ML20035F949

1992 Annual Rept, for TMI-1 & 2 & Ocnpp

ML20035F949
Person / Time
Site:	Oyster Creek, Crane
Issue date:	12/31/1992
From:	Leva J GENERAL PUBLIC UTILITIES CORP.
To:
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ML20035F948	List: ML20035F947 ML20035F949
References
NUDOCS 9304230115
Download: ML20035F949 (46)

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Revenues General Pubbr Unihris Corporauun und Subsdiary Ca>rrirenin Teams with a common goal achieve great results.

From the Marines raising the Stars and Stripes at Iwo Jima to the women's U.S. Olympic team taking the gold in the 4x100-meter relay in Barcelona, successful teams are driven by dynamic energy that surpasses 7;;,.. < - ;. 1 individual performance. At GPU, we blend the diverse talents of our employees in strong teams to provide the greatest value for our customers and our shareholders, customer sales by operatin, company i

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._1 GPU Financial Summary l

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1992 1991*

Change Financial Data (in Millions)

Operatmg revenues

$ 3,434

$ 3.372 1.9%

0;wrating income 450

$ 417 H.1 W Retum en Equity Net income 252

$ 276 (8.8% )

Operating Data (in Thousands)

Megawat -hour sales to customers 39,262 39.592 (0.8W )

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Customers sermi at year-end 1,901 1,879 1.2W

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Common Stock Data r

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Earnings per share

$ 2.27

$ 2.49 (H.8%)

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$ 1.575

$ 1.45 MIA t

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$ 21.46

$ 20 81 3.1 W

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Closing market price per share

$ 27 %

$ 27%

1.49 Market price to book value at year-end 129 %

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Return on average common equity 10.7%

12.07f Results for 1991 reflect an increase in earnings of $0.53 per share ($58.2 million) for the cumulative edect of an accounting thange for unbilled revenues and a decrease in earnings of

$0.51 per share ($56.2 million) for estimated costs to prepare TMI-2 for monitored storage

($33.8 million) and for TMI-2 decommissioning costs not considend hkely to be recovered from customers ($60.0 million).

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To Our Shareholders:

1992 was marked by significant challenges at GPU. Externally, we experienced continued pressure from the recessionary economy. Internally, we began the positive process of reassessing our corporate vision, values and ss. tegk plans for the future.

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Both the dormant economy and mild weather took their toll on our 1992 finan-cial results. With r latively flat customer sales growth, net income was $252 million, down from $276 million a year ago. Earnings per share for 1992 were $2.27, down from $2.49 for 1991.

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We increased the dividend on the common stock by 7 percent last April to an annualized rate of $ L60, providing a higher cash return to you. The yield on our l

"T stock is now comparable to that of the industry.

. ^< /h, im Iooking ahead,I believe we can expect some exciting developments for two i

reasons: as the economy shows signs of recovery, we plan to follow through on o/thi, o a,, rap <at opportunities that fit within our expertise. Secondly, we're rethinking our internal r, a m n,a 4 practices to energize our employees and our whole approach to business.

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crafting a vision The survival of any business depends on its adaptability in an

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the face of uncertainty. We are crafting a mp rate vision that will guide us as we

, o a < < uy a u a r iu,nph, o shape our destiny. This vision integrates of 4 ad, i.ber a u,/

our values, purpose and mission so that all a,utmua,suani employees can work together more effectively toward common goals.

In addition to these internal changes, we have undertaken a Systemwide initiatise to encourage employees to volunteer in their local community schools.

l Partnerships with area schools benefit GPU not only by investing in the students who will be our future workforce, but also by providing opportunities for our employees to share their talents, experience and professional skills in a highly effective setting. We are committed to making a positive contribution to the children we reach.

The theme of this year's report-teamwork-reinforces an essential element of I

our vision. We're creating an atmosphere of leadership and empowerment, where each employee is essential to our success and is responsible for sharing ideas and insights on new, better ways to run the business.

1 Managing the Business in 1992, we continued to see the bene 6ts of our comprehensive Expenditure Analysis Program. As a result of our increased efficiencies and consolidation efforts, we have reduced operating expenses throughout

the System by about $115 million since 1987. While our maior consolidations are Emmings Per Share now in place, we continue to seek opportunities for long-term cost savings in our operations.

I am particularly pleased that both of our nuclear facilities ran safely and at fff3 production levels above the industry average during 1992. Oyster Creek nuclear d f h i;h h station achieved its best annual operating performance in 23 years, with an 84.5

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i4_ZA1 Our fossil-fuel stations performed exceptionally well, with an average 84 percent equivalent availability factor.

Our concentration on ef6ciency and top performance in all areas of the business enable us to serve our customers reliably and to ensure you that your investments are safeguarded. The interests of both provide strategic balance to our business decisions-that's the reality of the '90s.

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Our commitment to you and to our customers is stronger than ever.

New Playing Field last fall, Congress passed comprehensive new energy legislation, the Energy Policy Act of 1992. This legislation adds its own direction to the long list of changes that are occurring in the electric utility industry.

In areas such as transmission access and independent power production, we're in a whole new arena. Competition is a reality. I believe the new law will open up the marketplace, allowing us to secure even more low-cost energy options for our e

customers.

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We are preparing for these sweeping changes in numerous ways. In fact, we have created a new department speci6cally dedicated to strategic planning for the GPU System. We view the '90s as an exciting time to be in this business.

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We welcome the developments in our industry as opportunities for GPU. We are not simply waiting for the weather-or the economy-to change. We are 6nding ways to capitalize on the changes that will inevitably happen.

naarket vakse vs. s k value I want to thank my fellow employees, our Board of Directors and you, our shareholders, for your support and con 6dence during my first year in office. I'm privileged to be working in partnership with you as we face the years ahead.

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James R. Leva Chairman, President and Chief Executive Of6cer March 15,1993 1

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customers at yearens CPU at a Glence People providing people with energy to meet today's needs and realize tomorrow's l

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. dreams-that's GPU's purpose for being in business.

J hE-With 1992 revenues of $3.4 billion, General Public Utilities Corporation is I

one of the 20 largest investor-owned electric utilities in the nation. GPU owns all g

fh the common stock ofits three operating subsidiaries: Jersey Central Power & Light g6kfh' Company (Jersey Central) in NewJersey, and Metropolitan Edison Company

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l (Met-Ed) and Pennsylvania -

Electric Company (Penelec) in Pennsylvania.

GPU's other key subsidiaries are GPU Nuclear Corporation, operating the System's nuclear b; -

7 TW sa facilities at Three Mile Island and Oyster Creek, and GPU

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9 Service Corporation, providing.

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support services to the GPU 4.

System companies. General g

Portfolios Corporation is the par-ent of the System's non-regulated

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subsidiary, Energy Initiatives, Inc., a company that specializes in developing and operating nonutility generating facilities.

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The System's 12,000 employees provide energy to 1.9 million customers in a s

service territory covering about half of Pennsylvania and NewJersey.

Using a combination of coal, nuclear, gas, hydroelectric and oil fuels, GPU's

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- own generation is capable of producing about 6,700 megawatts of electricity. We Nuclear Plant Performar ce purchase about 2,300 megawatts of electricity from other utilities and an additional 1,100 megawatts from nonutility suppliers.

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Jersey Central Power & Light Company With operating headquarters in li

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Morristown New Jersey, Jersey Central provides power to nearly 900,000 customers

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in a service territory covering 43 percent of the state. Jersey Central's sales to

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. customers were nearly 17,000 gigawatt-hours in 1992, or 43 percent of GPU's System sales. With newly implemented demand-side management incentive regula-tions going into place in the coming year, the company will significantly accelerate

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Photo above, from left: Dc nois Baldawari, president and t hief oprating o&cer ofjersey Central Power

& Light Company; Philip R. Clark, president and chief executive ofiker of GPU Nudear Corporation; Fred D. Hafer, president and chief operating offker of Metropolitan Edison Cornpany; and Robert L Wae, 4

president and chief operating officer of Pennsylvania Electric Cornpany.

its efforts to assist customers in improving their energy efficiency and controlling system peak demand. Jersey Central's DSM programs provide incentives for cus-tomers and stockholders and assist in customer retention.

Metropolitan Edison Company Closely linked to the communities it serves, Afer-Ed has a reputation for having a strong customer focus in its 3,274 square-mile service territory. Mer-Ed people take pride in their volunteer imolvement, giving their own time to health, education and human services projects in their communi-ties. Although customer growth in Met-Ed's sector has recently slowed somewhat, it has increased over the past five years by 10 percent, the highest growth rate in the GPU System. Headquartered in Reading. Pennsylvania, Mer-Ed continues to explore innovative uses of electrotechnology for the businesses, hospitals, schools and manufacturing customers it serves.

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Covering about 40 percent of

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within the GPU System. Agribusiness, j [M M

manufacturing and mining form the kN I

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economic base of this largely rural region. Penelec supplies 559,000 residential, commercial and industrial customers, with electric costs among the lowest in the Commonwealth. Based in Johnstown, Pennsylvania, Penelec owns or operates plants with more than 7,000 megawatts ofcapacity and bums about 16 million tons of coal annually.

GPU Nuclear Corporation GPU Nuclear oversees operations at Three Mile Island Unit 1, bcated near Harrisburg, Pennsylvania, and Oyster Creek Nuclear Generating Station, Forked River, New Jersey. The two plants generated a record amount of electricity in 1992. TMI-l's capacity factor was 100.5 percent. Oyster Creek's 84.5 percent capacity factor included the scheduled refueling and maintenance outage that began in late Novemlwr. The industry average was about 69 percent. Oyster Creek set a ; lant safety record, surpassing two million hours without a lost-time accident. TMI-l received its second Award of Excellence from the Institute of Nuclear Power Operations.

Stepping Up to Change The electric utility mdustry faces monumental changes in the coming years.

The comprehensive Energy Policy Act of 1992 has created a context for signiG-cant developments in our industry. Several key provisions have direct bearing on our plans and operations at GPU.

M Speci6cally, the Energy Act allows more independent power producers to compete in the utility marketplace, and so opens up more supply options to us. Our customers will M

be the ultimate bene 6ciaries of this increased competition because their rates are expected to be lower as a consequence.

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At the same time, Energy Initiatives, GFU's entrepreneurial subsidiary in the independent power market, is now in a better position to compete as an energy supplier.

Moreover, the Energy Act speciGes conditions under which we can be directed to h

provide transmission access to others over our power lines. Rather than reacting with alarm to this mandate, GPU is actively working with other I

companies to forge beneGeial agreements within regulatory limits. Through a broad-based group, the Interregional q

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Transmission Coordination Forum, GPU is working with r?e -

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others to resolve transmission issues that arise.

Another key area of the Energy Act addresses energy efGciency and conservation. Our three operating companies, Jersey Central, Mer-Ed

..n < pa qu.ani and Penelec, have a variety of demand-side management programs for residential, commercial and industrial customers that promote conservation and environmental

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responsibility.

Last fall, Jersey Central received regulatory approval E for its extensiv

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incentive earnings, this program constitutes a major initiative for us in 1993. While awaiting regulatory action 1,a un, t A u, ru.< u E" *

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• E N,,,, s t,o p,o. a r,, u ahead with these programs.

Managing demand conserves natural resources while lowering our customers' electric bills.

Photos above, from top: (Il Paramount to our energy supply are the transmiuson and distribution lines that transport power imm our pianu, to our customers (2) The Elec tric W hnle Recharging $tation made irs only stop in New Jersey last year ut Jersey Central headquarters. (3) Energy f rutiatives' team reviews fuel o;erations at our Wrtal (openeration plant in NewJersey.

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Balancing Our Ensrgy Options Through a thme-pronged supply strategy of building generation, buying power and conserving energy, GPU delivers energy to its customers upon demand.

First, we build capacity by adding combustion ruibines for peak demand, by refurbishing and upgrading our existing generating units and, as the need arises, by constructing new baseload generating plants.

Reliable, reasonably priced power is the foundation of our customer service philosophy. By keeping existing generating facilities well-maintained, we ensure a continued

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reliable power supply. At Afet-Ed, a project team is over-

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.g hauling all 14 combustion turbines which contribute a total

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of nearly 300 megawatts toward meeting supply requirements.

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Last year, the coal-fired plants Penelec operates for our System and for other utilities recorded a total of 22 months in which they achieved the one-million megawarthour mark, a principal indicator of successful performance.

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On the nuclear side, the combined generation of Three

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Afile Island Unit I and the Oyster Creek Nuclear

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Generating Station was greater in 1992 than in any previous

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year. In addition to its excellent operating record, Oyster

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Creek marked another first. As part of our program to control costs and increase effectiveness. GPU Nuclear employees

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. am developed most of the project specifications for the plant's 11-week refueling and

, % s/,,,,mr maintenance outage. We previously relied on contractors for this work.

Second, we buy power from both utility and nonutility generators when it is our p ' /,/. /m. m.. 4/ o most economical option. Competitive procurement programs in both NewJersey and J R < u J ! s, Pennsylvania will pmvide an additional 200 megawatts of capacity for Afer-Ed and about 150 megawatts of demand m,,. s/.W 6/ -

reduction or additional capacity forJersey Central.

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Another element of our supply plan is our proposed

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GPU-DQE project would add a 268-mile transmission line bW l '

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\\ l,b am and 500 megawatts of power to our system. The contract with Duquesne has been h

revised to reflect lower fuel prices and respond to lower-cost purchased energy.

Because of the amount of power we are purchasing and the opportunities available to us to rebuild some ofour existing generating units, our strategy now emphasizes maintaining the option of utility ownership of new facilities.

Photos above, from top:(I) At sunnse. Penelen Keystone Station is u;rraung at full power to help nurt our customers' ncrds. (2) Oyster Creel employees this year < elebrated the plant's m ud u hinements in huh generation and safery. (3) *Dil.I's refxhng outare mju red the axperation of dozens of nuch ar teams.

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Our third strategy-to save energy-is evident in our various conservation programs. For example, as a result ofits demand-side management incentive plan, Jersey Central anticipates saving about 58,000 megawarthours in the next two years in customer energy consumption. Additionally, we expect to realize a reduction in summer peak load of about 37 megawatts and to earn a performance-based incentive.

nd Our operating companies also offer incentives to

~ business and industrial customers who install energy-eflicient k4 electric equipment. By working with our energy teams, one A

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financial services company received a $71,000 rebate check and is saving $35,000 annually in its electric bills.

Preserving Our World New standards for air quality tmder the Clean Air Act of 1990 demand that all electric utilities become more innovative in protecting the g

environment while generating energy. Teams of GPU employees are dedicated to refining strategies and technologies to comply with these regulations.

Our most ambitious project is a flue gas desulfurization (or " scrubber") system under construction at Conemaugh

.{Lgf Station. Designed to reduce sulfur dioxide emissions by 1

more than 90 percent, the scrubbers on Unit I will be f

W. an operational in 1994, with Unit 2 following a year later.

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Penelec discovered an innovative way to recycle the fly ash waste from Keystone Station's coal units by using it as an ingredient for the u ha t u r n paarvdh do 525-foot-high concrete stack and its foundation at Conemaugh.

Another Penelec innovation, a fuel compound made up of coal-water slurry and I m /4 Ha o

pulverized coal will be rested at the Seward Station this spring. This technology con-Hol slH sis t.

verts very Sne coal, usually discarded as waste by the industry, hur a bahlt into a usable low-emission fuel. We also will be switching to lower sulfur Pennsylvania coal at Shawville Station.

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Renew America, a national organization that recognizes

[U successful envitunmental pmgrams, honored Penelec for its b toi4 M

C Keystone and Conemaugh ash!mine refuse disposal projects and its Shawville wastewater treatment system.

Met-Ed was honored by the Electric Power Research Institute for the strobe light 3

system it instalk d at York Haven Power Station to prewnt shad from entering the i

underwater rurbines during their annual migration down the Susquehanna River to the Atlantic Ocean.

Photos above, from top: (111.rrw crews respond to an emerge ncy m Towanda, Pa. f 2! Conemaugh 5tation's %crubler' proie< t is our most ambitious ennronmental response tn the Clean Air Act of 1990.

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!U O! GPU Nutlear tet hnioan tests samples at TMI.I's erwironmental laboratory.

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At Tall-2, we agreed to provide fundix for a citizens' group established to monitor plant radiation releases. This agre.nent helped fulfill the last regulatory requirement for placing Unit.

"ing-term monitored storage, now scheduhl for the fall of 1993, and will be ano: _ enajor step in putting the 1979 accident behind us.

GPU Nuc: ear continues its extensive monitoring programs around TMl and Oyster Creek. These programs use state-of-the-art radiation

?

j monitors to sample water, air, milk and even vegetables y

.pl[,

gmwn in the vicinity of the plants.

+

- O g

u yg Our commitment to protect this world we call home is ill.

Y a

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unshakable.

<J d

- A Working in Partnership with Our Customers With regulatory restrictions h>osening and competitors threatening our markets, we are acutely aware that we must stay focused on our customers. As part of our commit-ment to customer service, we have established mutually beneficial customer partner-ships. Several industrial customers expanded their operations under Penclec's economic development rate, it. creasing our annual revenues by about $8 million.

On the residential front, we have incorporated a highe 7

ievel of telephone and computer technology into our customer i',

C 1

m service operations. Both Met-Ed and Jersey Central are now gi offering customers more efticient voice response reporting to mAi track hical power outages.

For the second consecutive year, the Pennsylvania PUCs consumer bureau named Penekc and Met-Ed as two of the best performing utilities in the state. Both companies were praised for responsiveness to consumer complaints, successful colkc-

.- tion efforts, contpliance with consumer protection regulaticus

y

$g,, r] and effective management ofcustomer service operations.

M.

O b *s Met-Ed's business office employees practice a philosophy

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,- for having one of the four best business offices in the nation.

db, y 7 5h@r,,,&M While the motivating ideas behind this successful progra are " Teamwork, Learning and Communications," there's an equal measure of

" Tender Loving Care" that goes into the formula.

At GPU, customer service is our top priority. It must be.

Photos above, from top: Oj Planning for the future needs of our customers requires conferences by a var cry of energy tet brucians at GPU N rvice Corporation. (21 U.S. Cycling Federation's Oly. pic Trials in Altoona, Pa., were aided by Peneled corporate sponsorship and employee involvement. (3/ Jersey Central line crews worked around the t h,tk in early Dnember follow ing the " storm of the century" to restore vrvise to 250,000 customers.

Anticipating Our Future As technology evolves to keep pace with the expand-ing energy uses and requirements our customers are facing, we find ourselves on the threshold of a vastly different world.

Envision the homes, businesses and industries of the next century: the simplest tasks will be accomplished more quickly and efficiently through cordless electric pMW P6T] appliances and microwave technology. Communities will be 7 built around thermal storage facilities. Among other innovations, textile and automobile manufacturers will use electrotechnology to dry fabric and paint in seconds. Utility j

linecrews will repair power lines using robotics. Fiber optics will greatly improve our ability to monitor and i

8 maintain our electrical systems, as well as increase our ability to communicate T

with our customers.

wu I

Impossible? No. These are just some examples of new technologies being tested or refined at the present time.

U.S. and foreign automobile makers, for example, expect electric vehicles to be commercially available before the end i

of the decade. Running on rechargeable batteries rather than internal combustion engines, these vehicles could reduce h

their major pollutant emissions by as much as 97 percent.

EN===-

Jersey Central is one of 15 utilities nationwide } romotitig cordless electric lawn mowers. In a contest last fall,100 customers were selected to exchange their old gasoline mowers for clean, quiet, battery-operated models. A fully charged mower cuts about I/4 of an acre and costs about $4 for the season.

Another important development in our plans for the future involves seeking ways to broaden our business horizons. We will continue to explore options to expand our businesses into energy-related ares where we can put our expertise to its best use. Energy Initiatives is actively pursuing opportunities to expand GPU's business scope in the field of energy supply. With projects in New York, New Jersey and California, El is

-/

applying its experience in developing and operating power production facilities.

Our expertise in the energy business, our unshakable commitment to our customers and our vision for the future-this is our formula for success.

This is GPU today.

Photos above,imm tops (1) Met-Ed surveyor koks tom ard our future tninsmission needs. (2) Linemen review plans hefore upgrading equip went at a Mer-Ed substation. (3) Penelec employees monitor and control power supply using one of the most sophisticated t.ransmasion and distribution system mapboards in the nanon.

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General Pubk l'olitan Loquranun and Subidiary Com;wmn Shareholder Notes

?

Dividend Reinvestment 1993 Annual Meeting Transfer Agent More Inforenation General Public l'tilities The Annual Meeting of Chemical Bank Copies of GPU's System Corporation offers record Stockholders of General P.O. Box 24935 Statistics and the holders of common stock a Pub!ic Utilities Corporation Church Street Station Corporation's 1992 Annual convenient and economical will be held at 2 p.m. EDT, New York, NY 10249 Report to the Securities and way to purchase shares of May 6,1993, at The (800) 647-4273 Exchange Commission on GPU stock directly from the Metropolitan Museum of Art, Form 10-K will be available company without paying Grace Rainey Rogers Transfers also can be after March 31,1993 typical brokerage fees.

Auditorium, Fifth Avenue at hand-delivered to:

82nd Street, New York, NY.

Chemical Bank

Contact:

Pian features include:

Securities Window investor Relations Full reinvestment of Dividends Street level General Public Utilities f

=

dividends Dividend declaration dates 130 John Street Corporation Purc hase of shares are the first Thursdays of New York, NY 10038 100 Interpace Parkway rnrough optional cash December, April, June and Parsippany, NJ 07054-1149 l

investments October.

Guarterly Report Mailing (201)263-6600-Safekeeping services for to Brokers Eliminated i

stock certificates The record dates for the divi-Beginning in 1993, GPU will if you receive more than one dends fall on the last Fridays eliminate mailing quarterly copy of the GPU Annual i

l For rnore information and inJanuary, April, July and reports to brokers for distribu-Report because of multiple l

an application, please October.

tion to their clients in order to accounts, please send the back l

contact Chemical Bank or save mailing and handling cover of the extra copies to:

our Investor Relations The dividend payment dates fees.

Chemical Bank l

Department.

fall or. the last Wednesdays of PO. Box 24935 l

Fchruary, May. August and Stockholders with brokerage Church Street Station November.

accounts who wish to contmue New York NY 10249 receiving these reports should General Public Utilities is contact the Investor Relations hsted as GPU on the New Dcpartment.

l l

York Stock Exchange.

~

[

On December 31,1992, there I

were 51,350 registered l

l holders of GPU common stoc k.

l 1

I t

b I

i i

I GPU Conwnon Stock Prices dt.ph hm. m a.11aru l

(,

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2c,1 2n ?n g

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r-l 16

General Pubbt Utdmes Corporanon and Subsahary Companies Selected Finnncial Data For The Years Ended December 31, 1992 1991*

1990 1989 1988 1987 Common Stock Data Earnings per share 2.27

$ 2.49

$ 2.51

$ 2.50

$ 2.38

$ 2.06 Cash dividends paid per share

$ 1.575

$ 1.45

$ 1.25

$ 1.00

$.675

$.225 Book value per share

$ 21.46

$ 20.81

$ 19.83

$ 18.63

$ 17.44

$ 15.74 Closing market price per share

$ 275

$ 2714

$ 22 %

$ 23%

19

$ 14 %

Common shares outstanding:

Average (In Thousands) 110,840

.110,798 110,763 112,764 119,451 125,727 At year-end (In Thousands) 110,857 110,815 110,775 110,747 116.045 125,727 Market price to book salue at year-end 129*4 131W I15 %

1279E 109%

90 %

Price / earnings ratio 12.2 10.9 9.1 9.4 8.0 6.9 Return on average common equiry 10.7%

12.07 12.9 %

13.8 %

14.2%

13.8 %

Financial Data (In Thousands)

Operating revenues

$3,434,153

$3,371,599 $3,m4,224 $2,991,727 $2,870,238 $2,718,131 Other operation and maintenance expense 856,773 891,314 834,455 843,550 892,199 868,350 Net income 251,636 275,882 278,234 282,464 283,786 259,097 Net utility plant in service 5,244,039 5,064,254 4,833,045 4.537,154 4,261,512 4,081,162 Cash construction expenditures 460,073 467,050 490,546 486,911 441,408 458,148 Total assets 7,723,355 7,401,301 6,927,907 6,686,241 6,415,405 6,278,915 Obligations under capital leases 192,883 213,054 210.720 218,277 218,341 205,834 long-term debt 2,221,617 1,992,499 1,935,956 1,867,553 1,727,914 1,668,763 Cumulative preferred stock with mandatory redemption 150,000 100,000 100,000

• Results for 1991 reflect an increase in carnings of $0.'3 per share ($58.2 million) for the cumulative effect of an accounting change for unbilled revenues and a decrease in earnings of $0.51 per share ($ 56.2 million) for estimated costs to prepare TMI-2 for moratored storage ($ 33.8 million) and for TMI-2 decommissioning costs not considered likely to be recovered from customers

($60.0 millionL 1992 Operating Companies' Statistics JCP&L Met-Ed Penelec GPU Operating revenues (In Thousands)

$1,774,071

$ 821,823

$ 696,337

$3,434,153 Total assets (In Thousands)

$ 3,879,521

$1,811,689

$ 1,903,075

$7,723,355 Megawatt-hour sales mix:

Residential 39%

35 %

29%

35*A 0

Commercial 377e 26 %

29%

32*4 Industrial 22 %

36 %

37W 30*/o Other 29 3%

5%

3%

Cucomers at year-end (In Thousands) 897 445 559 1,901 Megawatt-hour sak s to customers (In Thousands) 16,837 10,123 12,252 39,262 Peak loads (In MW) 4,149 1,845 2,355 8,067 Number of employees 3,434 2,328 3,551 11,969 17

Gnwral Publu i% hon Cor;craoon and Submhary Gemgurun Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operatioris residential and commercial sectors in the New Jersey and eastern i

Pennsylvama serme terntones, while the dampening effects j

In 1992, earnings pet share were $2.27 mmpared to $2A9 per of the economy continued to impact wstomer usage in the share m 1991 and net inmme dureased $24.3 milhon to $251.6 western Pennsylvania service territory. The GPU System million. The dec rease m earnings was principally due to a anticipates annual i

reduc: ion m customer sales resulting from the m. d summer d

gru Customer Sales seather m 1992 as mmpared to 1991 mhen the GPU System s by Customer Class sales of about service territones experienced significantly warmer-than-normal danub u M m 1.5W over the temperatures. Increases in depreciation and financing costs next two years.

"4 e

",m wc associated with additions to utility plant also wntributed to thc.

y,

f reduction m earnings per share. These dnreases were partially 1991 ofIset by increased revenues from new residential and commercial KWil rnenues

- int 7 7'a Op customers. The earnings comparison also reflects the absence increased in 1991 g'

g in 1992 of a nonrnurring credit with respect to a c hange in due to weather

~

-~

y accounting policy resuhmg in the recognition of unbilled effecu and a OFI 3

t y @7 rnenues in 1991 of $0.53 per share and a c harge of $0.51 per increase in the Q

.W 5

~

share for certain Tall-2 msts. In April 1992, GPU increased its average number of g

quarterly dividend by 6.77 from $0.375 to $0.40 per share.

customers. New

$,,,,y y

GPU's return on average equity was 10.79 for 1992 as compared customer growth to 129 for 1991.

oc curred in the BN=***

residential and h=aa W Net income for 1991 was $275.9 million, compared to a u,a commercial

.$27K2 milhon in 1990. In 1991, increased revenues due to sectors, u hile non-warmer-than-normal summer weather, the effect of a base rate weather relateo usage per customer durcased m. the NewJersey increase at JCPAL and an increase in customer additions were and eastern Pennsylvania service territories due to economic substantially on~ set by higher reserve capacity expense and capital

~

wnditions.

costs. In 1990, the favorable ettan of the gmwth in the number of customers and increased non-weather related usage per

. Rau anam customer were offser by inc reased reserve capacuy expense, 1991 capitd costs and Pennsylvania taxes.

In November 1990, the NewJersey Board of Regulatory Commissioners (NJBRC) issued a rate order authorizing an Res enues:

i increase of $95.5 million inJCPAL base rates, or approxitnately 1

Total rnenues increased 1.9% to $3.43 bdlion m 1992 after 6T annually. The 1991 increase reflec ts the full annual impact of increasing 84,a. to $3.37 bilhon m. 1991. The mmponents of

'"'#""""****P*'"

rbese changes are as follows:

• En g m m a tin nihnno 1992 and 1991 Changes in energy revenues do not affect net income as they Kilowatt. hour WWW revenues reflnt corresponding changes in the energy mst rates billed to sexcluing energy prtion)

$(29.9)

$ 399 customers and expensed. Energy revenues increased in 1992 and Rate mcreasm 91.2 1991 as a result ofincreases in the energy cost rates in efTect. The Energy revenun 72.5 92.9 increase in 1992, however, is principally due to a 667 increase in Other revenues 20.0 04 electric sales to other utilities.

Increase m revenun

$ 62.6

$2674

• Odwr mrnan 1992 and 1991

• Kdeuan4ur merua Generally, changes in orher revenues do not affect net income as 1992 they are offset by corresponding changes in expense, such as taxes i

KWH revenues decreased primanly due to mild weather during other than inmme taxes. However, other revenues increased the third quarter of 1992 as compared with warmer-than-normal in 1992 as a result of a timing difference in the receipt of weather durmg the same penod in 1991. This decrease was Pennsylvania tax surcharge revenues received during the year for partially offset by a 1.2% inc rease in the average number of state tax increases enacted in the third quarter of 1991. The customers and a slight increase m non-weather related usage.

increase in other revenues in 1991 includes $ 38 m liion of New customer growth occurred mostly in the New Jersey servue revenue taxes primarily as a result of rate increases and territory in the residential and commercial sectors. The inc rease Pennsylvania state tax inaeases.

in non-weather related usage was reflected primarily in the 1

18

cencrat Pubbt vohnes n>rn,mmn amt wbsahary n.mponies Operating Expenses:

Interest Charges and Preferred Dividends:

• Pauerturdwelandintmhanged I992 and 1991 1992 Interest on long-term debt increased in loth years pnmarily due Power purchased and inten hanged increased in 1992 as a result to the issuanc e of additional long-term debt. offset partially by of an increase in nonutdity generation purchases offset partially decreases associated with the refinancing of higher cost debt at by a reduction m purchases from other utilines.

lower available interest rates in 1992 and 1991. The decrease in 1991 other interest for both years is a result of a lower federal income The musse is due to mcreased energy and capacity costs tax deficiency accrual level as tax deficiency payments relating to resulting from per purchase contracts entered into by JCP&L the 1983 and 1984 tax years were made in 1991. Other interest and Met-Ed. Not all of these increased capacity costs are u as also affecrtd by a reduction in the average level of short-term recovered through the energy clauses.

borrowing outstanding and lower short-term intenst rates.

Preferred dm..dends m. creased m. 1992 due to the issuance of

• Oeer operarius and maintenana preferred stoc k in 1992.

199'7 Liquidity arid Capital Resources The decrease a. due largely to he absence of $33.8 million of s

estimated costs recognized in 1991 for prcparing the TMI-2 Capital Needs:

plant for long-term monitored storn;e. Excluding that amount, The GPU System's capital needs were $514 million in 1992, other operation and maintenance expense remained relatively consisting of cash construction expenditures of $460 million and stable m 1992 as a result of a tight control on costs to offset the amounts for maturing obligations of $54 mdl;en. During 1992, etTects of inflation.

construction funds were primanly used to continue to mantain and improve existing Orher operation and maintenance expense increasal primarily as generating facilities Cash Coristructiott and add to the Expenditures a result of the recocnitmn of $33.8 million of estimated costs for

• -"d"'"*'"

transmission and preparing the TMI-2 plant for long-term monitored storage and unanacipated costs associated with a scheduled Oyster Creek distributma system.

w'.

Construction outage.

r a w

er[rnditures are m W M,

• Dcynciarian andamorti.anun estimated to be $582 l

1992 and 1991 million in 1993.

W Depreciation and amortization expense increased $ 10.8 mdlion Expenditures for l

and $9.4 million in 1992 and 1991, n spec uvely, due to addi-maturing debt are

_ _[([W((_

E tions to utility plant, exdusive of a $60 million charge in 1991 expected to be $29 for certain TM1-2 decommissioning costs. In December 1991, milhon for 1993 and WW WW Mer-Ed nd Penekc expensed their portions ($40 million and

$168 million for

$20 mdlion, respectively) of the radiological decommissioning 1994. In the mid of TMI-2 costs not considered hkely to be recmered through 1990s, const raction raremaking. Addinons to utility plant primanly consist of expenditures are exptted to include substantial amounts for additions to existing generating facilities to enhance system clean air requirements, a major transmission line, the acquisition reliability and additions to the transmission and distribution or construction of baseload generation and other system needs.

system related to new customer growth.

Management estimates that approximately twonhirds of the

• Taxes, other than inwme taxa GPU System's 1993 capital needs will be satisfied thmugh 1992 and 1991 mternally generated funds.

Generally, changes in taxes other than income taxes do not The Subsidiaries

• capital leases consist primarily of leases for significantly affect earnings as they are substantially recovered nudear fuel. These nuclear fuel leases are renewable annually, in revenues. However, the 1991 inc rease, which is primarily subject to certain conditions. An aggregate of up to $250 million attributable to tax increases enacted by the Commonscalth of

($125 million each for Oyster Creek and TMI-1) of nuclear fuel Pennsylvania, did affect earnings because of a timing difference costs may be outstanding at any one time. Nuclear fuel capital in the receipt of tax mn harge revenues.

leases at December 31,1992 totaled $156 million. When Other Income and Deductions:

wasumed, partions of the presently leased material will be 1992 and 1991 replaced by additmnal leased material at a rate of a;, proximately The decrease for both years is largely attributable to a reducn.

$53 million annually. In the event these nuchar fuel needs on in interest income resulting fmm the 1991 colk crion of federal cannot be leased, the associated capital requirements would have income tax refunds.

eo be met by other means.

19

i i

t l

Gennal PuW l'obors Corpontwn and $ukdiarg 04impmes i

k i

j

)

Financing:

Present plans call for the Subsidianes to issue long-term debt In 1992, the Subsidiaries issued $590 million prinapal amount and prefernd siwk during the next ihnt y ears to finance i

of first mortgage bonds, of whkh $332 million was used to wnstruction activities, make contnbutions to decommissioning

{

refinance higher cost debt. GPU est mates the annualized savings trust funds and, depending on the level ofinterest rates, refinance j

j from these refmancings to be approximately $4 million on a outstandmg senior securities.

l l

before-tax basis.JCP&L also took advantage oflower financing C.apitah.zauon:

rates by ruleemine $50 mdhon stated value of preferred stak The GPU System attempts to ensure its credit quality rating by j

i carrying a disidend rate of 8.759 and issuing a hke amount maintairung capitalization ratios that permit access to capital i

at 7.521 InJanuary 1993, Met-Ed issued an aggrepte of markets at a compentive wst. The targets and actual 3

5120 milhon of first mortgate bonds, of whk h a portion of. he capitalization ratios are as follows:

t net proceeds were used to redeem $100 milhon principal amount of 9'i series bonds on Manh 1,1993, Capaahmon Tamn Range 1992 1991 1990 The Subudianes have regulatory authority to issue and sell first mortgage bonds. which may be issued as secured medium-term Common equiry 45-45w 46%

469 45 9 i

4 notes for various periods through 1994.JCPAL and PenrN also Preferred sud 10-12 9

9 10 hase regulatory authority to issue and sell preferred stot k. Under - Notes payable and long-term debt 47-43 45 45 45 existing authorization,JCP&L Mer-Ed and Penelec may issue lonu-term debt in the amount of 580 million, $150 million and looq 100 %

1005 loow

$do million, respectively, in addition, JCP&L and Penelec may each sell up to $50 milhon of preferred stock. The Subsidiaries also have regulatory authority to issue commercial paper.

The quarterly dividend is currently $0.40 per share. GPU will wntinue to review the dividend to determine how to best sene In January 1993, Moody's and DutT & Phelps lowered the the long-term interests of the shareholders. In December 1992, t redit ratmes at Met-Ed and Penelec as a resu!r of rhe initial j

GPU fikd with the Securities and Exchange Comm.ission (SEC) regulatory decmon whkh disallowed certam TMI-2 costs in for standby authority to repurchase up to five million shares ofits a

the Met-Ed retail te proceedinc. Moody's subsequently common stock through 1995.

l-downgraded the credit ratings ofJCP&L. Standard & Pears did i

not take any action but did change their rating outhiok from Nonutility llusiness:

stable to negarne for each of the Subsidiaries due to ihe absence General Portfolios Corporation (GPC) was organized to invest i

of supportise PaPUC rate treatment of certain TMI-2 wsts and in related but nonregulated businesses. Currently, these are

}

the peneived credit risk associated with large purchase power primarily wnducted by Energy Initiatives,Inc. (EID, a subsidiary l

obligations. The GPU System's tost of capital is affetted by the of GPC, and its subsidiaries. Ell is in the business of developing, 1

Subsidiaries * (ecurity ratings. All three of the credit rating operaong and inverting in cogeneration and other nonutility

}

agenues now rate the bonds of Mer-Ed at an equivalent of an A-power producnon facilities. As of December 31,1992, Eli had rating and Penelec at an equivalent of an A rating.JCP&L's 143 MW of capacity in operation wich an additional 80 MW bondure rated an equivalent of an A-rating by Standard &

wrrently under development.

j j

Poors and Moody's and an A rating by Duff & Mielps. Moody's Ell is now permitted to parthipate in additional eners y markets aho Ic wered the c ommenial paper ratings of Met-Ed and JCP&L that become available from the passage of the Energy Policy Act to Prime 2, w hile DutT & Phelps lowered the wmmercial paper of 1992 (Energy Acty At D.ecember 31,1992, GPL...s mvestment ratmg of Mer-Ed to Duff 1. Moody,s and Duff & Phelps m GPC. was $ 31 million. Other than Ell. GPU does not expect continue to rate the commercial paper of Penelec at an equivalent mvestment outude its utility businesses to be a major pan of its of a Prime I andJCP&L.s wmmercial paper rating remains -

business activities.

t unchanged by DutT& Phelps at Du!T 1. Although credit quality I

has been nduced, the Subsidiaries' credit ratmgs remain well Ilusiness Strategy:

alvve the ninimum investment grade. The Subsidiaries The GPU Sys em's business strategy is to meet its customers' understand that the credit rating agencies will consider the effect needs with competitive and reliable energy while seeking ways to I

of the PaPUC's March 1993 modified decision in the Met-Ed better serve their needs and inc reasing shareholder value. This retail rate pnxenhng as part of their annual review of the consists of striving for improved pnxiuctivity and lower costs, Subsidiaries'secunty ratmgs later m 1993.

and further enhancing customer relations through more E """

The Subsidiaries' bond mdentures and artkles ofincorporation include provisions that limit the amount of long-term debt, Providing competitive electric energy is based on a combination preferred stexk and short-term debt the Subsidiaries may issue, of flexibility, the development of ahernatives and options, and l

The Subsidiaries' interest and preferred stock mverage ratios managing a portfoho of supply to rehably and safely meet are rurrently in excess ofindenture or c harter restrictions.

customer energy needs. The underlying phikisophy of the GPU d

i 20 l

L

w Genu.J Pubhc UnhoMennon pJ Ms.&n%mpe System's energy supply stretcgy is to dev' lop a mix of sources Meeting Energy Demands:

without undue rehance on any one particular source, w bde beg TL Subuduries hae a paw teJ need, due m L:gt part to p.k positioned to take advantage of beneticial (hanges in the load growth, of approximardy 1400 MW of new capacity by conditions of the energy su;> ply market. The GPU System's the year 2002 based on an average growth rate of about 1.UV portfobo approac h consists of a mix of ow ned generatmn of annually, with growth rates for the Subsidiaries proierted from diverse fuel types, esonomic power porduses, and wnsenation 1.39 to 1Fi. GPU intends to provide for this growing energy and loaJ manaptment h e., demand-s>Je management >

need through a mix of economic sources consistent with in riarnes. This will enable the GPU System to wntinue to providmg rehable senice.

manage the emnomic and rthable balancmg of supply and kun es Mnngy demand. At the end of 1992, sourc es of energy were comprised of 600 from GPU generating facilities,29'T from utihty and 1992

' 00~'

nonunhty supphers, and 119 from other sources suth as GWH GWH W

interchange and economy purchases.

Coal 18,123 36 19,215 35 On an mdustry les el, the GPU System is facing thallenges in Nut lear 11,449 23 h 080 15 the areas of inc reasing mmpention, regulatory emphasis on Gd' D*

• N 409 1

4 demand-side management and the need to responsibly aJJress Long-term Fohty Pun hases 6,510 13 2,910 5

em ironmental issues. The GPU System is followmg strategies Lnuohty Punbases 8,069 16 16,925 31 that take into account mmlest growth prolet tions as well as these Intenhange & Other changing wnditions.

Pun hases 5,422 11 5,41 n 10 The Energy Aa has broad imphcations for the electric utihty tom 49,982 100 NM M

industry. The legislanon contains stveral provisions that GPU believes will benein its customers, mduding reforms to the Pubhc Utihty lloidmg Company Act of 1935 (P. UllCAL One Through the year 2002, the GPU Sysa As supplv plan redects maior feature of PL,llCA reform is that it pctmits both utibry the continued utilization of exisant et nt ratmg facihties and nonutshty generators to budJ mdependent pmer facihn.

wmbined with power purchases, the wnstruumn and or es and se11 p>wer at who!csale wubout subjectmg them to PUUCA acquisioon of new facshties, and the promotion of anergy regulation. Th.u ch.mpe should enwurage more supphers of-conservation and load management programs. These sources and electricity to ente r the marker, uhimately resuhing m lower supply alternatives reacct the GPU System's underlying strategy of.

enagy cests for customers It will also expand opportunities for meeting future energy needs through a portfolio of options.

GPU.s nonregulated sabudiary, Ell. to do elop these types of The GPU System mtends to keep most ofits existing generating tacanes. The Energy Aa also comams provisions allowing the facihties operatine during the next 20 years, which in some cases Eederal Energy Rt gulatory Commission JERC) to order is udl beyond their presiously scheduled retirement dates.

~

w holesale, but not retad, transmission au ess on a casnhv-case During 1992, the nudean generating facdities operated basis. This c hange muld enable third parnes to obtain auess to

• "I""""

• *!! ""d ##" P'"i"""J '" '""'i""" "P"#d'i"E "'

E "" "" " F "" ~""'

• F " P'"

b

1. '"P the Subsidiaries' transmissmn sysu ms for w ho!esale power F

transa tions. Among orher thmgs,ihe Energy Au takes steps unhzmg nonutility generanon as a supply source, the GPU System beh.

c eves it can e thciently increase capacity available to toward promotine improved energy erficn ncy and nsolvm.

powmg demand for eleuricity without incurring the meu radioaane w ste disposal issues.

ugnifxant (apital requirements associated with new urdity Controlling Cmts:

ow ned generanon. How ever, the GPU System wdl continue to GPU has placed a wntinumg emphaus on better mauaging its exen ise prudence in determining the need to add addirmnal costs w hile improvmg c ustomer servue. Selectise consobdations long-term purdiased power souras beyond the level its of the organaanonal struaure have impromi productivity Subsidianes are c urrently mmmitted to take due to credit quality without reducing the y stem's ab!hty to provide service and wnurns raised by the major credit rating agencies. This (ntena reliabihry to a growing customer base. At December 31,1992, is subject to penodic review given the changes in the industry the GPU bystem had 11,969 employees, a 139 reduction over and future directions as a resuk of the Energy Act. GPU believes the last fise years. The mc rease in 1992 operation and mainte-it has c ompetitive energy ahernatives compared with nonutdity nance expense, after e hminating the effen of certain TMI-2 msts supphe rs and other sources to ma ntain its generation ownership rewgnaed in 1991, has been sept beb w the in0ation rate even position. The GPU System also has plans for the installation of as the number of customers sen ed has inc reased. These e fiorts 1,250 MW of wmbustion turbine peaking units, most of which were aided by the strong operating performarne of Oyster Creek could be sited at existing generation stations.

and TMI.1 during 1992. Remes of GPU System operations is a wntinuing process aimed at wntrolhng and nducing costs where dj'propTkate.

21

General Publa Unhnes (wporanon and Subudiary Compames Capacity generation now under contract but not yet under construction.

The NJBRC has also approved JCP&L's procurement of a block 1M2 NC of 30 AIW of nonutility generation (apacity for delivery commencing between 1993 and 1997 from facilities supplying Existing baschiad 5,111 51 5,090 44 not more than 10 MW each.

Exisung Peaking 1,607 16 1,540 14 In October 1992, the PaPUC approved,in part, the petitions 350 3

New Baseload w Peaking 1,250 11 filed by two nonutility generation suppliers to supply 80 MW Unbry Purtha>es 2.277 22 SM 5 each of capacity to Penelec under long-term contracts Nonutthry Purchases 1,083 11 2Si5 23 commencing in 1997. Penelec does not need this additional Total 10.078 100 11 AMO 100 capacity and believes the costs associated with these contracts are not in the economic interests ofits customers. Penelec has filed a request for reconsideration to the PaPUC and an sppeal to the

+ Nw Emx) Supplia Commonweahh Court.

The Subsidiaries have entered mto agreements with Duquesne The Subsidiaries have contracts and enticipated wmmitments Light Company (Duquesne) and various nonutihty generators for with nonutility generation suppliers,includ ng those mentioned the purchase of capacity and energy. In addition, the GPU above, under which a total of 1,083 Af %, of capacity is currently System has developed and is pursuing wntingency plans and in service and an additional 1,602 MW are scheduled or antici-energy supply options as part of its strategy.

pared to be in service by the mid 1990s. liased on the GPU In January 1993, the Subsidiaries entered into amendments to System's current energy supply plans, nonutdity generation will their agreements with Duquesne providing for the purchase by represent appmximately 239 of total capacity and 319 of energy JCP&L and Met-Ed of a 507 ownership interest in Duquesne's in the year 2002.

300 MW Phillips Generatmg Station, w hich would be reactivated, and the joint censtruction and ownership of a new capacity Manning 500-kilovolt transmission line and associated facihties. The Subsidiaries would own two-thirds and Duquesne one-third of the new transmission hne. In addinon,JCPAL and Met-Ed pw ta would purchase from Duquesne an additional 350 MW of capacity and energy under a 20-year Power Supply Agreement.

"g j

The Subsidiaries' share of the cost of these transactions is j

now estimated at approximately $490 mdlion for the new g

6 transmissmn line and the Phdhps Statmn. As a result of the

[

amendments, the wmmencement date of the Power Supply h

Agreement will be coincident with the in-ser ice date of the new

$M transmission line and Duquesne wdl use all reasonable etTorts, Mk ~

MRy p;L) subject to its chscretion regarding the timing and certainty of the Q

.n o

a m

m w

w m

w w

new transmission line, to return the Phillips Station to service by the inervice date of the new transmission line, which is wrrently targeted for 1997. Ior more information, see the Other The GPU System's wntingency plans and supply options include Commitments and Contmgencies section of Note 1 to the the modernization of existing generating facilities and the consohdated fmancial statements.

construction of new facilities. Some ofJCPAL,s older steam Pursuant to its Competitive Proc urement Program as approved units are candidates for refurbishment that would include the by the PaPUC. Met-Ed has solicited bids and is now negotiating utilization of the existing steam turbine generators with newly agreements for 200 MW of nonutihty generation capauty to be installed wmbustion turbines to wnvert to gas-fired wmbined-in commercial service by December 31,1997. Met-Ed is also cycle generation facilities. GPU believes that this source of awaiting approval by the PaPUC of wntracts for an additmnal supply will be competitive with existing ahernatives.

227 MW of nonunhty generation capacity for delivery e Convration and Lual Alanagement commencing in 1996.

The regulatory emironments in both N,ew Jersey and In September 1992,JCPAL received approval from the NJIiRC Pennsylvania are encouraging the development of new to issue a Request for Proposals to pmcure 150 MW of nonutility wnservation and load management programs. This is evidenad generanon capauty to be m service beginning in May 1997. This by demand-side management (DSM)inuntive regulations 150 MW capacity procurement, which may be satisfied through adopted in New Jersey in 1992 and similar regulatory demand-side management programs. is a wntingency measure to wnsideration currently under way in Pennsylvania. DSM provide a cushion for the possible cancellation of nonutdity mcludes utihty sponsored activities designed to maintain or 22

General Pubhc Urihnn Corporanm and Subudury Companin imprme energy efficiency in customer end-use. Both load contracts for the installation of scrubbers on the two coal units at management programs (i.e., peak nduction) and consen atiun Conemaugh, of which Met-F4s estimated share is $64 million.

programs (i.e., energy and peak reduction) are included.

This action is part of the GPU System's plans to comply with Phase I sulfur dioxide emission limitations. The cons:ructian in September 1992,JCP&L received approval from the NJBRC schedule is for Um.

t I and Um. 2 scrubbers to be in service by t

for its DSM plan w hich reflects DSM initiatives of 37 MW in each of 1993 and 1994. Under this regulatory treatment, January 1995 and 1996, respectively. Met-Ed and Penelec filed a qualiGed DSM investments will be recovered annually mer a six Phase I compliance plan with the PaPUC.. February 1993, m

year period with a return earned on the unrecoured amounts.

w hich provided information descr.bing their actions to comply i

j gp g

Additionally,JCP&L will be permitted to recover foregone or lost sales revenue between base rate filings and have the ability to compliance is to maintain flexibility in light of uncertainties carn a performance-based incentive. Through each of the first two regarding the deseloping emission allowance trading market.

years ofincentive DSM effort,JCP&L anticipates a savings m Installing scrubbers and switching to lower sultur coal continue customer energy consumption of 58.000 MWH! year, a redut non to be the primary compliance options under consideration.

in summer peak of 37 MW and a $5 million incentive to be For more information, see the Environmental Matters section of recovered over three years.

Note I to the consolidated financial statements.

The PaPUC is (urrently conducting a generic investigation into Regulation:

DSM cost recmery mechanisms and is expected to issue a cost in January 1993, the PaPUC issued an order in the Met-Ed recovery and raremaking order in the first quarter of 1993.

retail rate proceeding and approved a net base rate increase of Met-Ed's and Penelec's DSM plans, which were originally filed

$ 19.4 million. Separately, the PaPUC approved Met-Ed's inJanuary 1991, will be refiled with the PaPUC during 1993.

requested $13.6 million reduction in the Energy Cost Rate JCP&L is expected to reach a coral of approximately 195 MW of (FCR). In March 1993, the PaPUC directed Mer-Ed to reduce its load reduction by the end of 199, under the new regulatory annual amortization of the TMI-2 investment to $8.3 million, framework. For Mer.Ed and Penelec, the DSM imtiarnes are retroactive toJanuary 1993. The recovery of certain TMI-2 targeted at about 50 MW each for + first five year period of implementation, subieu to favorable regulatory treatment.

amortization, when the amortization of the TMI-2 investment ends in 1995. The net effect of the PaPUC's anions resulted in Environmental Inun:

an annual decrease of $14 milhon.

The GPU System is committed to complying with all environmental regulations in a responsible manner at the federal In February 1993, the NJBRC issued a summary decision authorn..ungJCP&L a $123 million annual retail base rate and state level. Compliance with the federal Clean Air Act Amendments of 1990 (Clean Air Act) and other environmental increase. The decision included a net reduction of $6.5 million needs will present a major challenge to the GPU System through m the tax surcharge adjustment, resulting in a net increase the late 1990s.

of $116.5 million, effective February 26,1993. The net tax surcharge adjustment is related to the New Jersey unit tax and The Clean Air Act will require substantial reductions in sulfur is scheduled to expire in January 1994.

dioxide and nitrogen oxide emissions by the year 2000. The GPU System s current plan provides for m.stalhng and operatmg Penelec is currently subject to a Show C,ause Order issued by emission control equipment at some of the Subsidianes coal-the PaPUC which could res.11t in a reduction in its ECR. Penelec fired plants as well as switching to lower sulfur toal at other does not agree with the allegations presented in the PaPUC.s coahfired plants. To comply with the Clean Air Act, the GPU Order and has filed a response supporting its position. For more System has plans to expend approximately $590 milhon by mformation, see the Other Commitments and Contingencies the 3 ear 2000 for air pollution control equipment. In 1992, section of Note 1 to the consolidated financial statements.

the Subsidiaries made capital expenditures of approximately TMI-2 Accident Claims:

$21 million for clean air requirements and have included As a result of the TMI-2 accident and its aftermath, individual approximately $83 million for this purpose in their 1993 claims for alleged personal injury (including claims for punitive construction pregrams. GPU continually reviews its plans and damages), which are material in amount, have been asserted altematives to comply with the Clean Air Act on a least-cost agamst GPU and the Subsidiaries and are still pending. For more basis. Alternatives include participation in the emerging information, see Note 1 to the consolidated fmancial statements.

emission allowance market and ernission allowance pooling, Effects ofInflan.on:

which has the potential to defer major capital investments while attaining the required level of compliance. Costs associated with Although the rate ofinflation has cased in recent years, the GPU the capital m. vested in this pollution control equipment and the System is still affected by even modest mflation since the mcreased operating costs of the affected stations are expected to regulatory process results in a time lag during which increased be recoverable through the raremaking prm ess. Mer-Ed and the operating expenses are not fully recovered in rates. Inflarm.nalso other owners of the Conemaugh Generating Station have awarded affects the GPU System in the form of m. creased replacement 23

J

)

i i

l General Pubbt Unbues Corpranon and Sutmdiary Compames I

t i

a i

i msts of utility plant, which are signi6cantly higher than the beginning after December 15,1992. For more information

)

historical cost reflected in the financial statements. The GPU wncerning these auounting issues, see Notes 2 and 10, j

System anticipates, however, that it will recover the increased respenively, to the consolida:ed financial statements.

wst of facilities over their useful lives if replacement actually in h,ovember 1992, the FASli issued Statemem of Financial 3

Accountir.g Standards No. I12 (FAS 112)" Employers' The GPU System is committed to long-term cost control. Cost Auounting for Postemployment lienefits." FAS 112 requires containment programs in place since 1986 have helped offset that postemployment benefits (benefits prosided to former or inflationary and recessionary pressures. In addition, the prudent inactive er.iployees after employment but before retirement) cspenditure of capital and debt refinancing pmgrams have kept should be accounted for on an accrual basis. FAS 112, which is J

down increases in debt levels and capital costs.

not expected to have a material impact on the financial position or results of operations of GPU, must be implemented on or

)

l Accounting issues:

before January 1,1994.

1 The h..nancial Accounting 5.andards Ikiard (FASB) issued l

statements on " Accounting for Income Taxes" and " Employers' I

q Accounting for Postretirement Benefits Other Than Pensions,"

w hich are both currently required to be adopted for fiscal years 9

f T

s i

i 4

l General Pubhc Unknes Corpranon and Subudury Compames j

Quarterly Financial Data (Unaudited)

In Thousands Except First Quarter Second Quarter Third Quarter Founh Quarter Per Share Data 1992 1991*

1992 1991 1992 1991 1992 1991**

==

Operating revenues

$892,403 $822.025

$811,389 $809,792

$890,167 $921,403

$840,194 $818,P9 Operating inwme 124,138 118,044 90,488 113,461 130,484 138,552 105,167 46,603 Net income (loss) 73,287 127,479 42,422 54,730 83,251 87,543 52,676 (3,870)

Earnings (lossi per share

.66 1.15

.38

.59

.76 79

.47

(.0 4)

Results for the first quarter of 1991 reflect an increase in earnings of $0.53 per share ($582 million) for the cumulative effect of an 1

accounting change for unbilled revenues.

" Results for the fourth quarter of 1991 reflect a decease in earnings of $0.51 per share ($56.2 million) for estimated wsts to prepare TMI-2 for monitored storage ($33.8 million) and for TMI-2 decommissioning costs not considered likely to be rewvered from customers ($60 0 mi!! ion).

1 I

24

cmea Na twune.uo ma smanwr >rt The fmanual statements hase been prepared m prevention and detection of fraudulent 6nancial reporting.

(onformay wah generally auerted auountme pnndples. In preparing the 6nancial statements, management makes mformed The Audit Committee, whith consists solely of outside directors of t he C.

judgments and estimates of the expetted effn ts of esents and orporaten, assists the Board of Directors in ful611ing the lioard. 6Juoary responubihnes to the extent that suc h s

transattmns that are c urrench beme reported 4

responsibihties relate to the au o tiag polioes, procedures and To ful611 its responsibihties for the rehabihty of the Gnan ial controls, auditmg and the quality and intepnty of the nnancial statements, n'an.7 ement has est.bbshed and maintams a sy stem reportmg of the GPU System. The Audit Commatee meets w ah of internal c ontrol This system pronJes for appropriate dinsion management and internal auchtors at least four times a 3 car to of respons:b '.*s and w ntren p>ht ies and proc eJures. These renew the dist harge by em b of their responsibihties. l'or a poboes and

+-dures. a hich mdude a Code of Business p>rtion of each meeting, the Audit Commarce meets separately Conduct PoFct en foster a strong ethnal c hmate, are uplated as wah the independent accountants, without management present, netessary and communicated to employees throughout the GPU to discuss mternal tontrol, auditing and finanaal reportmg

$ystem. Management continually monitors the system of internal matters.

control for comphance.

GPI mamtams an mterna! audamp program that mdependently assesses the eticctm ness of the ina rnal control system and reports 6ndmgs and recommends possible improvements to managtment and the Auda Committee of the finard of Directors.

k In aJJirion. as part ofits audit of GPU's 6nanaal statemt nis, Coopers A Lybrand considers the internal wntrol structure in James R. Ina Cin.et Exe(utne Ortner den rmming the nature, oming, and extent or auda procedures to be apphed. Manage ment has considered the internal auditor's and Coogrs a L brand's recommendations concerning the 3

system of mu rnal c ontrol and has taken actions that it bt bes ed to be (Ost-ettnine in the (arcumstantes to respond appropriately e,.n b y b(U _

C C

to these rnommendanons. Whde there are mherent hmaations Q

m the ettecrneness of any sy st(m of internal control manage-John G. Graham E Allen Donofrio ment beheses that, as of D mber 31,1992, the Corporation's Pnnupd I inanual Of6t er Pnnopal Accounting Officer 25

General h.Nn [Mrm Corpraoon and Salwhary Compnes Report of independent Accountants To the Board of Directors and SL ckholders We hase audited the accompanying mnsolidated balance sheets of December 31,1992 in conformity uith generally auepted General Pubhc Unhties Corporatmn and Subsidiary Companies as accounting principles.

of December 31,1992 and 1991 and the related consohdated As more fully discussed in Note I to mnsolidated financial statements of mcome, retained earnings, and cash Dows for each of statements, the Corporation is unable to determine the ultimate the three years in the perial ended December 31,1992. These consequences of certain contingencies w hich have resulted fmantial statements are the responsibility of the Corporatmn s from the accident at Unit 2 of the Three Mde Island h,uclear management. Our responsibility is to express an opiaion on these Generating Station (TMI-2). The matters ahich remain uncertam 6nancial statements based on our audits.

are (a) the extent to which the retirement costs of TMI-2 could We mnducted our audits in accordance with generally accepted exceed amounts currently recognized for raremaking purposes or auditing standards. Those standards require that we plan and otherwise acc rued, and (b) a excess, if any, of amounts u hic h perform the audit to obtain reasonable assurance about whether might be paid in connection with claims for damages resulting the fmancial statements are free of material rmsstatement. An from the accident over available insurance proceeds.

audit includes examming, on a test basis, evidence supporting As discussed in Note 2 to consolidated Gnancial statements, the the amounts and disclosures in the tmancial statements. An Corporation changed its method of accounting for unbilled audit also mcludes assessmg the acwunting principles used revenues in 1991.

and signihcant estimates made by management, as well as evaluatmg the oserall nnan(ial statement presentation. We irlieve that our audits provide a reasonable basis for our opinion.

3 In our opmion, the financial statements referred to above trages 2' through 40) pre ent fairly,in all material respects, the wnsolidated 6nancial position of General Public Utihoes Corporanon and Subsidiary Companies as of December 31,1992 New York, New York and 1991 and the consolidated results of their operations and February 3,1993, except as to the information presented in their cash Rows for each of the three years in the perial ended Note 3, for whh h the dare is March 11,199L l

2G

Gener.1 Pubhc Uni on Grporaoon and Subudary amruraes Consolidated Statements of Income (In Thousands)

For The Years Ended December 31, 1992 1991 1990 Operating Revenues

$ 3,434,153 5 3.371,599 5 3,101,224 Operating Expenses:

i Fuel 356,230 388,705 420,224 Power punhased and intenhanged 900,504 851,191 671,070 Deferral of energy costs, net 40,175 (11.419)

(38,434)

Other operation and maintenance 856,773 891,314 834,455 Depreoarion and amorti7ation 339,721 388.901 319.505 Taxes, other than income taxes 328,307 332,661 293.976 Total operanng expenses 2,821,710 2,811,356 2,500,796 Operating income Befort income Taxes 612,443 530,213 603,428 locom raxes 162,166 113,583 142,918 Opera,iing income 450,277 416.660 460,510 Other income and Deductions:

Allowance for other funds used dunng uinstruction 5,606 5,084 7,286 Other inwme, net 30,503 41,- ? ;

41,170 Income taxes (11,762)

(17,416)

(17,397)

Total other income and deductions 24,347 29,071 34,059 income before Interest Charges and Preferred Dmdends 474,624 445,731 494,569 Interest Charges and Preferred Dividends:

Interest on long-term debt 174,439 167,122 156,078 Ot her interest 18,966 31,372 36.669 Allowance for borrowed funds used dunng mnstruction (6,974)

(9,325)

(11,828)

_ Preferred stoc k dmdends of subsidiaries 36,557 35,918 35.416 Total interest charges and prehrred dmdends 22.2,988 228,087 216.335 income Before Cumulative Effect of Accounting Change 251,636 217,614 278,234 Cumularise einct as ofjanuary 1,1991 of accounting change for unbilled rnenues, ne t ofincome taxes of $;4,390 58,238 Net income

$ 251,636

$ 275,882

$ 278.234 Earnings Per Average Common Sharr Before Cumulatn e Effect of Acmunnng Change 2.27 1.96 5

2.51 Cumulative Effect as ofjanuary 1,1991 of Auounting Change for l'nbilled Enenues

.53 Earnings Per Average Share 2.27 5

2.49 2.51 Average Common Shares Outstanding (in Thousands) 110,840 110,798 110,'63 Cash Dividends Paid Per Share 1.575 1 45 1.25 Gennar Pom rohoes ar;w onn ana satwamn vmpon:n Consolidated Statements of Retained Earnings (In Thousands) for The Years Ended Dec ember 31, 1992 1991 1990 Balance at beginning of year

$ 1,644,249

$ 1,535,937

$ 1,401.702 Add - Net income 251,636 275,882 278,234 Deduct - Cash chudends declared on common stoc k 177,308 166,208 143,999 Other ad ustments 2,381 1,362 i

Balance at end of year

$ 1,716,196

$ 1,614,219

$ 1,535,937 The accompanying notes are an integral part of the mnsolidated financial statements.

27

Gercral Puma Unlinn Gwporanon and Sulwidiary Gun;=nws Consolidated Balance Sheets (In Thousands)

December 31, 1992 1991

=

ASSETS Utility Plant:

In '.enice, at original cost S 7,961,433

$ 7,586,121 Irss, accumulated depretiation 2,717,394 2,521,867 Net utility plant in service 5,244,039 5,064,254 Construction work in progress 314,756 272,730 Other, net 270,099 234,755 Net utility plant 5,828,894 5,571,739 Current Assets:

Cash and temporary cash investments 10,390 5,121 Special de; wits 13.444 16,213 j

Accounts receivable:

l Customers, net 226,819 238,377 Other 54,860 70,862 Unbilled revenues 108,415 102,063 Materials and supplies, at average cost or less:

Construction and maintenance 187,925 183,289 Fuel 71,635 74,478 4

Deferred income taxes 81,302 82,071

)

Prepayments 36,931 35,496 Total current assets 791,721 807,970 Deferred Debits and Other Assets:

j 1

Net investment in Three Mile Island Unit 2 352,236 310,462 Unamortized property kisses 105,476 106,777 Deferred income taxes 152,189 158,966 Decommissioning funds 126,273 99,783 Other 366,566 345,604 Total deferred debits and other assets 1,102,740 1,021,592 Total Assets

$ 7,723,355

$ 7,401,301 The accompanying notes are an integral part of the consolidated financial statements.

28

Geneal h,W t!nhan rormm.<,r, or.J,% tis,Jmrv rom;,ar,,n (In Thousands)

December 31, 1992 1991 LIABILITIES AND CAPITAL Capitalization:

Common sta k

$ 314,458

$ 314,458 Capital surplus 605,015 60 4,~o6 Retained earnings 1,716,196 1,641,219 Total 2,635,669 2,562,413 lxss, reacquired common stuk, ar cost 256,334 256,3'9 Total common sta kholders' equity 2,379,335 2,406,034 Cumulatae preferred stock:

With mandatory redemption 150,000 100.000 W thout mandatory redemption 314,674 36-1,674 long-term Jebt 2,221,617 1,992,a99 Total capitalizarmo 5,065,626 4 '63,207 Current Liabilities:

Debt due within one year 29,207 54,450 Notes payable 101,423 188,508 Obligations unJer capital leases 168,789 185,8i4 Ace 3unts payable 290,592 283,645 Taxes accrued 149,211 189,056 Deferred energy credits 32,528 (2,687)

Interest accrued 65,608 58,007 Other 186,162 193,619 Total current habihties 1,023,520 1,150,442 Deferred Credits and Other Liabilities:

Dderred inc ome taes 789,298 95,4'6 Unamortired insestment tax credits 182,526 195,544 Three Mile Island Unit 2 future costs 320,000 235,800 Other 342,385 280,832 Total defernd credits and other habibries 1,634,209 1,187,652 Commitments and Contingencies (Note 1)

Total Liabilities and Capital 5 7.723,355

$ ",401,301 29

oenmi Na na,tes armrou,r.,,a swemmm,n Consolidated Statements of Casa Flows (In Thousands)

Ibr The Ers Ended December 31, 1992 1991 1990 Operating Activities:

Income before prefe rrrJ dividends cd subsiianes S 288,193

$ 311,800

$ 313,650 Ad ustments to recondle income to cash prosided:

i Depreciation and amortization 340,138 391,735 330,173 Amortizarion of property under opital leases 67,820 59,874 M,149 Cumularise efTett of aucunung change (58,2381 Nuclear outage mamtenance costs, ner 16,736 (21,651) 13,744 Deferred income taxes and insestment tax cndits, net 8,720 (32,8s8) 5,799 Deferred energy costs, nu 40,989 (10,205) 6 6,843)

Auretion mtome (20,500)

(25,200)

(29.100)

Allowance for other funds used during wnstruction (5,606)

(5,084)

(7,286)

Changes in working capital:

Reuis ables 23,546 56,672 (45,971)

Matenals and supphes (1,780)

(2,866)

(47,772)

Special deposits and prepa)ments (852) 9,238 (20,941)

Payables and accrued habihties (47,039) 72,655 26,912 Orher, net (23,766) 895 39,437 Net cash prosided by operatmy actiunes 686,599 746,7F 605,951 Investing Activities:

Cash construction expenditures (460,073)

(467,050)

(490,546)

Contnbutions to decommissioning trust (22,714)

(19,337)

(33,910)

Orher, net (26,368)

(28.057)

(4,678)

Net ush used for investmg ausuries (509,155)

(514,444)

(529,134)

Financing Activities:

Increase in long-term debt 585,954 278,206 82,259 Inc rease idecrease) m notes payable, net (87,776)

(38,256) 25,570 Retirement oflong-term debt (387,029)

(186,427)

(57,922.)

Capital lease pnncipal payments (70,440)

(58.796)

(63,680)

Issuance of preferred :ta k c/ subsubanes 50,000 100,000 Rederr;< ion of preferred sta k of subsidianes (51,635)

(36,363)

Dividends paid on common stock (174,538)

(160,653)

(138,452)

Diudends paid on preferred stm k of subsidiaries (36,711)

(36,180)

(33,275)

Net cash required by 6nancmg actinties (172,175)

(238,469)

(85,500)

Net increase (decrease) in cash and temporary cash investments from above activities 5,269 (6,176)

(8,683)

Cash and temporary cash investments, beginning of year 5,121 11,297 19,980 Cash and temporary cash investments, end of year

$ 10,390 5,121

$ 11.297 Supplemental Disclosure:

Interest paid (net of amount capitahzed)

$ 200,640

$ 240,233

$ 176,142 income taxes paid S 184,062

$ 147,771

$ 174,779 New upital lease obligations incurred

$ 48,087

$ 62,988

$ 57,859 Common stock dividends declared but not paid S 44,327

$ 41,557

$ 36,002 The anompanying notes are an integral part of the consohdated financial statements, 30

,Generd Pubbt Doboes Carpenirn>n and SuhWiny Cmiywinics Notes to Consolidated Financial Statements General Public Utdities Corporation (the Corporation)is a Disision of Rate Counsel of the Depanment of the Public holdmg company registered under the Public Utility llokhng AJmcate (Rate Counsel) advised tht NJ11RC that there is Company Act of 1935. The Corporaten does not directly operate "neither an m ers helming benefit, nor an overw helming any utility properties, but ou ns all the outstanding common economic detriment" from the plant's continued operation "so stock of thnt electric unlities -Jersey Central Power & Light long as no major event occurs that would sigm6cantly increase Company (JCPAL), Metropolitan Edison Company (Mer-Ed> and the operating or capital expenditures required to keep the plant Pennsylvania Electric Company (Penelec)(the Subsidiaries). The operating or that would decrease the availabibry of the unit."In Corporation also owns all the mmmon stock of GPU Sernce addition, Rate Coumel said that if extended outages occur in the Corporation (GPUSC), a servke company; GPU Nuclear future, the continued operarmn ofOyster Creek *from that point Corporation (GPUN), whnh operates and maintams the nuclear forward should be re-evaluated." In May 1992, a report was fded units of the Subsidianes; and General Portfohos Cor;mration wit h the NJBRC by Rate Counsel supporting its position. The (GPC). parent of Energy initiantes, Inc., which devtlops and report also called for the NJBRC to establish certain reporting operates nonutihty generating facilities. All of these companies requirements and to develop cost and operating standards to considered together with their subsidiaries are referred to as the initiate a further review by the NJBRC of Oyster Creek should

• GPU System.~

actual results vary fromJCP&Us estimates. The NJBRC has "E

1. Commitments and Contingencies During 1986, inspections of the steel shell thar houses the reaaor Nuclear Facd...ities The Subsidiaries hase made investments in three maior nuclear vessel revealed corrosion of certain a ras of the shell.s wall After projects - Three Mde Island L, nit I (TMI-1) and Oyster Creek, examination and ihe performance of tests, GPUN concluded both of which are operational generating facilities, and Three that notwithstanding the corrosion, the wall continued to meet Mile Island Um. 2 (TMI-2), which was damaged during the design requirements and the plam was safe to operate. GPUN t

1979 accident. At December 31,1992, the Subsidianes net has taken thickness measurements and is proceeding to imestment in TM1-1 and Oyster Creek, including nutlear fuel, implemem a program to address the corrosion. Appmximately was $686 mdlion and $82,7 md. lion, respedisely. TMI-I and

$10 million has been spent through December 31,1992, and TMI-2 are jointly owned byJCP&L, Met-Ed and Penelec in the

"' ' "'" "I""#

• ##"E# **

per entages of 257,50% and 254_ respecovelv. Ovster Creek is

$16 million. GPUN believes that implementation of the I*F##* *.

P""" " " """ "P "*" " "I-owned byJCP&L

• P **'

structural reinforcement of the shell, for its full licensed life.

Costs associated mth the operation, maintenance and retirement of nuclear plants have continued to increase and become less

, gp" predictable, in large part due to changing regulatory requirements The 1979 TMI-2 auident resulted in signdicant damage to, and and safety $randards and experience gained in the construction and contaminanon of, the plant and a release of radioactivity to the operation of nuclear tacdities. The GPU System may also incur environment. During 1990, the cleanup program was completed costs and experience reduad output at its nuclear plants because and GPUN is presently preparing the plant for long-term of the design criteria prevailing at the time of construction and monitored storage for whic h it has submitted a work plan to the the age of the plants systems and equipment. In addition, for Nuclear Regulatory Commission (NRC).

economic or other reasons, operation of these plants for the full in 1991, the Corporation recognized $36 million of costs term of their now assumed hves cannot be assured. Also, not all estimated as necessary to prepare TMI-2 for long-term risks associated with ownership or operation of nuclear facilities monitored storage, of which $33.8 million was not considered may be adequately insured or insurable. Consequendy, the abdity hLely to be recovered through raremaking. Of the total cost of of eleuric utilities to obtain adequate and timely recmery of

$36 mil!;on, approximately $20 million had been spent thmugh costs associated with nuclear projects, including replacement December 31,1992.

power, any unamortired investment at the end of the plants' useful hfe (u hether schedoled or premature), the carrying costs As a result of the accident and its aftermath, m. dividual claims for of that investment and retirement costs,is not assured.

alleged personal injury (including claims for punitive damages),

Management intends,in general, to set k recovery of any such which are material in amount, have been asserted against the costs described above through the raremaking pmcess, but Corporation and the Subsidiaries Approximately 2,100 of such recognizes that recovery is not assured.

claims are pending in the U.S. District C,ourt for the Middle District of Penns)lvania. Some of the claims also request

• Optrr Cmk damages for injuries from alleged emissions of radioactivity in 1990, the New Jersey Board of Regulatory Commissioners before and after che accident. Questions have not yet been (NJBRC) initiated a proceeding addressing the economics, resolved as to whether the punitive damage claims are (a) subject reliabihty and remaining hfe of Oyster Cret k. In April 1992, the to the hmitation of hability set by the Price-Anderson Au 31

Gmeral PaMa Unhon Corpratam and Wdiars Girnpran

($560 mdlion at the time of the accident) and (b)outside the funding target because such wsts are subject to (a) the type of insurance t oserage provided pursuant to that Act ($1lo million Jetommissioning plan selected,(b) the escalation of various at the time of the accidenO. Motions made by the defendants are cost elements 6ncluding, but not limited to, general inflation),

pendmg before the court for summary judgment and to dismiss (c) the further development of regulatory requirements governing (consistent with earlier state wurt decisions)a number of claims decommissioning. d) the absence to date of significant experi-on the grounds they are barred by the statute of limitations.

ence in decommissioning such facilities and (c) the technology available at the time of decommissioning. The Subsidiaries Nuclear Plant Retirement Costs t harge to expense and, over time, contribute to external trusts Retirement costs for nuclear plants include decommissioning the both amounts coUected from customers and amounts that radiological portions of the plants and the wst of removal of hase been written-off for nuclear plant decommissioning and nonradiological structures and matenals. As described m. the amounts collected from customers for nonradiological c

Nudear Fuel Disposal Fee secnon of h,ote 2, the disposal of spent nuclear fuel is covered separately by contracts u ith the U.S.

Department of Energy (DOE).

• 7.111-1 andOpw Cml:

JCP&L is collecting revenues for dnommissioning, which are in 1990, the Subsidiaries submitted a report,in compliance with expected to result in ihe accumulation ofits share of the NRC N RC. regulations. setting forth a fundmg plan (employing the.

funding target for each plant.JCP&L is also collecting revenues external s. king fund method) for the dewmmissioning of their m

based on... l estimates, adopted by a 1990 rate case miria nuclear teactors. Under th.is plan, the Subsid.ianes mtend to settlement, for the cost of removal or.nonradiological structures wmplete the funding for Oyster Creek and TMI-l by the and materials at eac h plant based on its share of an estimated presentiv expected end of the plants license periods,2009 and

$13.8 million for TMI-l and $28.5 million for Oyster Creek. In 2014, respectisely. The TMI-2 funding completion date is 2014, Janury 1993, the Pennsyhania Public Utility Commission consistent with TM1-2 remainmg in long-term storage and being (PaPUC) granted Met-Ed decommissioning revenues for its share decomm.issmned at the same time as TMI-1. Under the NRC of the NRC funding target and an allowance for the requested regulations, the fundme targets un 1992 dollars) for TMI-l and cost of removal of nonradmlogical structures and materials based Oyster Creek are $144 million and $1M million, respectiveh.

on its share of an estimated $4 million for TMI-1. Penelec Based on a review of NRC studies, a comparable f undm.g targer

""#"'"E"*""""'

"" "E

$9.5 milhon share of an carh."**imate of $38 million for for TMI-2 (in 1992 dollars), u hich takes into acwunt the er est accident, is estimated to be $229 milhan. The NRC..is currently TMI-1. Penelec intends to request additional decommissioning studying the levels of these fundmg targets. Management cannot predict the efint that the results of this review, which is

^ ' " * " " " ' " "

1. • • " "" E#""'"

expected in 1993, will have on funding targets for the m Met-Ed,in its next retail base rate fding.

. plants, including TMI-2. NRC regulations and a regulatory guide provide mechamsms, including exemptions, to Management believes that TMI-l and Oyster Creek terirement adjust the funding tarFets our their collection periods to reflut costs,in excess of those currently recognized for raremaking increases or decreases due to inflation and changes in technology purposes, should be re overable through the ratemaking process.

and regulatory requirements. The fund ng targets, while not actual wst estimates, are referente levels designed to assure that In 1991, the Corporation and its Subsidiaries recognized a hcensees demonstrate adequate Gnancial resnonsibility for liability for the radiolog.ical decommissioning of TMI-2, decommissionmg. While the regulations address activities reflecting the NRC funding targt t at that time. In 1991, reland to the removal of the rachological portions of the plants, the Subsidiaries also rewrded a liability in the amount of they do not establish residual radioactivity limits nor do they

$20 million for incremental costs specifically attributable to address costs related to the removal of nonradiological structures monitored storage. Such costs are expected to be incurred and materials.

betwwn the time that TMI-2 is placed in monitored storage and in 1988, a wnsultant to GPUN performed site-speafic studies 2014, when the decommissionmg of TMI-1 and TMI-2 is of TMI-I and Oyster Creek that wnsidered various demmmis-foru ast to begin.JCP&L made a contribution of $15 milhon to sioning plans and estimated the wst of decommissioning each an exte nal decommissioning trust in 1990 and Met-Ed and phnt to range from approximately $205 to $285 million and Penelec wrote-off $40 rnilhon and $20 million, respectively, in

$220 to $320 rnillion, respectively (adjusted to 1992 dollarst 1991. These amounts relate to their shares of the accident-related in addition, the studies estimated the cost of removal or portion of the decommissioning liability.

nonradiological structures and materials for TMI-l and Oyster The NJBRC and the PaPUC hase grantedJCP&1. and Met-Ed Creek at $71 milbon and $46 million, respectively. The ultimate demmmissioning revenues for the non-anident portion of the wst of retirmg the GPU System s nuclear faulities may be NRC tunding target and allowances for the cost of removal of materially different from the funding targets and the wst nonradiological structures and materials. For more m. formation estimates contained in the site-specific studies and cannot about Mer-Ed and Penelec, see h.ote 3. Penelec intends to now be more reasonably estimated than the level of the NRC.

32

General Pubhc Utilan Cierpurarmn and Subudian Cornpanies request decommissioning revenues and an allowance for the cost Under its insuranc e policies applicable to nuclear operations and of removal of nonradmlogical structures and materials, similar to facihties, the GPU System is subject to maximum retrosputive the amounts granted to Met-Ed,in its next retail base rate 61ing.

premium assessments of approximately $39 million in addition Management intends to seek recovery for any increases in TMI-2 to those payable under the Price-Anderson Act.

retirement costs, but recognizes that recovery cannot be assured.

Environmental Alatters The Subsidiaries expect to begin to incur an annual cost, As a result of existing and proposed legislation and regulations, currently estimated at $5 milhon, for long-term monitored and ongoing legal proceedmps dealing with envitc.nmental storage of TAf t-2 beginning in 1994. The JCPAL share of these matters, including acid rain, water quality, air quality, costs has been recognized by the NJBRC in raremaking as part of electromagnetic fields, and storage and disposal of hazardous the TMI site costs. As a result of the PaPUC rate action, Afer-and'or toxic wastes, the GPU System may be required to incur Ed and Penelec will ontinue to defer TMI-2 incremenal substantial additional costs to construct new equipment, mcshfy monitored storage costs and will seek recovery when such costs or replace existing and proposed equipment, remediate or clean are actually incurred.

up waste disposal and other sites currently or formerly used by Insurance it, including previously owned manufactured gas plants, and The GPU System has insurance (subject to retentions and with regard to electromagnetic 6 elds, postpone or cancel he deductibles) for its operations and facilities including coverage installation of, or replace or modify, utility plant.

for property damage, liability to employees and third parties, and To wmply with the federal Clean Air Act Amendments of 1990, loss of use and occupancy (primarily incremental replacement the GPU System expects to expend approximately $590 million power msts). There is no assurance that the GPU System will for air pollution control equipment by the year 2000. Costs mamtain all existing insurance coverages. losses or liabilities that associated with the capital invested in this equipment and the are not completely insured, unless allowed to be recovered increased operating costs of the affened stations are expected to through raremaking, could have a material adverse effect on the be recoverable through the raremaking process.

financial condition of the GPU System.

The GPU System companies have been notified by the The decontamination liability and property damage insurance Environmental Protection Agency (EPA) and state environmental coverage for the TM1 station (TMI-l and TMI-2 are considered authorities that they are among the potentially responsible one site for insurance purposes)and for Oyster Crnk totals parties (PRPs) w ho may be jointly and severally liable to pay for

$2 6 billion per site. In accordance with NRC regulations, these the costs associated with the in estigation and remediation at insurance policies generally require that proceeds first be used for 10 hazardous and or toxic waste sites. In addition, the GPU stabihzation of the reactors and then to pay for decontamination System compan es base been requested to supply information to and debris removal expenses. An, remaming amounts available the EPA and state environmental authorities on veral other under the policies may then be used for repair and restoration sites for w hich they base not as yet been named as PRPs. The costs and decommissioning costs. Consequently, there can be Subsidiaries have also been named in lawsuits requesting no assurance that, in the event of a nuclear incident, property darrages for hazardous and'or toxic substances allegedly released damage insurance proceeds would be available for the repair and into the environment. The ultimate cost of remediation will restoration of the stations.

depend upon changing circumstances as site investigations contmue, including (a) the existing technology required for site The Pru.e-Anderson Act limits the GPU System s liabih.ty to third parties for a nuclear incident at one ofits sites to cleanup, (b) the remedial action plan chosen and (c) the extent of approximately $M billion Coserage for the first $200 million of site contamination and the portion attributed to the GPU System such liabihty is provided by private insurance..The remaining companies.

coverage is provided by retrospective premiums payable by all JCP&L has recorded $20 million for environmental liabilities nuclear reactor ou ners. A nuclear incident at one of the GPU relating to formerly-owned manufactured gas plants; however, System's reactors or any other licensed nuclear power reactor in the ultimate costs could be in excess of this amount.JCP&L is the country could result in assessments of up to $6' - % n per collecting $2.5 million annually and at December 31,1992, had incider.. for each of the GPU System's three reactt collected from customers $7.8 million in excess of expenditures et to an annual manmum payment of $10 million per i.

per of $9.6 million. In JCP&L's arrent rate case, the Administrative reactor.

Law J udge (ALJ) has recommended that collections cease until The GPU System has insurance coverage for incremental expenditures are equal to the amounts wilected. Management replacement power costs resultin;; from an accident-related ex;ms that any excess expenditures will be recoverable through outage at its nuclear plants. C. overage mmmences after the the ratemaking process.

first 21 weeks of the outage and continues for three years at The GPU System companies are unable to estimate the extent of reducing levels beginning at $1.7 million for Oyster Creck and possible remediation and associated msts of additional

$2A million for TMl-1, per week.

environmental matters. Also unknown are the consequences of environmental issues, which could cause the postp >nement or 33

Gnmi Puh thanes Corpraoon cd hbdurv Luniunws (ancellation of either the installation or replacement of utility Philhps Generating Station (which is to be nactis sted), the joint plant. Management belines the costs dest nbul ahos e should be construction and ownership of a new 500-kikaoh transtmssion rumtrable through the ratemaking process.

line (the New Transmission Line) and associated transmission facilities and the punhase by JCP&L and Met-Ed of 350 MW Other L,ommitments and Contingencies of capacity and energy from Duquesne for 20 years. The in 1991, the C.ommonwealth of Pennsylvania enacted lega. lation amendments provide that the commencement date or the 20-> ear resulting in general tax increases uhich are being collected from power supply apretment wd. l be cointident with the in-service Pennsdvama customers by means of a revenue surcharge. In date of the h,ew Transmission Line and Duquesne will use all respimse to a joint petition filed by the Ornce ofConsumer reasonable ettons, subject to its discretion regardmg the timing Advocate and the Ottice of Small Business Advocate regardm.g and certainty of the New Transmission L.ine, to return the dus matur, the PaPCC has issued an Order to Show Cause to Phillips Station to servire by the in-service date of the N.ew deterrmne whether the level of Penelec's earnings in light of Transmission Line, whk h.is currently targeted forJanuary 199,i.

current market conditions are unjust and unreasonable. In June The tost of the Subsidianes two-thirds share of the New 1992, Penelec filed a respmse, together with suppirting data, Transmission Line is currently estimated to be $350 mdlion.

asserting that its current earmngs were not excessive,its rates The demand and energy charg' es payable by JCP&L and Met-Ed were not in exceu of just and rea.mable rates and its surcharge to Duquesne under the power supply agreement have been collections did not produce unjust or unreasonable rates. For reduced to rednt 1992 avoided costs for capacitv and energy.

resolution of this matter, see Note 3 The estimated purchase prke forJCP&L and Met-Ed's 50%

The audit statTof the PaPUC has completed an examination imerest in the Philhp Station has been reduced to $143 million of Penelec's Energy Cost Rate (ECR) for the years ended (from $150 million) and certain repair and maintenance activities Dnember 31,1990 and 1989. In an audit report, the staff will now be (onducted as part of the Phdlips Station reactivation, alleges, among other things that Penelec was not in compliance rather than after commercial operation as originally planned. The with its ECR tariff and has overcharged its customers by failing amendal agretments are subject to approval by the PaPUC, the to nilut in its ECR credits fur certain reserve capacity NJBRC and the Federal Energy Regulatory Commission (FERC),

transactions and by including certain nuclear fuel related costs.

as well as other conditions which must be met.

Such alleged mercharges amount to approximately $19 million

,.he Subsidiaries and Duquesne have filed petitions with the a

through 1990, excluding interest. In August 1992, the PaPUC PaPt'C, the NJBRC and the FERC seeking regulatory issued an Order to Show Cause directing Penekc to show a by _t i

authorizations for these transactions. The PaPUC has a. sued a should not be immediately required to refund to customers favorable decision on cenain aspects of the transactions includmg approximately $19 million. The matter has been assigned to an participation of Met-Ed and Pentlec in the proposed transactions.

ALJ and Penclec has fded testimony supponing us p>sition on Certain panies have, however, asknl for reconsideration of the the issues raised by the audit staff. There can be no assurance as PaPUC decision in light of the renegotiated agntments.

to the outcome of this matter for Penelec or any resulting impact Ilearings on the joint petition strking approval of the N. ew on Met-Ed.

Transmasion Line began in October 1992. Objections to the JCPAliiwo operating nuch-ar units are subject to the NJBRC's proposed siting of the line have lxtn filed by landowners, annual nudcar prformance standard. Operation of these units at environmental groups and other intervenors. In NewJersey, an aggregate generating (apacity factor below 659 or above 757 initial hearings before an ALJ have been concluded and further would trigger a charge or credit based on replacement energy pnxetdings have twen scheduled for the first quarter of 1993 costs. At current cost lesels, the maximum annual effnt on net Objeaions toJCP&L's participation in the transactions have income of the performance standard charge at a 407 capacity been raised by various panies In addition, certain interrenors factor would be approximately $12 million. Whde a tapacity have fded nbiections with the FERC and have requested a factor below 407 would generate no specific monetary charge, it hearing. There can be no assurance as to the outc ome of these would require the issue to be brought before the NJBRC for pnu redings, review. The annual measurement perial, which begin, in March As a consequence of reliability, licensing, environmental and of each year, coincides with that used for the Irveb. red Energy other requirements, substantial additions to urdity plant may be Adjustment Clause.

required relatively late in their expected service lives. If such The GPU System's construction programs, for which substamial additions,re made, current depreciation allowance methalology commitments have been incurred and w hkh extend over several may not make adequate pmvision for the recovery of such years, contemplate expendituns of $582 million during 1993, investments during their remaming lives. Management intends inJanuary 1993, as contemplated by a November 1992 to scrk reunery of any such costs through the ratemaking memorandum of understanding, the Subsidiaries and Duquesne process, but recognizes that recovery is not auured.

Light Company (Duquesne) amended their several interde-The Subsidiaries have entered into long-term contraus with pendent agreements for the pun base by JCPAL and Met-Ed of a nonaffiliated mining (ompanies for the punbase of. coal for 50% ownership interest in Duquesne.s 300 megawatt (MW) 34 l

GewM Pubik Uretm Gewum ed Sdmdar, Cornpmn certam generarmg stations in w hich they base ownership rendered rather than as billed. This change results in a better mterests. The contracts, w hkh expire between 1993 and the end matc hing of revenues and expcnses.

of the expated sc n ne hves of the generatmg stanons, require the purchase of either fh-d or minimum amounts of the stations' in 1991. the GPU System comphed wich ILRC Accounting Release N.o.14, s hich requires the redassm. cation of certain sales coal requirements. The prue of the cool is determined by twmulas proud ng for the ruovery by the mining tompanies of tor resale of electncity transactions from Power purchased and rhor costs of produumn The $ubsidiaries' share of the cost of interchanged to Operating Revenues.

r oal purchased under these agreements is expa ted to aggregate Deferred Energy Cmts 5106 million for 1993 Energy (osts are rnognized in the period in w hich the related The 5ubsidianes base entered into agreements with other utihties for the purchase of capauty and energy for various l'tility Plant periods through 1999. These agreements provide for up to I,SM lt is the policy of the GPU System to record additions to unlity MW in 1993, dechamp to 945 MW by 1995 and 189 MW by plant (material, labor, overhead and an allowanc e for funds usal 1999. Pa3 ments pursuant to these agreements are esumated to during construction) at cost. The cost of current repairs and aggregate 5283 milhon in 1993. The price of the energy minor replacements is charged to appropriate operating and purchased unJer these agreements is determined by contracts maintenance expense and clearing accounts and the cost of prosidmg generally for the recovery by the sellers of their costs.

renewals is capitalized. The original cost of utility plant retired The Subsidiaries have entered into power purchase agreements wah independently os ned power proJuction fachties for the Depreciation purchase of energy and capacity for penods up to 25 years. These The GPU System provides for depreciation at annual rates agreements provide for the sale of approximately 2,300 MW of determined and revised periodically, on the basis of studies, to be cap.ory and energy to the GPU System by the mid 1990s. As suf6cient to depreciate the origmal c ost of depreciable property of Daember 31,1992, fac hties emered by these agreements m er estimated remaining service lives, u hic h are generally longer haung 1,083 MW of capacity were in service, and l'5 MW are than those employed for tax purposes. The Subsidiaries used sc heduled to uimmence operanon in 1993. Payments made depreciation rates which, on an aggregate composite basis, pursuant to these agreements wcre SCl mdhon, $343 milhon resulted in annual rates of 3179,3.207 and 3.307 for the years and 5189 milhon for 1992,1991 and 1990 respectisely, and are 1992,1991 and 1990, respectively.

estimated io aggregate 5528 mdhon for 1993. The price of the energ3 and capacny to be pur based under these agreements is Allowance for Funds Lied During Construction (AFUDC)

The Undorm S stem of Accounts defines AFUDC as "the net determined by contracts for which NJBRC or PaPL,C approval of 3

cost recm try has been obtamed or is bemy saught.

cost for the period of construction of borrowed funds used m r

construction purposes and a reasonable rate on other funds u hen in the normal course of the operation of their busmesses, the so used? AFUIX' is recorded as a (harge to construc tion work in GPU System companies are from nme to time msohed in progress, and the equisalent redits are to interest charges for the disputes, claims and, in some cases, as defendants in ht gation pretax u>st of borrowed funds and to orher income for the in whic h compensatory and punitive damages are sought by allowance for other funds. While AFUDC results in an inc rease customers, contrac tors, sendors and other suppliers of equipment m utihty plant and represents current earnings, it is reahred in and ser ices and by employees alleging unlawful employment cash through deprecianon or amorozation allowances only u hen praunes. It is not expected that the outcome of these matters the related plant is recognized in rates. On an aggregate u ill have a material effut on the GPU System's 6nanaal posinon composee basis, the annual rares utilized were 7.337,8.397 or results of operations.

and 9.747 for the years 1992,1991 and 1990, respectively.

2. Sumrnary of Significant Accounting Policies Arnortiration Policies System of Accounts

• Amuing fw 7311-2 and FudcJ Rne Intenmezu:

The consolidated tmanual statements mclude the aaounts of JCP&L and Penelec are collecting annual retail revenues for all su, sidiaries. Certam reclassiticar ons of prior rears. data the amortiration of TMI-2 of approximately $9A million and o

base been made to conform with current presentanon The

$13.7 md. lion, respectively. These leuls of revenues will be Subsidianes accounting records are maintained m accordance sufixient to recover the remaming investments by 2008 tor with the L.ruform System or Accounts prestnbed by the FERC.

JCP&L and by 1994 for Peneler. In its 1993 base rate decision, and adopted by the PaPUC and NJBRC.

the PaPUC reduced Met-Ed's annual retad revenues for the amortization of the TMI-2 msestment to approximately $8.3 Res enues mdlion, a level sufficient for Mer-Ed to recover its remaining Effectis e January 1,1991, the Corporation and as Subsidiaries investment in TMI-2 in 1995. For more information, see Note 3.

changed their accounting policy for recognizing electric At December 31,1992,594 mdlion is included in Unamortized operating revenues to one that accrues revenues for sernces as property losses on the balance sheet forJCP&L's forked Rint 35

r,mwruw tu m n<ae.o.w.asA hnLw e proie(t. JCPAL is unllet t mp annual retad resenues tur the utihtie% the Subsidiar!es beliest that the provisions of 1 A5109 amortuation of this protect of approximately $11.2 mdhon.

will not hoe a matenal irnpatt on their net mcome.

uInc h w dl be suf6uent to recmc r its rema omg imestmc nt by N.uclear i_uel Disposal I.ec the year 2006 Because the Subudianes her not been proudeJ The $ubsidianes are proddmg for estimated future disposal costs resenues for a return on the unamornied balances of the damaged for s;wnt nuclear fuel at Oyster Cret k and TMI-l m anordan(e TMI-2 tauhty and the <anit tled Forked Rntr proiect, these w ich the N.otlear 4aste Pohcy Act of 19N2. The Subsidianes imestments an being carned at thur discounted present values.

entered mto tontracts m 1983 with the IX)E. -for the disposal of The relied annual au retmn, w hn h represents t he (arry mg spent nuclear fuel. The total habdity under these contracts, charges that are aurued as the asset i, w ntren-up from its mduding mte rest, at December 31,1992, all of u hu h relates to dis < ounted value, is recorded m Ot her mt ome, net.

spent nudear tuel from nudeer generation through April 1983,

. h!wr N/:

amounted to $1U mdhon, and is re0nted m Deferred Credits Nutlear fuel is amortized on a una of pnductmn basis Rates are and Other Liabihties on the balanc e sheet. As the actual habihty determmed and perioda ally reused to amortue the cost mer the is substantially in euess of the amount recovered to date from useful hre.

rate payers, the Subsidianes have redened such euess of

$27 milhon at Deurrber 31,1992 in Dtferred Debits and Other in 1992, the $ubucharies rnorded a (harge to t!ie Nuclear I.uel Assets on the balance sheet. The rates presentiv charged to asset auount and a liabihty m the amount of $55.5 mdhon for customers proude for the unllec rion of these costs, plus mterest, tontnbutions to the Decontammatmn and Decommissionme; oser remamme perioJs of eleven years for JCPAL fifteen y ears 1:und (part of the Fnergy Pohcy Act of 1992 (Ene rgy AttH tor for Me t-Ed and five years for Pendec.

the (leanup or, gaseous ditiusion enrichment plants operated by the thleral government. Utihties with nudear plants w dl The Subsidiaries are coileumg I rnill per kdowatt hour from contnhute a total of 5150 mdhon annually, based on an their customers for spent nudear fuel disposal rosts resulting assessment, for 15 years up to a total of $2 25 bdhon 6n 1992 from nudear generation subsequent to Aprd 1983. These dollarst Eath unhry's share is computed on its enrichment amounts are remitted quarterly to the IX)E.

punbases made pnor to the passage of the Energy Art. It is Statements on C. ash Flows antaipated that pas ments to this f und wdl be recosered throuch I.or the purpose of the statements of (ash flows. temporarv the $ubudianes' energy dauses, as prouded for in the Energv Act.

mvestments incNde all unrestncred hquiJ auets, suc h as (ash Nuclear Ourage Maintenance Costs depos ts and debt sec unties, with matunties generally of three The GPU Sysu m au rues inc remental nut lear outage months or less.

mamtenance cmts antiopated to be mc urred Juring stheduleJ

3. Subsequent Events nudrar plant n fuehng outages.

In Aptd 1992 Met-Ed 61ed wah the PaPUC a petaion incomt Taxes requestmg a net $55 mdhon annual mcrease in retad base rates.

The GPl System ides a consolid.ted federal mtome tax return The request for addnional revenues induded provisions for and all participants are jointly and sescrally liable for the tull higher operating expenses, capital costs and nudear plant amount of any tax, mdudmg penalties anJ imerest, w huh may decommisuoning costs On January 21,1993, the PaPUC issued be assessed acamst the group.

7are order denymg resenues for certam TMl-2 retirement and Dcferred muime taxes w hich result pnmarily from bberahied mutmental monitored storage costs and the colle tion of costs deprenanon methods, deferred energy t osts, dnommisuoning assouated with the adopton of the Statement of Finandal funds and discounted Forked IUver and TMl-2 imestments are Auounting Standards No.106 (FAS 106), *Lmploy ers prouded for differences between book and taxable income to the Auountmg n>r Pustrenrement Itenents Other Than Pensionsf extent permated for raremakmg purposes. The (umulatne net On Manh 11,1993, m response to a peraion fded by Met-EJ for amount of m(ome tax timing differences, pnmarily due to dan 6 cation, ruonsideration and amendment, ihe PaPUC depredat on, for u hich deferred income taxes have not been moth.

i portions of its January 21,1993 rate order to allow fin prmiJed, approximated $12 4 milhon at December 31,1992. It for the future reuntry of certain TMl-2 retirements (osts is expected that future resenues will be provided for apphcable (radiological deuimmissioning and nonradiologual costs of taxes as they become payable. Im estment tax (recas (11.Ct are removal). As a result of the PaPUC. action, Met-Ed and Pendec amortized over the estimated sernc e lis es of the related faubn.es.

wdl (ontinue to defer TMI-2 inc remental monitored storage Statement of Finanua! Aucunting Standards h 109 (osts and will seek ruover> w hen such u>sts are anually inc urred.

WAS 109), "Aucuntmg her Inu>me Taxes." w hu h is apphc able For more information, see the Nudear Plant Reorement Cars with respeu to fiscal ears beginning after De(ember 15,1992, sntmn of Note 1. In addaion, the PaPUC aumn allows both 3

requires that utdities estabbsh substantial deferred tax liabihties Met-Ed and Penelec to defer the int remental u>sts assouated and receivables due from customers for suc h deferred rares not with the adoption of FAS 106. For more in63rmation, see Note prevmusly ruorded as liabihties. Itecause they are regulated 10 - Postemployment Bent fas. The P4PUC direued Met-Ed t

3(i

General Pubhc l'tibon Corpntmn and subudary Cnrnpmws to reduce its amonization of TMI-2 to $8 3 milhon, retroacute for the 3 ears 1993,1994,1995,1996 and 1997, the toJanuary 1991 The recovery of tertain TMI-2 retirement costs Corporationi subsidiaries have long-term debt matunties of will begin when the amortization of the TMI-2 investment ends

$29 milhon, $ 168 miUion, $91 mdlion, $119 milhon and in 1995 at the same annual rate as the amornzation, or $8 3

$155 rnillion, respecinely.

million. 'Ihe amounts in the consolidated financial statements at Substantiall all of the utility plant owned by the Corporan.,

. 3 on s December 31,1992 rethtr the above decision of the PaPUC. The PaPUC order is subject to possible appeal to the Pennsyhania subsidiaries is subject to the lien of their respective mortgages.

Commonwealth Court.

6. Capital Stock Separately, on Marc h 11,1993, the PaPUC aho dismissed an Common Stock Order to Show Cause to determine whether the level of Penelevs The following table presents information relating to the common earnings are unjust and unreasonable. For more information, see stak ($2.50 par value)of the Corporation:

the Other Commitments and Cteringencies section of Note 1.

1992 1991

4. Short Te *n Borrowing Arrangements Aut6rized shares 150,000,000 150JM10poo At December 31,1992, the GPU System had $101 milhon of issued shares 125,783,338 125,~83,338 short-term notes outstanding, of which $25 million was Reacquired shares 14,965,309 14,968, % 2 Outuanding shares 110,81 b.029 110,H 14,976 commercial paper and the remainder was notes issued under bank Resintred units 38,816 lines of <redit (credit facilitiest The Corporation and the Subsidiaries have a Re ohing Cred2' In 1992, pursuant to the 1990 Restricted Stock Plan, the Agreement (Credit Agreemeno with a consortium of banks that Corporation issued to officers restricted units representing rights permits total borrowing of $ 150 mdlion outstanding at any one m receive sbres of common stock, on a one-for-one basis, at the time. The Credit Agreement expires April 1,1995. The notes end of the restriction peritd The restncred units do not arTect issued under the Credit Agreement, which is subject t the issued and outstandmg shares of common stock until wmmitment fees, bear interest at rates based on either the conversion at the end of the restriction peritd However, the prime rate or various money market rates. Notes issued under restricted units are considered mmmon stock equivalents and the Credit Agreement are subject to various covenants and therefore are included in average common shares outstanding for accelerat on under certam conditions.

die earnings per share computation on the income statement.

Th Corporation and the Subsidiaries also have $210 milhon of The restricted units accrue dividends on a quarterly basis. In credit facilities. The agreements generauy proside for payment 1992,38,816 restricted units were awarded to plan participants.

of a commitment fee on the unborrowed amount of % of Ig In 1992,1991 and 1990, the Corporation issued a total of 3,053, annually. Borrowings under these credit fachties generally bear 39,600 and 28,450 restriued shares, respectively, from mterest based on the prime rate or money market rates.

previously reacquired shares. No shares of common stock were reacquired in 1992,1991 or 1990. The Corporation is seeking

5. Long-Term Debt standby authorization from the Securities and Exchange At December 31,1992, the Corporanon's subsidiaries had long.

Commission to repurchase up to frve mdlion shares of common term debt outstanding, as follows:

stock through 1995.

Interest Rates Preferred Stock 41/27 to 7 to 97 to At December 31,1992, the Subsidiaries had the following issues Maturities 6 7 8'T 8 '87 10127 Total of cumulative preferred snick outstandmg:

(In Thousando Stated Value Shares (In Thousands) w per Share Outstandmg stated Yalue First Mortgage Bonds:

With mandatory redemption:

1993-2002

$283,799 $ 610,762 3158.500

$ 1,053.061 7.529 - M 657

$100 1,500,00(I il 50B00 2003-2012 25,120 461,454 130h00 616,574 2013-2022 25poo 232.200 275.000 532.200 Without mandatory redemption:

Total

$ 333,919 $ 1,3D4,416

$ 563,500 2,201,835 1,

2 W2,W H of W - 8.367

$100 1,810,000 181poo Amounn due within one year (l4,47 7 TotM 3.133,912 313,391 Total 2,1 H7,35 8 Premium 1,283 Other kog-term debt (ner of $14,730 due within one year) 37,936 Td

$ 314,674 Unamortized net discount (3.677)

Total

$ 2,221.617 37

(

I i

General Paw Uratm (ormranon at ht%Lry Companic, l

I i

During 1992,JCP&L issued 500.O(K) shares of 7.529 series all of that Subsidiary's preferrni stock for all past quarterly j

cumulative preferred stock with mandatory redempnon dividend perkds have Nrn paid or declared and set aside for l

l provis. ions. The series is callable beginning in the year 2002 at payment.

l various p G rs above its stated value. The series is to be redetmed

7. Fair Value of F.mancial Instruments i

j ratably over twent) years beg.mning in the year 1998, Each issue j

j provides that JCP&L may, at its option, redeem an amount of In December 1991, the Financial Accounting Standards Board shares equal to its rnandatory sinkmg fund requirement at such issued Statement of Financial Accounting Standards No.107 l

time as the mandatory sinking fund redemption is made.

(FAS 107), Disclosures about Fair Value of Financial l

l Expenses of $0.5 million incurred in connection with the Instruments", which has been implemented by the Corporation j

issuance of the cumulative preferred stoc k have Nrn charged to for the year ended December 31,1992. FAS 107 requires Capital surplus on the balance sket.

additional disclosure about the fair value of financial instruments, j

a i

l based on materialiry (on and off balance sheet), including During 1992,JCPAL redeemed all its outstandins; 8.75W Sen.

liabilities, for whk h it is practicable to estimate fa.ir value The es li cumulative preferred stoc k (aggregate stated value of following metheds and assumptions were used to estimate the 1

$50 million), at a total cost of $51.6 million. Tiu.s resulted.ma fair value of the Corporation s finanaal instruments, j

$1.6 mdlion charge to retained earnings. Additional preferred j

stock expenses of $0.7 million have Nrn (barged to retained The fair value of the Corporation's long-term debt is estimated j

]

earnings.

based on the quoted market prkes for the same or similar issues or on the current rates otTered to the Corporation for debt of the l

During 1991, Penelec redeemed all its outstanding 97r same remaining maturities.

5eries L cumulative preferred stock (aggregate stated value of i

j

$35 million), at a total cost of $36.4 million. This resuhed in a The estimated fair value of the Corporation's long-term debt, as

$1.4 milbon charge to retained earnings.

of December 31,1992,is as follows:

d During 1990,JCPAL issued 500,000 shares of each of two dn Thousands) i series (8.489 and 8.659 )oicumulatiw preferred stak with hing rer l

mandatory redemption provisions. The 8.487 series is not Amount Value i

i cadable. The 8.659 series is callable beginning in the year 2000 l

$ 2.221,617

$2,304.701

)

at various prices abme its stated value. The 8.489 series is to be redeemed ratably mrr five years beginning in 1996 and the f

i 8.659 series ratably mer sis years begmning in the year 2000

8. Income Taxes 4

Each issue provides that JCP&L may, at its option. redeem an amoun, of shares equal to its mandatory sinking fund The reconoliations from net income to book income subjeu to requirement at such ume as the mandatory sinking fund tax and from the federal statutory rate to combined feederal and

)

redemption is made. Fxpenses of $0.8 million incurred in state efTective tax rates are as follows:

]

connection with the issuance of cumulative preferred stuck g g,g

]

have been charged to Capital surplus on the balance sheet.

1992 1991 1990 No other shares of preferred stock of the Subsidiaries were issued i

or redeemed in the three 3 ears ended December 31.1992.

Net income

$252

$276

$278 j

Preferred stock dividends 37 36 35 I

i The issued and outstanding shares of preferred stock without income tax expense 174 165 160 l

mandatory redemption are (allable at various prices above their ikx,k mcome subien to tax

$463

$477

$473 l

stated values. At December 31,1992, the aggregate amount at which these shares could be called by the Subsidiaries was rederal statutory rate 34 %

34 9 34 9 I

$326 million.

Effut of ddierence between tax At December 31,1992 and 1991. the Subsidiaries were and book deprecianon for which deferred taxes were not prmaded 2

3 2

authorized to issue 37,035,000 shares of cumulative preferred Amortiration oflTC (3)

(3)

(3) stoc k. If dm..dends en any of the preferred stock of any of he w-tax, net of federal benefit 5

3 3

Subsidiaries are m arrears in an amount equal to the annual other (n

(2) dividend, tne holders of preferred stoc k, voting as a class, are entitled to elect a majority of the board of directors of that

-3M Effettive int ome tax rate 389.

iS9 subsidiary untd all dividends in arrears have been paid. No redemptions of preferred stmk may be made unless dividends on 38

l General Publu Utdities Corporanim and kbsdar, Compi.nws Federal and state income tax expense is comprised of the A summary of the components of net perkidic pension cost following:

follows:

Un Md! ions) tln Mdbons) 1992 1991 1990 1992 1991 1990 Proviuons for taxes currently payable S165

$161

$150 5en ic e cost-benefits earned Deferred income taxes during the perim!

$ 26.3

$ 28.2

$ 28.2 Interest cost on proiewed I.iberalized deprecianon 34 36 29 Mt obbyion 87.8 80 0 72.6 Decommissmnmg (3)

(27)

(5) 1.ess: Expected return on plan assets (89.5)

(84.3)

C6.6)

Deferral uf energy costs (16) 5 8

Amortization (2.5)

(2 6)

(4.5)

Accrenon income 9

11 12 Unbilled revenues 24 (13) Net periodic penson cost S 22.1

$ 21,3

$ 19.7 Nuclear outage maintenance costs (6)

(5)

TMI-2 pre-monitored srcrape costs 8

(14)

Interest on prmr years' taxes 3

(10) 3 Other (7)

(12) p)

e adual remm on the plans. aswts for the year 1992 was a gain of $53.2 trullion, for the year 1991, a gain of $191.3 million, and Deferred mcome taxes, ner 22 20 22 for the year 1990, a k>ss of $21.2 million.

Amortizanon of1TC. net (13)

(16)

(12)

The funded status of the plans and related assumptions at income tax expense

$174

$165

$160 December 31,1992 and 1991 were as follows:

(In Millions)

The Internal Revenue Service has completed its examinations of 1992 1991 the GPU System's federal income tax returns through 198& The year 1986 is currently under appeal, the result of which is not Accumulated benefit obbgation:

Vested benefits S 820.6

$ 783.5 expated to have an adverse erTect on net income. The years 1987 Nontested benefits 93.6 86.0 1988 and 1989 are currently under audit.

Iffect of future compensation levels 194.3 1810

9. Supplementary Income Statement Information Pmiected benefit obligation (PBO)

$ 1,108.5

$ 1.056.5 Maintenance expense and other taxes charged to operating P

f S U 67.1

$me expenses consisted of the following:

PBO (1,108.51 (1.056 53 dn Millmns)

Plan assets m excess of PBO 58.6 92.2 1992 1991 1990 less: Unrecognized net gam (56.7)

(81.4)

Unrecogmzed pnor service cost (12.7)

(17.9)

Mamtenante

$251

$239

$233 Unrecognized net tranunon anet (9.5)

(10.3)

Other taxes:

^

I" NewJersey umt tax

$197

$201

$180 Pennsylvania state gross receipts 67 66 60 Principal act uanal assumptons(cf );

Real estate and personal propeny 22 22 16 Annuallong-terrn rate of return on plan assets 8.5 8.5 Other 42 44 38 Dacount rate 8.5 8.5 Total

$328

$333

$294 Annual increase in compensation levels 6.0 6.0

10. Postemployment Benefits The assets of the plans are held m.a Master Trust and generally The GPU Syste..,aintams defmed benefit pension plans invested in common stocks, fixed mcome securities and real covering substantially all ofits employees. The GPU System's estate equity investments. The unrecognized net gain represents policy is to currently fund net pension costs within the deduction actual experience different from that assumed, which is deferred limits permitted by the Internal Revenue Code.

and not induded in the determination ofpension cost until 39

I i

(

l j

Certwral PuA UoLon 0,qvirenn e.d hhumy umgumn l

I it meeds certain incis. Both the unrempnued poor service

11. Jointly-Owned Stations t

cost resulting f rom retroauive t hanges in benents and the Eac h partiopant in a pomtly-owned station 6 nances its portion of i

unretogmied net transinon asset arisme out of the adoption of the investment and charges its share of operating expenses to the i

3 Statement of Fmanual Accounting Standards No. 87 are being appropriate expense accounts. The Subsiduries parncipated with i

9 i

amortand as a credit to pension cost over the aserage remainmg nonatfdiated utdities in the following jointly-ow ned stations at i

sernte peruds for wvered employees.

Denmber 31,1992; i

)

f l

The GPU System also maintams sasings plans for substantially bana&W6M all of its employees These plans provide for employee 3

^' C"* "I""d i

contributions up to speci6ed limits. Certain of the GPU

$ tat on Owner Ownership Investment De preuation

[

System's saungs plans proude for various levels of matchm.g

]

contributiont The man hing contributions for the GPU System Ilomer City Penelec 50 5407.7 5144 3 i

for 1992,1991 and 1990 were $112 milhon, $9.7 nullion and Conemaugh Mer-rd 16AS 923 16 7

['

Keystone JCPA1.

16 67

2 3 20.0 59.3 mdlion, respectheh.

Yards Cntk JCPAL 50 22 6 5.9 In addition to providing the above bene 6ts, tiv GPU Syste.o senna Peneln 20 163 4.2 provides certam retiree health care and hfe insurance benents for t

substantially all employees who reach retirement age w hile f

12. Leases working for the GPU System. These benents are generally retognized as expense when premiums are paid. For 1992,1991 The GPU System's capital leases consist primarily of leases for I

and 1990, the wsts associated with pronding these twnefits nuclear fuel. Nuclear fuel capital leases at December 31,1992 totaled approximately $16.6 million, $16.3 million and and 1991 totaled $156 milhon and $174 mdlion, resr"CliVCIF

$ 10.7 mdlion, respectisely.

(ner of amortization of 5153 million and $101 mdlion,

]

In Daember 1990, the Fmancial Accountmg Standard > Board respecth ely). The recordmg of capital Icases has no etTect on net issued FAS 106, which is effecove for 6 scal yet rs begmning after income because all leases, for raremaking purposes, are ccasidered

{

Dn ember 15,1992. The GPU System will elect the opnon to operating leases.

l j

l record the transition obhgation existing at the date of adoption Durmg 1991, the Subsiduties entered into new nuclear fuel I

on a delayed basis oser twenty years. This statement wdl result lease agreements with nonatTiliated tuel trusts replacing their J

m increased annual msts because the GPU System will be existing nuclear fuel leases. An aggregate of up to $250 milhon I

required to accrue the costs of benefits expected to le paid to

($125 mi! bon each for Oyster Creek and TM1-1)of nuclear fuel i

employees w ben they reure, compared to the current method costs may be outstanding at any one time. It is contemplated that i

?

I j

of acmunting for such costs on a cash basis. The GPU System when consumed, portions of the presently leased material wdl be esumates the accumulated postrentement bene 6: obhganons replaceu, by additional leased matenal. The Subsid:..

i anes are l

1 other than pensions to be approximately $ 360 million (ner of responsible for the disposal costs of nuclear fuel leased under i

plan assets of $52 mdh.on) at January 1,1993. The annual cost a these agreements.

j esumated to be 562 million, a portion of whuh will be diarged J

to wnstn crion. These costs are based upon health care cost trend These nuclear fuel leases are renewable annually. lease expense j

rates ranging ratably fmm 149 m 1993 to 89 in 1999 and consists of an amount designed to amortire the cost of the tbsmi:-r and also re6ect implementation of a mst cap of 69 for nuclear fuel as mnsumed plus interest wsts. For the years ended l

i l

retin.ments after December 31,1995. InJCP&L's current base December 31,1992,1991 and 1990 these amounts were l

rate proceedmg the ALJ has recommended that JCP&L be

$74 mdlion, $66 million and $63 million, respectively. The allowed to collect currently one-third ? he mcremental leases may be terminated at any time with at least 6ve months postrenrement bene 6: costs. Addnionally, pending a final base notice by either party pnor to the end of the current period.

d rate order and the outwme of a genenc proceeding to consider Subject to certain wnditions of termination, the Subsiduries are

}

the impacts of FAS 106,JCP&L will defer the remaining required to purchase all nuclear fuel then under lease at a prite

{

amounts. As a result of the Met-Ed rate order, Met-Ed and that will allow the lessor to recover its ner investment.

Penelec wdl begin deferring inc remental iosts in 1993 JCPAL and Met-Ld have sold and leased back, for a term of

- 2 j

44 years, substantially all of their respet tive ownership interests l

l in the Merrill Creek Reservoir Project. The minimum lease j

payments under these operating leases us erage approximart1y

$ 3 milhon annually for each company.

l i

l j

l

)

I 40 l

i

General Publu Uriboes Corp >ranon and SulmJiary Q,mpanies System Statistics for The Years Ended Dncember D, 1992 1991 1990 1989 198N 1987 Cepscity at System Peak (In MW):

Compariy owned 6,718

.s,737 6,870 6,865 6,775 6,787 Contracted 3,360

.,,04 5 2.270 2,120 1,985 1,939 Total capacity (a) 10,078 9,782 9,140 8,985 8? 60 8,726 Hourly Peast Load (In MW):

Summer peak S,067 8,271 7,634 7,711 7,987 7,315 I

i Wmter peak 7,173 7,119 6,847 7,339 7,019 6.519 Reserve at system peak (7) 24.9 18.3 19 7 16.5 9.7 19,3 Load factor (W)(b) 62.3 61.1 64.4 604 61,5 63.4 Scurces of Energy On Thousands of MWH):

Net generation 29,981 27,727 29,842 31/>07 29,919 29,070 Power purchases and interclunge 20,001 20,189 16,798 14.564 14,621 13,034 Company use, hne loss, etc.

(4,843)

(4,773)

(4,325)

(5,026)

(4,743)

(4A35)

Energy sales 45,139 43.141 42,315 41,145 39,797 37,669 Energy mix pX ):

Coal 36 37 40 42 42 44 Nuclear 23 18 21 21 20 19 l

l'tibry purd ases and mterchange 24 30 29 27 32 31 Nonutihry purchases 16 12 7

4 1

Other (gas, hydre & oil) 1 3

3 6

5 6

Total 100 100 100 100 100 100 l

w Energy cost (In Mills yr KWih:

Coal 13.79 14.99 14.96 14.29 14.04 14.02 Nuclear 5.51 6.30 6.58

6. h.

5.99 6.02 Utility purchases and interchange 19.94 21.89 24.98 24.42 2440 24.60 Nonutihty purchases 58.50 57.81 60.18 60.86 58.77 47.05 Ocher (gas & oil) 39.9J 32.87 39.22 37,96 33.77 33.85 Average 20.90 21.32 19.38 18.76 17.I5 16.75 Electric Energy Sales (In Thousands ofMWil):

Residential 13,725 13,852 13,369 13,377 13,283 12,445 Commercial 12,333 12,336 11,700 11,469 11,038 10,275 Industrial 11,901 12,035 12,344 12,422 12,800 12,140 Other 1,303 1,369 1,239 1,208 1,306 1,309 Sales to rustomers 39,262 39,592 3H,712 38A76 38,427 36.169 bales to other utihtses 5,877 3,549 3,603 2,669 1,370 1,500 Total 45,139 43,141 42,315 41,145 39,797 37,669 Operating Revenues na Millions):

Residential

$1.336

$1,340

$1,?l l

$1,181

$ 1,152

$1,085 Commercial 1,075 1.060 951 903 848 793 Industrial 752 752 709 700 705 670 Other 96 95 86 86 90 92 Revenues from customers

• 259 3,247 2.957 2,870 2,795 2,640 Sahs to other utilities 127 84 108 81 36 45 Total cicrtric revenues 3,386 3,331 3,065 2,951 2 831 2,685 Other revenues 41 39 41 39 33 i

Total

$3,434

$ 3,372

$ 3,104

$2/Y)2

$2.870

$2.718 Kilowatt-hour Sales per Residential Customer 8,213 8,374 8,146 8.238 8,305 7,938 Rasidantial Price per FWH Un Cents) 9.73 9.67 9.06 8.83 8.68 8.72

Customers at Year.End On Thousands)

Residential 1,S80 1.661 1,648 1,630 1,611 1,583 Commerdal 208 205 202 199 193 1.87 Industrial 9

9 10 10 10 10 Other-4 4

3 3

3 3

Total 1,901 s.879 1,863 1,842 1,817 1,783

. (a) Summer ratings at December 31,1992 of owned and contracted capacity were 6,718 MW and 3,360 MW, respectively.

(b) The ratio of the average hourly head in kilowatts supplied during the year to the peak load occrrring during the year.

l 41

General PuW L'tWon G,quironon and %lmdar) Compann Corporate I iformatiort Glossary General Public Utilities The GPU System Corporation Cornpanies Officers General Pubilc Utilities Base Load Generation -

Kilowatt-Hour (KWH)- A Corporation Generating facilities whic h basic unit of electricity equal t

James R. Leva 100 Interpace Parkway essentially operate at a con-to one kilowatt or 1,000 watts Chairman, President and Parsippany, NJ 07054-1149 stant output.

of power supplied to or taken Chief Executive Of6cer (201)263-6500 from an ekctnc circuit Coveneration - The simulta-steadily for one hour.

Era H. Jolles Jersey Central Power &

neous pnduction of electrical Senior Vice President and ught Campany (or mechanical) energy and Megawatt-Hour (MWH) -

General Counsel 300 Madison Avenue useful thermal energy from a Equivalent to 10,000 Morristown C 07962-1911 single energy source. With 100-watt light bulbs John G. Graham (201) 455-H200 this process, the fueFs energy operating for one hour.

Senior We President and is most often used to produce Chief Financial Officer Metropolitan Edison electricity, and the thermal NontTility Generating Company energy recoverable is Facility - A nonregulated F. Allen Donofrio 2800 Pottsville Pike employed in a vanery of other power productioa facility Vice President and Reading, PA 19610-0001 uses.The overall efficiency of from whkh utihties punbase Comptroller (215)929-3601 some cogeneration systems power.

surpasses 807 in converting Don W. Myers PennsylvardA Electric fuel to use ful energy.

Peak Demand - The maxi-Vice President and Treasurer company mum amount of electricity 1001 Broad Streer Demand - The total amount required to supply customers Mary A. Natewako Johnstown, PA 15906-2437 of electricity required at any at a speci6c piint in time.

Secretary (814)533-8111 gnen time by a utility's cus-tomers.

Reserve Capaci' Sharon K. Cepeda GPU Nuclear Corporation Empense - Fres paid to other Assistant Set retary 1 Upper Pond Road Demand-Side Management electric systems a have avail-Parsippany NJ 0~054-1050 (DSM)- The modification of able a speci6ed amount of (20113160 000 the customers' electric use power to be dehsered on Presidents of Subsidiary pattern. Examples of DSM demand.

Companies CPU Service Corporation mclude conservation, load 100 Interpace Parkway management and incentive Substation - A structure Dennis Baldassari Parsippany. NJ 07054-1149 rate programs.

used for switching and'or Jersey Centtal Power & IQht (201)263-6500 (hanging or regulating the Company Distribution System -

voltage of electricity Gowing General Portfolios Portion of utility plant used to along a transmission or distn-t Fred D. Hafer Corporation dehver tiectric energy from bution line.

MetropAitan Edison Mellon Bank Center the transmission system to the Company 10th & Market Streets customers.

System Capacity - The W Imington, DE 19S01 maximum capability of the Robert L. Wise (302)654-5893 Electromagnetic Fields system to supply pm er.

Pennsyhania Electrk (EMF)- Charges in electric al Company Energy Initiatives, Inc.

wires that pn du'e electric and Transmission Acc+ss - The l Upper Pond Road magnetic fields that surround ability of utiitty and non-Philip G. Clark Parsippany, NJ O'054-1050 the wires. These fields also utility generators to access GPU Nudear Corporation (201)263-6950 exist in household another utility's transmission appliances.

system in order to deliver a

John G. Graham energy to customers.

Genera Portfolios interchange - MWih Corporation delivered to or received by one Transmission Line - Lines electric utility system from that transfer electric energy in Bruce L. Levy another.

bulk to orher principal parts Energy Irutiatn es. Inc.

of the system or other utihr Kilowatt - A measure of systerr.

ein tric power equal to 1,000 watts.

Watt -

at of clmtric power. On mrsepower equals 746 wat ts.

42

@ This report is printed entirely on rc:yded pagr.

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

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f General Pubbt Utiliors Corporatu und htmdiary Comp nies Directors A

James R. Leva William G. Kuhns?M g

Elected 1992 Elected 1967 a

p Chairman, Presidem and Retired Chairman, President 4

i i

Chief Executise Of6cer and Chief Executive Odicer General Public Utilities General Pubhc Utihties e

Corporation Corporation Parsippany, NJ Parsippany, NJ I

i I~

~

Louis J. Appell, Jr.d John M. PietruskiU Elected 1972 Eksted 1989 President and President, Dansara Co.

i I

Chief Executise Ofiker Retired Chairman of the Board I

Susquehanna Pfaltzgraff Ca and Chief Executive Officer f

York, PA Sterling Drug Int.

[-[

Ag Consumer Products)

(Pharmac eutical and (Communications and New York, NY

~

ilousehold Pralucts) 2 Donald J. Bainton d Terms expire 1993: William G. Kuhns, Theodore H. Black.

Elected 1982 Catherine A. Rein 3 2

Don.1dJ. Bainton and LouisJ. Appell,Jr.

Chairman and Elected 1989 Chief Executire Of6cer Executne Vice President Contmental Can Co, Inc.

Metropolitan Life Insuranc e Co.

Syosset, NY New York, NY (Holding Company for (Diversified bnancial Serviceu l

Businesses in Engineering l

g g

and Packaging)

1. aul R. RoedellA F

Elected 1979 Theodore H. BlackU Director. Retired Cha rman Elected 19M and Chief Executisc Of6cer l

g Chairman of the board and Carpenter Technology Corp.

v.

Chief Executive Of6c er Readine, PA Ingersoll-Rand Co.

(Speciairy Merah)

Woothliff Lake, N1

+

(Industrial Mac hinerv and Carlisle A. H. TrostlJ l

Equipment)

Elected 1990 j

' t

• Admiral, U$N (Ret.), former gas-

/

Thomas B. Hagerti.'

Chief of Naval Operations g

J Electul 1988 Potomac. M D y

IF#

Chairman and Terms expire l'!94: Thomas B. Hagen, Carlisle A. H. Trost.

Chief Exec utis e Offk er Dr. Patricia K. WoolfL*

Paul R. Roedel and Dr. Patricia K. Woolf.

Eric insurante Group Eleued 1983 Erie, PA Consultant, Leu urer and (Proprty Casualty and Life Author Insurante)

Print et on. NJ r

Henry F. Henderson, Jr.23 o

Llected 19H9 I

.%ni.a y As.Jn C< n:nana President and 2 %de utPews:mlaml Chsef Lxecutive Di6cer c.miponsoon cumn:ma g

II.F. IlenJerson Industries 3 mA-r y mmiu.nug cumn.mn West CaldwelI, NJ 4

.% mie y Cv,psic and Pulda e.

f i.

~ 0 A

(Engineered Systems for Imp <muunm (ammenn f

/

Government !ndustry)

"~

Y k

m s.

f f

l l

{

Trrms expire 1995: James R. Leva, John M. Pietruski, Henry F.

Henderson,Jr. and Catherine A. Rem.

L i

6.-

General Public Utilities Corporation 100 Interpace Parkway Parsippany, New Jersey 07054-1149 (201) 263-6500

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