ML20151U482

1987 Annual Rept

ML20151U482
Person / Time
Site:	Oyster Creek, 05000000, Crane
Issue date:	12/31/1987
From:	Dieckamp H, Kuhns W GENERAL PUBLIC UTILITIES CORP.
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k GENERAL PUBLIC UTILITIES 1987 ANNUAL REPORT x

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t GPU SYSTEM PROFILE eneral l'u e tiHtin System JERSEY CENTRAL

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Companies provide about 36.2 billion kilowatt-POWER

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& LIGHT hours of electricity for approximately 1.8 million

, s' customers, or a total population exceeding 4.2 l

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million. The GPU serilce territories encompass l

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about half the land area of Pennsylvania and New

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Jersey.

METROPOLITAN

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.T-The operating companies are Jersey Central EDISON i

Power & Light Company (JCP&L) in New l

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Jersey and Aletropolitan Edison Company (Slet-Ed) and Penns)lvanla Llectric Company (Penelec) in Pennsylvania Another subsidiary, PENNSYLVANIA ELECTRIC GPU Service Corporation (GPUSC), provides integrated System plans and pollenes, along with a j

broad range of professional serilces to the i

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operating companies. A fifth subsidiary, GPU Nuclear Corporation (GPUN),is responsible for the operation, maintenance and management of the Sy stem's nuclect facilities.

M KP& L Met-Ed Penelec GPU anenon (m) si,335, 76 s 6ii,752 s 732,76i s2f73,42:

OPERATING T tai auets (m) s2 s23,m si,m,970 si,783,7:3 s6,278,9i5 COMPANIES, 8"'"'"

STATISTICS

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1987 Commercial 34Cr 24?c 25 ",

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Industria!

25'~c 39Pc 41cc 34cc Customers at ) ear-end (000) 841 403 539 1,783 Siegawatt hour sales (000) 15,551 8,931 11,687 36,169 Peak load (.%1W)*

3,754 1,645 1,916 7,315 Number of employees 3,961 2,855 4,235 13,777 "

• At time of GPU System peak.

" includes emplo)ees of GPU Nuclear and Sersice Corporations.

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i 1987 FINANCIAL

SUMMARY

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1987 1986*

Change FINANCIAL DATA un.villions)

Revenues S 2,673 S 2,787 (4.17c )

Income from operations S

394 S

354 11.37c Net income S

259 S

211 22.87c h

Construction expenditures S

474 S

513 (7.67c )

5 se OPERATING DATA 3

Megawatt hour sales (000) 36,169 34,770 4.07c Customers served at year end (000) 1,783 1,743 2.3 %

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COMMON STOCK DATA Earnings per share S 4.12

$ 3.36 22.67c g

g Book valt.e per share S 31.48 5 27.83 13.17c Dividends per share S

.45 S

Shares outstanding at year end (000) 62,864 62,864 Market to book value at year end 90.17c 81.37c Return on average common equity 13.87c 12.87c

• Restated to reflect change in accounting standards, see Note 3 to the financial statements.

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mamammmmmmme.

m C0NTENTS Letter to Shareholders 2 GPU-Poisedfor Competitic,4 Presidents' Reports 10 Quarterly Fina cialData 18 Selected F nancial Data 18 n

.\\tanagement's Discussion and.4nalysis 19 Statement of.\\fanagement 23 Report of.4sditors 24 Conschdated FinancialStatements 25 Notes to FinancialStatements 29 System Statistics 43 Directors and Oficers 44 Shareholder Notes inside Back Coser

O TO OUR SHAREHOLDERS:

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The Company's financial and operating status improved greatly last year, allowing

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restoration of a common dividend. We are now in 4

a position to formulate strategies for the future jM c

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without the severe financial constraints of the

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post Ull 2 accident period.The restoration of the quarterly dividend in April at 15 cents per share and subsequent increase in January 1988 to a Herman Dicckamp 5 ililliam G. Kuhns 30 cents per share reflects our confidence as we face an exciting, challenging future.

GPU's 1987 net income rose 23%, to $259.1 million (from $210.9 million in 1986, as restated).

liigher ratings mean lower costs when we finance.

Earnings were 54.12 per share, an increase of 76 An above agerage equity ratio is appropriate cents from the previous year. Our return on at this time. To control the equity growth aboie sierage common equity of 13.8% was slightly our target level, we hate initiated a stock ab< ve the average for the electric utility industry, repurchase program and proposed an inv estment nose figures include the effects of program. Authority was received from the accounting adjustments made in both 1986 and Seci.rities and Exchange Commission (SEC) to 1987 for regulated enterprises concerning repurchase up to two million shares of stock and abandonments and disallowances of plant costs, w e bought 1,180,000 shares through Febru.ry 19, ne adjustments bring the amounts reflected in 1988. We are seeking authority to repurchase an our financial statements for certain assets more in additional three million shares, line with their true economic ialue given their We also asked the SEC for authority to treatment under rate regulation.

Intest in equities. If granted, we will be able to Total revenues decreased by $113.7 million, form a new subsidiary, separate from our due to a decrease in energ) related revenues regulated utility business, to make financiat (which do not affect net income) of $173.8 iniestments. Our intention is te make eersified million. Hat was partially ofTset by an increase in intestments in other b:ninestes and to earn a full base retenues of $60.1 million.

rett;a on these funds.

With improved earnings, and despite Safe nuclear operations remain a top inflation of 199 since 1982, rates to our management priority. Since the restart of Three customers have remained stable. Stainly due to 5 tile Island Unit 1 in October 1985, the plant has reduced fuel costs, our customers are pa> lng less operated tery wcll, with a capacity factor of about today per kilowatt. hour than at the end of 1982.

709. The industry average is 60.39.

At ) ear end 1987, our capitallation was 54.1 The O) ster Creek nuclear facility is billion, with common equity proiiding 489 and approaching its 20th y ear of operation. The next long term debt 429. He improsed earnings few years will be critical as we continue to assess produced strong interest coterages for the senior the future of this facility.

securities of our operating subsidiari?s. Tuo of Two milestones in the cleanup program at the major rating agencies upgraded c ar debt and Dil.2 were cchieved in 1987. All fuel material preferred stock in 1987 and again ini arly 1988, was remated from the original reactor core region 2

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E and more than half of the damaged fuel was O' Leary, who was elected chairman and CEO on moved to a federal government repository.The Stay 7,1987, died on December 19,1987. Jack remaining fuelis *xpected to be removed by the had been a director since October 1979. During end of 1988.The cleanup program, including his short time as CEO, he provided strong shipment of the fuel off the site,is scheduled to be leadership within the Company and on the completed before the facility is placed in Post.

national scene in preparing for a changing utility Defueling Stonitored Storage in mid 1989. Both industry. We are thankful for his time with us, the estimated cost of the cleanup program and its With Jack's sudden death, the Board of funding remain as planned. Th112 is not included Directors asked Bill Kuhns to return as chairman in our present energy supply plans.

and CEO. Bill had retired in hiny and had In the post accident period, we adopted a continued to serve as a director and a consultant strategy of improving and extending the lh es of to the Company. Ills return provided a smooth existing generating facilities, fully utilizing our transition without disruption in the Company's transmission capability for power purchases and

course, encouraging the development of cogeneration and lierman Dieckamp has announced his desire w

other non utility generating sources. We believe to retire June 30,1988, following his 60th y

our frecast needs are reasonably assured of being birthday earlier in June, lie has served as a GPU met through the mid 1990s.

director and president and chief operating officer Our strategy to improve existing fossil fired for most of his 15 years with the Company. Bill facilities is resulting ir. record production from Kuhns noted lierman's outstanding contributfors the System's coal plants, w hich produced nearly to the Company and his important and positive half of our System's needs in 1987.

impact on the GPU System.

The public debate and pressure for some f.

degree of deregulation of the electric utility for the Board ofDirectors, e

industry continues. In addition to making available sources of non owned generation, we

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f anticipate more competition. Efficiency and cost effectiveness are essentialingredients of a j

successful future. Our long term plans are made g

to help assure the Company's competitive W. G Kuhns y

position.

Chairman f

All areas of the business were examined and and ChiefExecutive Oficer significant potential savings were identified during 1987. Our goal is to keep payroll and other j

s controllable costs constant through 1990, despite y

7 Inflation and additional customers. We also took k

steps to constrain construction expenditures, H. DiccAamp ahich totaled 5474 million in 1987. We expect to Persident maintain that level, adjusted for some effect of and Chief 0perating Oficer loflation,in the next several > ears.

De year closed on a sad note John l'.

.%farch 4.1983 3

GPU - POISED FOR COMPETITION l

l SALES AND REVEllUES GPU sales in 1987 rose from 34,770 to 36,169 gigawatt hours (billions of kilowatt.

hours), or 4%. That increase is largely the result OPER' JING REVENUES of new customers added to the system as well as N'n' <(IAdid" hot summer weather.

The signific. ant variations in the economic 2 87 character of our senice territory are reflected in

, 74 2n m the sales growth differences across the System.

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p) result of the robust economics of New Jersey and t

The sales of JCP&L and Slet Ed rose by 5%, a castern Pennsylvania. Penelec's sales rose by only 2%, reflecting the w esk industrial sector of western Pennsylvania. Looking to 1988 and beyond, our expectations are for a slowirig of that n s4 es se a7 level of growth in the GPU System.

Record power peaks were recorded on four

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8 leurv da)s last July. The all-time System peak load of t

7,315 megawatts surpassed the previous year's l

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peak by 700 megawatts, l

Resenues declined from $2.79 billio's in 1986 to 52.67 billion in 1987. That decrease, despite the l

4% increase in sales, followed reductions in customer charges to reflect the lower cost of fuel OPERATING & MAINTENANCE EXPENSES and purchased power and lower federal taxes.

M.!!uun <fikdlars s55 868 769 pg we 5"

CONTROLLING COSTS The GPU companies continued programs to reduce costs to the minimum necessary for

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maintaining safe, reliable senlee. Some costs were reduced in 1987 and we are confident that 83

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'8s 84 47 more will be reallred in the future.

OPERATING EXPENSES Our goal for 1988 through 1990 is to stop the growth in opersiing espenses caused by increased 4

5 demands at our nuclear plants and customer service programs. We intend to spend about the HATES AND REGULATION same amount as we did in 1987.

That uill mean the increases caused by During 1987, retail customers of all three additional customers and inflation will have to be operating companies were the beneficiaries of rate offset by better efficiency-working smarter.

decreases, primarily teflecting energy cost adjustments and the impact of the feders! Tax CONSTRUCTION Reform Act of 1986.

We are applying the same level of effort and JCPAL also reduced retail rates to reflect attention to our construction expenditures.

the end of collection of its customers' previously Construction costs are not expected to grow authorized share of the T5112 cleanup costs, rapidly since we don't have to build significant 51et Ed's retail customers will complete paying new generation in the near future.

their estimated share of the cleanup later this year We expect construction costs in 1988 and and Penelec's retail customers =111 have paid their 1989 to be about the same as 1987 expenditures.

estimated share by mid 1989. This component of cost will then be eliminated from hiet Ed and 1 EMPLOYMENT LEVELS Penelee rates.

As of December 31,1987, the number of Both Slet Ed and Penelee increased their System emplo3 ees totaled 13,777. That is a rates by an average 2.7% on January 1,1988, decrease of about 1% from the year before and Those incree:e* resulted from higher collections reflects the initiation of our cost control program, for the cost of fuel, partially offset by the impact We have made an even greater reduction in the of the federal Tax Reform Act of 1986 and a state number of contructors' employees uorking on our tax decrease, the result of a settlement of

premises, contested taxes.

We plan to resluce the number of our Despite those increases, retall customers in employees to 13#00 by 1990, primarily through both.Mw Jersey and Penns>liania are pa>lns attrition and retraining-less per kilowatt hour (kwh) of electricity today than they were six years ago.

CAPITAL COSTS JCF AL has reached an agreement with Our improved financial condition has interienors and is an alting approval from the allored us to take greater advantage of New Jersey Board of Public Utilities (NJBPU) opportunities in the financial markets to minimize for a $31 million increase, or 2.2%.That reflects capital costs. We retired $88 million of high-cost a boost in its energy charges, offset in part by debt and preferred stock. We sold and leased back reductions resulting from the Tax Reform Act

$13 million of nuclear fuel at a favorable rate.

and a settlement approved by the NJHPU We expect to use the commercial paper regarding maintenance outages at the Oyster markets to further reduce interest costs in 1988.

Creek nuclear plant in 1983-84 and 1986. If approved, that u ould be the first increase for JCP&L customers since November 1984.

Slet l' s and Penelec's residential rates remain among the lowest in Penns)lvania and JCPAL's are among the lowest in New Jersey.

Although their relatlie positions nill change from 5

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time to time, GPU companies strive to maintain r

competitive rates.

g During 1987, the NJUPU adopted a performance standard for nuclear plants.The standard is designed to raise or lower rates w hen the nuclear plants perform above or below certain TYPICAL BILL COMPARISONS standards during a given 12 month period.

R<udruial 300 AYH Afm4 Although the standard could,in the future, reward Durs good performance by increasing caruings, it is more likely to have no effect or to reduce one earnings. Such performance regulation is a"

becor..ing increasingly widespread in our industry.

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O AIMING FOR COST EFFICIENCY The GPU companies, through media

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f advertising, bill inserts and financial incentives, encourage their customers to increase the effielency of the electricity they use and to use a

a,s xrat M. me. rene.e

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nJ Pa is large appliances during off peak hours. Those f

programs have a two-fold purpose: to ensure that Rain is < Bra 2 / M customers remain comfortable w hile reducing g

their electricity bills and to delay our need to build new generating facilities.

The operating companies want all their customers to realize that they can control their current and future electric bills by such means as ENERGY SUPPLY SOURCES using energy-efficient appliances and insulating an car their homes.

Working together, the companies and their cust mers can reduce electricity bills and be sure

.......................... ws M Mau M that they remain as low as possible.

A R RELIABILITY The GPU System companies in 1987 I

$j lj achleted 99.97 percent reliability. That means, on f

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.j the average, GPU customers had use of their

[J electric service 8,757 hours0.00876 days <br />0.21 hours <br />0.00125 weeks <br />2.880385e-4 months <br /> of a total 8,760 hours0.0088 days <br />0.211 hours <br />0.00126 weeks <br />2.8918e-4 months <br />

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Stost reliability problems occur from acts of 8 W d N rr nature, such as lightning, snow, high winds and

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tree branches touching wires. Those account for g

a cs about 70 percent of all problems. Stany other outages are caused by vehicles hitting poles and

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animals getting into electrical equipment.

reduces our load by 204 megawatts and makes The balance of power failures is caused another 66 megawatts available to us for primarily by the failure of equipment subject to

purchase, weather conditions. The GPU companies Annual construction spending for the next constantly must maintain and improve substations five years is expected to be about $500 miillon.

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cnd transmission and distribution lines to assure We spent $474 million in 1987.The five year the best possible service, forecast includes only modest amounts for new L

i generation. llowever, investments will be made to

.T reinforce and expand the import capability of the d

transmission system and to Install combustion turbines to meet local peak demand requirements.

since we intend to purchase pown to nieet OPERATIONS our additional requirements, we support a merit selection system for pricing purchases from small We are forecasting a 1.4% per. year average pow er producers and cogenerators. Regulators su

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20-year energy growth rate across the GPU now exploring ways that these facilities can be System. That would raise our total System energy procured and priced by the utilities within their j

requirements from 40,604 gigawatt hours (gwh) jurisdictions.

1 in 1987 to 51,700 gwh by 2007, an increase of Our proposed merit system would take into about 27% o5er that period. Afore than half of account not only the price of energy and espacity, that increase is forecast to come from our New but also each factors as geographic location, Jersey territory, ability to dispatch the 2nergy, type of fuel used, s.

C MEETING THE DEMAND c

capability and stability of the developer. Such GPU expects to meet the increased demand merit selection systems are being implemented in f

through a variety of methods

• other states and are being encouraged by the We are extending the lives and boosting the Federal Energy Regulatory Commission, productivity of our existing generating facilities.

We expect to continue cost effecthe conservation M FOSSIL GENERATION and load management programs to encourage our We are proud of the efforts of our people who customers to use electricity wisely. We will work with coal fired generating uaits and the continue to purchase power from neighboring results they achieved last year. As an example, utilities according to price, reliability and two coal. fired generating stations, Keystone and asallability over the long term.

Titus, set new operating records during 1987.

We aho anticipate purchasing more power in ne 240-megan att Titus station, ow ned by the years ahead from cogenerators that produce Niet Ed, ran more than 100 days with all three of power as a by product of an industrial process, its turbine generator units in operation, and Unit I and from other independent power producers, had a continuous run of 2t3 days. Keystone, Cogeneration and small power production wbich has a 1,680 meganatt capacity, recorded its projects, protiding us with about 1,500 megr. watts highest megawatt output per month during 1987, of energy and capacity, are planned to be in as well as the longest continuous run, longest operation by 1992. Rat represents a major string of million meganatt months, greatest increase from the projects now in sersice which number of meganatt months in one year, longest 7

t continuous operation of both units and longest time without a lost time accident. Keystone is operated by Penelee and is owned by JCP&L and six other non GPU utilities.

5 EARNINGS PER SHARE Man erm-eyrm ENVIRONMENTAL 4;2 RESPONSIBILITY V

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q Environmental protection by the GPU System is a multi million dollar commitment to r,,

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the territory we serve.

y q Last year we spent about 540 million for a

~i variety of projects to minimize the effect of 3

operations on the entironmert and to comply with

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or extend be)ond local, state and federal regulations. Our obilgation is not only to preserve natural resources such as air and wa:er, bat also to manage hazardous waste, protect endangered species, pratide recreational facilities and reclaim 5

and reicgetate ash disposal sites, One of our.asjor concerns is the cause and E

effect of acid rain on the ensironment. We endorse and support research to learn more about RETURN ON AVERAGE COMMON EQUITY acid rain. We recognize the potential for damage hrcem and are committed to both the study of clean-coal technology and the participation in the Living 13 s Lakes research prog.am. Through the Lliing g

Lakes program, lime is ndded to takes and 12 strums to help balance the acidity of acid-

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stressed aquatic ecosystems.

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Penelee last year received a $900,000 grant from the U.S. Department of Energy to study coal j.-

cleaning methods at a test facility operated at llomer City, PA, by the Electric Power Hesearch e

's3 s4 'as 'ss s7 Institute. The aim of the program is to detelop lowcr-cost methods of reducing harmful emissions from generating station smokestacks.

Penelee and the utilities for whleh it operatea 8

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I power plants spent nearly $20 million for ens tronmental protection in 1987. The company is EMPLOYEES placing liners under coal piles, ash ponds and ash sites and is building new ash sites and MANAGEMENT CHANGES reiegetating sites it closes. Slet.Fd and JCP&l.

John G. Graham was elected sice president are conducting similar groundwater protection and chief financial officer of GPU, succeeding projects.

Verner 11. Condon, w ho retired on September 30.

F Other programs include JCP&I.'s Str. Graham continues as executige sice president intestigation and cleanup of former coal of GPU Senice Corporation (GPUSC) and is gasification sites. Cleanup methods varied from chief financial officer of GPUSC and the other remosing contaminated soil to cleaning w ater on GPU subsidiaries, site and reinjecting it into the soll. JCP&I, had F. Allen Donofrio, GPU comptroller, was transferred onnership of some of those sites many also named senior vice president-financial years ago.

controls of GPUSC and was elected to the GPU in August, Slet.Ed put into use one of two Senice Corporation floard of Directors, new fly ash collection facilities at the Portland Stichael P. Storrell succeeded Str. Graham facility.Those nine. story precipitators emose as GPU treasurer and continues to sene as ash from gases released as a result of b.rning GPUSC treasurer, coal. The second precipitator is schedu.ed to be completed this year.

EMPLOYMENT OPPORTUNITIES Slet.Ed has also installed groun in ster The GPU Sy stem companies have monitoring wells at its Portland Ger crating implemented Affirmatise Action Programs Station and its ash disposal site. It,5 building a designed to encourage the full participation of new waste treatment plant at Portland.

women and minorities in all areas at all lesels of In its continuing efforts to protect the the Company. Administration and support of ensironment, GPUN continuously monitors air, Affirmatise Action Programs continues to be a water and icgetation. A recently issued priority within the GPU Sy stem companies.

comprehenslie report of enstronmental rnonitoring at T511 from 1974 through 1986 shows that releases of radioactisity from normal Thil plant conditions hase been far below federal regulatory limits. The report concluded that normal T5tl operations hase made no detectable difference in normal background radiation.

i MEETING INCREASING DEMAND scrw=mrtenomramemac=cramco:Ar:c m James R. i.em. 33. ispresident. chiefoperating ofcer a *,g

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and a director ofJCPd L HeJoined the GPUSystem in

. h 19H as a utility lineman, then earned his bachelor of F % ; <f

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retence degreefrom Fairleigh Dickinson University and a q

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I' Juris doctoratefrom Seton Hall Law School He rose y

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4 through the ran ks ofJCPdL to cadet engineer, assistant l,*%

• k enginer and manager of employee relations before being k-i.:

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named vice president personnel. nfety and service then f

• %V vice president-consumer afairs. In i982, he was elected

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L president ofPenelec, where he served until1985 when he cy ';

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q ; s-was elected president ofJCPdL, the largest GPU

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f operating company. He served two terms as mayor of g

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t Morris Township (NJ) and is aformer member of the

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Morris Township Committee and Morris Township i

Jim Leva. left, inspects local cogeneration facihty.

Board ofEdugation. He is a director of GPU Suvia Corp., GPU h uclear Corp.. Utilities Mutualinsurance u-L Company. NJ Utilities Association. NJ State Chamber of

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Commerce and Energy Initiatives, Inc. He also is a y

memter of the NJ State and American Bar Association 1 b

JAMES R. LEVA

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President & COO Jersey Central Power & Light Company customers in JCP&L's serilee area sInce 1983, p

nearly 12G Over this same period, JCP&L's summer peak increased by 750 megawatts, w hich i

L "At one time, we might simply hage considered is about 18'~c of ou' capacity.

the prospect of building another large-scale power flowever, aftcr two years of record levels of plant. Our strategy now,instead,is to meet new serilce connections !n our service territory, g

increasing demand through programs whlch we experienced a slight reduction in 1987. Most include improilng existing generation and of our connections were made in our southern E

purchasing pow cr."

area, specifically in Ocean County, which has been the fastest. growing county in New Jersey s.

The level of our sales last year was higher over the past seven years.

E than anticipated.That was the result of the Another significant growth area for JCP&L p

healthy economy in New Jersey and hot weather is Somerset County, one of the most aftiuent H

during the summer. After adjusting sales figures counties in the United States. That county ranks P

to account for the weather, we still had an overall sixth in the state for total omce square footage.

Increase of 4.5'*e over 1986. Managing growth of Omce space is expected to double by 1997. A L

this magnitude is by far the most dimcult 900,000 square foot shopping complex opened in I

challenge we face.

February 1988. Residential development is also f

We base our future expectations for strong forecast to increase at a strong pace, growth on both short and long term trends in New At one time, w e might simply have 7

Jersey. In the 1970s, this state experienced a considered the p ospect of building another large-realignment from a manufacturing to a serilce scale power plant. Our strategy, now,instead, is economy. We hate had an increase of 100,000 to meet increasing demand through programs eim--ee-m.

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Jersey Central 1%r & Light Company serves apredominantly suburban and ruralarea that is pmstering under booming growth due to the large number ofhighly technical businesses that located in New Jersey in the last severalyears That rapid grow th has created specia!

l demands on JCrd L to continue reliable service while meeting its en nwnmental responsibility in a denselypopulated stateparticularly vulnerable ;o environmentalsensitivities Both the a

l shore area and a multitude ofmouniain lales must beprotected. Most ofits customers are on l

the middle to upper income livels. Many are retired and elderly.

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which include improving existing generation and E

purchasing power. Our purchases will be made j

from cogenerators and both utility and non utility OFF PEAK SNOW MAKING f

suppliers.

LIFTS PROFITS a IMPROVING GENERATION A J2 'r8il8 Al"50

We are extending the lives and increasing the

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productiitty of our generating stations. As much hours with a resultant 23%

'a os 100 megawatts could be deri,ed from decrease la 'lectricity costs M....

improvements made to JCP&L's five generating

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? A stations, inspection programs have been JCrdL's energy services 9,

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}4 completed and management has a good representative.

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understanding of what it will take in terms of IA' "'#'d' f"*#

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through 100% machine.

1-y material, human resources and finances to made snow and has most of

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%i improve all of our generating stations for higher its 13 stilft trails lit performance levels, during evening hourt d.)

We also are planning to add 90 megawatts of dAe[us[me I

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combustion turbine capacity in our southeru area his electricaircquirements t

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by 1990. We either will own that facility or use an and devised a plan to independent financing or ow nership arrangement.

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r uring peak heurs and has con verted mercury vapor trailligh?ng to sodium e

b U COGENERATION vapor to lower his electric costs Cogeneration projects, which produce energy os a by. product of an industrial process, are espected to proilde for the bulk of the projected increase in demand at JCP&L. We have signed use. Those utilities are generally located to the contracts for about 950 megawatts of cogenerated west of our territory, New or extended contracts k

power for our system and are negotiating for an will be secured to replace esisting contracts which k

odditional 200 meganatts. As a result, w e espect are scheduled to espire in the early 1990s.

k-to add 1,150 megawatts of cogenerated electricity L'ltimately, how eier, as demand for I

to our s) stem by the mid 1990s, electricity grows in those utilities that now haie h

This heavy reliance upon non utility sources ecmmic esp rt capability, we intend to procure 2

makes the price and the terms and conditions c mPetitlicly priced power from other sources,

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critically important. We are implementing including non utility suppliers.

L policies to ensure that our customers will recelie We are weighing the options now before us to the greatest benefit from these facilities, ensure our financial well being and our continuing ability to proilde dependable seriice to our D PURCHASED POWER

'"'I The balance of our energy requirements will be met through purchased power agreements with utilities that generate more energy than they can

=

m 11

y-l RESTORING CREDIBILITY, CONTRIBUTING TO ECONOMY VIA STABLE RATES y

}

Fred D. flafer. C. president. chiefoperating oficer and

%(

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a director of.tfet.Ed. joined the GPUSystem while c

1 attending Dre selin staute of Tech nology. m here he

^

h studied electvtcalenpnc< ring. He began his career mith 55' Met Ed as an engineermg trainee. Sin years later. he l

3,.,

became a staf accountantfor GPU and later was elected y

b;h GPU treasu rer. Before his return to Met Ed as president.

I' l k %

Senice Corporaion. Met.EJ and Penelec. He n a t

he mas sice president rate case managementfor GPU l

director of GPU Senice Corp. and GPU Nuclear Corp.

He is a director and vice president of the Manufactu rers l

,-C

~ O Anociation ofBerks County. director and member of the

• {,

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c.necutive comminee of BerL s County Chamber of t

Commerce, director of Utdaies MutualInsurance

• E' 'Y ""

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' "" ' "* * '"" l Fred Hafer, a director ofRead ng Hospaal. tours n ray Penn nivania Electric A uociation. He also is a director of facility.

Readmg Hospaal & Medical Center and is a member of the President's Councd ofAlbright College. Reading chapter. He serves on the Endon ment Committee of Atonement Lutheran Church, li)vmining. PA.

mmmwe.emm FREDO.HAFER President & COO

.lferropolitan Ednon Company all of Slet.Ed's generating stations, including T5tl.1,in 1987 allowed the company to further improie its flnancial status while maintaining

... the outstanding performance of all of \\lct.

stable rates at a lesel among the lowest in Ed's generating stations, including Dil 1, in l'enns)liania, 1987 allow ed the company to further improse its The influs of residential customers from the financial status while maintaining stable rates at a metropolitan areas around the Slet Ed territory leiel among the lowest in 14nns)liania."

drose the rate of new customer additions at a near record pace in October 1987, Slet Ed hooked up Alet Ed is uell prepared to take adiantage of its 400,000th customer,in the face of rapid new the continuing economic deielopment throughout customer growth and a strong business climate eastern l'enns>liania. We anticipate meetinR that saw unemployment rates in the.%!ct Ed current and projected customer sersice territor) running 12"e below the state average, requirements without a need to build generatinR the company sold 5.9"e more meganatt hours in facilities, and our ongoing efforts to reduce 1987 than in the preceding 3 ear. Earnings oierall costs are beginning to yield impreulie assilable for common stock reached $64.2 million

results, for the first time.

We hate osercome the stigma and economic An aggreulie espenditure anal) sis program obstacles that were a consequence of the 15112 instituted oier the 3 car also contributed to the accident. We haie resumed the posture of a fasorable 19M7 results. A major corporate goal for financially healthy electric utility insolied in and 19NN is to reduce controllable operating and concerned with the communities we serie.

maintenance costs per customer to below.19N7 In many respects.1987 *as a remarkable Iciels. That would allow the compan) to achiese year for.%1et Ed.The outstanding performance of another major goal-to keep its rates htlow those charged b) neighboring companies, 12

a r

g Metropohtan Edison prvrides electricity to more than MM customers in eastern and southeastern Pennsylvania. Its territoryis economically diwise, rangingfrom ogriculture to heasy industry. Wtth both crastomers and employees draw nfrom a populatwn charactented by

~

smmg merk ethics and high productirtty Met Ed today is afinancially healthy urdity with stable rates and a promisingfutu re.

o Operations at Slet Ed were equally

]

impressise last ) car. All three units of the 240-p k

megan att coal fired Titus Generating Station ran CARE ING WORKS concurrently for more than 100 days, with Unit 1 E

of that plant recording 284 continuous days. Slet.

O"' *( f','jd

('

,.....;g,

j j

Ed employ ees across the system responded to a ga,, t e,,,,7,cg 7, m,

,.,hny Ty% -

new, aggresslie industrial safety initiatit e, recently observed an elderly Nt "o*J' "i'h bruises on her

• \\ : s making Slet Ed one of the safest electric utilities

', ?.j fan as war g to be y

g in the state'

• p,

alone and upset. lie called

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F one of our C4 RES

=

CUSTOMER SATISFACTION representarires. w ho M

.iN>^~k' ' ' k,, A Slet Ed has come a long wsy since those iS *'didlJ " h7i'd'h' local Ofice on.4ging.

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dark days following the accident at T5t! 2.The That ofice contacted our company is committed to building on the success customer and learned thar

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i. I,,.

of the recent past in both customer and

'he mOman hJd[a((en and

~ '

community satisfaction.

to thephysicnan s office on Slaintaining a good image is an integral part her om n. The Ofice on.4ging arrangedfor of oterall corporate strategy as we prepare to face travportJtion and the noman mas able to get medical a changing utility i.idustry, in fact, a key

"#his isju st one of many stories that can be ro!d that.

regulator said in 1987 that Slet Ed descries the without the onoreness and concern of a Met Ed highest praise for its outstanding customer sertice emplowe, might have ended tragica!/y. l'er allit cost was staying alat, caring a nd a quarterfor the rhone call operations, liasing his statements on a report from the l'enns)liania l'UC's llureau of Consumer Serilees, he rated our company as the most effectise in handling customer complaints.

We are proud of our success in returning actliity, in our KID Care programs, coordinated Slet Ed to a financially strong, cflicient protider through local police departments, children are of electric serilee. But we are equally proud of photographed and fingerprinted.

our accomplishments in human serilces. One is g

the Customer Auistance Referral Etatuation EMPLOYEE INVOLVEMENT Seriices (CARFS) I'rogram to refer pay ment-Community seriice insoliement builds pride.

troubled customers to agencies to assist them, skills and cooperation among uorkers, e

g-4 Residential customers temporarily unable to pay Emplo)ces' outside actlittles protide additional y

electric bills are helped through I'roject Good channels through w hich our customers can Neighbor, funded by employee, cuttomer and approach us with problems and concerns. Those company contributions, actitities open paths of communications, help us Under the compan>'s Gatekeeper l'rogram, identify needs before they become problems and meter readers and other customer-contact proie to our tarious publics that we are a personnelidentify potential problems associated concerned and caring community member, with ol<ler citirens so that appropriate Slet Ed represents a proud and dedicated professional organisations can Intestigate and work force prepared and eager to face whateter 6

render assistance,in our communit) Crime opportunities and challenges the future may bring.

Watch program, emplo)ees contact appropriate authorities if they notice signs of criminal 13

En ATTRACTING NEW CUSTOMERS t 1 Robert L H1se. 44. mas eles tedpresident, chiefoperating oficer and a director ofPenelec in i9% He began his

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career with Penelec in 1963 as a cades engineer and was I!e aJunior engmeer, station supervisor, starion

~~

V superintendent ofoperation s, station superm.cndent and

)

manager ofgenerating stJtions before being named

,,,y l.

A assistant vicepresident ofoperations. He was named sice

,:.m. t,==

president ofoperations in 1990 and vice president of 3 K~

generation engineering and support in 19M. A registered

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professional engineer, he recmed his bachckr of science

~

degreein mechanicalengineeringfrom Lafayette College in i961 He is a director of GPU Sersice Corp.

and GPU Nuclear Corp. lie is a member ofthe Etecutive Committee ofPen.nsya nia Electric

~

Bol nise leads a preu conference at the state capi ol A uxiation. has semd anha;rman of the Ednan Electric Institu te's En vironmental L,tecutive da n sory Committee and a member of the eel Tas( force on Division Operations and was recently appointed to the ikpartment of Cairgy's innovative Control Tuhn ology Advisory Panel smema ROBERT L WISE President & COO Pennsylvania Electric Company electric sales dropped esen fut r.

At the same time, l'enete.eas hit hard by the resurgence of major enu, imental issues.

"Responding to enilronmental issues and Acid rain emerged and rapidly escalated into an broadening its customer base in an era of international concern w hich could affect l'enelce increasing competition and aggrenhe cost cuttind-as a major producer of coal fired electricity.

measures are among the primary factors n"*

Responding to ensironmental issues and drising the ft:ure of this compan).

broadening its customer base in an era of ir. creasing competition and aggreuhe cost-cutting Unlike its sister companies, l'enns) hania measures are among the primary factors now Electric Compan) is no longer realliing the drhing the future of this company, which was the benefits of rapid growth.

mainsta) of the Gl'U S) stem during the early j

l'or decades, l'enelec benefited from its ycars of recoser) from the T.\\ll 2 accident.

1 1

locale. located in the heart of the nation's steel I

ECONOMIC DEVELOPMENT l

production center and near l'enns)hania's major coal fields, the company prospered as it met the l'enclec plans to espand its support of the steelindustr>'s seemingly insatiable appetite for ec n mic deielopment needs of communities electricity, within its sertice territor), aulsting communities lhen, as the booming steelindustr> declined in retaining and creating jobs where pon;ble, in the 1980s, l'encies saw its industrial sales drop Am ng the considerations are rate structures, sharply. Aging steel mills and surging imports such as economic deselopment rates for situations combined to drhe unemplo) ment to alarming ihat emphasite job creation.

lesels. Tight budgeting among the population then In the commercial and industrial sector, affected commercial busincues and, as a result, l'enelee has one of the lowest rates in l'enns)hania. Those low rates combined with 14

2 Pennsyinnia Elstric Company supplies poner to 31 largsly ruralcounties stretchmg across the state and reaching asfar south as the Maryland border. 4 majority ofIhatpopulation had been primardyfinancially depndent on the troub!cd stalindustry l'he area es r.ow e.nperiencing a modest rebirth in commerce andindustry. Penchc. one of the nation's largest coal consu mers is duply in vohrd in eforts to expa nd the indu strial/com mc rcial cu stomer base anJ contrsbute to the economy of ahe Common.cahh ofPen nsyhania.

adequate and reliable electric serilce, will be

]

maintained as an edge toward future C " PIII "'

PENELEC & ITS CUSTOMERS l'enelec endorses a statewide energy policy BENEFIT a

that supports and encourages a business

- -s environment to protide more and better jobs in 4 /Icdghng employu-7

'}

l'enns)hania. Such an energy policy would

"""[d[""#["[' "#'

yf jf

,,,jo, j<

position l'enns)hania as a preferred place for but now has considerable

~;w business to locate, espand and stay, gran th potentiallvcau se of i

P'"#l" '8 i" "'h '*'"'-

i #,,',

N-l The pending acid rain legislation uhich One of Penelcc's would increase l'enclec customers' electric scrtice industria/ enginurs placed 3 y,

+

'6-bills by 10"< to 17G is a concern, l'enelee is thefoundry on ofpca A 9 4 nt'

.$h'"

4

'd'#5 ""d *#'"'#d 'h' committed to preserting and improting the company as a curtadable entironment, but esperts disagree on whether a customcr. 7hefoundry now

'g reduction in power plant emissions uould result in eperatcs du rmg the o//-

a corresponding reduction in acid rain. A ploncer P'd A h"kr5 o/8 f m 'o 8 in clean coal technology research, l'enelec, along

[Q '(('# '"['g"[,'fy,,jc l-[I with all Gl'U companies,is cooperating *ith bal by cooperatmg in elected leaders to find a reasonable balance renelu's curtaddble rdre among competing interests in deteloping an acid I'{' m, rcag j,mo,n,<j,o arpro,jma,efy rain policy for the nation.

$1Wm of aanded costs our a sn. month priod. the As the largest purchaser and consumer of equivaknt ofan addaional $1 mdhon in salct

.4a added benefit to Pcnckc mas the rcduction in the l'enns)hania coal and one of the largest potential demandfor addaionalgenceving capacity.

a producers of coal fired generation in the country,

,4,j, jf,,,c,wthened Pcrirlu's irnage in the bu siness

'Y i

l'encice is responsible for circulating more than commumty as bcmg rcvunme to adustry's ne:s and

$500 million into the economy of the aucpting the dWicult task offinJmg answers in a angmg tuhno@al en monrnent Commonn calth of l'enns) h ania. l'or the eight ststions it ow ns and/or operates, l'enclec uses more than 15 of the 40 million tons of coal purchased annually by I'enns>lsania utilities.

Each million ton of coal sustains about 280 progrems, Operations and rnalntenance espenses direct mining jobs and nearly 58.4 million in in 1987 were reduced by 57 million from the ) car pay roll. It aho prosides for about 225 direct jobs before and are espected to be ar.other 56 million for support scriices, including transportation, lower by the end of 1990. The emplo) ment force with a pa)rollin escess of 55.6 million,in at l'enelee nill be reduced by about 200 addition, each million ton accounts for business employ ees, mainly through attrition.

tas restnues to the state based on 532.1 million in We at l'enelec are dedicated to our sales as well as personalincome tax retenues to customers and to the Commonwealth. We will the state bawd on the wages of 500 emplo)ees.

continue to proiide the best ser$1ce at the least pmible cost with a minimal etTect on the COST CONTAINMENT ensironment.

Since cost containment is a Le3 to competitinencu, l'enelee is committed to reducing its costs while intensifying its production 15 1

Nuclear i.;

SAFETY AND EXCELLENCE

.g,

{

Philip R. ClarL. 37, is president, chiefexecutive ofcer.

f chiefoperating oficer and a derector of the GPU Nuclear V

Corporation. lieJosned GPUin ]984 after more than 23 E

i) years in the NavalNuclear Propulsion Program under zl ** O

u:

Admiralllyman Rickover. lie is the recipient of the

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W

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Navy Distinguished Cisilian Service Awardand the U.S y

y.

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Energy Research and Development Administration

=~f.\\l-

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-e Special Achievement A ward. lie earned a bachelor's l

degree in civilengineeringfrom the Polytechnic Institute e

l tt g

ofBrooklyn. m here he also did graduate studies lie is a t)fF i

director of the Imrd of the Nuclear Utility Management f

k V

and Resources Counciland of the Institute ofNuclear i

yq Pomer Operations, a mem/wr of the Edison Electric F

institute iblicy Committee on Energy Resources.

?

f) chairman of the nuclear subcommittee ofthe IUmer Ph;l Clark checks a trainirtg device at Oyster Creek.

Generation Committee of the A nociated Edsson a

illuminating Companies and a member ofthe American Nuclear Society. lie also is a director of GPU Senice Corp.

m innmannessumusesse PHILIP R. CLARK President. CEO & COO CPU Nuc/ car Corporation creation of a new division of Planning and B

Nuclear Safety, a new structure to set safety priorities and enhance attention to the need for

"!)e return to senice and excellent operation of excellent performance.

Dil.1, the upgrading of 0) ster Creek and the progress of the Ull 2 cleanup are significant TMI 1 accomplishments for a company that was a 1)espite a fit.'- anth outage for regulatory prisoner of the past."

required modifications that ended in.% larch and a i

subsequent one month maintenance outage, Gl'U Nuclear Corporation, in its sesenth ntg.1 had the excellent capacity factor of 74.lfe P

} car, is managing the GPU S) stem's nuclear for 1987.The sierage output of nuclear reactors f

plants with a commitment to safety and in the United States in 1986 mas 60.3rr. The next excellence, planned refueling outage is scheduled for June The return to senice and escellent operation

1988, i

of Ull 1, the upgrading of 0) ster Creek and the ngg.1, which w as operated from 1974 to progress of the Ull 2 cleanup are significant 1978 as one of the most efficient and consistently accomplishments for a compan) that uas a top rated performers in the commercial nuclear prisoner of the past. All Gl'UN actititles are power industry, was shut down for refueling at the carried out with f ull regard for public health and time of the Unit 2 accident. It remained out of safety. Radiation releases from the plants haic serilce for sls and a half ears before the Nuclear 3

been well below federal limits, as haie radiStion Regulatory Commission (NHC) granted restart exposures to uorkers.

approt al.

Gl'UN's commitment to safet) and After returning from the refueling shutdown escellence was intensified during 19N7 with the in.\\ larch, Ull 1 operated at a 95.6"r capacit) letet and had a constant 100"r power lesel for r

16 y

The GPU Nuclear Corporation mas licenwd as a sutuidiary qf GPUin i93? to ojvrate.

~

manage and maintain the GPUhstcm's three nuclearfacil wc 1kree 3iile bland Units I it and 2 in AfidJteromn, P.L and Outer Creek in Torled Rint. NJ four months. TS11 1 generated 5 million mwh of components below the now empty core region and electricity in 1987.

In the bottom of the 40 foot deep reactor,in Se$eral output records wetc set by TSil.1 addition, nearly 5 tons of debris is estimated to be during 1987. A new monthly generation record between two sertical, internal walls of the reactor, was set in October, only to be broken in Followlag the completion of the cleanup December with a monthly high of 651,898 mwh. A program, we plan to monitor the plant.

new daily net generation record w as logged in The radiation protection program at TS!!

October and a new hourly generation peak *as Unit 2 mas cited by the Electric Power Research ett in Stay.

Institute (EPRI) in September for outstanding Also during 1987, Thll l's rated electrical nork and for hailng potential benefits for other outi,ut of 800 megawatts was increased by about nuclear utilities. EPRI, the research and 30 megawatts as a result of modifications and desclopment arm of the U.S. electric power tuning of the plant's turbine and other industry, stated that the cleanup is likely to be improvements.

completed with far lower collectise radiation esposure to workers than was estimated by the TMl2 NRC in 1983.

The removal of tirtually all of the core debris from the original core region of TS!! 2 *as OYSTER CREEK completed in December, marking a major The O) ster Creek Nuclear Generating milestone in the unprecedented defueling process.

Station was shut down se$eral times for The Department of Energy has shipped more than maintenance and inspection in 1987, but has half of the radioacthe core material to its operated

• ell since its return to serilce in late National Engineering Laboratory in Idaho for Nosember. In December, for example, the plant research and storage, produced more than 480 million kwh of We are continuing to decontaminate the electricity, or a capacity factor of just oier 100"<.

systems and buildings toward placing the plant in During the year,0) ster Creek produced 3.1 Post Defueling Stonitored Storage in mid 1989.

billion kw h of electricity. The goal for 1988, We expect to complete most major cleanup

• hich includes a refueling outage late in the ) ear, activities by the end of 1988.

Is 3.34 billion kw h.

Defueling started in the fall of 1985, when lhe plant was cited for two serious crews uorked from a rotating platform stop the operational failings in 1987. One related to the reactor to remose debris from the normal core destruction of some control room records and the region where the original nuclear fuel core was other to an improper operating practice which located in the reactor. Working through about 30 could hase reduced the effectlieness of the plant's feet of wster that coscred the core, defuelers containment s> stem. 'stanagement took loaded debris into canisters with long handled immediate and forcefu' steps to correct those tools and sacuuming equipment with the aid of problems and public health and safet) were not undern ster lights and cameras, endangered.

In January 1988, we installed a drilling machine on the reactor gewel to begin taking apart internal components of the vtor to gain access to the remaining one third m ure debris.

An estimated 43 tons of debris remains in 17

QUARTERLY FINANCIAL DATA (UNAUDITED) s W.

nnt Charter

• Secend (harter

• le nouueds Except Per Share hta 1981 1986 19,97 1986 Operating resenues

$719,406 5776,794 5621,580 5652,158 Operating income 118,691 104,582 88,786 72,557 Net income, as presiously reported 84,989 69,144 51,213 34,545 Adjustments 1,300 1,426 1,300 1,426 Net income, as adjusted 86,289 70,570 52,513 35,971 Earnings per share, as presiously reported 1,35 1,10

,82

.55 i

Adjustments

,02

.02

.02

.02 Earnings per share, as adjusted 1,37 1.12

.84

.57 Tk ed (harter

• Fourth (karter*

le Thouunds Except ter Share lkste 1987 19 %

1987 19A6 Operating resenues

$702,623 5697,660 5629,812 5660,405 Operating income 108,458 93,072 77,696 84,014 Net ncome, as presiously reported 70,788 57,173 48,207 44,385 i

Adjustments 1,300 1,426 1,422 Net income, as adjusted 72,088 58,599 48,207 45,807 Earnings per share, as presiously reported 1,12

.91

.77

.70 Adjustments

,02

.03

.03 Earnings per share, as adjusted 1,14

.94

,77

,73

• Restated to reflect change in accounting standards. See Note 3 to the fmancial statements.

SELECTED FINANCIAL DATA Year E=dcd &cember Jf.

1997 1996*

19-O '

1944'

/943 '

l COMMON STOCK DATA Earnings per share 5 4,12 5 3.36 5 1.99 5 2.19 5 1.46 l

Disidends per share 5.45 5 -

5 -

5 -

5 -

l Ikvi salue per share 531,48 527.83 524 53 522.37 520.16 l

Closing market price per share 5 28 %

5 22 %

5 17 %

$ 11%

5 7Y.

Market to book salue 90,1 9 81.3 9 69.8 9 51.49 3849 Return on aserage common equity 13,8 9 12.8 9 8Sq 1029 7.49 FINANCIAL DATA ti. now.so Operating resenues

$2,673,421 52,787,077 52,869,504 52,735,286 52,480,304 I

Net income 259,097 210,047 125,200 137,603 89,550 Total awets 6,278,915 6,01o,434 5,84s,088 5,515,4?3 4,825,476 Long. term debt 1,668,763 1,736,550 1,816,31!

1,797,154 1,894,965 Cumulatise preferred stock --

mandatory redemption 58,300 63,650 67,194

• Restated to refleet chanFe in accounting standards. For the 3 ears 1984 and 1983, net income included estraordinary items, net of tases, of 512.6 milhon and $16 0 milhon, respectisely, whieh were reslawfied to continuing operations See Note 3 to the financial statements.

18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Jersey and eastern l'enns>liants service RESULTS OF OPERATIONS territories, customer usage increased in 1987 mainly in the residential and industrial categories.

1987 vs 1986 Industrial customer usage increased primarily at Net income increased $48.2 million to 5259.1 l'enelec despite the fact that l'enclec's overall miulon for the 3 ear ended December 31,198? and customer sales remained relatively stable. Rate earnings per share increased 76 cents or 22.6fc to increases granted in 1986 increased base revenues 54.12, as compared to restated 1986 net income, by $39.8 million in 1987. Other items decreased Return on average common equity nas 13.8Pc for base retenues by 553.1 million.Thesa changes are 1987, which compares favorably with the current primarily due to a decrease of $41.8 million due to industry aserage of approximately 13.1"c.The lower federal tax rates ir. the Tax Reform Act of return on equity for 1986 was 12.8?c.The 1986 and $11.3 million primarily due to a increases in earnings and return on equhy were reduction in retenue taxes caused by decreased due to increased base revenues which were energy charges.

partially offset by higher depreciation espense.

JCI'&L's last general base rate order uas Net income redects a change in accounting effectise in June 1986 mhile Slet.Ed's and standards which increased net income in 1987 by I'enebc's last settlements for base rates were 55.2 million or 5.08 per share,in 1986 by $5.7 effecthe in Notember 1986.The subsidiaries are million or 3.10 per share and in 1985 by 58.1 not especting general base rate increases in 1988 mil!!on or $ 13 per share (see Note 3 to the financial statements, page 37).

Costs and Expenus Total operating espenses decreased $156.1 Revenues million or 6.9Pc in 1987, due to a $193.8 million Total retenues decreased by 5113.7 million reduction in energy costs part! ally offset by 4

or 4.ltc to 52.7 billion due to a decrease in energy increased depreciation and ottier operation and f

related retenues of 5173.8 mill!nt, partially otiset maintenance espense, by an increase in base retenues of $60.1 million.

Depreciation expense increased $28.6 million Energy.related revenues decreased in 1987 as in 1987 due to additional plant in senice. The ri result of the return to customers of previous increases in plant in senice were primarily to y

energy cost over collections and decreased energy improve the performance and extend the life of costs. Energy retenues do not affect net income as esisting generating facilities and for additions to energy costs are adjusted to equal energy the distribution r) stem related to new customer grow th.

revenues, l-Ilase reienues increased by 560,1 rnillion to Other operation and maintenance espense increased only 513.7 million or 1.6"c in 1987, 52.1 billion due to higher customer sales of 4.0cc in the amount ol 573.4 million, the full realintion after a trend of sharpl) increasing expenditures in of rate increases granted in 1986 of 539.8 million, recent > ears, and decreases in other items of 553.1 million.

customer sales increase d base retenues in 1987 1986 vs 1985 due to both a 2.3"c increase in the number of Net income increased SM5.7 million to 5210.9 t

customers end increased usage per customer, million for 1986 and earn!ngs per share increased 51.37 or 68.8c to 53.36, based upon restated Stost new customer growth occurred in the c

commercial and residential sectors in the New 19M6 and 1985 net income. Return on average 19

i i

common equity was 12.8% for 1986 as compared

~

to 8.5% for the prior year. The increases in LIQUIDITY AND CAPITAL earnings and re. urn on equity were due to RESOURCES increased base revenues which were partially offset by higher operation and maintenance El CAPITAL NEEC',

expenses.

The GPU System capital needs, which consist of construction expenditures and amounts Revenues for maturing obligations, were $562 million in Total revenues decreased by $82.4 million or 1987 and are expected to be $594 million in 1988, 2.9% to $2.8 billion due to a decrease in energy 51anagement estimates that approximately related revenues of $278.9 million partially offset two-thirds of its total capital needs in 1988 will be by an increase fu base revenues of $196.5 million.

satisfied through internally generated funds.

Energy related revenues decreased in 1986 as Construction expenditures, including a result of the return to customers of previous AFUDC and certain additions to nuclear fuel energy cost over-collections and decreased energy leases, were $474 million in 1987 and are expected costs. Energy revenues do not affect net income as to be $540 million in 1988.The future energy costs are adjusted to equal energy construction program is designed to keep most of revenues.

the System's existing generating stations Base revenues increased by S196.5 million to operating well beyond their previously scheduled

$2.0 billion due to the return of T51I 1 to rate retirement dates.The GPU System currently base in the amount of $89.3 million, rate increases expects to meet approximately 75% of its energy of $78.3 million, higher customer sales of 4.3% or requirements over the next several years with its

$38.0 million and decreases in other items of $9.1 own generating facilities. The GPU System has million. The effect of Thil 1 in rate base was fully adopted a strategy of relying upon the purchase of realized in 1986 as T511 1 was restarted late in non utility generation to meet its customers' 1985. General base rate orders received in 1985 future energy needs. This strategy will enable the and 1986 increased base revenues by $78.3 million GPU System to maintain a stable level of in 1986. Customer sales increased base revenues construction expenditures. The availability of by $38.0 million in 1986 due to a 2.4% growth in energy for purchase and regulatory acceptance of numbe'r of customers and increased usage per the costs associated with this strategy is of customer. Other items decreased base revenues b/

significant importance to the ongoing financial

$9.1 million, primarily due to a reduction of health of the GPU System, revenue taxes, which were passed through to Expenditures for maturing debt, preferred customers and had no effect on net income.

stock retirements and sinking fund requirements were $88 million in 1987 and are expected to be Costs and Expenses

$54 million in 1988. In 1987, JCP&L retired a Total operating expenses decreased $229.7 525 million issue of preferred stock. Slet Ed a id million or 9.3% in 1986 due to n $311.7 million JCP&L retired First Afortgage Bonds of $19 reduction in energy costs partially offset by an million and $14 million, respectively. GPUSC increase in operation and maintenance expense.

retired $15 million of long-term debt. Other long-This increase of 585.3 million was mainly due to term debt retirements and sinking fund payments increases of $31.5 million for the 1986 major totaled approximately $15 million.

modification outage at Oyster Creek and $8.5 million for increased T511 1 expenditures.

20

-~

r The subsidiaries have lease arrangements to U CAPITALIZATION fin nee nuclear fuel requirements for T5111 and Improved earnings along with continued debt Oyster Creek. In February 1988, the GPU ani preferred stock redemptions and retirements System renegotiated its lease arrangement which and earnings retention, have worked to increase I creased each stations' financing limit from $100 the common equity percentage of the million to $125 million.

capitalization ratios, which are as follows:

W FINANCING capitalization JCP&L is considering issuing long term debt 1987 1966 1985 in 1988 to refinance maturing debt, satisfy sinking Long-term debt 42 % 45 % 48 %

fund requirements and to finance construction Preferred stock 10 11 12 activities. In addition, the subsidiaries may sell commercial paper and enter into new financing arrargements to meet future nuclear fuel 100 % 100 % 100 %

requirements. The GPU System's ability to obtain external financing is evidenced by the To attain management's long term subsidiaries' security ratings. The subsidiaries' capitalization target of approximately 45% debt, bonds and debentures are rated from A3 to Al by 11% preferred stock and 44% common equity, 51oody's, from BBB to A-by Standard and the GPU System has taken several steps. GPU Poor's and from 7 to 5 by Duff and Phelps.

reinstituted a cash dividend in April 1987 by Interest coverage ratios (the number of times declaring a quarterly dividend of 15 cents per operating income exceeds interest payments) are share. The quarterly dividend was increased to 30 substantially in excess of indenture restrictions cents per share in January 1988. GPU has for new debt issues.These ratios by operating obtained authority from the SEC to repurchase up c mpany are:

to two million of its outstanding common shares through December 31,1989. Approximately

1. ""*' C"""#'

1,180,000 shares have been repurchased through 1937 1986 1 935 February 19,1988. GPU has requested Jersey Central Pcwer authorization to repurchase an additional three O Light 4.46x 3.64x 3.03x million shares through December 31,1990.

51etropolitan Edison 4.76x 4.38x 1.86x Since the present common equity ratio is, in Pennsylvania Electric 4.91x 4.99x 3.54x management's judgment,in excess of current needs of the utility business, GPU has requeste<J authorization from the SEC to make diversifiej investments.

COMPETITION The electric utility industry is faced with an increasingly competitive environment. Large customers are exploring the potential benefits of shopping in a broad energy market, rather than being tied to a single utility. In addition, federal 21

legislation has created competition in power System's nuclear programs, contingencies and generation through incentives to cogenerators, retrospective examinations, see Note 1 to the The Federal Energy Regulatory Commission has financial statements.

begun looking at ways to establish competitive Inflation affects the GPU System in the form bidding for supplying new pon er generation ofincreased replacement costs of utility plaat, needs. This new reality in the industry makes it which are significantly higher than the historical imperative for the GPU System to keep the price cost reflected in the financial statements. The ofits suvice competitive with those of GPU System anticipates it will recover the neighboring utilities. The GPU System's ability increased cost of facilities when, and if, to remain competitive in this environment may replacement actually occurs. Inflation also affecte affect the results of operations in future years, the GPU System's operating costs in times of high GPU inter.ds to meet the challenges of a changing inflation. Although, as a regulated utility, the regulatory climate and increased competition by GPU System can expect to recover its increased controlling costs and limiting the need to operating costs,it may be adversely affected by construct new generation facilitle.

the regulatory lag in recognizing them.

U CONTROLLING COSTS U ACCOUNTINGISSUES The GPU System initiated an Expem'Iture In Decemb.r 1987, the Financial Accounting Analysis Program (EAP) in 1987. Its purpose is, Standards Board (FASB) issued Statement of through a continuing effort, to effect long range Financial AccountingStandards No.% (FAS savings by controlling costs to reduce the 96), "Accounting for Income Taxes." The operating costs of the business. The GPU Statement is effective for fiscal years beginning System's goal is to maintain operating and after December 15,1917, and will require utilities maintenance expenses level through 1990 and to establish deferred tax liabilities and related views the EAP as a tool to accomplish that goal.

receivables due from customers for such deferrcd As part of the effort, the GPU System has taxes not previously recorded as liabilities. The planned to reduce the number of employees to provisions of FAS % could adversely impact net 13.000 by the end of 1990. This cost containment income.

effort should contribute to the GPU System The GPU System currently provides certain objective of remaining competitive with its postemployment health care benefits for its neighboring utilities.

retirees.The FASB is considering an approach for recognizing the costs and liabilities for providir,g a OTHER CONSIDERATIONS these benefits similar to that prescribed in the In recent years, the ability of electric Statement of Financial Accounting Standards No.

utilities to obtain adequate and timely recovery of 87,"Employers' A$ counting for Pensions."If a their investments in, and operating costs of final standard using this approach is adopted by nuclear generating sations and associated the FASB, a substantial liability for such replacement power costs has become more postemployment benefits and a receivable from uncertain. In addition, there has been a growing customers for the cost of such benefits not tendency by regulators to retroactively assess the previously recorded as liabilities may be required prudence of operation and capital investments.

to be reflected on the balance sheet.

For more information ec mrning the GPU 1

22 l

4 STATEMENT OF MANAGEMENT y

n-9 The management of General Public Utilities recommendations concerning the system of Cerporation is responsible for the information Internal control and has taken actions that are and repre sentations contained in the financial believed to be cost effective in the circumstances statements and other sections of this annual to respond appropriately to those r: port. The financial statements have been recommendations. For the reasons stated above, preparrd in conformity with generally accepted management believes that, as of December 31, acco ating principles consistently applied. In 1987, the Corporation's system of internal control prepring the financial statements, management provides reasonable assurance as to the integrity mdes heformed judgments and estimates of the and reifability of the financial statements, the expecti d offects of events and transactions that protection of assets from unauthorized use or r re cur. ently being reported.

disposition and the prevention and detection of To fulfillits responsibilities for the fraudulent financial reporting.

reliabil.ty of the financial statements, The Board of Directors, through its Audit mxge ment has established and maintains a Committee, consisting solely of outside directors system of h.,ernal control. This system provides of the Corporation,is responsible for reviewing for ep9ropriate division of responsibilities and and monitoring the Corporation's financial r.rritten policies and procedures that are reporting and accounting practices.The Audit con'm.micated to employees with significant roles Committee meets with management ad internal in the financial reporting process and is updated auditors four times a year to review the work of a,necessary. Afanagement continually monitors each and to monitor the discharge by each ofits the systern of internal control for compliance.

responsibilities. The Audit Committee also meets GPU maintains an internal auditing program that at least four times a year with the independent a

L Independer.tiy assesses the effectiveness of the auditors who have free access to the Audit internal contro!s and recommends possible Committee, without management present, to improvements thereto. In addition, as part of its discuss internal control, auditing and financial audit of GPU's financial statements, Coopers &

reporting matters.

Lybrand enluates internal controls to establish a Coopers & Lybrand, independent public bals for reliance thereon in determining the accountants, are engaged to examine and express niture, timing, and extent of audit tests to be an opinion, which appears on page 24, on the applied. Sf anagement has considered the internal financial statements.

tuditor's and Coopers & Lybrand's 23

REPORT OF-AUDITORS sum.m:sn.c.ma ecumeumar:e To the Board ofDirectors and Stockholders of the excess, if any, of amounts which might be GeneralPublic Utilities Corporation paid in connection with claims for damages Parsippany, New Jersey resulting from the accident over available insurance proceeds.

We have examined the consolidated balance In our opinion, subject to the effects on the consolidated financial statements of such sheets of General Public Utilities Corporation and Subsidiary Compa'nies as of December 31,1987 adjustments, if any, as might have been required had the outcome of the uncertainties discussed and 1986 and the related consolidated statements above been known, the aforementioned financial ofincome, retained earnings and changes in financial position for each of the three years in the statements (pages 25 through 42) present fairly period ended December 31,1987. Our the consolidated financial position of General examinations were made in accordance with Public Utilities Corporation and Subsidiary generally accepted auditing standards and, Companies at December 31,1987 and 1986 and accordingly, included such tests of the accounting the consolidated results of their operations and records and such other auditing procedures as we the consolidated changes in their financial considered necessary in the circumstances, position for each of the three years in the period As more fully discussed in Note 1 to ended December 31,1987 in conformity with Consolidated Financial Statements, the generally accepted accounting principles applied l

n a consistent basis, after restatement for the Corporation is un tble to determine the ultimate consequences of certain contingencies which have change, with which we concur, in the accounting resulted from the accident at Unit No. 2 of the f r their investments in TMI 2 and the Forked I

Three Mile Island Nuclear Generating Station River nuclear project as described in Note 3 to Consolidated Financial Statements.

}

(TMI 2) and the respon e of rate regulatory I

authorities to that accident. Among the matters l

which remain unresolved are (a) the recovery of the cost to be incurred in connection with the Coopers a Lybrand cleanup and, with r *pect to the Corporation's Pennsylvania subo.c: aries only, the eventual February 23,1988 decommissioning of TMI 2 from various funding 1251 Avenue ofthe Americas sources including customers, and (b) the recovery New I'ork, New I'ork i

l 1

24

CONSOLIDATED STATEMENTS OF INCOME u aty w ~

-:=m'.~

m.n m

r -~ms GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES In Thousands forthe YearsEnded Arember31, I98 7 I986*

I983*

Operating Revenues

$2,673,421 52,787,077 52,869,509 Operating Expenses:

Fuct 411,718 350,966 432,341 Power purchased and interchanged, net 367,444 455,056 550,976 Deferral of energy costs, net (85,654) 81,279 215,681 Other operation and maintenance 868,350 854,688 769,418 Depreciation and amortization 253,771 225,143 223,324 Amortization of property losses 17,040 21,778 25,343 Taxes, other than income taxes 263,637 263,490 264,977

'i,0UI,3Ui "5'.5~'5,I66" 'i,A52,060

~

"50tdoperating expenses

,5 Operating income before income taxes 577,115 534,677 387,449 Income taxes 183,484 180,452 114,990 Operating Income 393,631 354,225 272,459 Other Income and Deductions:

Allowance for other funds used during construction 12,065 16,186 8,923 Other income, net 55,595 51,701 60,683 Income taxes (24,982)

(18,013)

(27,378)

.................. Total other income and deductions 42,678 49,874 42,228 Income Bef. ore Interest Charges and Preferred Dividends 436,309 404,099 314,687 Interest Charges and Preferred Dividends-Interest on long-term debt 137,175 143,589 145,794 Other interest 17,234 17,547 12,118 Allowance for borrowed funds used during construction (7,760)

(4,957)

(8,402)

Preferred stock dividends of subsidiaries 30,563 36,973 39,971 Total interest charges and preferred dividends 177,212 193,152 189,481 Net Income T 555,~0UI T 5id,~93f T I25,305 Earnings Per Share S

4.12 5

3.36 5

1.99 Average Commen Shures Outstanding 62,864 62,864 62,864 Cash Dividends Paid Per Share S

.45 5

5 CONSOLIDATED STATEMENTS OF RETAINED EARNINGS 11 y

m GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES In Thousands For the Years Ended Arember Ji.

1987 1986 1983 Balance, beginning of year, as previously reported S 867,223 5663,718 5546,612 36,836 42,536 50,636 Deduct, effect of change in accounting standards (Note 3)

Balance, beginning of year, as adjusted 830,387 621,182 495,976 Add, net income 259,097 210,947 125,206 Deduct, cash dividends on common stock 28,289 1,349 1,742 Deduct, other adjustments

........ ~.... -

Balance, end of > car

$1,059,846 5830,387 5621,182

• Restated to reflect change in accounting standards, see Note 3.

The accompanying notes are an integral part of the consolidated financial statements.

25

CONSOLIDATED BALANCE SHEETS w n w = n e r, r=x..

c c-m GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES In Thousands Dwember 31.

1987 1986*

ElASSETS Utility Plant (at original cost):

In service

$5,943,183

$5,5(M,848 Less, accumulated depreciation 1,862,021 1,701,293 Investment in Three Mile Island Unit 2 627,529 593,538 Less, accumulated depreciation and amortization 367,046 328,445 Net 260,483 265,093 Construction work in progress 253,316 301,488 Property under capital leases, net 205,834 92,902 lield for future use 20,243 28,190 Nuclear fuel, net 19,371 117,459 Net utility plant 4,840,409 4,608,687 Investments-Loans to non affiliated mining companies 6,725 7,775 Other, at cost 18,579 8,918 Total investments 25,304 16,693 Current Assets:

Cash 1,743 4,238 Temporary cash investments 62,790 60,040 Special deposits 89,243 108,059 Accounts receivable:

Customers, nel 178,708 189,623 Other 116,658 21,365 Inventories, at average cost or less:

Materials and supplies for construction and operation 146,228 136,435 Fuel 62,425 54,799 Deferred income taxes 62,558 115,788 Prepayments 14,848 12,002 Total current assets 735,201 702,349 Deferred Debits-Unamortized property losses 130,074 142,255 i

Deferred costs-TMI 2 cleanup, net of recoseries 192,397 289,018

-Nuclear fuel disposal fee 52,862 59,061

-Oyster Creek outage, net 51,925 61,874 Deferred income taxes 197,132 72,420 Other 53,611 66,077 "IotalieEe'rred"d5its 65,'001 UU',5U3

~

Total Assets

)

$6,278,915

$6.018,434

• Restated to reflect change in accounting standards, see Note 3.

The accompanying notes are an integral part of the consolidated financial statements.

l 26 4

e e

in Thousands December 31.

1937 1986*

O LIABILITIES AND CAPITAL Long Term Debt CapitalStock and Consolidated Surplus:

Long term debt

$1,668,763 51,736,580 Cumulative preferred stock 399,674 424,739 Common stock and consolidated surplus:

Common stock 157,229 157,229

' Consolidated capital surplus 761,757 761,757 Consolidated retained earnings 1,059,846 830,387 Total 1,978,832 1,749,373 Less, reacquired common stock 70 70 Total common stockholders' equity 1,978,762 1,749,303 Total capitalization 4,047,199 3,910,622 Current Liabilities:

Securities due within one year 54,112 46,098 Notes payable to banks 109,459 44,248 Obligations under capital leases 175,467 66,758 Accounts payable 202,834 241,833 Taxes accrued 138,903 141,700 Deferred energy credits 44,765 119,283 Interest accrued 44,563 42,868 Other 129,870 98,618 Total current liabilities 899,973 801,406 Deferred Cre.*its and Other Liabilities-Deferred income taxes 728,627 576,512 Unamortized investment tax credits 248,390 247,75' TMI-2 cleanup costs 161,175 268,860 Obligations under capital leases 30,367 26,144 Nuclear fuel disposal fee 103,187 97,166 Other 59,997 89,967 Total deferred credits and other liabilities 1,331,743 1,306,406 Commitments and Contingencies (Note 1)

Total Liabilities and Capital

$6,278,915 56.018,434 27

CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES In musands For the Years Ended December 31.

]98 7 1986*

1983*

Source of Funds:

Operations:

Net income

$259,097 5210,947 5 125,206 Principal non-cash charges (credits) to income:

Depreciation and amortization 291,234 279,833 279,109 FAS 90 accretion (39,600)

(43,400)

(53,200)

Investment tax credits, net 633 17,481 77,914 Deferred income taxes, net 84,796 20,820 (52,732)

AFUDC on other funds (12,065)

(16,186)

(8,923)

Total from operations 584,095 469,495 367,374 Long-term debt 2,800 59,500 80,300 Increase (decrease) in bank borrowings 65,211 44,248 (95,000)

Common stock 10,225 Sale of nuclear fuel 104,873 262 41,313 Decrease (increase) in other working capital items (a) 22,963 95,174 (45,8(M)

Other, net 4,451 7,137 (24,113)

Total source of funds

$784,393 5675,816 5 334,295 Application of Funds:

Construction expenditures (excluding AFUDC on other funds) 5436,092 5496,569 5 399,072 Leased nuclear fuel 107,370 4,685 50,473 Retirement or redemption oflong term debt and preferred stock 87,665 213,498 88,242 Cash dividends paid on common stock 28,289 Deferred energy credits, net 85,654 (81,279)

(215,681)

Deferred costs-nuclear accident, net 11,064 18,911 16,124 Reserve capacity 28,259 23,432 (3,935)

Total application of funds

$784,393 5675,816 5 334,295 (a) Decrease (increase) in components of other working capital:

Cash and temporary cash insestments 5 (255) 5 60,367 5(103,058)

Accounts receivable (84,378) 4,801 5,022 Special deposits 18,816 (4,148)

(34,823)

Insentories (17,419)

(18,909) 13,278 Accounts payable (38,999) 28,922 (15,931)

Taxes accrued (2,797) 5,558 39,085 Obligations under nuclear fuel capital lease 107,370 4,685 50,473 Other, net 40,625 13,898 150 Total 5 22,963 5 95,174 5 (45,804)

• Restated to reflect change in accounting standards, see Note 3.

The accompsnying notes are an integral part of the consolidated financial statements.

28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS w=ux

~- ~

.~,

-2 a:: ce

- n General Public Utilities Corporation (the associated with investments in nuclear facilities, Corporation) is a holding company registered their operating and maintenance expenses, and under the Public Utility Holding Company Act of the costs of any needed replacement power has 1935. The Corporation does not operate any become incrcasingly subject to question. In utility properties directly, but owns all the addition, for economic or other reasons, operation outst nding common stock of three electric of these plants for the full term of their now utilities, Jersey Central Power & Light Company assumed lives cannot be assured. The subsidiaries (JCPAL), Metropolitan Edison Company (Met-are not collecting revenues for the Ed) and Pennsylvania Electric Company decommissioning of TMI 2 and do not believe (Penelec) (the subsidiaries). The Corporation that the current level of revenues being collected also owns all the stock of GPU Service for the decommissioning of their other nuclear Corporation (GPUSC), a service company, and plants will be adequate ta cover actual future GPU Nuclear Corporation (GPUN), which costs. It is management's intent to seek ta recover operates and maintains the nuclear units of the the costs described above in rate proceedings, subsidiaries. All of these Companies considered however, their recovery cannot be assured.

together are referred to as the "GPU System."

TMI2 The TMI-2 accident resulted in significant

1. COMMITMENTS AND damage to the TMI 2 system and components, CONTINGENCIES contamination of major portions of the plant and a release of radioactivity to the environment, R NUCLEAR FACILITIES w hich published reports of governmental agencies The subsidiaries have made investments in indicated did not constitute a significant public four major nuclear proj cts -Three Mile Island health or safety hazard.

generating station Unit No. 2 (TMI 2), which is Accident Cleanupe The Corporation's now being defueled following the March 28,1979 program (and estimate of costs) for the cleanup nucle:r accident, Three Mile Island generating of TMI-2 does not include the costs of either Post-st tion Unit No.1 (TMI 1) and the Oyster Creek Defueling Monitored Storage (PDMS) or generating station, both of which are operational decommissioning.

f:cilities, and the cancelled Forked River project, Cleanup efforts at TMI 2 continue to all of which are discussed below. TMI l and progress and, except for the disposal of the TMI 2 arejointly owned by JCP&L Met-Ed and processed water remaining on site as a result of Penelec in the percentages of 25%,50% and the accident and cleanup program, are expected to 25%, respectively. Oyster Creek and Forked be completed in 1989 at a cost of approximately River are owned by JCP&L. Saxton Nuclear 51 billion. The Nuclear Regulatory Commission Experimental Corporation (Saxton), the common (NRC) has scheduled public hearings regarding stock of which is owned by the subsidiaries, owns the disposal of the water. The cleanup cost is a small demonstration reactor which was removed subject to continuing uncertainties, including (a) from service in 1972.

regulatory requirements, (b) the full scope of the In recent years, the operating costs and technical challenges in decontaminating the c:pital requirements for nuclear plants have been facility, (c) the resolution of criteria for increasing and are becoming less predictable, in maintaining the plant pending its ultimate lirge part due to changing regulatory disposition and (d) the effect of government requirements and safety standards and the actions on the issue of waste disposal.

experience gained in the construction and As of December 31,1987,5839 million has operation of nuclear facilities. As this has been spent on the cleanup. The subsidiaries have occurred, the ability of electric utilities to obtain arranged for funding the remaining cleanup costs, adequate and timely recovery of their investments some of which is dependent on scluntary in nuclear projects has become more uncertain.

contributions or annual authorizations, as follows:

Similirly, the recovery of the carrying costs 29

l l

1 un Mih>

Investigations-Investigations and inquiries concerning the nature, causes and consequences of Customers S 39 the TMI 2 accident have generally been Federal government ;

11 completed but continue to provide a potential for 1

Investor-owned utilities,and other,

,,,2 further uncertainties. The NRC has stated that, f

6 Total 112 depending upon the findings of continuing

)

Advances to be provided by the investigations,it may take additional enforcement I

I subsidiaries 49 action with respect to the TMI-2 accident and its Remaining estimated costs S161 aftermath.

Litigation and Claims: As a result of the accident and its aftermath, claims, which are Upon completion of the cleanup program, GPUN intends to implement the PDMS plan.

aterial in amount, have been asserted against the Under this plan, which is subject to approval by Corporation,its subsidiaries and certain of their flicers and directors. The claims include the NRC, radioactive materials would be largely removed and conditions would be established to individual claims as we!! as purported and actual f

maintain a safe, stable and secure facility. The class actions for alleged personal injury and l

PDMS plan contemplates costs of approximately Property damage (including claims for punitive 510 million in 1989 and annual costs of $5 million damages) resulting from the accident. Some of the thereafter.

claims also request damages for injuries from Management believes that any costs incurred alleged emissions of radioactivity before and after by the subsidiaries associated with the cleanup, the accident.

for which they do not receive financial assistance Que<tions have not yet been resolved as to or reimbursement from others, should be whether certain of these claims are (a) subject to recoverable through the ratemaking process.

the limitation ofliability set by the Price-Management further believes that costs associated Anderson Act and (b) outside the insurance with PDMS and the eventual decommissioning of e verage provided pursuant to the Price-Anderson Act. In a 1985 decision, which was later TMI 2 should also be recoverable throegh the ratemaking process.

reversed on jurisdictional grounds, a U.S. District Repair and Restoration of T3f/ 2: The Court held that punitive damages are available in subsidiaries' present energy supply plans do not actions under the Price-Anderson Act.

reflect the restoration to service of TMI 2 and no In 1985, the Corporation's insurance carriers funds are presently being expended to presen e the settled 282 personal injury claims for an aggregate plant or equipment for future use. Retirement of f$14.3 milli n. Additionalcomplaints havebeen TMI 2 would require prior regulatory filed against the Corporation and its subsidiaries on authorization; no application for such behalfof over 2,100 plaintiffs claiming personal authorization has been submitted.

injuries (including claims for punitive damages) as Accountingfor the Investment in T3fI 2:

a result af the TMl 2 accident and its aflermath.

The Pennsylvania Public Utility Commission The insurance carriers has e assumed the defense of (PaPUC) and the New Jersey Board of Public these actions, substantially all of which are pending Utilities (NJBPU) have authorized revenues for in the Pennsylvania Court of Common Pleas.

amortization of the subsidiaries' investments in Plaintiffs have appealed a decision dismissing a TMI-2. Met Ed and Penelee are presently number ofclaims on the grounds they are barred by collecting annual revenues of approximately $25 t he statu te oflimitations. An initial t rial of twelve million and $12 million, respectively, which will cases has been post poned pending the outcome of be sufficient to recover their remaining the appeal.

l investments over the next six years. The NJBPU TMI 1 has authorized JCP&L to recover its investment At December 31,1987, the subsidiaries' total over an 18 year period beginning in 1989. The investment in TMI 1, net of depreciation, was PaPUC and the NJBPU hase not prosided

$511 million along with $84 million of nuclear revenues for a return on the investment in TMI 2 fuel, net of amortization.

and, accordingly, the investment is recorded at its Cracks in the steam generator tubes, w hich discounted present value. (See Note 3.)

were first diwovered in 1981, has e been extensively 30

repaired. While management believes the cause of for completion in 1988, together with continuing the 1981 cracking has been identified and arrested, esorts to prevent water leakage into the corroded it remains possible that other steam generator region, will retard further corrosion. A plan to problems may occur. In addition, some of the tubes monitor the corrosion rate is in place and if h ve been plugged and removed from service; corrosion persists to the point that the shell can however, they do not limit TMI-l's power outpat.

no longer satisfy its intended safety functions, the The plant's output may periodically be plant would have to be shut-down in order to restricted due to flow interference from mineral make structural repairs to the shell.

deposits, which typically accumulate in reactor In September 1987, while the plant was shut plants such as that at Thfl-1 in the secondary, down for maintenance, a violation of a safety non nuclear side of the unit's steam generators.

related technical specification occurred. Findings Steps to reduce this possibility are planned for the of an independent investigation, commissioned by next refueling outage which is tentatively GPUN, concluded that one or more members of scheduled for the third quarter of 1988. The the control room shift on duty acted improperly, deposits may, however, temporarily limit future but that management personnel acted promptly to operation of the plant. If the problem persists, investigate and report the violation. In November, further removal of the deposits or other corrective with NRC authorization, the plant was restarted.

rction may be required.

Investigations by GPUN and the NRC Oyster Creek e neerning the incident are continuing.

At December 31,1987, JCP&L's total Forked River investment in the Oyster Creek nuclear generating station, net of depreciation, was $531 million NJBPU rate orders permit JCP&L to recover eJong with $98 million of nuclear fuel, net of its remaining investment in the abandoned Forked amortization.

River nuclear project. JCP&L is presently Certain 1983 84 outage-related costs have collecting annual revenues for amortization of been deferred. JCP&L is collecting revenues to approximately $12 million which will be sufficient recover these costs (without a return on the to recover its investment by the year 2006. The unamortized balance) oser a period of 10 years NJBPU has not provided revenues for a return on pursu nt to a 1986 rate order. At December 31, the investment and, accordingly, the investment is 1987, the unamortized balance of these deferred recorded at its discounted present value. (See costs was $52 million.

Note 3.)

i In January 1988, the NJBPU approsed a settlement ofissues raised in the NJDPU's review NUCLEAR PLANT DECOMMISSIONING COSTS of certain outage related costs incurred by JCP&L during 1983-84 and 1986 outages of the Oyster The subsidiaries, in accordance with rate Creek plant. Pursuant to the settlement determinations, are charging to expense and either agreement,in December 1987, JCP&L wrote of crediting to reserves or funding amounts intended

$3 million of deferred costs incurred during the to provide for the cost ofdecommissiomng the,

1983-84 outage, and will defer the recovery of $25 TMI I and Oyster Creek nuclear plants over their million of replacement power costs. These remaining service lives. The subsidiaries are not deferred costs will then be recovered (without a e llecting revenues for the decommissioning of return on the unamortized balance) over a ten-TMI 2, the costs of which are expected to be substantial.

yeir period beginning in 1989.

i During 1986, inspections of the steel shell As previously noted, management believes that houses the reactor vessel indicated that a that costs associated with PDMS and the eventual portion of the shelPs wall is thinner than decommissioning of TMI 2 should be recoverable expected. Tests indicate that, although some through the ratemaking process. Ilowever, the corrosion has occurred, the wall meets design issue of collecting TMI 2 decommissioning costs requirements and the plant is safe to operate.

has not as yet been presented to the PaPUC.

After a review by the NRC, the plant was in August 1987, the fue year period for restarted in December 1986. Management believes charges to JCP&L customers for prniously thit installation of a protective system, scheduled authorized TMI 2 cleanup expenses was 31

scheduled to terminate and, correspondingly, the based upon a total estimated cost of $9.2 million.

charges to JCP&L customers would be reduced by A site-speci6c study estimates a cost of approximately $13.6 million annually. JCP&L approximately $13 miPion for Saxton.

suggested to the NJBPU that it might fmd it The subsidiaries expect that the current level appropriate under these circumstances to of revenues being collected for nuclear plant moderr.te tha; reduction by allowing the initiation decommissioning expense will not be adequate to of reco cry fram customers of JCP&L's share of cover actual future costs. The subsidiaries believe TMI-2 t'ecomndssioning costs in the amount of that additional expenditures above the levels 51.3 million. In an August 1987 order, the currently being collected should be recoverable NJBPU rejected that suggestion, stating that, through the ratemaking process.

widle its policy has been to allow utilities to recover the costs of decommissioning nuclear NUCLEAR FUEL DISPOSAL FEE plants as a part of the cost of sersice borne by The subsidiaries are providing for estimated ratepayers, such policy has been implemented future disposal costs for spent nuclear fuel at only in a fully litigated base rate proceeding. The Oyster Creek and TMI l in accordance with the NJBPU order also stated that it would, therefore, Nuclear Waste Policy Act of 1982.The be inappropriate to grant the JCP&L request at subsidiaries entered into contracts in 1983 with that time, but that the next JCP&L base rate the U.S. Department of Energy (DOE) for the proceeding would provide the appropriate forum disposal of spent nuclear fuel. The total liability for determining the total estimated reasonable including interest at December 31,1987, all of costs of decommissioning TMI 2 and the which relates to spent nuclear fuel from nuclear appropriate collection mechanism and period.

generation through April 6,1983, amounts to in a 1985 proposed rulemaking, the NRC

$103 million. As the actualliability under these assumed that,in the absence of a site-specific contracts is substanAlly in excess of the amount study, an amount of $100 million per plant,in recovered to date from ratepayers, the subsidiaries 1984 dollars, would be required to fund have reflected such excess of $53 million a.

decommissioning costs. If the NRC rule becomes December 31,1987 as deferred costs. The rates effective, the subsidiaries would have to fund presently charged to customers recognize these decommissioning costs of $100 mi!! ion (in 1984 levels of costs, plus interest, and provide for dollars) per plant unless site-specific studies collection over eight years for Met Ed and determine otherwise.

Penelec and fourteen years for JCP&L.

Even though the subsidiaries have requested The subsidiaries are collecting, from their revenues for decommissioning based on the customers, I mill per kilowatt hour generated for proposed NRC rule requirement, they have been spent nuclear fuel disposal costs resulting from granted revenues based on lower estimates nuclear generation subsequent to April 6,1983.

l proposed by other participants in these rate These amounts are remitted quarterly to the proceedings. JCP&L is collecting revenues for DOE.

decommissioning Oyster Creek based on an estimated cost of $56.2 million, assuming :n place INSURANCE entombment. JCP&L is collecting revenues based The subsidiaries have obtained the maximum on its share ($15 million) of an estimated $60 amount ofinsurance available to them to insure million cost to decommission TMI 1, assuming their nuclear plants for (a) property damage i

in. place entombment. Met Ed and Penelee are (other than certain flood and earthquake collecting resenues based on their shares ($19 coverages) and decontamination, (b) liability to i

million and $9 million, respectively) of an third parties and (c) incremental replacement estimated 538 million cost to decommission power costs, as presented below. The GPU l

TMI 1, assuming dismantlement. The revenue System has also obtained insurance for its other levels for Met Ed and Penelee are based on the operations and facilities, including coverage for i

cost of decommissioning only the radioactive property damage, liability to employees and third components of TMI 1. The subsidiaries are parties and loss of use and occupancy (primarily collecting revenues for decommissioning Saxton incremental replacement power costs). Most of i

i 32

this insurance is subject to certain deductibles.

amount of $500 million is provided by American Some potential losses or liabilities may not be Nuclear Insurers / Mutual Atomic Energy insurtble or the amount ofinsurance carried may Liability Underwriters (ANI/MAELU). ANI/

~ not be sufficient to meet potential losses and MAELU provides all-risk coverage for TMI-l but liabilities, including liabilities relating to the only limited non nuclear coverages for portions of relecse or escape of hazardous substances into the TMI 2. The insurance for Oyster Creek is environment. There is also no assurance that the provided by Nuclear Mutual Limited, a mutual GPU System will maintain all existing insurance insurance company. Additional insurance is cover:ges. Future losses or liabilities which are provided by Nuclear Electric insurance Limited not completely insured, unless allowed to be (NEIL), a mutualinsurance company, and ANI/

recovered through ratemaking, could have a MAELU for losses in excess of the primary miterial adverse effect on the financial condition insurance coverage up to a total of $1.525 of the GPU System, billion per site. The primary property and additional insurance provides that expenses for Nuclear insurance decontammati n and debns removal shall be Insurance coverage applicable to the GPU pa m any payments for daims aladng to System's nuclear power sites (TMI 1 and TMI-2 Prope y dmag e considered as one site for insurance purposes)

Price-Anderson Act could result in assessments to the subsidiaries of up to $15 million (55 million for each reactor) in the event of a nuclear incident SId2im"* d****I at any licensed nuclear power plant in the Ni[

c untry. The maximum liability in the event of r3pc and sourre of 3ra2imum coremre co crare Aummem more than one incident in a particular year is $30

• I Property Damage and Decontamination (1):

TMI and Oyster

.tr spec e pumim assessments totahng 48 Creek 5 500 None and $16 million f r radioactive related injuries occurring TMI and Oyster after January 1,1988, to on site plant workers in Creek 1,025 57.8 and $7.7 the United States.

Although the Price Anderson Act expired in

$1,525 August 1987, the protection provided under the Liability to Third Parties (2):

Act continues for the GPU System as the plants' Private insurance perating licenses were in effect at the time the companies S 160

$7.8 Act expired. Legislation to amend the Price-Price Anderson Anderson Act, which would raise the liability

- Assessment 560

$30 limit from 5720 million to approximately $7 5 320 billi n, has been passed by the U.S. House of Representatives. Assessments in the case of an incremental Replacement incident would increase from 55 million per Power (3):

nuclear reactor per incident to $10 million per TMIl

$2.2 weekly 53.9 year. The maximum assessment per incident Oyster Creek

$1.7 weekly

$3.1 would be 563 million. Similar legislation is now I

being considered by the U.S. Senate.

The subsidiaries are subject to retrospect.ive (3) Insurance coverage is provided by NElL premium assessments totaling $76.3 million for incremental replacement power costs resulting annually, which may result from losses that from an accidental outage. Coverage commences exceed accumulated funds available to mutual i

insurance companies or as provided under the after the first 26 weeks of the outage. The poh..cies limit weekly mdemmty for covered outages to Price Anderson Act.

100% of the weekly indemnity for the first 52 (1) The primary property damage and weeks and 50% of the weekly indemnity for an decontamination insurance for TMI in the additional 52 weeks.

33

=

1 OtherInsurance two non-affiliated companies that had ptrmitted The GPU System is also subject ta those companies to recover in rates charges for retrospective premium assessments under the amortization over a ten-year period of their directors' and officers' liability and general investments in four generating units which had liability insurance policies which could total been under construction and which were approximately 55.4 million annually, cancelled in 1980 before their completion. The Pennsylvania Supreme Court based its decision on PJ OTHER COMMITMENTS AND -

a provision of a Pennsylvania law adopted in CONTINGENCIES December 1982 stating that the cost of The GPU System's construction programs, construction of a facility "shall not be made a part which extend over several years, contemplate of the rate base nor otherwise included in the rates expenditures of approximately $540 million charged by the electric utility until such time as during 1988. In connection with these the facility is used and usefulin senice to the construction programs, the subsidiaries have public" and that with certain exceptions,"no incurred substantial commitments. In the normal electric utility property shall be deemed used and course of the operation ofits business, the GPU useful until it is presently providing actual utility System is from time to time involved in disputes, service to customers." The Pennsylvania Supreme claims and, in some cases, as defendants in Court rejected arguments that the provision as so litigation with contractors, vendors, and other applied would violate the United States and suppliers of equipment and senices.

Pennsylvania Constitutions. The Court also The subsidiaries have entered into long-term rejected arguments that such amortization was contracts with non-affiliated mining companies for permitted by a provision of Pennsylvania law the purchase of coal for certain generating adopted in October 1985 stating that "an electric stations in which they have ownership interests.

utility may be permitted to recover a return of, The contracts, which expire between 2001 and the but not a return on, prudently incurred costs on end of the expected senicelives of the generating any partially completed facility when such stations, require the purchase of either fixed or cancellation is found by the commission to be in minimum amounts of the stations' coal the public interest" on the ground that the 1985 requirements. The price of the coal is determined provision was not applicable because it was by formulas providing for the recovery by the enacted after the PaPUC's ruling and was to mining companies of their costs of production.

operate prospectively only. The non-affiliated Under one of these contracts, the price of coal is utilities involved in that decision are seeking based on escalation ofindexed cost components.

review ofit by the United States Supreme Court.

The subsidiaries' share of the cost of coal hiet Ed and Penelec, which do not have any purchased under these agreements is expected to base rate proceedings now pending before the aggregate $83 million for 1988.

PaPUC or the Pennsylvania courts, are unable to The subsidiaries have entered into predict what significance, if any, this decision of agreements with other utilities for the purchase of the Pennsylvania Supreme Court will have on up to 2,355 megawatts of capacity and energy for them.

various periods through 1999. Payments pursuant In hiarch 1986, the Pennsylvania Consumer to these agreements are estimated to aggregate Advocate (Consumer Advocate) filed complaints

$305 million for 1988. The price of the energy against the Energy Cost Rates (ECR) of a purchased under the agreements is determined by number of electric utilities, including those of contracts, which have been accepted by the hiet Ed and Penelec. The Consumer Advocate Federal Energy Regulatory Commission, has taken the position that any problems providing generally for recovery by the sellers of encountered with the Thil-l steam generators are their costs. Other possible long term purchases due to management imprudence and that are the subject of pending negotiations.

replacement power costs associated with an In October 1987, the Pennsylvania Supreme inspection of the unit's steam generators during Court reversed earlier decisions of the PaPUC and the April 1986 Thil 1 outage, and any other Pennsylvania Commonwealth Court involving related outages, should not be borne by customers. hiet Ed's and Penelec's share of the 34

replacement power costs from the TMI l outage The subsidiaries have been named by the h:ve been estimated at $6.9 million and $2.7 U.S. Environmental Protection Agency as million, respectively. The Consumer Advocate has potentially responsible parties with respect to also stated that certain fossil fuel costs passed certain hazardous waste disposal sites, and may be dons to customers may be excessive. The liable for contributing to the costs of cleaning up Consumer Advocate has called for further such sites. There can be no assurance as to the reductions in ECR charges related to fossil fuel outcome of these proceedings. As a result of charges in the amounts of $1.6 million and $21.5 existing and proposed legislation and regulations million for Met Ed and Penelec, respectively.

dealing with environmental matters including Met Ed and Penelec have denied these allegations.

legislation regarding acid rain, air quality An Administrative Law Judge has begun hearings regulations relating to stack height requirements on these matters. Additionally, the Consumer and storage and disposal of solid and hazardous Advocate has filed complaints against the 1987 wastes, the subsidiaries may be required to incur ECRs to the extent they seek to recover energy substantial additional costs to construct new costs which are the subject of the Consumer equipment, modify or replace existing and Advocate's earlier complaint of March 1986. The proposed equipment and to improve or clean up Consumer Advocate has asserted that some or all waste disposal sites currently or formerly used by of the replacement power costs incurred during them, including previously owned coal the TMI l refueling outage, which began in gasification sites. The subsidiaries are unable to October 1986, may have been imprudently estimate the full extent of such possible costs incurred and should not be borne by customers.

(which may be material and may not be covered The outcome of this matter is not expected to by insurance) or the impact thereof on future have a material effect on the financial position of operations. Management expects to recover such Met Ed and Penelec.

costs, as described above, in rate proceedings, but Consumer groups have filed complaints there can be no assurance as to the extent to sgainst the Met Ed and Penelec 1988 ECRs, which these costs will be recoverable.

which were approved by the PaPUC in December 1987. Met-Ed and Penelee have denied these diegations. Hearings on these complaints will be

2.

SUMMARY

OF SIGNIFICANT held by an Administrative Law Judge.

ACCOUNTING POLICIES In 1987, the NJBPU established an annual performance standard for JCP&L's two operating MGENERAL nucten units. Operation of these units at an The consolidated financial statements include aggregate generating capacity factor below 60%

the accounts of all subsidiaries.

or above 80% would trigger an adjustment to the recoverable portion of replacement energy costs.

G UTILITY PLANT At current cost levels, the maximum annual effect it is the general policy of the GPU System to l

on net income of applying the automatic charge at record additions to utility plant (material, labor, a 40% capacity factor would be approximately overhead and an allowance for funds used during l

510 million. A capacity factor below 40% would construction) at cost. The cost of current repairs l

generite no specific monetary charge but would and minor replacements is charged to appropriate require the issue to be brought before the NJBPU operating and maintenance expense and clearing for review to determine the appropriate accounts and the cost of renewals is capitalized, collectibility of the replacement power costs. The The original cost of utility plant retired or current measurement period, which began otherwise disposed ofis charged to accumulated l

March 1,1987, coincides with the Levelized depreciation.

Energy Adjustment Clause (LEAC) period and will result in no adjustment for the period.

M OPERATING REVENUES The subsidiaries are defendants in actions, Revenues are generally recorded on the basis including purported class actions, seeking of billings rendered.

compensatory and punitive damages for alleged unlawful employment practices.

i 35

D DEFERRED ENERGY COSTS proceedings, but there can be no assurance of the Energy costs are recognized in the period in extent to which these costs will be fully recovered.

which the related energy clause revenues are The subsidiaries use depreciatica r2tes which, on billed.

an aggregate composite basis, resuhad in an approximate annual rate of 3.47%,3.40% and D ALLOWANCE FOR FUNDS USED DURING 3.33% for the years 1987,198a.nd 1985, CONSTRUCTION (AFUDC) respectively.

The Uniform System of Accounts defmes AFUDC as "the net cost for the period of e AMORTIZATION POLICIES construction of borrowed funds used for Nuclear fuel: Nuclear fuelis amortized on construction purposes and a reasonable rate on a unit of production basis. Rates are determined other funds when so used." AFUDC is recorded and periodically revised to amortize the cost over as a charge to construction work in progress, and the useful life. (See Note 11.)

the equivalent credits are to interest charges for Property losses: Property losses are the pretax cost of borrowed funds and to other amortized and recovered through rates as income for the allowance for other funds. While prescribed by the NJBPU and the PaPUC. The AFUDC results in a current increase in utility total amount of unamortized property losses at plant recognized for ratemaking purposes and December 31,1987, was $130 million, before represents current earnings, it is not an item of taxes, of which $116 million related to the current cash income until the related plant is abandoned Forked River project. (See Note 3.)

depreciated or amortized. On an aggregate No revenues are being provided for a return on composite basis, the annual rates utilized were the unamortized balances.

10.08%,9.75% and 10.67% for the years 1987, TMI 2 /nrestment: See Accounting for the 1986 and 1985, respectively.

Investment in TMI 2 under Note 1, and Note 3.

In 1987, as a result of the Tax Reform Act of 1986, the subsidiaries employed an AFUDC ci INCOME TAXES accrual rate which was not reduced by income The GPU System files a a solidated federal taxes. Prior to 1987, the subsidiaries generally income tax return and all participants arejointly used a net of tax accrual rate for AFUDC, which and severally liable for the full amount of any tax, provided that the income tax reductions including penalties and interest, which may be associated with the interest component of assessed against the group.

AFUDC were allocated to reduce interest charges Deferred income taxes, w hich result and the corresponding tax effect has been included primarily from liberalized depreciation methods, in other income.

deferral of energy costs and aoandonment losses, are provided for differences between book and M DEPRECIATION taxable income to the extent permitted for The GPU System provides for depreciation ratemaking purposes. Investment tax credits at annual rates determined and resised (lTC) are being amortized over the estimated periodically, on the basis of studies, to be sufficient senice lives of the related facilities.

to depreciate the original cost of depreciable The cumulative net amount ofincome tax property over estimated remaining senice lives, timing differences, primarily due to depreciation, which are generally longer than those employed for which deferred income taxes have not been for tax purposes. As a consequence oflicensing.

provided, approximates $600 million at December environmental and other requirements for nuclear 31,1987. It is expected that future revenues will and non-nuclear facilities, substantial additions to be provided for such taxes as they become facilities may be required relatively late in their payable.

expected senice lives. Current depreciation In December 1987, the Financial Accounting allowance methodology for rate regulatory Stardards Board (FASB) issued Statement of purposes nay not make adequate provision for the Financial Accounting Standards No. 96 (FAS recovery of such investments. It is management's 96), "Accounting for income Taxes" w hich is intent to seek to recover such costs in rate effective for fiscal years beginning after December 36

15,1988. FAS 96 requires, among other things, No. 87-2 which changed the computation the c:lculation of deferred tax liabilities based on methodology under FAS 90. The GPU System the enacted tax rates for the period in which the adopted the Technical Bulletin in 1987 by tcx is expected to be paid, and the recording of restating prior years' fmancial statements for its such deferred tax liabilities and related investments in TMI-2 and Forked River, thereby receivables due from customers for such deferred increasing the losses which were recognized in t*xes not previously recorded as liabilities.

1979,1980 and 1984. This resulted in additional Moreover, changes in the tax laws could have a losses, in those periods, of $101 million, net of miterial effect on such deferred tax liability taxes (1979-566 million; 1980-524 million; bal:nces and such receivables from customers. It 1984-$11 million, w hich are net of related is expected that the effect of any such changes in income tax credits of $55 million; $20 million; and deferred tax balances will be recognized and

$10 million, respectively). The cumulative effect provided for in the ratemaking process. If, ofimplementing the Technical Bulletin reduced however, the ratemaking process does not make consolidated retained earnings at December 31, provision for such deferred tax liabilities in an 1987 and 1986 by 532 million and $37 million, rdequate and timely fashion, the provisions of respectively.

FAS 96 could adversely impact net income.

The effect ofimplementing the Technical Bulletin on the Consolidated Statements of Income is summarized as follows:

3, RESTATEMENT FOR ATANDONMENTS AND i m, uaoy,,auf DISALLOWANCES OF PLANT cf,,.m

,y,,, f,,33,,,1u,,,

1937 f936 1933 COSTS Other income, net S 9.3 $10.6 $15.0 Inc me taxes on other In 1986, the GPU System implemented

'" I

(

)

Statement of Financial Accounting Standards No.

90 (FAS 90) by restating the financial statements Net Income S5.2 55.7 $ 8.1 for ye rs prior to 1986. FAS 90 requires that, Earnings Per Share S.08 5.10 $.13 chen abandonment of an operating asset or asset under construction becomes probable, (I) the cost of that asset be removed from construction in accordance with Securities and Exchange work in progress or plant in ser ice, (2) the Commission (SEC) Staff Accounting Bulletin present value of the future revenues,if any, No. 72 released in November 1987, the GPU expected to be provided by the ratemaking process System has reclassified allitems from 1979 to recover the allowable cost of that abandoned through 1984 which were presiously reported as plant and the return,if any, on such investment be extraordinary to continuing operations.

reported as a separate new asset, and (3) the excess of the remainder of the cost of the abandoned asset over that present value be 4.SHORT-TERM BORROWING recognized as a loss. It also provides that, during ARRANGEMENTS the period in w hich revenues are received in respect of this separate new asset, such asset shall The Corporation and certain ofits be amortized in a manner w hich will produce a subsidiaries have a Revohing Credit Agreement constant return on the unamortized investment (Credit Agreement) with a consortium of banks.

therein equal to the discount rate employed in The Credit Agreement, which will expire on April determining such present value. Since the 1,1989, permits total borrowings of $110 million, unamortized balance of such separate new asset with a $20 million sublimit applicable to the declines from period to period as a consequence of Corporation. The notes issued under the Credit such amortization, the dollar amount of the Agreement bear interest at rates based on either return thereon also declines.

Citibank's Alternate Baw Rate (prime rate), a in 1987, the FASB issued Technical Bulletin cenificate of deposit rate or a Eurodollar rate.

37

Notes issued under the Credit Agreement are For the years 1988,1989,1990,1991 and subject to various covenants and acceleration 1992, the Corporation's subsidiaries have long-under certain conditions, including the failure to term debt maturities, including cash sinking fund satisfy a common equity ratio requirement.

requirements,of 554 million,540 million,567 The Corporation and its subsidiaries also million,524 million and $65 million, respectively.

have informal bank lines of credit which provide Substantially all of the properties owned by for various compensation requirements.

the Corporation's subsidiaries are subject to the llorrowings under these lines of credit generally lien of their respective mortgages.

bear interest based on the prime rate or money market rates.

See Note 11 for a discussion of the C. CAPITAL STOCK AND SURPLUS subsidiaries' fmancing arrangements under various nuclear fuel leases.

A COMMON STOCK Of the 75 million authorized shares of 52.50 par value common stock of the Corporation,

5. LONG-TERM DEBT 62,863,595 were issued and outstanding and 28,073 shares were reacquired at December 31, At December 31,1987, the Corporation's 1987 and 1986. The Corporation has requested subsidiaries had long-term debt outstanding, as authorization to increase its authorized shares of follows:

$2.50 par value common stock to 150 million shares. Under authorization granted by the SEC

(/s nossands)

Interrst Rates to repurchase up to two million shares through 4% to 6%to 9% to December 31,1989, the Corporation repurchased, uarumin 5%%

a%%

11 %

roral on the open market, 1,180,000 shares through First mortgage bonds:

February 19,1988 at an average share price of 1988-approximately $30. The Corporation has 1997 5216,401 5112,575 5 31,833 5 360,809 requested authorization to repurchase an 1998 additional three million shares through December 2007

- 575,731 356,407 932,138 31,1990.

2008-2016

- 72,200 144,950 217,150 D PREFERRED STOCK Total $216,4015760,506 5533,190 1,510,097 At December 31,1987 and 1986, the subsidiaries had the following issues of cumulative Amounts due within one year (46,334) preferred stock (without mandatory redemption Total 1,463,763 provisions) outstanding:

Debentures:

Shares Stated Value 1988 Outstandort (in nousands) 1997 5 32,390 5 96,800 $ 17,000 146,190 S,r,es 1937 1946 1937 1936 1998

- 35,400 35,400 3.70?c.

Total 5 32,390 5132,200 $ 17,000 181,590 7.88?c 1,323,912 1,323.912 5132.391 5132,391 8'00?c -

Amounts due within one year (7,630) 9.36"c 5.210,000 5,460,000 266,000 291,000 Total 173,960 Total 6.533,912 6,783,912 398,391 423,391 Other long term debt 35,073 Premium 1,283 1,348 Other current obligations (148)

Unamortized net discount (3,885)

Total 5399,674 5424,739 Total

$1,668,763 If disidends on the preferred stock of any subsidiary are in arrears in an amount equal to the 38

annual dividend, the holders of preferred stock,

7. INCOME TAXES voting as a class, are entitled to elect a majority of the board of directors of that subsidiary until all Income tax expense was different from the dividends in arrears have been paid. No amount computed by applying the statutory rate redemptions of preferred stock may be made to book income subject to tax as follows:

unless dividends on all of that subsidiary's prefen ed stock for all past quarterly dividend (In Millions /

1937 1986 1985 periods have been paid or declared and set aside Operating income for payment.

before meome The preferred stock is callable at various taxes

$577 5535

$387 prices above its stated values of $100 and $25 Other income, net 56 52 61 (two issues). At December 31,1987, th Tota!

633 587 448 aggregate amount at which shares could be called by the subsidiaries was $445 million. Non-

~..(161)- -.(158)

Interest expense (154) mandatory redemptions of 9.367o preferred Book income subject amounted to $25 million in 1987, while to tax 5479

$426

$290 mand: tory redemptions of various series were $64 Income tax at million and $4 million in 1986 and 1985, statutory rate (a)

$191

$196

$!33 respectively.

Effect of difference At December 31,1987 and 1986, the between tax and subsidiaries were authorized to issue 37,035,000 book depreciation shues of cumulative preferred stock, no par value.

h'

.ch deferred No sh:res of cumulative preferred stock have been prosided 12 12 l'

sold during the three years ended December 31, Amortization of 1987.

TMI2 5

6 11 Amortization of ITC (16)

(12)

(15)

M RETAINED EARNINGS Other adjustments 16 (0

E ch of the subsidiaries has indenture Income tax expense

$208

$198 fa42 restrictions on the payment of common stock dividends from retained earnings. At December Effective income tax rate 43 %

467c 49 %

31,1987, the subsidiaries had retained earnings of

$1,060 million of which 5128 million was (a) The statutory Federal rate was 40?o for 1987 restricted. For Penelec and JCP&L, payments of and 469c for 1986 and 1985.

dividends on common stock after December 31, 1978 end 1980, respectively, are restricted in the extent of earnings available for common stock less unounts paid for the purchase or reacquisition of their own stock (other than by mandatory sinking fund redemption of preferred stock). The NJBPU has ordered that JCP&L notify it before paying dividends on its common stock.

The adjustments to retained earnings result from premiums paid for the redemption of preferred stock over stated values. These adjustments are $1.3 million and $1.7 million in 1987 and 1986, respectively.

39

Income tax expense is comprised of the following:

8. SUPPLEMENTARY INCOME STATEMENT INFORMATION lin Millions) 1987 1986

)983 Maintenance expense and other taxes Federal income tax

$ 97

$137

$ 84 charged to operating expenses consisted of the State income tax 15 23 16 follow ng:

Income taxes on other income, net 11 (2) 6 Provisions for taxes currently Maintenance

$245

$263 5230

........-payable 123 158 106 Other taxes:

Deferred income taxes:

State and local gross Liberalized receipts

$153 5159

$156 depreciation 29 40 44 Gross revenue and Deferral of energy franchise 40 42 44 costs 38 (42) (102)

State surtax 17 18 19 Reserve capacity Real estate and credit 15 12 (2) personal property 20 13 18 Reversal of FAS 90 adjustment 18 19 24 Other 34 31 28 Unbilled revenue (14)

Total 5264 5263 5265 Gain on sale of nuclear fuel (14)

(5)

• Nilkn

9. POSTEMPLOYMENT BENEFITS '

(15)

TMI-2 cleanup costs 54 Other (26)

(9)

(12)

The GPU System maintains defined benefit "gIErdincome pensi n plans covering substantially all ofits taxes, net 85 20 (53) employees. Plan benefits are based on years of continuous senice and the average annual base Current ITC 16 32 104 compensation during the five years of highest Amortization of ITC (16)

(12)

(15) compensation. The GPU System's policy is to In:ome tax expense

$208 h198 514}

currently fund net pension costs within the limits consistent with the Internal Revenue Code.

Effective January 1,1987, the GPU System Examinations of federal income tax returns adopted Statement of Financial Accounting through 1982 have been completed, resulting in a Standards No. 87 (FAS 87), "Employers' tentative settlement which had an insignificant Accounting for Pensions," which had an effect on net income. The years 1983 and 1984 are insignificant effect on 1987 net income.

currently under audit by the IRS.

As a result of the 1986 Tax Reform Act, JCP&L offset $12 million of deferred tax credits against the Forked River abandonment loss account in accordance with an order from the NJBPU.

40

A summary of the components of net A discount rate of 8% and increases in periodic pension cost for 1987 follows:

compensation levels approximating 6.5c7c per year were used in developing the actuarial present

- (1. Millions) 1987 value of the PBO The expected long-term rate of Service cost benefits earned during the return on plan assets is 8% per year. The assets of period S 26.7 the plans are held in a Master Trust and invested Interest cost on projected benefit principally in common stocks, guaranteed obligation 57.5 insurance contracts, bonds, and real estate equity Expected return on plan assets (58.3) investments. The unrecognized net loss represents Amortization of net transition asset

(.9) actual experience different from that assumed, het periodic pen ion cost which has been deferred and not included in the 5 25.0 determination of 1987 pension cost. The unrecognized net transition asset arising out of the The actual return on the plans' assets for the transition to FAS 87 has been deferred and is year 1987 was 560.7 million. Pension cost for the being amortized as a credit to pension cost over GPU System amounted to approximately $35.3 the average remaining service period of covered million in 1986 and $35.7 million in 1985.

employees (14 to 19 years).

The funded status of the plans at December in addition to providing pension benefits, the 31,1987 and January 1,1987 were as follows:

GPU System provides certain retiree health care and life insurance benefits for substantially all December 31.

January 1.

employees who reach retirement age while (In uans>

1987 1987 working for the System. For retired employees Accumulated benefit these benefits are recognized as expense w hen obligation:

premiums are paid. For 1987,1986 and 1985, Vested benefits S 484.9 5 456.0 those costs totaled approximately $3.9 rnillion, Nonvested benefits 61.5 55.7

$3.5 million and $3.2 million, respectively.

Effect of future compensation levels 241.3 220.0 Projected benefit obligation (PBO)

S 787,7 5 731.7 P1:n assets at fair value S 799.1 5 732.3

, 731.7,)

PB0,,,

,..?87.7.)_.

(

(

PL*n assets in excess of PBO 11.4

.6 Unrecognized net loss 1.0 Unrecognized net transition asset (13.8)

(14.7)

Accrued pension liability 5 ( 1.4) 5 (14.1) e l

41

+

10. JOINTLY OWNED FACILITIES The subsidiaries participated with non affiliated utilities in the following jointly owned facilities at December 31,1987:

Balance (in Mdlions)

Accumulated Station Ouner

% Ownership In vestment Depreciation llomer City Penelec 50 5358.1 595.8 Keystone JCP&L 16.67 58.6 16.1 Conemaugh Met Ed 16.45 61.6 18.6 Yards Creek JCP&L 50 19.7 4.0 Seneca Penelec 20 13.9 3.0 Water Supply Project Merrill Creek JCP&L/ Met Ed 16.74 35.2 Each participant in a jointly owned facility finances its own portion and l

charges the appropriate operating expenses with its share of direct expenses.

]

11. LEASES The GPU System has recorded capital leases individuallimits of $125 million outstanding at which have balances at December 31,1987 and any one time. The leases are renewable monthly, 1986 of $206 million and $93 million, respectively subject to certain conditions, and expire by their (net of amortization of $65 million and $28 terms in 1993. Lease payments consist of an million, respectively). These leases include amount designed to amortire the cost of the amounts for nuclear fuel under capital lease at nuclear fuel as consumed plus interest costs. The December 31,1987 (net of amortization of $36 leases may be terminated at any time upon five million) and 1986 of $163 million and $$$

months notice by either party. Subject to certain million, respectively. The recording of capital conditions of termination, the subsidiaries are leases has no impact on net income because all required to purchase, within 120 days, all nuclear leases, for ratemaking purposes, are considered fuel then subject to the lease arrangement at a operating leases.

price that will allow the lessor to recover its net Pursuant to nuclear fuel lease agreements, investment. The subsidiaries are obligated for the the subsidiaries may currently finance nuclear fuel spent nuclear fuel disposal costs of nuclear fuel requirements up to $250 million outstanding at leased under these agreements. In 1987, the any one time. Oyster Creek and TMI.1 have subsidiaries sold and leased back nuclear fuel having a book value of $105 million.

42 1

SYSTEM STATISTICS GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES 1987 1986 1983 1984 1983 1982 Generating Capacities and Peaks (MW):

Installed capacity (at year end)(a) 8,167 8,195 8,195 8,251 8,251 8,251 Annual hourly peak load (b) 7,315 6,608 6,691 6,401 6,140 6,442 Reserve (%)(a) 11.6 24.0 22.5 28.9 34.4 28.1 Net system requirements (in thousands ofMWil):

Net generation 29,980 25,121 24,590 20,075 20,635 20,841 Power purchased and interchanged, net 10,624 13,277 12,656 16,681 14,333 13,336 Total net system requirements 40,604 38,398 37,246 36,756 34,968 34,177 Load Factor (%)

63.4 66.3 63.5 65.3 65.0 60.5 Production and Power Purchased Data:

Cost of energy (in mills per KW11):

Coal 14.02 14.45 15.79 15.92 14.90 16.35 Power purchased and interchanged, net 24.13 30.63 42.33 45.89 48.60 41.50 Nuclear 6.02 3.59 5.03 6.25 5.85 4.08 Oil 30.48 39.54 44.31 49.06 52.31 58.16 Other 35.21 39.41 52.45 59.74

$5.55 64.06 Aserage 16.26 19.45 25.91 32.58 31.65 28.21 Sources of Energy (%):

Coal 46 43 46 46 51 49 Power purchased and interchanged, net 26 35 34 45 41 39 Nuclear 20 16 11 6

Oil 2

2 2

2 2

1 Other (gas & hydro) 6 4

7 7

6 5

Total 100 100 100 100 100 100 Electric Energy Sales (in thousands ofMWil):

Residential 12,445 11,779 11,142 11,273 10,901 10,6N Commercial 10,275 9,654 9,080 8,826 8,322 8,173 Industr al 12,140 11,856 11,707 11,770 10,608 10,752 i

Other 1,309 1,481 1,417 1,622 1,669 1,824 Total 36,169 34,770 33,346 33,491 31,500 31,353 Operating Revenues (in millions):

Residential

$1,085 $ 1,107 $1,109 $1,049 5 979 $ 920 Commercial 793 816 828 765 688 662 Industrial 670 736 808 773 673 694 Other 92 97 95 108 105 102 Total electric revenues 2,640 2,756 2,840 2,695 2,445 2,378 Other revenues 33 31 30 40 35 28 Total 52,673 $2,787 $2.870 $2.735 $2,480 $2,406 Price per K Wil-all customers (cents) 7.30 7.93 8.52 8.05 1.76 7.58 Customers at Year-End (in thousands):

Residential 1,583 1,549 1,511 1,482 1,456 1,434 Commerial 187 181 175 170 166 164 Industrial 10 10 10 10 10 10 Other 3

3 3

3 3

3 Total 1,783 1,743 1,699 1,665 1,635 1,611 (a) Includes the installed capacity of TMI l and TMI 2 of 800 MW and 906 MW, respectively, for all periods. The reserve (7c) excluding TMI 2 for 1987,1986 and 1985 would be (.77c),10.37c and 8.97c, respectively, and excluding TMI I and TMI 2 for 1984,1983 and 1982 would be 2.27c,6.67c and 1.67c, respectively.

(b) Summer peak except for winter peak in 1982.

43

DIRECTORS

c a=rm, 20a u LOUIS J. APPELL, JR.1.3 0 THOMAS B. HAGEN 1.3 Elected 1973 Elected 1988 President President Susquehanna Broadcasting Co.

Erie Insurance Group York, Pennsylvania 17401 Erie, Pennsylvania 16530 (Communications and Consumer Products)

(Insurance)

U DONALD J. B AINTON 12 E WILLIAM G.KUHNS Elected 1982 Elected 1967 Chairman and Chief Executive Omcer Chairman and Chief Executive Omcer Vistech Inc.

General Public Utilities Corporation Syosset New York 11791 Parsippany, New Jersey 07054 (Engineering, Architectural and Surveying Services)

U DR. JOHN W. OSWALD 1.3 J T!iEODORE H. BLACK 12 Elected 1980 Elected 1988 President Emeritus President and Olef Operating Officer The Penns31tania State Uni ersity Ingers ill. Rand Co.

Ogont Campus Woodcliff Lake, New Jersey 07675 Abington, Pennsylvania 19001 (Indus rial 5tachinery Stanufacturing)

R PAUL R. ROEDEL 1.3 JOHN l'. BURDITT 1.3 Elected 1979 Elected 1974 President and Chief Executive Omeer Retired Chairman and Chief Executive Omcer Carpenter Technology Corporation ACF Industries Inc.

Reading. Pennsylvania 19603 Earth City, Silssouri 63045 (Specialty Sietals)

(Equipment Stanufacturlog)

R DR. PATRICIA K.WOOLF12 i HERMAN DIECKAMP Elected 1983 Elected 1974 Consultant in the Sociology of Science President and Chief Operating Officer Princeton University General Pubile Utilities Corporation Princeton, New Jersey 08544 Parsippany, New Jersey 07054 DR. DAVID L GROVE 12 Elected 1981 Former President David L Grove Ltd.

I MemNr o( Ant Commmee Armonk, New York 10504 2 Memkr of Personnel Committee (Econom.ic Consultants) 3 Member c4 Nominatmg Commntee OFFICERS u.

um GENERAL PUBLIC UTILITIES CORPORATION SUBSIDIARY COMPANY PRESIDENTS I WILLIAM G. KUHNS PHILIP R. CLARK 4

Chairman and Chief Esecutive Omcer GPU Nuclear Corporation HERMAN DIECKAMP HERMAN DIECKAMP President and Chief Operating Omcer GPU Senice Corporation JOHNG. GRAHAM FREDD.HAFER Vice President and Chief Financial Omcer Af etropolitan Edison Company F. ALLEN DONOFRIO J AMES R. LEVA Comptroller Jersey Central Power & Light Company MICHAEL P. MORRELL ROBERT L WISE Treasurer Penns3lvania Electric Company GRACE WADE Secretary hne a MARY L BRISLIN u e Assistant Secretary 44

THE GPU SYSTEM SHAREHOLDER COMPANIES NOTES M CENERAL PUBLIC UTILITIES CORPORATION 1988 ANNUAL MEETING 1001:terpace Parkway The Annual Sleeting of Stockholders of General Public Parsippany, New Jersey 070541149 Utilities Corporation will be held at 2:30 p.m. EDT, (201) 263-6500 Slay 2,1988, at the Sheraton Berkshire Inn, Reading.

'""'3I'*"I**

CPU SERVICE CORPORATION 100 I:t:rpace Parkway General Public Utilities is listed as GPU on the New Pctsippany, New Jersey 07054-1149 York Stock Exchange. On December 31,1987, there (201) 2!3-6500 mere 83,907 registered holders of GPU common stock.

CPU NUCLEAR CCRPORATION

? TRANSFER AGENT I Upper Pond Road Stanufacturers llanover Trust Company, P.O. Box Parsippany, New Jersey 07054 24935 Ourch Street Station, New York, New York (201) 316 7000 10249 0 JERSEY CENTRAL POWER & LIGHT COMPANY Transfers also can be hand-delivered to Alanufacturers Stadison Avenue at Punch Bowl Road llanover Trust Company, Securities Window Street Storristown, New Jersey 07960 Letel,130 John Street, New York, New York.

(201) 455-8200 TOO MANY REPORTS?

METROPOLITAN EDISON COMPANY You may be receiving more than one copy of the GPU 2800 Pottsville Pike Annual Report because of multiple accounts within Readi:;g, Pennsylvania 19640-0001 your household. To stop the extra copies, please write (215) 929-3601 to Slanufacturers llancier Trust Company, P.O. Box 24935, Ourch Street Station, New York, New York

^ PENNSYLVANIA ELECTRIC COMPANY 10249, and enclose the mailing labels from the extra 1001 Broad Street i

1. P

Joh:stown, Pennsylvania 15907 (814) 533-8111 FOR FURTHER INFORMATION Copies of GPU's Sptem Statistics and the Corporation's 1987 Annual Report to the Securities l

and Exchange Commission on Form 10-K will be available after Starch 31,1988. Write to Shareholder Relations, General Public Utilities Corporation,100 i

Interpace Parkusy, Parsippany, New Jersey 07054-i149, or call (201) 263-6600.

l l

1 STOCK PRICE I

IVN - 19Y7 I#5 79 %

l 26's 25 24 %

25 l

tri <

l

'8 's N'

gy, 22 % 22 29 j

,i f., %

l ps,

,l 16' i y,

F.

l 1,

6'-i 7'a g _ I' l

E 61 7

y; 81

'79

'80

'81

'82

'83

'84

'85 10 JC 30 40 10 20 30 40

'48

'87

1

.1.

c

os:

=~rr - :

~.

s i

i GENERAL PUBLIC UTILITIES CORPORATION l

100 Inkrince briuay lbrsippany, New Jenev 0M54-1149 (201) 263 4500 r

a-

GPU & SUBSIDIARY COMPANIES 1

7-

-_=..,_y

- m - --:. =.:

c, 1987 UNIFORM STATISTICAL REPORT ta 7his report should be read in conjunction with GPU's 1987 Annual Report to Stockholders

UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 (To American Gas Association, Edison Electric Instrtute and Financial Analysts)

Please sutwWt the re@ed pa0ee to the American Gas Associaton ard'or the Edson Electnc Instrtute for use in compeng statistics published in AGA's Gas Facts and EEra Statistical Yeartook. Also fumish a copy of the Company's Annual Report to Stockholders with the USA or as soon as the annual report becomes avasebie.

As energy and dollar amounts should be reported in thousands. Because this report is froovently used in coniuncton eth the Company's Annual Report to Stockholders. the data included herein should acree with the comoerat49 informahon in such Annual Recort. To assure accuracy and E sy, numerous croesties and footnotes have been appended to the schedules so that the statistics for the same item shown on more than one schedule wig be identical Name and Address of Company GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPMiIES 100 INTERPACE PARKWAY PARSIPPMiY, NEW JERSEY 07054-1149 Ust Aff*ated Comparses, echewie Aetatenship (Parent, Seedary, Associate, etc.) and idertly f(tiuto of Busaness GENERAL PUBLIC UTILITIES CORPORHI(N GPU SERVICE CORPORATION (SUBSIDIALY)

GPU NUCLEAR CORPORATION (SUBSIDIAR'!)

JERSEY CENTRAL POWER 6 LIGHT COMPANY (SUBSIDIARY)

METROPOLITAN EDISON COMPANY (SUBSIDIARY)

PENNSYLVANIA ELECTRIC COMPANY (SUBSIDIARY) trxtviisal Fumishin0 Informaten P. E. Maricendo g.

Comptroller - GPUSC g

(201) 263-6718 7,

Maren 25. 1988 Date This Report Re6 eased l

VHIS REPORT HAS BEEN PREPARED FOR THE PURPOSE OF PROVOING OENERAL AND STATISTCAL INF0FB,tATON CONCERP.'NO THE COMPANY AND NOT Pi CONNECTION W1TH ANY $ ALE. OFFER FOR SALE OR SOUCITATON OF AN OFFER TO BUY ANY SECURITtES

I UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES TABLE OF CONTENTS ELECTRIC

_Pgge, Schedule GENERAL STATISTICS 1

i Oporcting Revenues by State and Jurisdiction Subsidiaries and Leased Companies included in Operating income Utility Systems Acquired, Sold or Otherwise Disposed of Changes in Communities Served Populaton and Square Miles of Temtory Served FINANCIAL AND ACCOUNTING STATISTICS Statements of income. Retained Earnings, and Common Stock Data 2

11 Notes to Statements of income and Retained Earnings 3

Ill Functonal Details of Operation and Maintenance Expenses 5

IV Taxes.

6 V

Balance Shtti 7

VI Detail of Capital Stock and Long Term Debt Outstanding by issues...............

7a Via Notes to Balance Sheet 8

Vil Utility Plant by Functonal Accounts.

9 Vill Notes to Utility Plant by Functonal Accounts 10 IX Additons and Retirements to Utility Plant-Current Year 10 X

Changes in Secunties Dunng the Year 11 XI Statement of Changes in Financial Positon 12 Xil EMPLOYEE DATA 13 XIll Number of Employees Salanes and Wages Pensions and Benefits OPERATING STATISTICS-ELECTRIC Classificaton of Energy Sales. Revenues and Customers.

E 14 XIV Classification of industnal (or Large Ught and Power) Energy Sales and Revenues..

E 15 XV Source and Dispositen of Energy E 16 XVI Maximum Demanos and Net Capability at Time of Company Peaks-Calendar Year.

E.17 XVil CENERATING STATION STATISTICS-ELECTRIC Generatog Staticn Statistics E 18 XVill Fuel Consumed for Generation E 19 XIX Etticiency of Steam Gene.4 ting Units E.19 XX Changes in Generatng Un:ts E-20 XXI MILES OF ELECTRIC LINE OPERATED /AD OTHER PHYSICAL DATA E 21 XXil 1

Transmiswn Distributon Substatens and L...e Transformers

PAGE 1 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGI 1

• GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES y

SCHEDULE l-GENERAL STATISTICS i.

1.

Report information for states in which Company operates: (if more space is needed please submit additoral page.)

Percent of Operating Revenues Percent of Subject to Rate Regulation State (s)

Operating Revenues State (s)

FERC i

New Jerse_v 50%

49%

1%

Pennsv_ivania 50%

49%

1%

2.

Name(s) of subsidiaries and leased com. anies included in Operating income, Line 16, Schedule 11, Page 2 of report: (11 data are included for less than full year, please indicate.)

GPU Service Corporation ("CPUSC")

GPU Nuclear Corporation ("GPUN")

Jersey Central Power & Licht Cotapany and Subsidiarv ("JCP&L")

Metropolitan Edison Company and Subsidiary ("Met-Ed")

Pennsylvania Electric Company and Subsidiaries ("Penelce")

3. Utility systems acquired, sold or otherwise disposed of: (Indicate the penod for wh'ch these acquis#100s or sales are reflected in this report.)

ACQUIRED DURING YEAR SOLD OR OTHERWISE DISPOSED OF DURING Yf AR Name of System & Date e of Customers Name of System & Date e of Customers Distribution facilities of Distribution facilities of Elkland Electric Co.-12/23/87 892 Nineveh Water. Co.-12/31/87 658 4 Changes in Communit>es Served: (Indicate whether community is or was served at wholesale or retaillevel by inserting a (w) or an (t) after name of community. Identify separately as Electric or Gas.)

COMMUNITIES ADDED DURlNG YEAR COMMUNITIES TRANSFERRED OR LOST DURING YEAR Name of Commumty & State Prevously Served By Name of CommunW & State Now Served By

,Elkland Boro (r) - Pa.

Elkland Electric Seward Boro. East Central Pa.

(electric)

Co.

Wheatfield Tvp. and Water Supply Co.

St. Clair Tvp. (r) - Pa.

(water) 5.

Population and Square Wes of Terntory Served:

POPULATION SERVED SQUARE MILES OF TERRITORY SERVED Electne Gas Eiectre Gas 4,485,000 Retail 1.1, 63,000

(

Wholesale 1.2.

Total 1.3.

4,548,000 24,145 l

l 12/31/87 12/31/87 Estimated as of

PAGE 2 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PACE 2 GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES y

SCHEDULE ll-STATEMENTS OF INCOME AND RETAINED EARNINGS (Thousands of $)

]

FOR NOTES-SEE SCHEDULE Ill-PAGES 3 & 4 Steam Heat INCOME

& Other Toen si.com o..

1. Operating Revenues (a)(b).

2.1 2,673,421 2,671,287 2,134 Operating Expenses:

2.

Operaton(c)..

2.2 1,317,333 1,315,505 1,828 3.

Maintenance.

2,3.

244,469 244,038 431 4.

Depreciat on 2,4 253,771 253.522 249 5.

Depletion 2.5.

6.

Amort. Charged to Operaton(d)(e).

2,s, 17.040 17,040 7.

Property Losses Charged to Operation 2,7, 56 56 8.

Taxes other Than income Taxes....

2.8.

263,637 263,568 69 9.

Federal income Taxes (f)(g) 2.9.

97,061 96.797 264 10.

State income Taxes (f)(g) 2.10, 15,231 15,166 65 11.

Deferred income Taxes-Charges 2.11, 352.318 352,205 113 12.

Deferred income Taxes-Credits 2.12 I 281,1411 l 280,7671 I I I 3741 13 Investment Tax Credit Adjusts. (Net)(f) 2.13, 15 54 (39) 14.

2.14,

15. Total Operating Expenses 2,15, 2.279.790 2,277,184 2,606 2.16.

393,631 394.103 (472)

16. Operating income

17. Other Operating income (h) 2.17,

18. Total Operating income.

2.18, 393,631 394,103 (472)

19. Allow for Other Funds Used Dunng Constr (i) 2.19, 12,065 30,613 Miscellaneous Financial Statistics

20. Other income Less Deductons-Net (e)(h) 2.20,

21. Minonty interest 2.21, l2.43. l$ _ 4.1262. 86haNs per share based on

22. Income Before Interest Charges 2.22 436,309 average number interest Charges:

of shares outstanding dunng year.

23.

Interest on Long-Term Debt (j) 2.23.

137,175 24.

Interest on Short. Term Debt 2.24 3,271

'N

!2 44. IBook value per share $

25.

Amort. of Debt Disc. Exp. ana Prem. (Net) 2.25, 484 26.

Other interest Expense 2.26, 13,479 l2.45. l Market value: Hi $

21 3/4 27.

Allow. for Borrowed Funds Lo S Used Dunng Constr.-Credit (i) 2.27 t

7,7601 Close $ 28 3/8 146,649

28. Net interest Charges 2.28.

13.8

29. Income Before Ext. Items and Cumulative Effects 2.29.

289,660 l2.46. IRetum on average common equity g

30. Ext. Items and Cumulative Effects (Net)(h).

2.30, 289,660

31. Net income 2.31 Quarterly dividends paid per share:

32. Pld and Pfc Dividend Requirement (j) 2.32.

30,563

33. Net income Available for Common Stock 2.33.

'5

• 7 2.47, 1st otr. $

2.48.

2nd qtr.

.15

34. Common Drvidends 2.34 2.49.

3rd qtr.

.15

'808

35. Net income After Divdends 2 35.

~

2.50 l4th qtr.

.15 RETAINED EARNINGS Year $

.45 830,387

36. Balance, January 1 (1).

2.30

37. Net incomeAf ter Preferred Dividends 2.37 259,097 Secunties and Exchange Commisson

38. Pfd and Pfc Dividends Declared 2.38.

Fixed Charge Coverage-

• see

39. Common Dividends Declared-Cash 2.39.

28,289 Individual 2.51 IncMng AFUDC -

Subsidiary

40. Common Orvidends Declared-Other(k).

2.40,

41. Adjustments (l) 2,41 (1,349) 2.52. Exclucing AFUDC.*_

t.gg,3

42. Balance. December 31 2 42.

1,059,846 (1) Restated to reflect change in accounting standards, see CPU 1987 Annual Report, Page 37, Note 3.

PAGE 3 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE 3 GENERAL l'UBLIC UTILITIES CORPORATION AMD SUBSIDIARY COMPANIES Company SCHEDULE Ill-NOTES TO STATEMENTS OF INCOME AND RETAINED EARNINGS (Thousands of $)

INCOME-SCHEDULE Il-PAGE 2 (s) W saes of by9toducts are handed as operateg revenue, report here the amount of by9tod>ct revenue (nebded on Lee f)i and product ex1racton erpense (nebded on Lees 2 and 3) $ --

(b) Operasng Revenues relude: Revenues conected under bond or subsect to rebnd-Eoctnc

• w: Gas $

Urtuted revenues: Electnc $

Gas 8 Indicate retail (R) and/or wholesale (W) jurisdictionalincreases/ decreases in revenues over the prior year resulting from base rate increases / decreases granted andor billed:

Enoctne Gas Arnovnt Anort Effectrve included in Effoceve Induded in Junsdo on Date Annuanzod Current year Junaddon Date Annualtzed Current year l

See Individual Subsidiary 1987 USR's l

l l

l Ncte Amounts co4Mted on an etenrn base should to thcwn M a rate cercue ln N voar suren2ed and not te e part of M WW ncreme granted wth the feel rate order.

l l

(c) Opera'.co Expenses-Operaton inebdes Amounts subrect to rotund Emetre t Gas $

Sgndicart amount of renta $

tor tor See Individual Subsidiarv 1987 I!SR's g

tor tor (d) Inchoes amortaston of adN 1rnants to sopharcos for gas conversons $

g to) Amortzabon of P ant Acoviston Adustments ecbded on Lees 6 and 20. Page 2 l

Eocmc $

Gas $

Ocwr 6 l

Elecire Gas Oiner Total (t) investment Tan Crede 16.042 (2) 16,040 Peormaued.

3.1, 15.988 37 16,025 tess Amortzed tover tea,).

3.2.

54 (39) 15 Net 3.3, Fowed Trrougn.

3.4 (c) Pat Aeducton e.c Tames (Not Normatred)

Electne Gas Other Ehscine Gas Other Acceersled Amortzston Propony 3.5, 3,6, (l6,172)_

6

( ?, 310 2

cano, proceer l

Otner (sm) 3,7, (5,452)

(54)

(1.46%

(I M (21,624)

(48)

(3,78M (11)

Toni 38.

• Investment tax credits (ITC) are being amorti::cd evcr the estimated sen ice lives of the related facilities.

.e PATE 4 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE 4 i

GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES Company i

SCHEDULE Ill-NOTES TO STATEMENTS OF INCOME AND RETAINED EARNINGS (Thousands of $)

(continued)

<n) Detu map, soms and amounts and a becme taxes bcuded m:

Other Operatog ecome (meOdag bcome Temos oI S

)

Nonc Other bcome Less Deductens-Net (bcOdeg income Temos of $ 24.982 3

(2 not mecandostg bckded, grve amowt)

See Individual Subsidiary 1987 USR's Extraordinary items and Cumulatrve Effects (bcludeg income Teres of 8

)

None i

(i) Gwe desenpion of method used to dete<mne Anomence for Funds Used Dunng Construccon (incbdeg rem opoked gess vs not of far inethod, type et con-styc00n of sJe orjob cove'ed. and penod of Dme used to esckde jobs of short duranon)

See CPU 1987 Annual Report. Pace 36. Note 2 Q) Annual nterest and Preferred and Prefe ence Devd R

ement calculated on amounts (locbdeg due a fy outstandog et Dec 31.

i Profoned and Preference Stock $

Long-Term Debt $

RETAINED EARNINGS-SCHEDULE Il-PAGE 2 OUP G) Octa2m of Common Drvdends Declared-Other naan Cash (T) D: tass of mapr Roms and amounts inebded in Advstments to Petaced E arnngs JCP&L - $1,344 1.oss on redemption of 9.367 Series Cumulative Preferred Stock.

Penclec - S6 Premiums paid for the redemption of Preferred Stock over stated values.

c NOTES & REMARKS:

. ~.

SCHEDULE IV-FUNCTIONAL DETAILS OF OPERATION AND MAINTENANCE EXPENSES (Thousands of $).

m.

Steam IIcat and Other tttcmic

ous op mea u==

ac.

Tu op a

u-wwnc.

Producten 1.

Fuel (a)

4. i.

y,,,,,,,,,,,,,,_

6 2 7,,,,,,,,,,,,,,,,,,,

411.091 411,091 627

]

367,444 367,444 2 Purcnased Fbwer (Ner)(a).

4.2.

,,,,y, ass======anas===

l 3 Purchased Gas (Net)(a).

4.3.

a=._u....,.....

...........u.._

n.,.... a = P r s =1 4 Other Prod. Expenses (a) 4.4 326,098 183,245 142,853 869 863,,

6,43 yc g

5 Total Producten.

4.5.

1,104,633 961,780 142,853 1.496 1,490 6

o 6 Storage & Laquefed m2 gE Natural Gas.

46.

_n unart=m=====

===. ========a_

.======.=

40.582 25.980 14.602 8 Distrcuten.

48.

155.300 7L515 79.785 571 157 414 C".

7. Transmisson.

47, 0

63,546 63,546 34 34 9 Customer Accounts 4.9, 23,243 23,243

10. Cust. Semce & Info 4.10.

E )-

ti. Sales 4.11 y

172,239 165.441-6,798-158 147 11

12. Admanistratrve & General 4.12.

1.559.543 1.315.505 244.038 2.259 1,828 431 g3 13 Totaf 4.13.

es m nh l4.14. l 14 Credit Residuals mcluded m Lme Steam IIcat o2 4

(85,511)

(143)

}

m wuo c g e,.c o

>im m uc t

g,c,,,,,

m s =

.ot sc%cui.wiu -eag.c i, g4

,m sc! wwo. % swm w.co a p.oducica e' 9**

pe Int: bare e.pioraien aM arvetywvent costs of prosportv. gas swe=Sursng % }4.15. lg to)

• m Z

i NOTES & REMARKS e E.

i O

gCO to m us o H m Ea

>- e k 3-n I

o :"

oka i

l R8

~

l M

U1 i

o m

a

+

-m.-.

e e-r

---

,-r

---,m

-,--.,m-

,r.

.-.-..---e,e,

l

'PAGE 6 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PACE 6 GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES y

SCHEDULE V-TAXES (Thousands of $)

ACCRUALS CHARGEO To:

Tamos Other Than income Taxes:

oeERArino ExPCNsEs-taxes ALL oTHER State and Local:

Total EMric Gas oWier Depa.

ACCouMTsia) 1.

Property. Ad Vak> rem, etc.

5,1, 20,959 20,935 24 89 2.

Franchise 5.2.

40,193 40,193 5.3.

170,066 170,066 3.

Gross Receipts...

Capital Stock 5.4 9,207 9,179 28 4.

5.

Miscellaneous.

5.5.

6,760 6.752 8

6,142 6.

Total State and Local Taxes 5.6.

247,185 247,125 60 6,231 Miscellaneous Federal Taxes:

7.

Payroll.

5.7 15,916 15,907 o

11,138 Environmental 5.a.

536 536 8.

9.

Total Mtscellaneous Federal Taxes 59.

16,452 16,443 o

11,138 10.

Total Taxes Other Than income Taxes 5.10.

263,637 263,568 69 17,369 ___

income Taxes-Current:

11.

Federal income Taxes..

5.11 97,061 96,797 264 9.056 12.

State income Taxes 5.12.

15.231 15.166 65 2.308 13.

Total income Taxes Current 5.13.

112,292 111,963 329 11,364 Deferred Income Tax-Charges:

Federal:

14.

Property Related(b) 5.t t.

67,745 67.692 53 146 15.

Non Property Related 5.15.

246,979 246,929 50 18.911 16.

Total Federal Provision.

5,16.

314,724 314,621 103 19,057 State:

17.

Property Related(b) 5.17 2,752 2.752 18.

Non Property Related 5.1 a.

34,842 34,832 10 41 19.

Total State Provision 5.19.

37.594 37,584 10 41 Deferred income Tax-Credits:

F:deral:

20. Property Related(b) 5.20.

t 25,181 1 l

25,1551 I

26 1

(

)

21.

Non-Property Related

$ 21 t

214,3451 1

214,0011 i

1 344 1 I

7,472 1 22.

Total Federal Portion 5.22.

t 239,526 1 t 239,156 1 I

t 3701 7,472 i St:te:

23.

Property Related(b) 5 23.

I 16,062 1

[

16.0581 I

t 41 I

I 24.

Non Property Related 5 24.

I 25,5531 1

25,5531 I

1 i I

t 388 1 25.

Total State Portion 5.25.

t 41,615 1 t

41,611 1 i

1 I

41 r

388 1 26.

Investment Tax Credit Adjustment (c) 5 25.

15 54 (39)

27. Job Tax Credits 5 27 28 Total Taxes 5 28.

447,121m 447,023e

,o 98m 39,971 fa) Sucm as Utsty Plant. Other income Deouctons Entracrocacy iterns. Cwanno Accounts Retaced Eamings et:

(t) Report amount e Acceersted Amortzason and Leerakzed Decreciaton (FEAC Srstem of Accoums 28 7 av 2826 Amount of investment sver ct to investment Tai Cre$t. Electne

. Gas

. omer Departments e

(c)

(c) Secuid equal Total of Lines 10.13.16.19. 22. 25 26 aM 27 and Total of Lees 8,9 10.11.12 and 13 Scne3ue it-Pege 2 Notes A Remarks tpease e ota,n a,y ue.suas eems n"ecrep ta ess

- ~

S' SCHEDULE VI-BALANCE SHEEY (Yhousands of $) FOR NOTES-SEE SCHEDULE Vil-PAGE 8 l fk y

ASSETS CAPITALIZATION AND LIABILITIES Captaleation Utihty Plant:

Plant m Sennce N'IM 1 931 9fr4 36 Common Stock (b).

6.36.

1.

E k=ctnc 61 n

Capital Stock Expense 6.37 (18.056) g 2

Gas.

6.2.

37 3

Common 6.3.

38 Premium on Common Stock (If not m Lme 39).

6.3s.

t's C fg Steam !! cat and Water 6(

5,219 39 Ottw r Paden captat(c) 6.39.

779,813 4

5 Total Piant m Servne.

6.5.

5,943,183 40 Retained Eammgs(d) 6.40.

1,059,846_

o c":E ls 021) 41.

Total Common Stock Equity.

6.41 I,978,762 W 862, M 6

Accum Prov for Depr & Amort 6.6.

N, 42 6,42.

o 7.

Construct.on W.wk en Progress 63.

N 8

Nuclear ruei 6 s.

2Q,M6 43 Preterred and Preference Stock not subject to O

9 Accum Prov for Amort of Nur.iear fuel 6.9.

@6))

Mandatory Redemption (b) i ucl ud i ny, premlum 6.43.

399,674 gg I nves t r,en t in TMI-2, net (1)

6.,0.

260,483 e4 Preterred and ereference Stock Sub ect io uandatory w

l d

in bO II! I for futore use/ Capital Leaecs 6,,.

226.077 Redemption (b) (Excl. amt. due ettun one year).

6.44 11 12 FJet UtiMy Plant 6,12.

4,840,409 t ong term Debt: (Excl amt. due wittun one year) d 13 Gas Stored Urw1erground (NortCurrent) 6 13-45 Mortgage Bonds.

6.45.

1,463,763 yg i4 6 14 46 Debenturestt) 6 46.

I73.960 n @i 15 Othe r Peroerty and investments (NetHa) 6.15.

25,304 47.

Other{g) -

6.47 31,040 I

48 6.48.

o Cunent and Accrued Assets 49 Total Long-Term Debt 6 49.

l.668.763 y

nv.

6 16.

153,776 50 Total Captaleation (Exci amt due wittun one year) 6.50.

4.047.199 dm 16 Cash.Spac Dep. Wkg runds & Temp Cash a 17 Gas Stored UrWrgeound (Current) 6 17 Other Non-Current babihtees 18 (NG Stored & Held for Processmg 6 18.

51 Accum Prov for Rate Refunds 6.51 m

yg6 19 Notes Recesvable.

6.19.

52 Other (3) 6.52 SI.425 20 Customer Accounts Receiva*>ie (Net) 6 20.

[78,7QS 53 Totai Other Non-Current babditw=s 6.53.

51./25 Q

i g

21 Receivables from investor Owrwxt Finc Cos 6.21 3,543 Current and Accrued babihties

@o 22 Other nece. vat ses 6 22.

___113,115 54 Amounts Due ett=n orwa year (h).

6.54 54.1I2 ggm 23 Accrued Ortuned Revenues 6 23 55 Short. Term Debt (i) 6.5s.

109.459 c7 m 56 Acrts Payabie (Enct amt m Lme 57) 6.56. _2D2,631

$h Sj5M3 24 Matends and Surol es (i ncl.mel Itumtorieni 6.24

$m 25 Prepayrrw nts 62s 14,848 57 Pryat*s to investor Owned Eiec Cos 6 57 26 Other Current and Accrued Assets G 26

~

62,558 59 Other Current and Accrued babehties (4)...

6.58.

I18_901 O

58 Tames Accrued (e) g i

Deferred Income Taxes 6.27.

6.59.

394.665 27 28 Total Current and Accrued Assets 619 735 201 60 Total Current and Accrued b3behties 6.60.

89".973 gy De erred Credits:

0*

v Deterred Detats 728,627 y"

29 Unamortued Debt Expense 6 29 5,498 61-Accumulated Deterred income Taues(e) _

6.61 30 Estraordinary Proparty Losses 6.30 I30.074 62 Accumulated Deterred investment Tax Credits (i).

6.62 248,390 31 Deterred rue Costs 6.31 63 Customer Advances for Construction 6.63.

14,934 127,192 32 Other Deterred Dnbets (2) 6 32 3M,032 64.

Other Deterred Cred ts (5).

6.64 33 TMI-2 Cleanup, net of recoveries 6.33.

192,397 65 Tt!I-2 Cleanup Costs s.65.

161.175 l

34 Totat De+ erred Debits 6.34 678.001 66 Total Deferred Cred.ts 6.6s.

I.280.318 g

35 Total Assets 6 35.

6,278.415 67 6.67 g

68.

Totat Captateation and babihties.

6.6s.

6,278,915 m*

~

N l

PAGE 7a UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PACE 7a GE'!ERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES y

SCHEDULE Vla-DETAll OF CAPITAL STOCK AND LONG TERM DEBT OUTSTANDING BY ISSUES For Stock: show rate, par value, shares and amount. Ust separately, amounts applicable to redeemable preferred stocks, as def ned j

by the Secunt>es and Exchange Commisson, other preferred stocks, and common st0Ck. For Debt: show senes, rate, matunty date cnd cmount. Group by type and show totals for each type.

D*senoton of Issuer Amount (Thousands of $)

See Pages 7b and 7c

PAGE 7b LONG TERM DEBT OF THE SYSTEM 18 7Avwi.h Ekcember 31,1987 Jer:ey Central Pouer & Ught Company:

First Mortgage Bonds - Senes as noted:

4!;9 due 1988

.5 7,500 7%% due 1998

.5 8,000 o';", due 2003

.548,154 5';% due 1989.

.4,524 7!a% due 1998

.24,191 8%% due 2003

.29,840 4%9 due 1990

. 5,000 12 % due 1999

.39,998 9's4 due 2006

.59,748 4%% due 1992

.10,153 8%% due 1999

. 8,022 9%9 due 2006

.35,000 4%% due 1993

.14,477 11%9 due 1999

.37,999 8%% due 2007

.59,899 4',9 due 1994

.14,317 10 % due 2000

.11,995 9 % due 2008

.49,950 4',% due 1995

.17,430 8%% due 2000

.15,656 7%9 due 2009

. 6,300 6%% due 1996

.25,701 8%% due 2001

.32,887 7%9 due 2015

.12.200 6 % due 1997

.10,000 8 9 due 2001

.24,093 Current maturities and 6%% due 1997

.25,874 8 % due 2002

.23,569 sinking funds.

.(14,001)

$ 648,476 Debentures Series as noted:

4',% due 1988. 5 4,680 5 % due 1990..5 2,790 9%% due 1996

.517,000 4%% due 1989

.3.240 5%% due 1990.

.5,040 8%% due 1998

.21,000 4%9 due 1989

.2,600 6 % due 1992.

.8,700 Current maturities and sinking funds.

.(5,570) 59,480 7.8% mortgage note due 2017.

2,788 (25)

Current portion of mortgage note (969)

Unamortized net discount on long-term debt Total 709,750 Aferropohtan Edison Company:

First Mortgage Bonds - Series as noted:

5 9 due 1990

.515,000 7 9 due 1998

.526,000 9 9 due 2006

.550,000 4N9 due 1992

.15,000 8%% due 1999

.25,000 8%9 due 2007

.35,000 t',9 due 1995

.12,000 7';9 due 2001

.15,000 6 9 due 2008

. 8,700 10%% due 1995

.28,500 7%9 due 2002

.26.000 9 9 due 2008

.50,000 5%9 due 1996

.15,000 8%% due 2003

.20,000 341,200 Debentures - Series as noted:

4%9 due 1990

.5 3,240 8%4 due 1997

.537,100 Current sinking 6',9 due 1992

.12,000 8%9 due 1998

.14,400 funds

. 5 t 1,860) 64.850 Unamortized net discount on long-term debt.

(1,113)

Total 404,967 Pennsylvania Electric Company:

First Mortgage Bonds - Series as noted:

4 9 due 1988

.529.000 6%4 due 1998

.538,000 7%9 due 2006

.512.000 5 9 due 1989

.15.000 8 9 due 1999

.28,000 6%9 due 2007

.16.420 5 9 due 1990

.12,000 11%9 due 1999

.40.000 9%9 due 2008 45.000 4%% due 1991

.10,000 9%9 due 2000

.25,000 8%9 due 2015

.20.000 4',% due 1994

.20.000 7's9 due 2001

.30.000 6%9 due 2016

.25,000 6';9 due 1906

.25,000 8%9 due 2003

.30.000 Current maturities and 6%9 due 1997

.26,000 9%9 due 2006

.60,000 sinking funds.

.(32,333) 474.087 Debentures - Series as noted:

5 9 due 1990

.510.800 8%9 due 1996

.519.800 Current sinking 7 9 due 1992

.6,000 839 due 1996

.13.200 funds

.5 (200) 49,600 Unamortized net discount on long term debt (1,803)

Total 521,884 GPU Service Corporation:

10 879 secured notes due 2001 32,000 Other long term debt 285 Other current obligations (123)

Total 32,162 System Total.

51,668.763

CUMULATIVE PREFERRED STOCK PAGE 7c OF SUBSIDIARY COMPANIES Current Tctal 5%res 5%res Call Swed Value m

LWcmber 31, 1987

.Gahon:rd Gutstadae Pnce uln 1howanJ3)

Jersey Central Power & light Company:

Cumulative preferred stock.

15,600,000 4

% Series, 125,000

$106.50

$ 12,500 i

8.12 % Series..

250,000 103.53 25,000 8 % Series...

250,000 103.91 25,000 7.889 Series E.

250,000 103.65 25,000 8.75% Senes H 2,000,000 26.65 50,000 Total.

137,500 3ferropolitan Edison Company:

Cumulative preferred stock.

10,000.000 3.90% Senes.

117,729 105.63 11,773 4.35% Series.

33,249 104.25 3,325 3.85 % Series.

29,175 104.00 2,917 3.80% Series,

18,122 104.70 1,812 4.45% Series.

35,637 104.25 3,564 8.12 % Senes...

160,000 105.56 16,000 7.68% Series G 350,000 105.56 35,000 8.32% Series H 250,000 106.16 25,000 8.12% Series 1 250,000 105.56 25,000 8.32% Series J 150,000 105.62 15,000 Total,

139,391 Penns.sivania Electnc Company:

Cumulatise preferred stock.

11,435,000 4.40% Series B,

56,810 108.25 3,681 3.704 Series C.

97,054 105.00 9,705 4.05% Series D 63.696 104.53 6,370 4.70% Series E.

28,739 105.25 2.874 4.50% Series F.

42,969 104.27 4,297 4.60% Series G 75,732 104.25 7,573 8.36% Series H 250.000 104.09 25,000 S.12 5 Series ! -

250,000 103.53 25,000 9.00% Senes L.

1,400,000 26.13 35,000 Total.

121,500 S.sstem Total.

$398,391 (1) No mandatory redemption no par value (2) Excludes premium of 51,:83.

i

PACE 8 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE 8 GENERAL PUBLIC UTILITIES CORPORATION AND SUB3IDIARY COMPANIES SCHEDULE Vil-NOTES TO BALANCE SHEET (Thousands of $)

(a) ocas ma,or m.ms ano emounts news Enceu Cest or inves=ms n sut s.nn ecaeosdaiw me soon vwe a Acou.seen oew Loans to non-affiliated nining companies - S6,725 I2/3I/87 PreferrM W

83,007 (d) Nume,et stocancions as os Preterorce (c) Inc4 des Promums on Captal Stock.

Proiemed $

Common 8 Other 8 Preterence S (a) Amount restneteo srcen paymsnt es can o= ceres on common stock s See GPU,1987 Annual Report. Page 39, Notc 6 l

(e) De' erred Feoeral and State income Tau Ba4nces-FEDERAL STATE Eoctne Gas Other Electrv.

Gas _

Other Accet Amort Prop-Lee No.

7.1 445.067 615 22,597 57 61 7,2, w u.a oop, p,o, oera ps Co,t _.tce so 27 7,3, (14,315)

(241 (3,597)

(6) 61 7,4, 235,263 7

25,049

%._ g g 666,015 598 44,949 51 Totas 7,5.

• Etatorate in holes & Remares' N sgrurcant.

U#

(f) incWes convertcie secunhos tspec#y)

(g) inciuoes unamoriaed Promum and Descount (Neo 8. ( 3,88 5)

Secured Notes - S32,000: Mortcare on JCP&L Corporate Headquartera - $2,763; ou, go,,,,,3,)

Installment Purchases

$162 54,112

. p,,,eew sm W w uanoam Rosew s cm Long Tem oots s ONr (Descnoes s i

(4 to.

inewes commerew Peer 5

. Gas storspe bans s 44,687 i

Average shon-tem oeta ekseg year. t,ases on nsmber of days outstanaco s

0) Accumulated Deced Mstment Tai Creces-248,120 E ctre 7,7, Gas 7.8.

270 Othe 7.9, 7,10, I

248,390 Tus 7.11, i

NOTES & REMARKS, (1) Investment in Three Mile Island Unit No. 2 (Including Nuclear Fuel Core)-$677,529 Less Accumulated Depreciation and Anortization-S367,046.

(2) Includes Def. Costs-Nuclear Fuel Disposal Fee-$52,862; Def. Costs-Oyster Creek Outage Net-$51,925; Def. Income Taxes-S197,132.

(3) Includes Obligations Under Capital Leases-$30,367.

(4) Includes obligations Under capital Leases-$175.467; Deferred Enercy Credits-$44,765; Interest Accrued-$44.563.

(5) Includes Nuclear Fuel Disposal Fee-S103.187.

e SCHEDULE Vill-UTluiY PLANT BY Fut?CTIONAL ECOutITS (Thousands of 5) j '

• FOH NOTES-SEE SCHEDUtE IX-PAGE 10 accuu eseow tosi DE Pf(C

.g Ufitsf v ma40RT AW I C' 'DM ESI'8dAII AS (J8 PL *NT 'ai etet #4 woetal F as $>.e w-te_

f en Prus we 5as eese1.d v. Ese

'9er 19R4 99e9 1990 ELECTsuC hW 9.059 era wrpue New a.

Pero xs.un N ne g

I,082,670 478,723

[,pS,940 602,5376-69,361 68,09q o*

2 sm.n er 87,884 86,IK)0 Mh 3 t&xterme

• e3 M

_ 24,927 8,512 1,589_

__l,000_

g d

" 'd">

i t 5

P.nww.s Str;rane es 33,358

_ 6,988 890 g

Not Available gh 6 Gas Tu tere e6

__m,962 n.489 3i,000 gs 7 m, cr cc.tt, e,

m,iBi a

Total Prorha:tm Puerd se 3.200,076 1.230,721 181 213 186,000

[$

g 799,741 263,928 32,97_9_

65,_000 o5 9 Tesismssrm pixw es 10 Detstadion Plant e so.

2,261,713

_ 657,734 183,276 187,000 gf it Gr.o rai Piare sie 294,90f.

75,870 49,877 45,nno s

~.ubethJ e ir.

6,565,495 2,228,323 447,345 483,000

[m 12 d]

13 M&eGaneous Plant (el eis 20,243 279 gi m

_ m,eiz

i. C,..st,un-n ww.n Pa.,m a se 15 she Acq A.1 A ots, A4 e,s 35 i f> flew Pla.si sci fanivat Fewd e is 6,838,7',Q 2,2 % 037

__4 4 7,3g m 483,000 n

0 t7 tAmlentfing e ir 20,036 665 567,o

$7,000 km 6,858,786 2,229,302 447,912 540,000 18 Tr.=IAI f~t EC1 HIC PtArat e,e I I"' I *I"

-2 GAS

%m 19 Inteigible f"tard e is 20 e.,~,m e,,,

m O

21 Urmsmground Storagagg) e si.

O O 22 Otter Storage e 77.

i 23 Lt#1 Terenahng & Procesyng en CO

• • fn yg 24 Tra*=strussson e te 25 Destreutm e ts.

O, W

. m 26 General e st g3 27

• M al e rr.

.< y 28 MisceRananaes Plant (e) e 2e n?

29 Con' trur.tm Wsh an Progress.

e 23

,ge,%

30 Nnt Acq Ada & Other A4 em yy

]

31 TOTAL GAS PLANT e.3t.

,n l

OTHER UTUTV PLANT Stears Ilcat & Water i

37 5,521.y 430 245 1

e ar 205,834,y h

j 33 Capital Leases, net en 34 TOTAL OTHER UTILITY PtANT

• N.

21I,355 430 7/A 9 M

l 35 COfAMON PtANT sJ.

e 35

,o

=>

7.070,141 2,229,732 448,157,,,

540,000 36 TOTAL UTILITY PLANT e 3s 1

1 e n v-e--

~nm

..,-n e,n,

---.n

-m- - -

,--n--

.n

PAGE 10 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PA2E 10 GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES SCHEDULE IX-NOTES TO UTILITY PLANT BY FUNCTIONAL ACCOUNTS (Thousands of $)

(a oepreciaue Property u of Decenter 3t:

ELECTRC OTHEA Total Eweme 19,1,1 6,680,112 7,,,, om,

),,3, j 5,090 GAS:

COuuoN-Total Gas Q

Total Common l9,4 l (b) Compoeste boot copreciason rate for DeproceNe Property as or December 31:

3.47 Elsetnc

% Gas

% Onor

% Common

% Overal Rate g

v (c) Estrnated Constructe Emperotures ncivoe Amoeance for Funds Used Dunng Constructon-Yes.O or No_ tdeale n total me AFUDC amounts ncbood

(:1cboed) n esamates Nort Year 8 25,000 2nd year s 3rd year s (d) Excludes Purchased Proceny. Refort experdtures, remer man transfers to ushty p6 art (e) hebdes Experrnental Piart Unciasss ed. Leased to Otners Head for Future Use; Corrowed Constructen Not Cwasted, ard Omer (Specay)

(t) Snould agree eth Constructen Empuetures shown on Lees i mrough 8. Scheovie X t$ow. See Note (b) Seeduis X sor amoures of Atowance lor Funds Used Dunng Constructon.

(g) hetuoes non<urrone gas *For Reponed YW $

I (h) incboes intangoes 8

Lee No 32 ;g

,, one 3, (i) Essmewd an. aunt apc*cabe to Uttty Piant {9,9.

I Ewetne $

Gas 5 Omer $

Estimated amount appscaone to Accum Prov. for Depreciaton-l9.10, ]Etectnc $

. Gas 8 Otrer $

SCHEDULE X-ADDITIONS AND RETIREMENTS TO UTILITY PLANT-CURRENT YEAR (Thousands of $)

Constructen Encorotures Pu chases &

Gross r

fabb)

Accuesmons Aostonsfe)

Aetrements Other Entnes Not Adortons 1, Elec. Eset Nuclear Fuel 10,1, 447,345 447.345 3o 422 (24,950)(1) 362,973 567 567 35,23,4_(192.720)(2) (227,396) 2 Nuclear Fuel.

10.2.

3. Gu

.& b'a t e r 10,3, Steam Heat 10A 245 245 607 (14)

(466) 4.

5.

Prop. Under Cap.

- 10,5, Leases: Nuc. Fuel 162,528 (2) 162,528 6.

10 6, 7.

Other 5,562 5,562 10 7, 448,157 448.157 7s,1s3 (4o,6nu 3?3,?n1(d) 8 Total 10.e.

m Sncuid wee weh Coumn *Construr: ton Expenotures-tor Aeocate Yea n Screovie viu-Page 3 r

(e > inchoes Aso.ance ior pures used Dunno Consructon.110.9 IElectne sucboeg Nuclear Fuel 5 I9'b22

Nucwar Fuei $

Gas s

Otner 3

Totai s 19.825 Gm::s Aostons snoud to the se of the Construeson Esoenco res and two Purchases and Acovissen coavrms Snovid agree eth Seneouse xit. Line 21 (c) u cc) The Total Nea Aostens snound spree etn the not change n Total UtSty Ptaat over last year (i.re 36, Senedse Wi-Pepe 9), and should be the sum of Gross Aoct,ons (Consrvenon scenovos obs 8Vrenases and Accurseems L wu Aetirements crus or mms Otner Entres (1) Includes S(33,700) attributed to 1987 restatement of prior fiscal years to reflect change in accounting standards in accordance with Technical Bulletin No. 87-2.

Includes $29,800 accretion due to FAS 00 as adjusted by Technical Bulletin No. 87-2.

See CPU 1987 Annual Report, Page 37, Note 3.

(2) Reficets reclassification of 12/31/86 balance of s55,158 - Nuc1 car Fuel i

l Capital Lease (included in Nuclear Fuel on the 1986 USR Balance Sheet) to 1987 presentation.

Includes sale / leaseback of Nuclear Fuel in lo87 of $104,873.

See CPU 1987 Annual Report, Page 42, Mote 11,

PACE 11 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PACE 11 GENERAL PUBLIC UTILITIES CORPORATION AND SUESIDIARY COMPANIES Company SCHEDULE XI-CHANGES IN SECURITIES DURING THE YEAR New Securities issued During Year:

urviPnee.

To company to Punne Amoun,m Qgs dl Pm M

Tyge W Numoer e (Thousams Proceeove) j saw Date Deeenpuon et ne ve(s) snares W 5) 8 cr %

s s or %

s (Tnousanos) ce per e p.,

(e)

(f)

Mooar Common issues (g) 3, None 2.

3.

4.

5.

6.

7.

Ptsferred and Preference Stock 1.

None 2.

3.

Bonds and Debentures 1.

None 2.

3.

4.

5.

6.

7.

Notis (r rev or enger sanc on ongreat matanry)

Pvt.

N 5/12 7.8 Promissorv Note -

2,800 j,

2.

Mortcace 3.

4.

Securities Reacquired and or Retired (Describe and report in thousands of 5):

1.

JCP6L - Bends

- $20.307 Penelec Bonds

- S 1,634 2.

Debentures 1.030 Detentures -

3.J334 i

3.

Preferred Stock - 25.000 GPl!SC

- Notes

- 15,368 4.

Other 12 i

5.

Met-Ed - Bonds 19.000 1,980 6.

Debentures 7

8[

See Individual Subsidiary 198'1 L'SR's for more detail on individual issues Security Reclassifications and Conversions (Describe and report in thousands of $):

1.

2.

3.

4.

5.

ici pepon eacn revo.o esse sepercy vovers securves oswa as awenos. as.en as ne. arewersi eseg astono sneet e necessa y specay mesney t

cre tre par vaiw conver$omy. ne or reveng it convence enee oesence tems e convesen v

m snow onnees amounts to, soms Deteves ano Narn co. stateo veues for Preeneo ano Prerence sma ano cerng once for common stocs ic) Proceeds enoue ce synonymous e pnee cao ey unor ners (e) A9er urcerWnter a Commessons io) inun sywoo. Pvt-Pnvre, PA-Pstac. and PM-perent til voet sentos C-comc.m. ano N-Negowes ig) trocate by the tonoweg syrrec,s PUB-Putwic. DRIP-Ovoene Reenvestment Pian. SA-Sn f Reg st aton Esp-Emocyee Stoca Pens Otner (SpecM e

l

PAGE 12 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31 1987 PAGE 12-GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES y

SCHEDULE XII-STATEMENT OF CHANGES IN FINANCIAL POSITION (Thousands of $)

(Detail Material items Not Shown On Form)

SOURCE OF FUNDS Funds from Operatons:

1. Net income Af ter Pref crred (a).

l12.1. l 259.097 Pnncipal Non-Cash Charges and Cred:ts to income 253.771

2. Depreciaton and Depleton(b) 12 2 37.463

3. Amortzation (Desende m Notes & Asmarks Delow) (1) 12.3.

4. Deferred income Taxes (Net)(c) (Incl. 413,619 Assoc. With Other Income) 12 4.

84.796

5. Investment Tax Credd Adjustments (d) (Excl. S618 PAYSOP Credits).

12 s.

633

6. Ahowance for Funds Used Dunng Constructon-Other Funds 12 6.

(

12.065 1

7. Other intemal Sources (Net) 12.y.

8.

it s, (39.600)

FAS 90 Accretion 9.

12.s.

10.

12.10.

11.

12.11 564.095

12. Total Funds from Operatens 12.12.

Funds from Outsee Sources (New Money):

2.800

13. Long Term Debt (e)(f) 12,13.

14. Preferred and Preference Stock (f).

it i 4.

15. Common Stock (f).

12.i s.

16. Net increase in Short. Term Debt (G) -

12.i s.

65.211 104.873 37, Sale of Nucicar Fuel 3 2,,,,

27,414

13. Other (2) is 3,.

19. Total Funds trom Outside Sources 12.19.

200.208

20. Total Sources of Funds.

1220.

784.393 APPLICATsON OF FUNDS 448,157

21. Gross Add:t ons to Ut.hty Plant (inct land)(h) 1221.

22. Ahowance for Funds Used Dunng Constructen 5222.

12.065 1 23 Dtvcenos on Pre + erred and Preference Stock (i) 1223

24. Cash Diveends on Common Stock (j) 52.2 1 28.289 Funos for Retirement of Secunties arc Snort Term Deot

25. Long Term Debtte)(f) 12.25.

62.665

26. Preferred and Preterence Stock (f).

12 26 25.000 27.

1227 28 Net Decrease m Short Term Deottg) 12 2s.

M*DO5 29 Total Funds for Retirement of Secunt,es and Snort Term Debt.

12 2s

1. eased Nuclear Fuel 33.33 107,370 30.

Deferred Energy Credits. Net 12.31 85.654 31.

32, Deferred Costs - Nuclear Accident, Net 12.32.

11.064

33. Tota! Otner Appocatens (Aet) - Reserve Capacity.

12 s3 28.250 34 Total Apphcation of Funds t 254 78'. 101 m snooe wee.e sc%. u. une si' cfi wi orco.a e, uvmens ei ricteoes s creges to cwarrsg aNI ore tgi ricuaes Cevvcial Pope 8 accevnts not exteoc e he s. Lees a s s' W Sncue ayee =e & creme a Lee a Consnn 3' ici snue wee.e s-rex, n. Lees si s ta' s srowe eyee.e sensa u cr. as' snow a tree.e seneouo h Lee 39' is) Sacun spee.e scr*N. u Lee i3' e

ie> tunes Decampes aN or+< ur9 e'm Doet T

• e ra enow teo.

(a) Line 1 above ret, resents Net Income Af ter Pref erred Dividends.

NOTES & REMARKS: (1) Includes Property Losses, vyster Creek O W.,

Suclear Fuel Cost. 5 pent Fuel costs. Unrecovered Plant Studv Costs and excludes Debt Discount Expense and Premiun.

(2) Includes Decrease in utner Workinc Capital Ite=s.

PAGE 13 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE 13 GENERAL PUBLIC UTILITIES CORPORATION AND SUBSIDIARY COMPANIES y

SCHEDULE XIll-EMPLOYEE DATA uoc.t. e Ewec. o.s and oiner coe.nments ecemon encorees.ho cevote pan d tw we to Em ard pan to Gas and or otner Depanments Esema'.e soms on bats of payves cosas et any other reasonee bas 4 NUMBER OF EMPLOYEES (Average For Year)

ELECTRIC GAS ofHem TOTAL

1. Operation and Maintenance 13.t.

2. Constructen..

13.2

3. Other (Desenbe) 13.3.

4.

Total 13 4.

13 on6 (A) 3 13.909 SALARIES AND WAGES (Thousands of Sf')

341,689 (A) 239 341,928

5. Operation and Maintenance is s.

85.873 (A) 40 85.913

6. Constructen 13 6.

Note (B) 113.751 113,751

7. Otner (Desenbe)

,3.7, 541.313 279 541.592 8.

Total 13 8.

9. Payroll, comrnissons and bonuses apphcable to Merchandising only (included on line

).

l13 9 l PENSIONS AND BENEFITS (Thousands of $ fbi 47.928 15 47.943

10. Operaton and Ma:ntenance i s.t o.

9.052 6

9,058

11. Construction 13 11

12. Otner (Descnde) N te (B) 15.028 15.028

,3 n 72,008 21 72.029 13.

Total 1313 i (a) Co not incuoe besons and Bene'44 (D) Enumerate tre Mes of Bevts encteed-s.ch as Nasons. L8e essence Mescutauson. etc Pensions Life Insurance llespitalization Uorkmen's Compensation Other Miscellaneous Expenses NOTES & REMARKS:

(A) Includes 3.729 CPUSC, GPlt and barraininc unit er.plovec salaries charced to operation and caintenance and construction accounts and not directiv to the pavroll account of

$112.265 and $17.801. resrectivelv Aversce e-levece rcre not alleented beenuce the GPU System crplovces are not alvavs assiened solelv to operation. naintenance and construction.

(D) Includes Fuel Stock Expense Undistributed, Stores Exrense l'ndistributed.

Transportation Expense Clearine Accounts. Miscellaneous Deferred Debits and Accounts Receivable.

1

PAGE E>14 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE E 14 company State of Total System O SCHEDULE XIV-CLASSIFICATION OF ELECTRIC ENERGY SALES, REVENUES AND CUSTOMERS ca a.es eca me v w. no uma am e o r

.a.ue w For tEs e.,e

.eca e un onty

!ll l!

c.ceos utoA*4tTwovas oatm. arvawes evotoisens (s) me6est.se et Sze)

At vtAR ges0 avt4Act-tt t009 sense to Ummete Cwetomers 12.445.032 1,084,638 1,581.908 1.567,802

1. Resoontaktf 14,1,

2. Commwcw of SmaI Lgt & PWr-(c[

14.2, 10.275,160 793.495 1P7,108 184,866

3. Inousinal or Large Lgt & Pwe-(c) 14,3, 12.140.098 670.024 9.727 9,511 152,695 26,373 2,944 2,933 4 Putse Street & agn.ar Lgntng 14.4, 98.105 7.835 405 408

~

5 Ceer Saes to Pvtsc Avtnormes 14.5,

6. Sases to Raroacs and Raaways 14.6,

7. truercopartmental Sass 14,7, 0-14 8, 9 Total Sass to Utmate Customers.

14 9.

35.111.090 2.5S2.365 1,7 9 7, no ?.y 1.7e5.52o ty Se6ee 1or Reesie 92.535 4.139 8

8

10. Investor Owned EwetN Utst+s 14.10.

578.333 33.275 3

3

11. Coocerstwery C%d Eoctne Systems 14.11, 356.595 19.995 15 15 12 WacceW Owned Ectnc Sys' ems 14.12.

13. Fooeral & Sta's Eoctne Agences 14.13, 14 14.14 15 Total Sa'es for Resa-e 14.15, 1.057.463 57.409 26 26 36.168,553 2.639,774 1.782.118 1.765,546

16. onAsso total -

14.16.

17. Less premsen hr rate reNnos 14.17, it-oTHEA tLtcTRIC REvtwt8

.14.18.

31'bl3

19. total ELECTR!C optmATesQ navewas 14.19.

2.A71,2A7 c -.

s.c. w..

m..e r

14 20, 3.039.105 244,052 205,530 202.012 3

c

-a=

Not Available asi noe. w.

14.21, a

>g:

y asor,

14 22 3

• ,., e m c.a wi.c

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! s,044,,

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a a

• ~

a.m a4 j14.24

,1.208.11 691.62 s

A egehe.m aPw e m f14 25 8.030,

6.715

• ies reces sensas.w e, em 9 re mese*arme esms e sectre. Law. 2 mg s Gve ye pusre v.ee e, ce=se, e em te om.e we reo e. resca e ymse see ese pews ear =*ss Ley ee le ai6gre sw 6t=c be sacs.es 114 26.

is v.e re ieweep ta are i wee she.rwe anwese awe es. me.aca.e apare namcas nam as ee*

m oc a+

Asocwe te..m.

e e m we Tom W w v e c wes 5 e eewe, as em, gr. wen me w

-e meseg inee,ees a sees i og #.aoecs M mea.' utret ers'. rme er, era a w e..eco

• m m.w.- e.ew. mi.en.

.a. m m,com

. n

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.==

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c a.,e c.e. c+- i 6e iw

=,,.4

., v tsi n.mm j14 2L j ra.

. e as sa =e i 3 ie m we,iwe up,s m w

Notes & Remarks:

• 5ee Individual Subsidiary 1987 l'S R ' s

PACE E 15 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE E 15 company State of Total System 8 l

SCHEDULE XV-CLASSIFICATION OF INDUSTRIAL (OR LARGE LIGHT AND POWER)

ENERGY SALES AND REVENUES compar. ep. rete, e ma. un one mi.noue como ew. unm. ior 3

{

1

.xn mi. a.%cn ny cwa 4

e pacicat noas. g*. a tr.* oo.n or your %. mum Laro. Lee a po.*) sat and Rn.<w. by w. v metry. p.wasy by n uan, unna and uarexsunne j

Groups of N standard Industrel Cassiestawa) W not coded stnct'y by $tandard %stnal Ctassdicaton, peas. g4. Compar6td. ntormaton by any smlar groupng you i

mgy have t$ opted Ir you Cannot Surrush N mtrmaton on a Compr.h.nsh. b4 4. data tw yout Largest industnes would b. useful(t.n f posstd.).

j were a Custom, or estaesinmers has cc+rstons penanno io more un one restry. m pnnc54r w..oi.e o.temn. m Ciascenton REVENUES TYPE OF INDUSTRY

' S l C N0(a)

MEGAWATTHOUR SALES (thousands of 5)

MINING 15,569 g

1,087 Mital Mining..

10 15.1 11 & 12 15.2.

581,177 26,737 Cosl Mining Oil & Gas Extraction 13 15.3.

13,148 968 l

4 Mining & Quarrying of Nonmetalhc Min.(except fuels).

14 15.4 196,572 14.016 l

15.5.

Total Mining i5 s_

806,466 42,808 i

MANUFACTURING 787,585 46.909 Food and Kindred Products 20 15.7.

i Tobacco Manufacturers 21 15.8.

6,883

_553

]

Textile Mill Products 22 tb.9.

123,046

,7,725 Apparel & Other Finished Products made from fabncs l

77,234 5,930

& similar matenals 23 15.10.

j Lumber & Wood Products except fumiture 24 15.11, 219,185 12,860 Furniture and Fittures 25 15.12.

59,398 4,469 i

Paper & Albed Products 26 15.13, 903,872 45,792 27 15.14 192,588 12,820 l

Printing, Pubbshing & Alhed industnes j

Cheimicals & Alhed Products.

28 15.15, 917,622 55,385 Petroleum Refining and Related Industries 29 15.16.

317,564 14,927 i

Rubber and M4scellaneous Plast 4 Products 30 15.17 704,006 40,429 Leather & Leather Products 31 15.18.

44,659 2,989 Stone Clay. Glass and Concrete Products 32 15,19.

891,253 42.582 3

Pnmary Metal industnes 33 15 20.

2,331,781 102,962 Fabncated Metal Products except machinery &

transportat.on equipment 34 15.21 528.952 32.374

]

Mcchinery, except Electncal 35 15,22 I22*126 37.673 i

Electncal and Electronic Machinery. Equipment & Supphes 36 15 23.

1,014,402 60.728 j

Transportaten Equipment 37 15.24 274:926 15,694 Maasunng. Anatyzing & Contro4hng instruments; Photo-l graoh< Medical & Optical Goods: Watches & Clocks 38 15.25.

175,687 11,542 i

M scenaneous Manufactunng industnes 39 1526.

183,499 13,465

]

Military Establishrnents 15 27, 303,908 19,623 l

Total Manutacturing 15 28 10,680,176 587,431 Total Mining and Manufacturing j.

js 29 11,486,642 630,239 l

'Industnal Customers' wth demad below

. kW

'5 N Other *Industnal Custom?s* not ciested

- I! ?1 l

Non-manuf actunng *industnal cuavmer,-

no 653,456 39,785 i

Ad;ust for Dsfierences '

MegQL,

it l

7 ti P=140.098 5

67n,024

)

]

Total industrial or.

NyL:

l tar Tae Stancard restr1e

. emb.e v a torw Te:nrucn vem...

. 52M Port Rami Road Spr rfed V A 22161 Or3.t Na PB 87+100012 i

v j

= us.s ve,..

. m es.,a m.e u u m w aSt.,. wa ca*= en ar%s age. a n. u s caemm.ni sia Agences Tra3e Ars w as (td Amcunts swks a;

@-so.. UV Po,w O 14 i

l

~

PAGE E 18 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEM^ER 31,1987 PAGE E.16 Company State of Total System C SCHEDULE XVI-SCURCE AND DISPOSITION OF ENERGY i

j j j i j j i i i see i

I I ' ! ! I I Cc Cooe !

Comonwo ec+'awg e more the ore rs's s'oAs cu,oete os sche &#4 tcr each swo e.wi eer coe ste Source of Energy COST Net Generston:

uroa.saTTHoums nnouseos of si 1.

Steam. Conventonal.

16.1.

19,654,536 s 448.649 2.

Steam. Geothermal 16.2.

3 Steam. Neclear 16.3.

8,107.535 302.145 4.

Hycro 16 4 245,368 2,594 5.

Pumped Storage (a) 16.5.

416.112 1,180 6.

Gas Turtxne.

16 6.

7.

Otner (Specify) (Incl. C.T., C.C. and I.C.)

16.7 2.175,014 60.245 8.

Les4. Energy input for Pumped Storage t6 s.

619,295 29.979.270 814,813 9.

Total Net Generatos 16.9.

Purchased Power incl. Not interchange (Account 555):(b) 10.414.659 359.310 10.

Investor Owned Electnc Ut tities 16.10.

11.

Cooperatrvely Owned Elect. Systems 16.11 12.

PvDtic Agenc es metuc.ng Municipats 16.12, 87,848 2,314 13.

Otner Non Utity Sources 16.13.

121.751 5.820 14.

Internatonalimports( + ).

16.14, 15 International Enports( - ).

16.15.

16 16.16.

17.

Less: Energy input for Pumped Storage Of apphcable) 16.17 18 Total Net Purchased Power-in. tout).

16.18 10,624.258 367.444

19. Recerved From Own Company Outs 4e State 16.19 20 Total Net Energy for Distnpution 16 20.

40.603,528 m,. um mu m

21. Energy Wheeled (for accounts of others)(c) 16.21.

l. Toc. r,7 7 7,701

22. Generaten Control and System Dispatening 16 22. nuumumunu (85,325)

23. Otner Expensestd) 16 23

vmmummu,

24. Total Production Expense (Electnc) 16 24 unnnnmurms s 1.Ina.633 Diepooltlon of Energy 36,168.553

25. Total Energy Saleste) is 25, 26 Useo m Eiectnc & Otner Depts and Fumisned Wttnout Charge 16 26 000+042

27. Total Energy Accounted for (25 and 26) 16 27.

37.167.645 28 Energy Lost and Unaccountes torte).

16 28 3,435,883

29. To Own Company in Otner States 16.29.

33 Total Dispostkon tLines 27 + 28 + 29 = Line 20)(a) 16 30. _40.603.528

31. Energy Wnee!ed (for accounts of others)(c) 16.31, 1.304.577 tai 6 cusve a evey

• pre g a ce, cote No o ea cume.o swan state awaie sw e.cesn n ese some e eewsw.

327.482 e ennenes **>.emrom *= sonni 16.32 8.514,160 g_

no.cna.e. Recoves.o oss.

16 33 3,608,102 84.40$

neenr9eo**e'**G'om t 634 (l.498,004)

(44.5361 Tcas, w Pwen o Pe.w.e i:wn-5 wo.ru.c w ta

'e 33 10.62!.,258 5 3A7,atc

= co-eer su,e.nei a w mm cv en ve m., *cra ce w.i =.;ee. ee ce..- c.

.e, soci.e ve we pe4no emm eas ici a cc.ce, ee =

po., e eo o ecc., e,.. v4,ca oc.,

acn ecw.o n ece a we e ea oeuem n pena a w scown ve. ca me 21 s131. the um e% esc (85.511) ici ne w n e ree w iv,xi o er r.es a co m :

<e, cewn e=ecs a waswe NOTES & REMARKS;

l 1

Iliii e

o o* * *" N y mQ E $ 5,,do% 2mg2e-l4$3"

$0mEef33 'E~

oN Y._N eu g g (;

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PAGE E.18 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE E.18 Company State Of Total System D SCHEDULE XVill-GENERATING STATION STATISTICS (a)

I w=

I I l Ill l

ce cooo I

CcrMersee.*uce o.m pens or pcreone tereof m more maa crw stow s'u:ud coneew Poe actedule lor esca swo m.ms:n rey are exaned 19E AT HATE AAT18eQ IN NET KILOWArTS (BTV per L

F04 UNITS ed SERVICE DEC. Si twh not NET QEMERADON NA&BE Ass 0 LOCAT10N OF STAT 100Nb)

TYPEds) seesnesseesse) casseenpop genersuon)

Mogo enheure Homer City, Homer Citv, PA (Penelec Interest)

SC 1,006,000 942,000 9,601 5,921.051 Shaw ille, Shawille, PA SC 640,000 609,000 10,267 3,694,687 sevard, Seward, PA SC 218,224 149,000 11,440 1,198,173 Front Street, Erie, PA SC 118,800 110,000 13,821 353,444 Warren, Warren, PA SC S4,600 88.000 13,843 393,920 Williamsburg, Williamsburg, PA SC 25,000 33,000 12,545 111,592 Portland, Portland, PA SC 426.700 349,000 10.010 1,746,044 Cone.auch Huff, PA (Met-Ed Interest)

SC 308,000 280,000 9,092 1.648,4 1 Titus, Reading, PA SC 225,000 240,000 10,505 1,445,328 Savreville, Sayreville, NJ SC 346,800 314,000 12,262 837,557 Keystone, Indiana, PA (JCP6L Interent)

SC 312,000 283,000 4,378 1,475.614 Gilbert, Holland twt., NJ SC 126,100 119,00n 12,824 181,457 Werner, South A:tbov, NJ SC 60,000 60,000 11,765 46,673 vyster Creel. Lacev Isv., NJ SN 550,000 628,000 10,629 3.111,307 Three Mile Island Unit 1 i

Dauphin County, PA SN 871,000 800,000 10,566 5.025.117 Three Mile Island Unit 2 Daurhin County, PA SN 461,200 4n6,000 (28,899)

I 3 Hydro Stations H

67,600 66.000 245,368 19 Combustion Turbine and Internal Cc-bumtion CT 1,117,400 1,459,000 336,060 Gilbert, Holland Twp., NJ CC 349,800 386,0n0 4,827 424,351

'tards treek, Llairstown, NJ 321.11; (JCP&L Interest)

PS 193,400 1A5,000 5eneca, Warren, PA i

(Penelec Interenti PS 84,400 7A.ono 04.007 Other (incl. Rieccl CT net cencration of 985 %'H - See Pace 20) 140,0nn*

404,603 30,50F.5f; 54 Tow is t.

nuninnun

unininun, inun.nu 6I9,205 tess Eneqp redi tor Peced snoroge t g 2, nunaninin Tow-u staes twow te 3 8,092,024 8,la7,nno 10.375 24,479,270.,

5 L

.= a m rg.s ewe swr e

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o i

i SCHEDULE XIX-FUEL CONSUMED FOR ELECTRIC GENERATION lllllllllll l#l l l J

5==

D, c

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m consueto Totat cost avenaar cosi nn an nace sTu setT oassananon efu nn a

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(thousande et s)

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t coaNTry sucs 19.s.

7.411 s 272.745 $36.76 146.78c 12.523 18,538,844 10,023 2 CeAnqPourwhMO 19 2.

3 t egr an(ttevmM4 19.3 M

4 19 4 3

s o, B.,,,,N 19 5.

628 12,467 $19.85 324.52c 13,550 234,733 1]M 1

g 6

19 6.

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10.605 27.537 $ 2.60 251.82c 1,031(f) 880,9 3

}L 4gj-8 19 8.

312.749 ISS*9IC 14.654,5 %

10,3206 d

9 Subsond $esera corwersional 19 9.

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450.107

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b 12 Gascas Twtmuc0 19.12.

13 Gas ene. n.s c. eusnrnuc0 19 13 11,498 32.230 $ 2.80 272. Q 1.030(f) 816,289 14,508 2

44,756 304.289 1.266.396 11,(zij l

te S.4 son 41 en=s 10. t1. 57 13) 99 14

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is metometorems 19.15.

1,488 53.586 $36.01 62.12g 57.905(r) 8.136,424(c)10,590 m

16 TOTAL Att flWtS 19.16-

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per SCHEDULE XX-EFFICIENCY OF STEAM-ELECTRIC GENERATING UNITS kilogram g

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j es PAGE E.20 UNIFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE E 20 Company State of Total System Q SCHEDUt.E XXI-CHANGES IN GENERATING UNITS 5..

caam Compwws operanng m more than are paso s%dd crepene me screMe ter each state m ehch rey cceraw RA11NG IN NET KILOWATTS (a)

Date in NAME ANO LOCATION OF STAftote(s)

TYPEN Nemoptseetc)

Cepee#My Statue (s)

Servloede)

Riegel CT 23,800 28,000 Rt

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.se Fe uros em rue enast ese W swergros areasen Fm was was ayerween g mJrumros esta.e te awe we p.e NOTES & REMARKS:

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PAGE E 21 UNFORM STATISTICAL REPORT-YEAR ENDED DECEMBER 31,1987 PAGE E 21 CG3i State of Total Systen C SCHEDULE XXIl-MILES OF ELECTRIC LINE AND OTHER PHYSICAL DATA cemeense co-m a mee een ur+ suo com ace,

e. eca.ue k, e.n

[*

Wees e aw t+v epenew MILES OF ELECTRIC LINE OVERMSAD Llase8 Uesoamonova(O LINES N L*E Concluat VOLTAGE-kV pole telse cw twee genn m mm Tranendeelen Ureer 22 kV 22.1 22 kV and om 22 to 30 hy

2L2, 31 e 40 kV 22.3, 1.416.75 1.691.38 16.62 60.20 411o 50 kV 22.4, 367.00 367.00

.03

.03 Si to 70 kV 22,5, 403.49 454.72

.12

.36 71 to 131 ky 22,6.

1.786.01 1.910,54

.21

,21 132 to 143 kV 22,7 14.23 14.23 144 to 108 kV 22,8, 139 2 253 kV 22,9, 1,250.07 1.502.28 147.90 147.90 254 to 400 kV 22,10, 401to 000 kV 22,11, 471.77 471.77 001 e 800 ky 22,12 5.857.22 6.559.82 16.98 60.80 Total transmemon 22,13, D6ewinutton 40,951.57 6.409.57 12.700.72 uncer 22 kV 22,14, 22 kV and om 22 to m kV 22,15, 1,664.20 203.74 685.52 31 to 40 kv 22.16,

_3.460.72 629.34 288.03 760.52 412 50 hv 22.17, 51 to 70 kV 22,18.

Over 70 kV 22,19, Tosat Owetwoon 22.20, 46,076.49 6.901.34 14.146.76 GRAND TOTAL (T&D) 22 21, 51,933.71 6.918.32 14.207.56 OTHER PHYSICAL DATA Nurneer Cape:ty (kVA)

1. Detrtuhon Sutetanone thcAvoes VDW Dew h:fusmal kestanene) 1.225 14.252.124 2 Lme Tramen:rmers tacame hoheat frewtrmas) 468.941 18.916.553 r

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