed by him and act and vote on behalf of the Corporation at all meetings of the stock-holders of any corporation in which the Corporation holds stock and grant any consent, waiver, or power of attorney in respect of such stock; l l

i t

(iv) he shal., whenever it r;, in his opinion be nece.s-sary or appropriate, prescribe the duties of of ficers and em-1 ployees of the Corporation whose duties are not otherwise de-fined; and (v) he shall have such other powers and perf er= suc.*.

other duties as c; be prescribed from tima to time by law, cy the By-Laws, or oy the Board of Directors.

(c) If a Chairman shall be chosen by the Scard of Directors and if he shall not be designated by the Board as chief executive officer of ne Ccrporation,

(i) he may sign in the name and on behalf of tne Cor-poration any and all contracts, agreements or other ins tru-ments pertaining to matters which arise in the ordinary course of business of the Corporation and, when authorized by the Board of Directors or the Executive Com=ittee, if there be one, may sign in the nr.me and on behalf of the Corporation any and all contracts, agreements or other in-1 struments of any nature pertaining to the business of the Corpora tion; (ii) he shall ha.ve such other powers and perform such other duties as may be prescribed f rom time to time by law, 1

by the By-Laws, or by the Board of Directors.

The President 29.

(a) If a Chairman shall not be chosen by the Board of Directors, the President shall preside at all meetings of the Board at which. he shall be present. i 1+-e--+e*-+

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holds s:cck and c.ran: an,v consent, waiver, er ocwer of

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e and e=ployees of the Corporation whose duties are ne other-

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.i other duties as may be prescribed f rom time to time tg la@,

by the By-Laws, or by the Board of Directors.

i (c) If the Chairman shall be designated by the Boarf of Directors as chief executive of ficer of the Corporation, the President, (i) shall be the chief operating of ficer of the Corpora-tion; (ii) shall have supervisien, direction and control cf the business of the Corporation, in the absence or disa-bility of the Chairman, subject, however, to the control of the Board of Directors and :1.e Executive Committee, if there be one; (iii) may sign in the name and on behalf of tne Cor-peration any and all contracts, agreements or o*.her in-struments pertaining to matters which arise in the ordinary course of business of the Corporation, and, when authorized by the Board of Directors or the Executive Committee, if there be one, may sign in the name and on behalf of the Corporation any and all contracts, agreements or cther in-struments of any nature pertaining to the business of the Corporation; (iv) at the request or in the absence or disability of the Chairman, may, unless otherwise directed by the Board of Directors pursuant to Section 38 of the By-Laws, attend in person or by substitute or proxy appointed by him and act and vote on behalt of the Corporation at all meetings of the stockholders of any corpora

i.cn in which the

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i Corporation holds stock and grant any consent, waiver, or Power of attorney in respect of such stock; (v) at the request or in the absence or disability of the Chairman, whenever in his opinion it may be necessary or appropriate, shall prescribe the duties of of ficers and employees of the Corporation whose duti' are not otherwise defined; and (vi) shall have such other powers and perform such other duties as may be prescribed f rom time to time by law, by the By-Laws, or by the Board of Directors.

Vice President 30.

(a)

The Vice President shall, in the absence or dis-ability of the President, if the President has been designated chief executive of ficer of the Corporation or if the President is acting pursuant to the provi'.1 nus of Subsection 29(c) (ii) of the By-Laws, have supe rvision, cirection and control of the con-duct of the business of the Corporation, subject, however, to the control Of the Board of Directors and the Executive Committee, if there be one.

(b) He may sign in the name of and on behalf of the Corpora-tion any and all contracts, agreements or other instruments per-taining to matters which arise in the ordinary _ course of business of the Corporation, and, when authorized by the Board of Directors or the Executive Committee, if there be one, except in cases where the signing thereof shall be expressly delegated by the Board of Directors or the Executive Committee to some other officer or agent of the Corporation.

i.

l

'.i (c) He may, if the Fresident has been deLignated chief exe cu tive ef f 4.cer of the Corporation or if the President is act-ing pursuant to the provisions of Subsection 29(c) (ii) of the By-Laws, at the request or in the absence er disacility of the President er in care of the f ailure of tne President to appoint a suustitute or prcxy as provided in Subsections 29(b) (iii) and 29(c) (iv) of the By-Laws, unless otherwise directed by the Board of Directors pursuant to Section 38 cf the By-Laws, attend in oerson er bv subs titu te or proxv. acc.cinted by him and act and vote in oehalf of the Corporation at all meetings of the stockholders of any corporation in which the Corporation holds stock and grant any consent, waiver er power of attorney in respect of such stock.

(d) He shall have such other powers and perform such other duties as may be prescribed f rom time to ti=e by law, by the By-Laws, or by the Scard of Directors.

(e) If there be more than ene Vice President, the Board of Directors may designate one or more of such Vice Presidents as an Executive Vice President.

The Scard of Directors may assign to such Vice Presidents their respective duties and may, if the Pres ide nt has been designated chief executive of ficer of the Corporation or if the President is acting pursuant to the pro-visions of Subsection 29(c) (ii) of the By-Laws, designate the order in which the respective Vice Presidents shall have super-vision, direction and control of the business of the Corporation in the absence or disability of the President.._

i The Secretarv 31.

(a) The secretary shall attend all meetings of the Scard of Directers and all meetings of the s:cckholders and record all votes and the minutes of all proceedings in books to be kect for that c.uro.cse; and shall aerform like duties for the Y

Executive Cc=mittee and any other cc==ittees created ty the Scard of Directors.

(b)

He shall give, er cause te be c.iven, notice of all meetings of the s:cekholders, the Scard cf Direc:crs, or the Executive Cetmittee of which notice is recuired to be.given by 1

law cr bv the Sv. -Laws.

}

1 (c)

He shall have such other powers and perform such other duties as sav be prescribed f rc= time to time bv law, by the Sv-Laws, or bv the 3 card of Directors.

( d.'

Any records kept bv the Secretarv. shall be the.crecerty oc f the Ccrpcration and shall be restered tc the Corporation in case cf his dea:n, resignation, retirement or re=cval frc=

-os.ine.

(e)

He shall be the cus:cdian cf the seal of the Corpora-tien and, cursuant ec Section 45 of the Sv-Laws and in other instances where the executien of documents in cehalf cf the Cer-poratien is authorized by the By-Laws or by the Scard cf Dir-ecters, =av af fix the seal te all instruments recuiring it and attes the ensealing and the execution of such ins trume nts.

l (f)

He shall have contrcl of the stock ledger, stock cer-tificate bcok and all bccks centaining =inutes of any =eeting of the s:cckhciders, Scard cf Direc:crs, or Executive Cc =ittee --_

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Other 30mmitte: created cy the Board of Directors, anc of 1

all f ormal records and documents relating to the corporate affairs of the Corporation.

(g)

Any Assistant Secretary or Assistant Secretaries shall assist the EP:retary in the performance of his duties, shall l

e::ercise his,0:wers and duties at his recuest or in his absence or disability, and shall exercise such other powers and duties as may be pres:ribed by the Board of Directors.

The Treasurer 32.

(a) The Treasurer shall be responsible for the saf e-keeping of the corporate funds and securicies of the Corporation, and shall maintain and keep in his custody full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit all moneys and other funds of the Corporation in the name and to the credit of the Corporation, in 1

i such depositories as may be designated by the Board of Directors.

(b) He shall disburse the funds of the Corporation in such manner as may be ordered by the Board of Directors, taking proper vouchers for such disbursements.

(c) Pursuant to Section 45 of the By-Laws, he may, when authorized by the Board of Directors, affix the seal to all in-l struments requiring it and shall attest the ensealing and-exe-cution of said ins truments.

(d) He shall exhibit at all reasonable times his r

I accounts and records to any director of the Corporation upon application during business hours at the office of the Corpora-i tion where such accounts and records are kept.

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l (e) He shall render an account of all his transactions as

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Treasurer at all regular teetings cI the Scard of Directors, or whenever the Board =ay req ire it, and at such other times as

=av be rec.ues ted by the Bea rd or bv. any director of the Corpora-tien.

(f) If required by the Board of Directors, he shall give the i

the premium on which shall be paid by the Corcoration a bcnd, 1

Corporation, in such form and a= cunt and with such suretv. or sureties as shall be satisf actory to the Board, for the faithful I

performance of the duties of his of fice, and for the restoration 1

to the Corporation in case of his death, resignation, retirement er re= oval frc= of fice, of all books, papers, vouchers, money and other property of whatever kind in his possession er under his control beloncinv to tne Corporation.

i (g) He shall perform all duties generally incident to the i

cffice of Treasurer, and shall have such other powers and duties 1

as frc= time to time =av be prescribed bv. law, by the Ev-Laws,

or by the Scard of Directors.

j (h) Any Assistant Treasurer 9: Assistant Treasurers shall i

assist the Treasurer in the performance of his duties, shall exercise his pcwers and duties at his request er in his absence er disabil ty, and shall exercise such other powers and duties as may be prescribed by the Board of Directors.

I.f required by

ne Beard of Directors, any Assistant Treasurer shall give the Cere.cration a bcnd, the c. remium on which shall be paid by the Corporation, similar to that which may be required to be iven bv the Treasurer.

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ei Comr:rciler 33.

(a) The Cc=ptrolle r of the Corpora:icn shall be the principal accounting of ficer of the Corporation and shall be accountable and report directly to the Board of Directors.

If required by the Board Of Directors, the Cc=ptrclier shall give ne Corpcration a bond, the premia on whien shall be paid by the Corporation in such form and amount and with such surety or sureties as shall be satisf actory :0 the Board, for the faithful performance of the duties of his effice.

(b) He snall keep or cause to be kept full and c0=plete books of account of all operations cf the Corporation and of its assets and liabilities.

(c) He shall have custody of all accounting records of the Corporation other than the record of receipts and disbursements and :hese relating to the deposit or custody of money er securi-ties of the Corporation, which shall be in the custody of the Treasurer.

(d) He shall exhibit at all reasonable times his bocks of account and records to any director of the Corporation upon a, plication during business hours at the of fice of the Corpora-tion where such bocks of account and records are kept.

(e) He shall render reports of the operatiens and business and of the condition of the finances of the Corporation at regular meetings of the acard of Directors, and at such other times as he may be requested by the Scard or by any director of the Corporation, and shall render a full financial report at the annual meeting of the stockholders, if called upon to do so..

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(f) He shall receive and keep in his custody an original copy of each written contract made by or en behalf of the Co rpora tion.

(g) He shall receive periodic reports frc= the Treasurer of 1

the Corporation of all receipts and disbursements, and shall see that correct vouchers are taken for all disbursements for any l

pu rpos e.

(h) He shall perform all duties generally incident to the office cf Cc=ptroller, and shall have such other powers and duties as frc= time to time may be prescribed by law, by the By-Laws, or by the Board of Directors.

i 4

(i) Any Assistant Cc=ptroller or Assistant Cc=ptrollers i

shall assist the Cc=ptroller in the performance of his duties, 1_

shall exercise his powers and duties at his request or in his absence er disability and shall exercise such other powers and i

duties as may be conf erred or required by the Scard of Directors.

1 If rec.uired bv the Scard of Directors, anv Assistant Cc=ptroller I

shall give the Corporation a cond, the premium on which shall be paid by the Corporation, similar to that which may be re-quired te be given by the Ccmptroller.

I Vacancies 1

34.

If the Of fice of any director becc=es vacant by reason of death, resignatien, retire =ent, disqualification, or other-l wise (including an increase in the nu=cer of directors), the remaining directors, bv the vote of a majority of thes e then i

in office, at a meetine., the notice of which shall have sc.eci-fied the fillin, of such vacancy as one of its purpos es,

=av.

I cheese a successer, who shall hold of fice for the unexpired ter: -

J 4

8 J1 in respect of which such vacancy occurs.

If the office c: any officer of the Corporation shall oecome vacant for any reason, the Board of Diractors, at a meeting, the notice of which shall have specified the filling of such vacancy as one of its purposes,

=ay encese a successor who shall hold of fice fer the unexpired term in respect of which such vacancy occurred.

Pending action by the Board of Directors at such meeting, the Board of Directors or the Executive Committee may choose a successor temporarily to serve as an of ficer of the Corporation.

Resicnations 35.

An of ficer or any director of the Corporation may resign at any time, such resignation to ce made in writing and transmitted to the Secretarv.

Such resignation shall take effect frc= the tirae of its acceptance, unless sc=e time be fixed in the resignation, and then f rem that time.

Nothing I

herein shall be deemed to relieve any officer from liability for breach Of any contract of employment resulting frc=

any such resignation.

t l

Duties of Of ficers May be Delecated 36.

In case of the absence or disability of any officer of the Corporation, or for any other reason the Board of Directors may deem sufficient, the Board, by vote of a majority of directors then in office may, notwithstanding any other provisions of the By-Laws, delegate or assign, for the time being, the powers or duties, or any of them, of such efficer to any other officer or to any director.

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FO Indemnification of Directors, Of ficers and Enployees 37.

(a) No present or future director, officer or employee of the Corporation (or his legal representatives) shall be liable for any act, omission, step or conduct taken or had in good faith, which (whether by condition or otherwise) is recuired, authorized of approved, or is otherwise in ec=pliance with or in reliance upon a regulation, ?.u le, order or determination issued or made, by a department, r.ge ncy, board, co==ission or au thority pursuant to any statute of any state or of the United S tates, including the Public Utility Holding Cc=pany Act of 1935 and the Federal Power Act, whether or not such regulation, rule, order or deter-mination shall subsecuently have been amended, rescinded or determined by judicial or administrative authority to be invalid or legality of any such regulation, rule, order or determination.

In any action, suit or proceeding based on any act,. cmission, step or conduct, as in this paragraph described, the provisions hereof chall be broucht to the attention of the court.

In the t

event that any of the foregoing provisions of this paragraph is found by the court not to constitute a valid defense on the ground that any such provisions are not applicable to the i

particular class of plaintif f, each such director, of ficer or e=ployee (or his legal representatives) shall, to the extend permitted by applicable law, be rei= cursed for, or indemnified aga ins t, all expenses and liabilities reasonably incurred ' by him or imposed on him, in connection with or resulting frc= any such action, suit or proceeding (other than for sums ordered to be paid to the Corporation by him).

Such expenses and,

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liabilities shall include, but shall not be limited to, judg,

ments, court cos ts and attorneys ' fees.

(b)

In addition to the foregoing rights of indemnification any director, officer or employee (or his legal representatives) shall be entitled to all rights of indemnification by, and assess-ment of expenses agains t, the Corporation to which he may be en.

titled under any statute now or hereaf ter in ef fect or otherwise as a matter of law but any such right of indemnification or assessment shall apply with respect to any liability of any I

director, officer or employee (or his legal representatives) arising under any of the provisions of the Securities Act of 1933, as amended, only to the extent that such rights of indem-nification or assessment may be determined to be valid by a court i

of competent jurisdiction.

Stock of Other Corporations 38.

The Board of Directors may authorice any director, officer or other person on behalf of the Corporation to attend, act and vote at meetings of the stockholders of any corporation in which the Corporation shall hold stock, and to exercise thereat any and all of the rights and powers incident to the ownership of such stock and to execute waivers of notice of such meetings and calls therefor.

Certificates of Stock 39.

The certificates of stock of the Corporation shall be numbered and shall be entered in the books of the Corporation as they are issued.

They shall exnibit the holder's name and 1. _. _.

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nu=ber of shares and may include his address.

No fractional i

shares of stock shall be issued.

Certificats of stock shall be signed by the Chairman or the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and shall be sealed with the seal of the Corporation or a f acsimile thereof.

Where any certificate of stock is countersigned by a transfer agent or registrar who is not an of ficer or e=ployee of the Corporation, the signatures of any such Chairman, President, Vice President, Secretary, Assistant Secretary, Treasurer, or Assistant Treasurer upon such certificate may be f acsimiles, engraved or printed.

i In case any such officer who has signed or whose facsimile signa-ture has been placed upon such certificate shall have ceased to te such before such certificate of stock is issued, it may be issued by the Corporation with the same ef fect as if such officer had not ceased to be such at the date of its issue.

Transfer of Stock 40.

Transf ers of stock shall be made on the books of the Corporation only by the person named in the certificate or by l

attorney, lawf ully cons titu ted in writing, and upon surrender of the certificate therefor.

Fixinc of Record Date i

l l

41.

The Board of Directors is hereby authorized to fix a time, not exceeding sixty (60) days preceding the date of any meeti.g of stockholders or the date fixed f or the payment of any dividend or the making of any dirtribution, or

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(a) All enecks or demands for =cnev and notes of the Cer: oration shall be siened by such cersen er,=ersens (who =av w L,.

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Directors, the signatures of such perst..s, or any of tr..

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any enecks for the payment of =e n ey may be ma de by e ngr a.-...,

lithographing or printing thereon a f acsimile of such sigt.e..res, in lieu of actual cignstures, and such f acsimile signaturer so engraved, 1;tnographed or printed thereon shall have the same force and effect as if such persons nad actually signed tr.e same.

(b) A;. conds, mortgages and other ins truments requiring a seal, wher required in connection with matters which arise in the ordtnary course of business or when authorized by the Board i

I of Direc crs, shall be executed on behalf of the Corporation by j

the Chairman or the President or a Vice President, and the seal i

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j of the Corporation shall be thereupon af fixed by the Secretary or an Assistant Secretary or the Treasurer or an Assistant 3

Treasurer, who shall, when required, attest the ensealing and executien of said instrument.

If authorized by the Board of Directors, a f acsimile of the seal may be employed and such i

f acsimile of the seal may be engraved, lithographed or printed l

l and shall have the same force and effect as an impressed seal.

If authorized by the Board of Directors, the signatures of the i

Chairman or the President or a Vice President or the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer upon any engraved, lithographed or printed bonds, debentures, notes or other instruments may be made by engraving, lithographing or printing thereon a f acsimile of such signatures, in lieu of actual signatures, and such f acsimile signatures so engraved, lithographed or printed thereon shall have the same force and effect as if such of ficers had actually signed the l

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In case any of ficer who has signed, or whose f acsimile I

signature appears on, any such bonds, debentures, notes or i

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other instruments shall cease to be such of ficer before such i

i bonds, de bentures, notes et ether instruments shall have been delivered by the Corporation, such bonds, debentures, notes or other instruments may nevertheless be adopted by the Corporation and be issued and deliver d as though the person who signed the

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same, or whose f acsimile signature appears thereon, had not i

i ceased to be such of ficer of the Corporation.

Receiets for Securities f

i 46.

All receipts for s tocks, bonds or other securities by the Corporation shall be signed by the Treasurer or an Assistant i

l Treasurer, or by such other person or persons as the Board of l

Directors or Executive Committee shall designate.

}

Fiscal Year l

47.

The fiscal year sball begin the first day of January i

in each year.

Dividends 48.

(a) Dividends in the form of ctsh or securities, upon 1

the capital s tock of the Corporation, to the extent permitted i

by law, may be declared by the Board of Directors at any regular or special meeting.

l (b)

The Board of Directors shall have power to fix and I

i l

determine, and from time to time vary, the amount to be reserved l

as working capital; to de termine whether any, and if any, what j

part of any, surplus' of the Corporation shall be declared as,

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div.de nds ; to se termine the date er dates for the declart:.cn and payment or distribution of dividends; and, before payrent of any dividend or the making of any distribution to set aside out of the surplus of the Corporation such a cunt or amounts as the Scard of Directors from time to time, in its acsclu a fis-cretion, may think proper as a reserve f und te meet conti..;e ncies,

or f or equalicing di'ti dends, or for such other purpose as it shall deem to be in the interests cd the Corporation.

Directors' A.nnual Statement 49.

The Scard of Directors shall present er cause to ce presented at each annual reeting of s tockholde rs, and whe.. called for cy vote cf the s cckholders at any sc.ecial meeting of the s tockholde rs, a full and clear statement of the bustnecs and con-dicien of the Corporation.

Notices 50.

(a) Whenever under the previsions of the Sy-Laws notice is required to ce given to any director, of ficer er stock-holder, it shall net ce construed to require personal notice, but, except as otherwise specifically provided, such notice may be given in writing, by mail, by depos iting a copy of the s ame in a pcs effice, letter box er mail chute, maintained by the United States Pos tal Service, postage prepaid, addressed to such s tockholde r, cfficer er director, at his address as the same appears en the books of the Corporation.

(b)

A stockholde r, director or Officer may waive in writing any notice required to be given to him by law or by the By-Laws. -

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Participation in Meetings by Telephone l

51.

At any meecing of the Board of Directors or the Executive f

Committee or any other committee designated by the Board of 4

Di:*ctors, one or more directors may participate in such meeting i

in lieu of attendance in person by means of the conf erence tele-phone or similar communications equipment by means of whicn all j

persons participating in the meeting will be able to hear and j

speak.

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4 Cath of Judges of Election 52.

The Judges of election appointed to act at any meeting j

of the stockholders shall, before entering upon the discharge of J

r their duties, be sworn f aithfully to execute the duties of judge i

at such meeting with strict impartiality and according to the l

best of their ability.

4 i

Amendments j

53.

The By-Laws may be altered or amended by the af firma-tive vote of the holders of a majority of the capital stock re-presented and entitled to vote at a meeting of the stockholders i

duly held, provided that the notice of such meeting shall have included notice of such proposed amendment.

The By-Laws may also l

be altered or amended by the af firmativa vote of a majority of directors then in of fice at a meeting of the Board of Directors, the notice of which shall have included notice of the proposed amendment.

In the event of the adoption, amendment, or repeal of any By-Law by the Board of Directors pursuant to this Section, 4 i

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J s tockholde rs for the election of directors the Sy-Law so ac:pted,

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I amended or repealed tegether with a concise statement of the I

c.".anges made.

Ey the af firmative vote of the holders of a l

majority of the capital stock represented and entitled to vote 1

at such meeting, the Ey-Laws may, without further' notice, be I

altered or amended by amending or repealing such action by the Board of Directors.

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Appendix A I.

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Determination of Cost of Service and Allocation thereof T

Cost of service will be determined in accordance with the Public Utility Holding Company Act of 1935 and the rules l

and regulations and orders thereunder, and will include all costs of doing business incurred by GPUNC.

l Records will be maintained for each Department and Division of GPUNC in order to accumulate all costs of doing l

business and to determine the cost of service.

These costs i

will include wages and salaries of employees and related i

expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent or other applicable cost i

of facility utilitation, including but not limited to light, heat, telephone, supplies, and.other housekeeping costs.

In i

addition, records will be maintained of general administrative I

expenses, which will include the costs of operating'GPUNC as a corporate entity.

Where appropriate, charges for services of personnel rendered and related expenses and non-personnel expenses j

(e.g., use of automotive eq aiptent, etc.) will be billed directly to the Owner.

This will include the charges for services of GPUNC personnel assigned exclusively to the S tation and, for other personnel, charges determined in accordance with the aggregate nuclear steam generating capa-cities of the eccpanies contracting with GPUNC.

_. _., ~. - -.

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Charges for services will be determined, where appro-priate, f rom the time sheets cf employees (other than scre secretaries, clerical and similar empicyees, the ecst of whose services will be treated as a part of general adminis-trative expenses).

Records of suen related expenses and general ade.nistrative expenses will be maintained and subjected to periedic review.

Out-of-pceket expenses which are incurred for the Owner will te billed at cest.

Charges for ncn-persennel expenses, such as for use of auterebiles net assigned exclusively to the Station, will ner: ally be ec peted en the basis cf ecsts per mile.

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EXHIBIT B-1 THREE MILE ISLAND NUCLEAR GENERATING STATION i

OPERATING AGREEMENT 1

among JERSEY CENTRAL POWER & LIGHT COMPANY and METROPOLITAN EDISON COMPANY and 1

PENNSYLVANIA ELECTRIC COMPANY and GPU NUCLEAR CORPORATION This AGREEMENT made and entered into this day of 1980 among Jersey Central Power i

& Light Company (Jersey Central), Metropolitan Edison Company (Met'Ed), Pennsylvania Electric Company (Penelec),

and GPU Nuclear Corporation (GPUNC).

L E E E E E E E E E E' WHEREAS, Jersey Central, Met-Ed and Penelec (hereinafter referred to collectively as " Owners" and individually as'an

" Own'e r " ) each owns, as tenants in common with the others, an undivided interest in the Three Mile Island Nuclear Generating Station (hereinaf ter referred to as the " Station").

The Station, which is located on the Susquehanna River near 1

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2, and certain facilities that are useful in the operation I

j of both units.

The preuent undivided interests are 50 percent in the case of Met-Ed and 25 percent each in the case of Jersey Central and Penelee.

Unit No. 2 was severely damaged and contaminated by radioactivity as a result of an i

accident on March 28, 1979, which will require substantial I

repair and modification to Unit No. 2 and the Station.

WHEREAS, it is desirable and to the mutual advantage of the Owners that GPUNC be engaged, under' the terms and i

i conditions hereinafter set forth, to operate, maintain and l

rehabilitate the Station and make any necessary repairs, modifications and additions thereto and retirements therefrom I

on behalf of the Cwners.

I NCW THEREFORI, in consideration of these premises, the I

parties hereto do hereby agree as follows:

ARTICLE 1 Sharing of Capacity and Energy 1.1 As tenants in common, each owning an undivided interest i

in the Station, the owners are each entitled to a share.

I of all the services provided thereby in proportion to their respective undivided interests in the Station, l

including, but not limited to, installed capacity, 1

available capacity, operating capacity and net hourly energy generation of the Station.

1.2 When plant conditions are such as to require a net input to supply Station power and light, the Owners are responsible for these requirements in proportion to their respective undivided interest in the Station.

ARTICLE 2 Services to be Provided I

2.1 GPUNC, consistent with such written guidelines as may

'be jointly developed with the Owners, shall provide and i

be responsible for the operation and maintenance of the Station in a safe and reliable manner in accordance with all applicable, lawful licenses and permits and a

requirements of state and federal regulatory agencies 1

and the generation of power and energy at the Station as economically as is reasonably practicable and shall rehabilitate the Station and make repairs and modifica-tions as made necessary or appropriate by the March 28, i

1979 accident. " Station", as used in this Agreement, is defined as any and all real, personal and mixed property located on or forming a part of the Owners' property commonly known as Three Mile Island Nuclear Generating Station located in Londonderry Township, Dauphin i

County, Pennsylvania excluding only those facilities which comprise the Owners' electric transmission f acilities extending from the high voltage side of the i

transformation installation.

GPUNC also shall make i

such further modifications of and additions to and retirements from the Statien as shall be consistent with such rehabilitation, operatic ~ and maintenance.

Such services and construction may.be provided by GPUNC.

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through its own personnel er in part by cthers under centractual or other arrange ents.

In furtherance of 4

the foregoing GPUNC shall, en behalf of the Owners, 4

among other things:

4 (a)

Select, hire, control and discharge personnel, who will be employees sclely of GPUNC, and select and retain the services of contractors and consultants.

(b)

Procure en behalf of the owners nuclear fuel including uranium and prcvide for the enrichment, conversien and f abrication thereof and storage and/or disposal or reprocessing of such fuel when j

spent (as permitted by law cr regulatien).

(c)

Arrange for the purchase en behalf cf the Owners of repair, modification, rehabilitatica, cperating l

and =aintenance materials, services and supplies.

1 (d)

Cesign, construct, start-up and test modifications of and additiens to the Station.

(e)

Cetermine and stipulate inventory levels of

=aterial and ecuip=ent for the Station.

(f)

Keep the owners infor=ed in a reasonable manner concerning repair, modification, rehabilitation, cperation and maintenance activities and additions l

to the Station.

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(g)

Prepare, or arrange for the preparatien of, in accordance with normal and custc=ary p ccedures annual budgets and forecasts for the Station's 3

repair,.medification, rehabilitatien, cperatinc j

and maintenance ecsts, capital expenditures and 4

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' retirements to be submitted to the Owners for I

approval.

Such approval shall be required before action may be taken thereunder, provided that work required to prevent hazardous conditions or sub-stantial reduction in generation may be undertaken prior to such approval with prompt notification thereof given to the Owners.

Such budgets and forecasts shall be revised from time to time to reflect material changes in circumstances.

(h)

Perform any services and take any action, on behalf of the Owners where appropriate, related to the repair, modification, rehabilitation, opera-tion, maintenance, renewals, replacements, addi-tions and retirements pertaining to the Station as may be necessary or appropriate to comply with the provisions of the Atomic Energy Act, as amended or as it may be amended, or any other applicable statute, rules, regulations, guidelines or similar criteria, and any provisions or conditions of construction permits and operating licenses or similar authorirations granted or that may be granted in connection with Scation and as such pe rmits, licenses or other authorizations may hereafter be a= ended.

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In its capacity as operator of the Station and as agent for the owners, provide communications to, and receive communications from, the Nuclear Regulatory Commission and/or any successor govern-mental agency, as well as any other governmental agency having jurisdiction with respect to any aspect of the Station's operation, maintenance, rehaLilitation, repair and modification and, in such capacities, represent (or engage others to represent) the Owners.

(j)

Perform, or, if deemed desirable by GPUNC, contract on behalf of the Owners with others (including agencies of Govern =ent or their contractors) for i

repair, modification, rehabilitation, maintenance, reneuals and replacements required to place and/or keep the Station in safe and efficient operating condition to protect the property, to conduct I

research and development with respect thereto and disburse or receive funds in connection therewith.

Such work shall be subject to not. al and customary GPUNC review and approval proced' res.

(k)

Perf orm any additional services pertaining to the Station to which the Owners and GPUNC shall have mutually agreed.

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Arrange for the maintenance, in accordance with normal and customary procedures of such necessary books of record, books of account and memoranda of transactions and for the provision of such reports with respect thereto to the Owners as each Owner shall desire to meet its accounting and statistical requirements and to conform to the applicable lawf;l rules, regulations and requirements of all regulatory bodies having jurisdiction over the Owners.

The costs for the Station shall be accumulated in a separate set of accounts.

(m)

Provide or arrange for the provision of, such other data or information with respect to the Station as may be reasonably requested by the Owners from time to time.

i 2.2 Matters and questions arising in connection with the repair, modification, rehabilitation, operation and maintenance of the Station which are not within the scope of the authority delegated to GPUNC under this Agreement and are not specifically provided for in this l

Agreement shall be jointly determined from time to time by the Owners and GPUNC.

I 2.3 The costs for services provided by GPUNC pursuant to l

the terms, conditions and provisions of this Agreement shall be paid to GPUNC as provid'ed in Article 4.

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. ARTICLE 3 Scheduline of Operation, Dispatch and Maintenance 3.1 It is anticipated that the Station will be operated so i

that the Owners use their respective shares of its output and capacity at the same time since such opera-tien will normally be ec=patible with each Owner's desired system operation.

Normal scheduling shall contemplate the division of entitlements to the Station output as provided in Article 1.

3.2 During operating conditions which GPUNC in its sole judgment deems abncrmal, GPUNC shall take such action as it deems appropriate for the public health and safety and the safety of personnel and equipment.

3.3 In order that the safe operation of the Station is assured, the Owners shall not effect any operating or physical changes to their respective transmission and distribution facilities which may affect the safe l

cperation of the Station without prior consultation and l

concurrence of GPUNC.

l 3.4 The Met-Ed Dispatching Department shall have jurisdiction over the TMI 230 KV and 500'KV substations.

Met-Ed also shall have maintenance responsibility from the TMI 230 KV and 500 KV substations up to the low voltage bushings of the generator step-up and main auxiliary transformers.

With the concurrence of GPUNC, Met-Ed shall provide switching and tacging in connection with m.

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the generator step-up and main auxiliary transformers.

GPUNC shall have jurisdiction over all station service equipment which affects the operation or saf ety of the plant.

Such jurisdiction shall be from the low voltage side of the generator step-up transformer and the main auxiliary transformers to the plant proper.

3.5 GPUNC shall have operational control of the IMI 23Q KV and 500 KV generator circuit breakers for synchronizing upon authority received f rom the Met-Ed Dispatching Department.

ARTICLE 4 Working Fund 4.1 The Owners shall establish and maintain a fund from which GPUNC shall make payments for all costs pursuant to its services and responsibilities hereunder.

The Owners, in consultation with GPUNC, shall determine, initially and from time to time, during the term of this Agreement, the amount or amounts required to maintain a satisfactory balance in the fund, and shall l

be liable in proportion to their respective undivided interests in the Station for any such additional amounts required to maintain the agreed-upon balance.

The Owners shall reimburse the fund promptly on receipt of notice from GPUNC of their respective obligations for reimbursement.

4.2 On termination of this Agreement, as hereinafter provided, any residual unexpended balance in the w

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. working fund shall be credited to the Owners in pro-portion to their respective undivided interests in the Station.

ARTICLE 5 Charges, Financial Statements and Billines 5.1 GPUNC shall arrange for reporting to the Owners for each month, promptly following the end of such month, by written statements the following:

(a)

The costs of repair, modification, rehabilitation, operation and maintenance, the cost of any plant additions and retirements including applicable cost of removal and salvage, on an accrual basis, classified as required to meet its obligations under Section 2.1(1) above.

(b)

A summary statement of the operation during that month of the Wcrking Fund, showing beginning balance, receipts, disbursements and closing balance.

5.2 The costs incurred or accrued from all sources during each calendar month in repairing, modifying, rehabili-tating, operating, maintaining and making additions to and retirements from the Station shall become liabilities of the Owners when incurred or accrued and shall be borne by the Owners in proportion to their undivided interests in the Station.

All such costs shall be determined in accordance with sound accounting mg4

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l practices, and shall include reasonable and appropriate int'irect costs including overheads.

In particular, all of the services rendered hereunder by GPUNC will be at actual cost thereof.

Direct charges will be made for services where a direct allocation of cost is possible.

The methods of determining such costs and the alloca-i tion thereof are set forth in Appendix A hereto.

These methods shall be reviewed annually and more frequently, if appropriate.

Such methods may be modified or 4

changed by GPUNC, with the approval of the Securities f

and Exchange Commission, without the necessity of an amendment of this Agreement provided that in each instance all services rendered hereunder will be at actual cost thereof, fairly and equitably allocated, and all in accordance with the requirements of the Public Utility Holding Company Act of 1935 and the f

rules and regulations and orders thereunder.

The i

Owners will be advised from time to time of any material changes in such methods.

5.3 It is the intent of the Owners that so far as'possible i

each Owner shall separately report, file returns'with respect to, be responsible for and pay all real proper-ty, franchise, business or other taxes, except payroll and sales or use taxes, arising out of its proportion-ate ownership of the Station and that such taxes shall be separately levied and assessed against each Owner.

However, to the extent that such taxes nay be levied

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. en or assessed against the S tation, or its cperat.icn, or the owners in such a =anner as, in the opinion of the owners, to =ake impossible or inequitable the carrying cut of said intent, then such taxes shall be deemed a part of the costs of cperating and main-taining the Station and shall be apportioned among the Owners under this Agreement in acecrdance with their respective percentages of evnership.

5.4 The owners shall have the right, during the term of this Agreement and thereafter as long as the books, records and me=cranda referred to'in Section 2.1 shall be preserved, to inspect all such ite=s and to make reasonable audits thereof at their own ecst as th,ey =ay deem necessary to protect their interests.

5.5 In the event an owner shall questien any statement i

rendered according to the provisiens of Section 5.1 hereof, it shall nevertheless promptly pay the a= cunt indicated in such state =ent but such pay =ent shall not be dee=ed to prevent such owner frem claiming an i

adjustment of any statement rendered.

5.6 If it shall be deter =ined that an owner has paid = ore or less than its preper share of the operating and capital costs of the Station for the month covered by such statement, an appropriate correction shall be =ade by GPUNC by preper credit er charge, as the case may be.

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Metering, Relaying and Control i

6.1 The net power generated by Unit No. 1 shall be deter-mined by =etering the power output at the high side of the 19-230kV step-up transformer minus the power l

metered on each of the two Unit servicetransformeEs (Nos. 1A and 13) at the 230kV bus, i

6.2 The net power generated by Unit No. 2 shall be deter-mined by metering the 7cwer output at the high side of j

the 22-500kV step-up transformer minus the power i

metered on each of the two Unit service transformers 1

(Nos. 2A and 28) at the 230kV bus.

6.3 The 500kV power delivery shall be the power generated i

by Unit No. 2 determined by metering the power output at the high side of the 22-500kV step-up transformer.

This value is provided to Pennsylvania-New Jersey-Maryland Interconnection (PJM) for determination of 500kV losses and system security analysis.

6.4 The accuracy of the metering equipment installed to provide information under Sections 6.1, 6.2 and i

6.3 above shall be in accordance with GPU Meter Standards.

The meters so provided shall be tested and calibrated I

l according to schedules arranged by GPUNC at intervals i

not to er.ceed twelve months.

Adequate notice of such l

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tests shall be given, if. requested, to the owners so i

that they may have representation present to witness them.

Correction of inaccuracies found to exist in any l

meter shall promptly be made and, if appropriate,,such correction shall be retroactively applied to the extent necessary to carry out the intent of this Agreement.

6.5 Settings, calculations and test procedures for relays, telemetering and associated control equipment in the plant and substation, which are of direct interest to any of the Owners shall be determined by mutual agree-ment between appropriate representatives of the owners and GPUNC.

Test schedules shall be jointly agreed upon by the Owners and GPUNC and adequate notice of such tests shall be given, if requested, to the Owners so they may have representation present to witness them.

ARTICLE 7 Compliance with Provisions of Permits and Requiremente of Governmental Agencies 7.1 The Owners and GPUNC shall cooperate in taking whatever action may be necessary to comply with the terms and provisions of permits and licenses for the Station and with all applicable lawful requirements of any Federal or State agency or regulatory body having jurisdiction in the premises.

ARTICLE 8 Damage to Persons or Prcperty; Penalties; Fines 8.1 Since GPUNC is undertaking its responsibilities here-under at cost and in order to assist the owners in meeting their rasponsibilities with respect to the

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l Station, the following provisions shall be applicable to damage to the property of any or all the parties hereto (including Station property) or third parties, including or injuries.to or loss of life by any person, employees of the parties hereto, and to penalties or fines assessed with respect to the Station:

Each Owner and GPUNC will procure and maintain (a) such physical damage, public liability, workers' compensation and other insurance as it may deem appropriate with respect to all losses, damages, liability and claims arising out of its ownership interest or the operation of the Statio'n and provision of services hereunder and the premium costs thereof shall be Station costs under Section 5.2, or, in the alternative upon concurrence of each party hereto, the Owners and GP'TNC will jointly procure and maintain such physical damage, public liability, workers' compensation and other insurance as they may deem appropriate with respect to all losses, damages, liability and claims arising out of their respective ownership interests or the operation of the Station and provision of services hereunder and the premium costs thereof shall be Station costs under Section 5.2.

All insurance shall contain a waiver of subrogation clause against the other parties hereto.

(b)

Claims cognizable under workers' compensation acts or temporary disability benefits laws or any other benefits under workers' compensation or analagous statutes and the expenses of defending or dispos-ing of the same, attributable to the ownership or operation of the Station, which are not covered in full by insurance procured in accordance with the preceding paragraph shall (to the extent not covered by such insurance) be treated as Station costs under Section 5.2.

(c)

All losses, damages, expenses, penalties, liabilities, fines and claims (including those in respect df property damage and personal injury) asserted by third parties and the expenses of defending or i

disposing of the same, attributable to the ownership or operation of the Station, which are not covered l

in full by insurance procured in accordance with the second preceding paragraph shall (to the extent not covered by such insurance) be treated as Station costs under Section 5.2.

(d)

Each of the parties hereto expressly waives any right it may have to recover f rom the other l

l parties hereto for any losses, damages, penalties, liabilities, fines, claims or expenses (including damage to property of the Station) for any cause including the negligence of the other parties hereto, its employees and agents in connection

I 9 *

. with the operation of the Station and the provision of services hereunder.

1 ARTICLE 9 i

Miscellaneous 9.1 Nothing in this Agreement shall be deemed to create or i

constitute a partnership, joint venture or association among the parties hereto or any of them, the sole purpose of this Agreement being limited to provision for the orderly and efficient repair, modification, rehabilitation, operation and maintenace of the Owners' respective separate undivided interests in the Station.

9.2 Each of the Owners hereby designates its President as its Representative, who shall receive notices and communications from GPUNC under the provisions of this i

Agreement and who shall send to the designated Represen-I tative of GPUNC all notices and communications under the f

provisions of this Agreement.

I 9.3 GPUNC hereby designates its President as the GPUNC Representative, who shall receive notices and communica-tions from the Owners' respective Representatives under the provisions of this Agreement and who shall send to the owners' respective Representatives all notices and communications concerning the provisions of this Agreement.

Each Owner shall determine the basis and method it will 9.4 use for purposes of depreciation and other matters where investment in Station property is relevant.

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9.5 In performing services under this Agreement on behalf of the Owners, GPUNC shall act as an independent contrac-tor responsible for the result to be attained, consis-3 tent with such guidelines as may be jointly developed with the Owners.

9.6.

Since Met-Ed is the sole owner of certain f acilities ancillary to the Station and since Met-Ed (or any other Owner) may from time to time provide goods and services to the Station, GPUNC shall pay for such goods and services at cost determined as herein

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provided, which payments shall be treated as Station costs under Section 5.2.

ARTICLE 10 Effective Date and Termination i

10.1 Subject to any applicable rules and regulations and associated approvals of any regulatory authority, this Agreement shall become effective as of the date first above written and shall remain in full force and effect t

unless and until terminated.

10.2 This Agreement may be terminated by any Owner upon reasonable notice to the other parties hereto provided that adequate provision is made to protect the public health and safety.

ARTICLE 11 Successors and Assions 11.1 This Agreement and all of the terms and conditions 7

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hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Any mortgage indenture trustee which I

shall foreclose on substantially all of the electric utility properties of any owner, including the undivid-ed interest of said Owner in the Station, may, at its R

l own election, be deemed to be a successor and assign l

of said Owner under this Agreement.

ARTICLE 12 I

i Governine Law 1

12.1 This Agreement has been executed and delivered in the State of New Jersey and is intended to be construed i

in accordance with, and to be governed by, the laws of l

that State.

I IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed and delivered in Parsippany, New Jersey as of the day and year first above written.

ATTEST:

JERSEY CENTRAL POWER & LIGHT COMPANY By j

Secretary President l

l ATTEST:

METROPOLITAN EDISON COMPANY By Secretary President i

ATTEST:

PENNSYLVANIA ELECTRIC COMPANY i

I By Secretary Presicent ATTEST:

GPU NUCLEAR CORPORATION 4

By Cnalrman

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Appendix A Determination of Cost of Service and Allocation thereof Cost of service will be determined in accordance with the Public Utility Holding Company Act of 1935 and the rules and regulations and orders thereunder, and will include all costs of doing business incurred by GPUNC.

Records will be maintained for each Department and Division of GPUNC in order to accumulate all costs of doing business and to determine the cost of service.

These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other i

employee welfare expenses, and rent or other applicable cost of facility utilization, including but not limited to licht, i

heat, telephone, suppl,ies, and other houtekeeping costs.

In l,

addition, records will be maintained of general administrative I

expenses, which will include the costs of operating GPUNC as i

t a corporate entity.

Where appropriate, charges for services of personnel rendered and related expenses and non-personnel, expenses (e.g., use of automotive equipment, etc.) will be billed 1

l directly to the Owners in accordance with their respective in.te re s ts in the Station.

This will include the charges for services of GPUNC personnel assigned exclusively to the S tation and, for other personnel, charges determined in

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accordance with the aggregate nuclear steam generating capa-cities of the companies contracting with GPUNC.

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h Charges for services will be determined, where appro-priate, from the time sheets of employees (other than some secretaries, clerical and similar employees, the cost of whose services will be treated as a part cf general adminis-trative expenses).

Records of such related expenses and*

l general administrative expenses will be maintained and 1

subjected to periodic review.

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Out-of-pocket expenses which are incurred for the i

j Owners will be billed at cost.

Charges for non-personnel expenses, such as for use of automobiles not assigned exclusively to the Station, will normally be computed on the basis of costs per mile.

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EXHIBIT B-I OYSTER CREEK NUCLEAR GENERATING STATION OPERATING AGREEMENT

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' l JERSEY CENTRAL POWER & LIGHT COMPANY and GPU NUCLEAR CORPORATION This AGREEMENT made and entered into this day of 1980 betweeen Jersey Central Power & Light Company and GPU Nuclear Corporation (GPUNC).

W I T N E S S E T H:

WHEREAS, Jersey Central Power & Light Company (herein-after referred to as the " Owner") owns the Oyster Creek Nuclear Generating Station located in Lacey Township, New Jersey (hereinaf ter referred to as the " Station").

UHEREAS, it is desirable and to the advantage of i

the Owner that GPUNC be engaged, under the terms and conditions hereinaf ter set forth, to operate and maintain and make any necessary repairs, modifications and additions to the Station and retirements therefrom on behalf of the Owner.

NOW THERE FORE, in consideration of these premises, the parties hereto do hereby agree as follows:

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ARTICLE 1 Services to be Provided 8

1.1 GPUNC, consistent with such written guidelines as may be jointly developed with the Owner, shall provide and be responsible for the operation and maintenance of the Station in a safe and reliable manner in accordance 1

with all applicable, lawful licenses and permits and requirements of state and federal regulatory agencies and the generation of power and energy at the Station as economically as is reasonably practicable.

" Station",

as used in this Agreement, is defined as any and all 1

real, personal and mixed property located on or forming a part of the Owner's property commonly known as Oyster Creek Nuclear Generating Station located in Lacey Township, New Jersey excluding only those f acilities which comprise the Owner's electric transmis-sion facilities extending from the high voltage side of the transformation installation.

GPUNC shall make such modifications of^and additions to and retirements from the Station as shall be consistent with its safe operation and maintenance.

Such services and construction i

may be provided by GPUNC through its own personnel or in part by others under contractual or other arrangements In I

furtherance of the foregoing GPUNC shall, on behalf of the l

l Owner, among other things:

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. (a)

Select, hire, control and discharge personnel, who will be employees solely of GPUNC, and select and retain the services of contractors and consultants.

(b)

Procure on behalf of the Owner nuclear fuel including uranium and provide for the enrichment, conversion and fabrication thereof and storage and/or disposal or reprocensing of such fuel when spent (as permitted by law or regulation).

(c)

Arrange for the purchase on behalf of the Owner of repair, modification, operating and mainten-ance materials, services and supplies.

(d)

Design, construct, start-up and test modifications of and additions to the Station.

(e)

Determine and stipulate inventory levels of material and equipment for the Station.

(f)

Keep the Owner informed in a reasonable manner concerning repair, modification, cperation and maintenance activities and additions to the Station.

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(g)

Prepare, or arrange for the preparation of, in accordance with normal and customary procedures annual budgets and forecasts for the Station's repair, modification, operating and maintenance costs, capital expenditures and retirements to l

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be submitted to the Owner for approval.

Such approval shall be required before action may be taken thereunder, provided that work required to i

prevent hazardous conditions or substantial reduction in generation may be undertaken prior to such approval with prompt notification thereof given to the Owner.

Such budgets and forecasts shall be revised from time to time to reflect material changes in circumstances.

l (h)

Perform any services and take any action, on behalf of the Owner where appropriate, related to the repair, modification, operation, maintenance, renewals, replacements, additions and retirements pertaining to the Station as may be necessary or appropriate to comply with the provisions of the Atomic-Energy Act, as amended or as it may be 2

amended, or any other applicable statute, rules, regulations, guidelines or similar criteria, and any provisions or conditions of construction permits and operating licenses or similar authori-zations granted or that may be granted in connection with Station and as such permits, licenses or other authorizations may hereafter be amended.

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In its capacity as operator of the Station and as agent for the Owner, provide communications to, and receive communications from, the Nuclear Regulatory Commission and/or any successor govern-f mental agency, as well as any other governmental I

agency having jurisdiction with respect to any aspect of the Station's operation, maintenance, repair and modification and, in such capacities, represent (or engage others to represent) the l

Owner.

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(j)

Perform, or, if deemed desirable by GPUNC, contract on behalf of the Owner with others (including agencies of Government or their contractors) for

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repair, modification, maintenance, renewals and i

replacements required to place and/or keep the Station in safe and efficient operating condition to protect the property, to conduct research and development with respect thereto and disburse or receive funds in connection therewith.

Such work-l shall be subject to norma.1 and customary GPUNC l

review and approval procedures.

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(k)

Perform any additional services pertainine to the l

Station to which the Owner and GPUNC shall have

. mutually agreed.

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. (1)

Arrange for the maintenance, in accordance with normal and customary procedures of such necessary books of record, books of account and memoranda of transactions and for the provision of such reports with respect thereto to the Owner as the Owner shall desire to meet its accounting and statistical requirements and to conform to the applicable lawful rules, regulations and requirements of all

~ regulatory bodies having jurisdiction over the Owner.

The costs for the Station shall be accumulated in a separate set of accounts.

(m)

Provide or arrange for the provision of, such i

other data or information with respect to the Station as may be reasonably requested by the Owner f rom time to time.

1.2 Matters and questions arising in connection with the repair, modification, rehabilitation, operation and maintenance of the Station which are not within the scope of the authority delegated to GPUNC under this Agreement and are,.not specifically provided for in this Ag reemen t shall be jointly determined from time to time by the Owner and GPUNC.

1.3 The costs for services provided by GPUNC pursuant to the terms, conditions and provisions of this Agreement shall be paid to GPUNC as provided in Article 3.

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. ARTICLE 2 Scheduline of Operation, Dispatch and Maintenance 2.1 During operating conditions which GPUNC in its sole judgment deems abnormal, GPUNC shall take such action as it deems appropriate for the public health and safety and the safety of personnel and equipment.

2.2 In order that the safe operation of the Station is assured, the Owner shall not effect any operating or physical changes to its transmission and distribution facilities which may affect the safe operation of the Station without prior consultation and concurrence of GP UNC.

2.3 The Owner's System Operations Department shall have jurisdiction over the Oyster Creek 34.5 KV, 230 KV l

i and any future 500 KV substations.

The Owner also shall have maintenance responsibility from the Oyster Creek 230 KV substation up to the low voltage bushings of the generator step-up and main auxiliary trans-l fo rmers.

With the concurrence of GPUNC, the Owner shall provide switching and tagging in connection with the generator step-up and main auxiliary transformers.

GPUNC shall have jurisdiction over all station service f

equipment which affects the operation or safety o# the plant.

Euch jurisdiction shall be from the low voltage side of the generator step-up transformer and the main aux iliar) transformers to the plant proper.

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2.4 GPUNC shall have operational control of the Oyster Creek 230 KV generator circuit breakers for synchron-izing upon authority received from the Owner's System Operations Department.

ARTICLE 3 Working Fund 3.1 The Owner shall establish and maintain a fund from which GPUNC shall make payments for all costs pursuant to its services and responsibilities hereunder.

The owner, in consultation with GPUNC, shall determine, initially and from time to time, during the term of this Agreement, the amount or amounts required to maintain a satisfactory balance in the fund, and shall be liable for any such additional amounts required to maintain the agreed-upon balance.

The Owner shall reimburse the fand promptly on receipt of notice from GPUNC of its obligations for reimbursement.

l 3.2 On termination of this Agreement, as hereinafter i

provided, any residual unexpended balance in the working fund shall be credited to the Owner.

l ARTICLE 4 l

l Charges, Financial Statements and Billings 4.1 GPUNC shall arrange for reporting to the Owner for each month, promptly following ?.he end of such month, by written statements the followinc:

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-g-(a)

Tne costs of repair, modification, operation and maintenance, the cost of any plant additions and retirements including applicable cost or removal and salvage, on an accrual basis, classified as 1

required to meet its obligations under Section 1.1(1) above.

(b)

A summary statement of the operation during that month of the Working Fund, showing beginning I

balance, receipts, disbursements and closing balance.

4.2 The costs incurred or accrued from all sources during each calendar month in repairing, modifying, operating, maintaining and making additions to and retiremencs from the Station shall become liabilities of the Owner when incurred or accrued and shall be borne by the Owner.

All such costs shall be determined in accordance i

with sound accounting practices, and shall include reasonable and appropriate indirect costs including l

l overheads.

In particuler, all of the services rendered hereunder by GPUNC will be at actual cost thereof.

Direct charges will be made for services where a direct allocation of cost is possible. The me thods of dete rmin-ing such costs and the allocation thereof are set forth in Appendic A hereto.

These methods shall be reviewed annta.lly and more frequently, if appropriate.

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. methods may be modified or changed by GPUNC, with the approval of the Securities and Exchange Commission, with-out the necessity of an amendment of this Agreement provided that in each instance all services rendered hereunder will be at actual cost thereof, fairly and equitably allocated, and all in accordance with the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations and orders there-under.

The Owner will be advised from time to tine of any material changes in such methods.

4.3 It is the intent of the Owner that so far as possible the Owner shall report, file returns with respect to, be responsible for and pay all real property, fran-chise, business or other taxes, except payroll and sales or use taxes, arising out of its ownership of the Station and that aur.h taxes shall be levied and assessed against the Owner.

However, to the extent that such taxec may be levied on or assessed against

. the Station or its operation in such a manner as, in the opinion of the owner, to make impossible or inequit-l able the carrying out of said intent, then such taxes shall be deemed a part of the costs of operating and maintaining the Station.

j 4.4 The Owner shall have the right, during the term of this Agreement and thereaf ter as long as the books, records and memoranda referred to in Section 1.1 shall

. be preserved, to inspect all such items and to make reasonable audits thereof at its own cost as it may deem necessary to protect its interests.

4.5 In the event the Owner shall question any statement rendered according to the provisions of Section 4.1 hereof, it shall nevertheless promptly pay the amount indicated in such statement but such payment shall not be deemed to prevent the Owner from claiming an adjust-ment of any statement rendered.

4.6 If it shall be determined that the Owner has paid more or less than the operating and capital costs of the Station for the month cove. red by such statement, an appropriate correction shall bs made by GPUNC by

. proper credit or charge, as the case may be.

ARTICLE 5 Metering, Relaving and Control 5.1 The net power generated and the power delivered to the 230 KV system is the metering at the generator leads compensated to the high side of the generator step-up transformer minus the auxiliary transformer metering.

5.2 The accuracy of the metering equipment installed to provide information under Section 5.1 above shall be in accordance with GPU Meter Standards. The meters so provided shall be tested and calibrated according to schedules arranged by GPUNC at intervals not to exceed twelve months.

Adequate notice of such tests shall be given, if requested, to the Owner so that it may have-

representation present to witness them.

Correction of inaccuracies found to exist in any meter shall promptly be made and, if appropriate, such correction shall be retroactively applied to the extent necessary to carry out the inte.nt of this Agreement.

-3 Settings, calculations and test procedures for relays, telemetering and associated control equipment in the plant and substation shall be determined by mutual agree-ment betwaen appropriate representatives of the Owner and,GPUNC.

Test schedules shall be jointly agreed upon by the Owner and GPUNC and adequate notice of such tests shall be given, if requested, to the Owner so it may have representation present to witness them.

ARTICLE 6 Compliance with Provisions of Permits and Requirements of Governmental Agencies 6.1 The Owner and GPUNC shall cooperate in taking whatever j

action may be necessary to comply with the terms and provisions of permits and licenses for the Station and with all applicable lawful requirements of any Federal or State agency or regulatory body having jurisdiction in the premises.

ARTICLE 7 Damage to Persons or Procerty: Penalties: Fines 7.1 Since GPUNC is undertaking its responsibilities here-under at cost end in order to assist the Owner in meeting their responsibilities with respect to the I

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. Station, the following provisions shall be applicable to damage to the property of any or all the parties hereto (including Station property) or third parties, or injuries to or loss of life by any person, including employees of the parties hereto, and to penalties or fines assessed with respect to the Station:

(a)

The Owner and GPUNC will procure and maintain such physical damage, public liability, workers' compensation and other insurance as it may deem appropriate with respect to all losses, damages, liability and claims arising out of its ownership or the operation of the Station and provision of t

services hereunder and the premium costs thereof shall be Station costs under Section 4.2, or, in the alternative upon concurrence of each party hereto, the Owner and GPUNC will jointly procure and maintain such physical damage, public liabil-ity, workers' compensation and other insurance as they may deem appropriate with respect to all losses, damages, liability and claims arising out of its ownership interr.st or the operation of the Station and provision of services hereunder and the premium costs thereof shall be Station costs under Sect ion 4.2.

All insurance shall contain a waiver of subrogation clause against the other party hereto.

. (b)

Claims cognizable under workers' compensation acts or temporary disability benefits laws or any other benefits under workers' compensatien or analagous statutes and the expenses of defending or dispos-ing of the same, attributable to the ownership or operation of the Station, which are not covered in full by insurance procured in accordance with the preceding paragraph shall (to the extent not covered by such insurance) be treated as Station costs under Section 4.2.

(c)

All 'osses, damages, expenses, penalties, liabilities, fines and claims (including those in respect of property damage and personal injury) asserted by third parties and the expenses of defending or disposing of the same, attributable to the ownership or coeration of the Station, which are not covered in full by insurance procured in accordance with the second preceding paragraph shall (to the extent not covered by such insurance) be treated as Station costs under Section 4.2.

(d)

Each of the parties hereto expressly waives any right it may have to recover from the other party hereto for any losses, damages, penalties,-

1 liabilities, fines, claims or expenses (including damage to property of the Station) for any cause j

including the negligence of the other re;ty hereto, its employees and agents in connection r

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. with the operation of the Station and the provision of services hereunder.

ARTICLE 8 Miscellaneous 8.1 Nothing in this Agreement shall be deemed to create or constitute a partnership, joint venture or association among the parties hereto, the sole purpose of this Agreement being limited to provision for the orderly and efficient repair, modification, operation and i

maintenance of the Station.

8.2 The Owner hereby designates its President as its Representative, who shall receive notices and communica-tions from GPUNC under the provisions of this Agreement and who shall send to the designated Representative of GPUNC all notices and communications under the provis-ions of this Agreement.

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8.3 GPUNC hereby designates its President as' the GPUNC Representative, who shall receive notices and communica-l tions from the Owner's Representative under the provis-ions of this Agreement and who shall send to the Owner's Representative all notices and communications concerning the provisions of this Agreement.

I 8.4 The Owner shall determine the basis and method 1r will use for purposes of depreciation and other matters where investment in Station property is relevant.

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. 8.5 In performing services under this Agreement on behalf of the Owner, GPUNC shall act as an independent contrac-tor responsible for the result to be attained, cons is-tent with such guidelines as may be jointly developed with the Owner.

ARTICLE 9 Effective Date and Termination 9.1 Subject to any applicable rules and regulations and associated approvals c# any regulatory authority, this Agreement shall becemc effective as of the date first above written and shall remain in full force and effect unless and until terminated.

9.2 This Agreement may be terminated by the Owner upon reasonable notice to GPUNC provided that adequate provision is made to protect the public health and safety.

ARTICLE 10 Successors and Assions 10.1 This Agreement and all of the terms and conditions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Any mortgage indenture trustee which shall foreclose on substantially all of the electric utility properties of the Owner, including the interest of the Owner in the Station, may, at its own election, be deemed to be a successor and assign of the Owner under this Agreement.

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. ARTICLE 11 Governing Law 11.1 This Agreement has been executes and delivered in the State of New Jersey and is intended to be construed in accordance with, and to be governed by, the laws of that State.

IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed and delivered in Parsippany, New Jersey as of the day and year first above written.

ATTEST:

JERSEY CENTRAL PCWER & LIGHT COMPANY By Secretart President ATTEST:

GPU NUCLEAR CORPORA

ION By Chairman

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ML19341A998

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