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-November 29, 1979 Mr. Richard H. Vollmer Director, Three Mile Island-2 Support Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission 7920 Norfolk Avenue Bethesda, Maryland 20014 RE: NRC Docket No. 50-289 -"MI-l Restart Proceeding | - ON 100 interpace Parkway Parsippany, New Jersey 07054 201 263-6500 TELEX 136-482 | ||
. Wnter's Direct Dial Nurnber (201) 263-6013 | |||
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November 29, 1979 Mr. Richard H. Vollmer Director, Three Mile Island-2 Support Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission 7920 Norfolk Avenue Bethesda, Maryland 20014 RE: NRC Docket No. 50-289 - "MI-l Restart Proceeding | |||
==Dear Mr. Vollmer:== | ==Dear Mr. Vollmer:== | ||
In respense to the NRC's supplementary requests for financial information telecopied to C. W. Smyth on November 9, 1979, enclosed are eight copies of the following: | In respense to the NRC's supplementary requests for financial information telecopied to C. W. Smyth on November 9, 1979, enclosed are eight copies of the following: | ||
1.Additional response to Supplementary Financial Request No. 9 (PA PUC's Order requring Met-Ed to "show cause why its certificate of public convenience should not be revoked"). | : 1. Additional response to Supplementary Financial Request No. 9 (PA PUC's Order requring Met-Ed to "show cause why its certificate of public convenience should not be revoked"). | ||
Please acknowledge receipt of this material by signing, dating and returning the enclosed copy of this letter. A stamped, pre-addressed envelope is enclosed for that purpose. | Please acknowledge receipt of this material by signing, dating and returning the enclosed copy of this letter. A stamped, pre-addressed envelope is enclosed for that purpose. | ||
Very truly yours, i v 1 k F. D. Hafer Vice President, Rate Case Management FDH:jb[y J. C. Petersen - No enclosures; to be distributed by ARC b b | Very truly yours, i | ||
v 1 k | |||
F. D. Hafer Vice President, Rate Case Management FDH:jb | |||
[y cc: J. C. Petersen - No enclosures; to be distributed by ARC b b H. Silver - No enclosures; to be distributed by NRC ' | |||
, I | |||
(,M g | |||
1474 001 7912040 OF7 4 GPU Ser rice Corporation is a subsdary of General Pubhc Ut Corporation | |||
l'e rson Hosponu lble for Prepa rat ioe: | |||
F. D. Itafer, Vice President - Rate Case Management, CPU Service Corp. | F. D. Itafer, Vice President - Rate Case Management, CPU Service Corp. | ||
Telephone: | Telephone: (201) 203-S013 Date: November 29, 19/9 GENERAL PUBLIC UTILITIES CORPORATION Me t ropoli tan Ed i son Company, Pennsylvania Elec t r ic Company and Je rse y Cen t ral Powe r f. Light Com pa n y NitC Docke t No. 50-289 Three Mile Island Unit No. I Restart Proceedinc, Supplementary response to NRC Staff's Supplemental Financial Information Request No. 9, telecopied 11/9/79 (item numbers refer to initial requests dated 9/21/79): | ||
(201) 203-S013 Date: November 29, 19/9 GENERAL PUBLIC UTILITIES CORPORATION Me t ropoli tan Ed i son Company, Pennsylvania Elec t r ic Company and Je rse y Cen t ral Powe r f. Light Com pa n y NitC Docke t No. 50-289 Three Mile Island Unit No. I Restart Proceedinc, Supplementary response to NRC Staff's Supplemental Financial Information Request No. 9, telecopied 11/9/79 (item numbers refer to initial requests dated 9/21/79): | "(10.5 and 10.c) Subsequent to our September 21, 1979 request, it was reported (Wall Street Journal, November 2, 1979, p. 12) that the Pennsylvania Public Utility Commission (PPUC) issued a show cause order to Met-Ed regarding the company's ability to provide utility service in Pennsylvania. Provide copies of the PPUC order and cop 'es of Met-Ed's response to the order, when available. Continue to keep the NRC Stt.f f informed of all developments in the uhow cause proceeding. Provide copies of all subsequent PPUC orders and other directives and Met-Ed rest anses relat ed to this proceeding." | ||
"(10.5 and 10.c) Subsequent to our September 21, 1979 request, it was reported (Wall Street Journal, November 2, 1979, p.12)that the Pennsylvania Public Utility Commission (PPUC) issued a show cause order to Met-Ed regarding the company's ability to provide utility service in Pennsylvania. | Response. | ||
Provide copies of the PPUC order and cop 'es of Met-Ed's response to the order, when available. | As a further response to this request, attached are copies of the following exhibits and testimony submitted at the continued prehearing conference in the PA PUC's Docket No. I-79040308 held on 11/27/79 in llarrisburg: | ||
Continue to keep the NRC Stt.f f informed of all developments in the uhow cause proceeding. | : 1. ME/PN Exhibit A-1 (revolving credit agreement; wi t n es ses: J. G. Graham, F. D. !!a f e r) . | ||
Provide copies of all subsequent PPUC orders and other directives and Met-Ed rest anses relat ed to this proceeding." Response.As a further response to this request, attached are copies of the following exhibits and testimony submitted at the continued prehearing conference in the PA PUC's Docket No. I-79040308 held on 11/27/79 in llarrisburg: | : 2. ME/PN Exhibit A-2 (petition to increase Met-Ed's levelized energy cost adjustment charge; witnesses: J. G. Graham, F. D. lla f e r) . | ||
1.ME/PN Exhibit A-1 (revolving credit agreement; wi t n es ses: J. G. Graham, F.D.!!a f e r) . | : 3. ME/PN Statement B, Exhibits n-1, B-2 (preliminary statements of 1980 rate base, operating and net income, with and without TMI-l and TMI-2, and related accounting testimony - Met-Ed; witness: D. L. Iluf f) . | ||
2.ME/PN Exhibit A-2 (petition to increase Met-Ed's levelized energy cost adjustment charge; witnesses: J. G. Graham, F. | : 4. ME/PN Scatement C, Exhibits C-1, C-2 (preliminary statements of 1980 rate base, operating and net income. with and without IMI-l and fMI-2, and related accounting testimony - Penelec, witness: F. A. Donofrio). | ||
D. lla f e r) . | : 5. ME/PN Exhibit F-1 (ME/PN presentatton before the PA PUC, 9/21/79; witness: 11. M. Dieckamp) . | ||
3.ME/PN Statement B, Exhibits n-1, B-2 (preliminary statements of 1980 rate base, operating and net income, with and without TMI-l and TMI-2, and related accounting testimony - Met-Ed; witness: | 1474 302 | ||
D.L. Iluf f) . | ! | ||
4.ME/PN Scatement C, Exhibits C-1, C-2 (preliminary statements of 1980 rate base, operating and net income. with and without IMI-l and fMI-2, and related accounting testimony - Penelec, witness: F. A. Donofrio). | LMu .n.% ~ , s .. | ||
5.ME/PN Exhibit F-1 (ME/PN presentatton before the PA PUC, 9/21/79; witness: 11. M. Dieckamp) . | ~ | ||
1474 302!LMu .n.% ~ , s..~..1 Il ME/?N E::hibit A-1 | .. 1 | ||
REVOL7ING CREDIT AGREEMENT Dated as of June 15, 1979 GENERAL PUBLIC UTILITIES CORPOBATION, a Pennsylvania corporation ("GPU"), JERSEY CENTRAL PCWER & LIGHT COMPANY, a New Jersey corporation ("JC"), METROPOLITAN EDISON CO 1P ANY, a Pennsylvania corporation ("ME"), and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation ("PE") (GPU, JC, ME and PE being , collectively, the " Borrowers" and each individually a " Borrower"), each Bank (as defined below) and CITIBANK, N.A.("Citibank"), as agent (the " Agent"), and CHEMICAL BANK | ' | ||
Il ME/?N E::hibit A-1 Witnesses. J.G. Graham; F.D.Hafer (Final Execution Copy] | |||
REVOL7ING CREDIT AGREEMENT Dated as of June 15, 1979 GENERAL PUBLIC UTILITIES CORPOBATION, a Pennsylvania corporation ("GPU"), JERSEY CENTRAL PCWER & LIGHT COMPANY, a New Jersey corporation ("JC"), METROPOLITAN EDISON CO 1P ANY, a Pennsylvania corporation ("ME"), and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation ("PE") (GPU, JC, ME and PE being , collectively, the " Borrowers" and each individually a " Borrower"), each Bank (as defined below) and CITIBANK, N.A. | |||
("Citibank"), as agent (the " Agent"), and CHEMICAL BANK | |||
(" Chemical Bank"), as co-agent ( the "Co-Agent" ) for the Banks, agree as follows: | (" Chemical Bank"), as co-agent ( the "Co-Agent" ) for the Banks, agree as follows: | ||
ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms snall nave the follcwing meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): | |||
" Additional JC Amount" means, at any time, an amount equal to the principal amcunt of JC Eonds pledged to the Co-Agent pursuant to the JC Bond Pledge Agreement less the principal amount of any JC Bonds released frcm such pledge; provided, however, that, upon the making of such pledge, tne co-Agent snall have received the applic-able JC Eonds, together witn an opinion of Messrs. | |||
Berlack, Israels & Libe rman , counsel for JC, in substan-tially the form of Exhibit I hereto and such other approvals, opinions and other documents as any Bank through the Agent may recsonably request. | |||
" Advances" means advances pursuant to Article II. | |||
* | |||
" Aggregate Octal Commitment' means the sum of the Total Commitments of tne | |||
L ibe rr.an , counsel to the Borrowers, confirming their opinion delivered pursuant to Section 3.01(vi)(p), with references therein to the Notes of such Borrower to mean the new Notes issued on such New Note Issue Date. | L ibe rr.an , counsel to the Borrowers, confirming their opinion delivered pursuant to Section 3.01(vi)(p), with references therein to the Notes of such Borrower to mean the new Notes issued on such New Note Issue Date. | ||
ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01. Recresentations and Warranties of the Borrowers. Each Borrower represents and warrants as at the Closing Date and as of the date of each Borrowing and on each New Note Issue Date with respect to itself as follows: | |||
(a) Such Borrower is a corporation duly incorpo-rated, validly existing and in good standing under the laws of its jurisdiction of incorporation. | |||
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(b) The execution, delivery and performance by such Borrower of each Loan Document to which it is or is to be a party are within such Borrower's corporate powers, have been duly authorized by all necessary cor-porate action, do not contravene (i) such Borrower's charter or by-laws or (ii) law or any contractual re-striction binding on or affecting such Borrower, and do not result in or require the creation of any lien, secur-ity interest or other charge or encumbrance (other than pursuant to the Collateral Agreements to which it is or is to | |||
The rights of each Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Bank may has3. | The rights of each Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Bank may has3. | ||
SECTION 8.06. | SECTION 8.06. Certain Determinations: Suscension of Availability. (a) A determination by cne Majority Ban.ss for purposes of Section 3.02(b), Section 3.02(c) or Section 6.01(g) shall be evidenced by notices in writing (including by hand delivery, telex, cable or telegram, but not by mail) to the Agent from the Majority Banks. The Agent may (but under no circumstances, except pursuant to the next sentence, shall have any obligation to) poll the Banks at any time to afford the Majority Banks an opportunity to make such a ggg determination. The Agent shall, reasonably promptly upon receipt of written notice (including by hand delivery, telex, cable or telegram, but not by mail), which notice must be received by the Agent prior to the giving of any notice of Borrowing, from Banks holding at least 15% of the then aggregate outstanding principal amount of the Notes or, if no such principal amount is outstanding, 15% of the Final Total Aggregate Commitment or 25% or more in number of the Banks (which notice shall state why it is believed that such a determination would be appropriate), give telex notice thereof to the Banks requesting their decision as to such a determination. A Bank which does not respond to such notice within two Business Days of its transmission shall be daemed not to have made such a determination. | ||
Certain Determinations: Suscension of Availability.(a)A determination by cne Majority Ban.ss for purposes of Section 3.02(b), Section 3.02(c) or Section 6.01(g) shall be evidenced by notices in writing (including by hand delivery, telex, cable or telegram, but not by mail) to the Agent from the Majority Banks. | (b) Each Bank shall, within the earlier of three Business Days of the forwarding by the Agent of the report of any Borrower delivered to the Agent pursuant to Section 5.05(b)(ii) and eleven Business Days of any enactment or issuance of which notice is given by a Borrower to the Agent pursuant to Section 5.05(b)(i), give written notice (includ-ing by hand delivery, telex, cable or telegram, but not by mail) as to whether such Bank has determined that the reve-nues to be available to such Borrower will be insufficient to assure its ongoing financial viability for purposes of lll 1474 046 | ||
The Agent may (but under no circumstances, except pursuant to the next sentence, shall have any obligation to) poll the Banks at any time to afford the Majority Banks an opportunity to make such a ggg determination. | |||
The Agent shall, reasonably promptly upon receipt of written notice (including by hand delivery, telex, cable or telegram, but not by mail), which notice must be received by the Agent prior to the giving of any notice of Borrowing, from Banks holding at least 15% of the then aggregate outstanding principal amount of the Notes or, if no such principal amount is outstanding, 15% of the Final Total Aggregate Commitment or 25% or more in number of the Banks (which notice shall state why it is believed that such a determination would be appropriate), give telex notice thereof to the Banks requesting their decision as to such a determination. | . | ||
A Bank which does not respond to such notice within two Business Days of its transmission shall be daemed not to have made such a determination.(b)Each Bank shall, within the earlier of three Business Days of the forwarding by the Agent of the report of any Borrower delivered to the Agent pursuant to Section 5.05(b)(ii) and eleven Business Days of any enactment or issuance of which notice is given by a Borrower to the Agent pursuant to Section 5.05(b)(i), give written notice (includ-ing by hand delivery, telex, cable or telegram, but not by mail) as to whether such Bank has determined that the reve-nues to be available to such Borrower will be insufficient to assure its ongoing financial viability for purposes of | . | ||
..45 Section 3.02(b) or that there has been a change in such Borrower's financial condition or prospects since May 29, 1979, which is material and adverse and substantially in-creases the risk that the Notes issued by such Borrower will not be repaid when due for purposes of Section 3.01;c) or Section 6.01(g). | 45 Section 3.02(b) or that there has been a change in such Borrower's financial condition or prospects since May 29, 1979, which is material and adverse and substantially in-creases the risk that the Notes issued by such Borrower will not be repaid when due for purposes of Section 3.01;c) or Section 6.01(g). A Bank which does not so respond within the allotted three Business Days shall be deemed not to have made such a determination. | ||
A Bank which does not so respond within the allotted three Business Days shall be deemed not to have made such a determination.(c)In the event of the enactment or issuance by the government of the Commonwealth of Pennsylvania or the State of New Jersey or any political subdivision or agency or commission of either thereof of any statute, order, decree, rule or regulation having applicability to JC, ME or PE, or the revocation, modification or termination of any of the foregoing, which could or would, directly or indirectly: re-duce the revenues and/or the cash flow of JC, ME or PE, and notwithstanding any other provision hereof, the obligations of th? Banks to make Advances to: (i) GPU and to such of the other Borrowers as are located in the state in which such action is taken shall be suspended upon receipt by the Agent of requests from Banks: (A) located in Pennsylvania and having not less than 66 2/3% of the Total Commitments of all the Banks located in Pennsylvania; (B) located in New Jersey and having not less than 66 2/3% of the Total Commit-ments of all the Banks located in New Jersey; or (C) having 66 2/3% of the Final Aggregate Total Commitment; and (ii) all the Borrowers shall be suspended upon receipt by the Agent of requests from Banks having 66 2/3 % of the Final Aggregate Total Commitment. | (c) In the event of the enactment or issuance by the government of the Commonwealth of Pennsylvania or the State of New Jersey or any political subdivision or agency or commission of either thereof of any statute, order, decree, rule or regulation having applicability to JC, ME or PE, or the revocation, modification or termination of any of the foregoing, which could or would, directly or indirectly: re-duce the revenues and/or the cash flow of JC, ME or PE, and notwithstanding any other provision hereof, the obligations of th? Banks to make Advances to: (i) GPU and to such of the other Borrowers as are located in the state in which such action is taken shall be suspended upon receipt by the Agent of requests from Banks: (A) located in Pennsylvania and having not less than 66 2/3% of the Total Commitments of all the Banks located in Pennsylvania; (B) located in New Jersey and having not less than 66 2/3% of the Total Commit-ments of all the Banks located in New Jersey; or (C) having 66 2/3% of the Final Aggregate Total Commitment; and (ii) all the Borrowers shall be suspended upon receipt by the Agent of requests from Banks having 66 2/3 % of the Final Aggregate Total Commitment. Such suspension requests shall be in writ-ing (including telex, cable and telegram) and shall be to the effect that an availability suspension is requested because of adverse regulatory action. Any such suspension shall be effective from the time of the Agent's receipt of the requisite requests; the Agent shall promptly notify the Borrowers and the Banks of any such suspension. Such a suspension shall not itself relieve the Banks of any obli-gation which they would otnerwise have hereunder to accept Notes on a New Note Issue Date pursuant to Section 2.02. | ||
Such suspension requests shall be in writ-ing (including telex, cable and telegram) and shall be to the effect that an availability suspension is requested because of adverse regulatory action. | Such a suspension shall continue until the Agent shall have received requests for its revocation from the Super Majority Banks. Such revocation requests shall be in writing (includ-ing telex, cable and telegram) and a revocation resulting therefrom shall be effective in respect of the first Borrow-ing noticed subsequen'_ to the receipt by the Agent of the requisite requests. | ||
Any such suspension shall be effective from the time of the Agent's receipt of the requisite requests; the Agent shall promptly notify the Borrowers and the Banks of any such suspension. | 147A 047 | ||
Such a suspension shall not itself relieve the Banks of any obli-gation which they would otnerwise have hereunder to accept Notes on a New Note Issue Date pursuant to Section 2.02. | |||
Such a suspension shall continue until the Agent shall have received requests for its revocation from the Super Majority Banks.Such revocation requests shall be in writing (includ-ing telex, cable and telegram) and a revocation resulting therefrom shall be effective in respect of the first Borrow-ing noticed subsequen'_ to the receipt by the Agent of the requisite requests. | . | ||
147A 047 | . | ||
..46 O SECTION 8.07. | 46 O | ||
The Trustee Banks. | SECTION 8.07. The Trustee Banks. Despite any provision contained herein or, in any other Loan Document: | ||
Despite any provision contained herein or, in any other Loan Document: (a) obligations hereunder of a Borrower to its Trustee Bank shall not be, or be deemed to be, secured by such Borrower's Bond Pledge Agreement and shall not be, or be deemed to be, entitled to any benefit therefrom, whether in respect of any realization upon the Pledged Collateral (as defined therein) or otherwise; (b) the Indebtedness cutstanding under the Note issued by a Borrcwer to its Trustee Bank shall rot be reduced to less than the applicable Base Amount by virtue of any prepayment pursuant to Section 2.07 or otherwise if, at the time such prepayment would otherwise be made and giving ef fect thereto, there is any Indebtedness of such Borrower outstanding and secured by such Borrower's Bond Pledge Agreement, and any amount which would otherwise be applied to such a prepayment shall be applied to the ratable (in proportion to their respective Percentages) prepayment of such Borrcwer's Notes issued to the other Banks; and (c) a Trustee Bank shall not, by virtue of the operation of Section 2.10, obtain indirectly any benefit which it is prohibited from obtaining directly by clause (a) of this Section 8.07. | (a) obligations hereunder of a Borrower to its Trustee Bank shall not be, or be deemed to be, secured by such Borrower's Bond Pledge Agreement and shall not be, or be deemed to be, entitled to any benefit therefrom, whether in respect of any realization upon the Pledged Collateral (as defined therein) or otherwise; (b) the Indebtedness cutstanding under the Note issued by a Borrcwer to its Trustee Bank shall rot be reduced to less than the applicable Base Amount by virtue of any prepayment pursuant to Section 2.07 or otherwise if, at the time such prepayment would otherwise be made and giving ef fect thereto, there is any Indebtedness of such Borrower outstanding and secured by such Borrower's Bond Pledge Agreement, and any amount which would otherwise be applied to such a prepayment shall be applied to the ratable (in proportion to their respective Percentages) prepayment of such Borrcwer's Notes issued to the other Banks; and (c) a Trustee Bank shall not, by virtue of the operation of Section 2.10, obtain indirectly any benefit which it is prohibited from obtaining directly by clause (a) of this Section 8.07. | ||
SECTION 8.08. | SECTION 8.08. Bindina Effect; Governina Law. | ||
Bindina Effect; Governina Law. | This Agreement is effective among the Borrcwers, the Agent, tue Co-Agent and the Banks which shall, on or prior to the Closing Date, have executed counterparts hereof and shall be binding upon and inure to the benefit of each Borrower, the Agent, the Co-Agent and each such Bank and their respec-tive successors and es sig ns, except that no Borrower shall have the right to assign its rights hereunder or any inter-est herein without the prior written consent of the Banks; provided, however, that in no event shall any Bank which is not a Confirming Bank have any obligation to make any Advance hereunder or otherwise, as at and subsecuent to the Closing Date, be deemed to be a party hereto; crovided, further, however, that no Bank shall be obligated to make its initial Advance hereunder if the Final Aggregate Total Commitment is less than $400,000,000. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York. | ||
This Agreement is effective among the Borrcwers, the Agent, tue Co-Agent and the Banks which shall, on or prior to the Closing Date, have executed counterparts hereof and shall be binding upon and inure to the benefit of each Borrower, the Agent, the Co-Agent and each such Bank and their respec-tive successors and es sig ns, except that no Borrower shall have the right to assign its rights hereunder or any inter-est herein without the prior written consent of the Banks; provided, however, that in no event shall any Bank which is not a Confirming Bank have any obligation to make any Advance hereunder or otherwise, as at and subsecuent to the Closing Date, be deemed to be a party hereto; crovided, further, however, that no Bank shall be obligated to make its initial Advance hereunder if the Final Aggregate Total Commitment is less than $400,000,000. | SECTION 8.09. Execution in Counterparts. This Agreement shall be execu ted in counterparts each of which shall be executed by the Borrowers, the Agent and the Co-Agent and one or more Banks and each of which shall be O | ||
This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York. | 347A DAB | ||
SECTION 8.09. | |||
Execution in Counterparts. | . | ||
This Agreement shall be execu ted in counterparts each of which shall be executed by the Borrowers, the Agent and the Co-Agent and one or more Banks and each of which shall be O 347A DAB | 47 substantially identical except for the identities, Total Com-mitments and other information specifically relating to such Bank or Banks. All such counterparts, when so executed, shall be deemed to be an original and all such counterparts, taken together, shall constitute one and the same agreement. | ||
.47 substantially identical except for the identities, Total Com-mitments and other information specifically relating to such Bank or Banks. | |||
All such counterparts, when so executed, shall be deemed to be an original and all such counterparts, taken together, shall constitute one and the same agreement. | |||
IN WITNESS EHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. | IN WITNESS EHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. | ||
GENERAL PUBLIC UTILITIES CORPORATION | GENERAL PUBLIC UTILITIES CORPORATION By / | ||
*'*' | |||
% s, - | |||
ViCE Pnu t 1 s a c JERSEY CENTRAL POWER & | |||
LIGHT COMPANY | LIGHT COMPANY | ||
[A.%4% | [A By /' .%4% | ||
.Title: '/ ICE Pr ? I' | Title: | ||
: ' T 1474 049 | VICE F;' 6 | ||
.48-.Total Commitment | . Np METROPOLITAN EDISON COMPANY By / h< e, Title: | ||
$65,000,000 CITIBANK, N.A., Individually and as Agent ,/ | VICE PP'! 7 NT PENNSYLVANIA ELECTRIC COMPANY N | ||
/-?y/j ' -W ~ | By f , . , , . - - | ||
. | |||
Energy-East Department, National Banking Group | Title: | ||
$50,000,000 CIIEMICAL BANK, Individually and as,.Co-Acent | '/ ICE Pr ? I' :'T 1474 049 | ||
/[.,q/ /, D'/i;y,9' | . | ||
:' /(- | 48 | ||
- | |||
Public Utili-ties District S (Name of Bank) | . | ||
'By Title: Address: Telex No.: | Total Commitment | ||
.1474 050 e | $65,000,000 CITIBANK, N.A., Individually and as Agent ,/ | ||
.SCHEDULE I SENIOR DEST SENIOR DEBT DOCUMENT AMOUNT CURRENTLY OUTSTANDING GPU Loan Agreement dated as of November 15, 1976, as amended by amendment thereto, dated March 30, 1979 S 39,000,000 3C First Mortcace Bonds Indenture, dated as of March 1, 1946, to Citibank, N.A.(formerly Citibank Farmers Trust Company) as Trustee | / - | ||
$690,560,000 Mortgage and Deed of Trust, dated as of March 1, 1944 from New Jersey Power & Light Company to Morgan Guaranty Trust Company of New York (formerly Guaranty Trust Company of New York) as Trustee S 39,200,000 Debentures Indenture, dated as of October 1, 1963, to Irving Trust Company, as Trustee S 74,203,000 Indenture, dated as of July 1, 1964 f rom New J e rsey Powe r '& | ? y | ||
Light Company to The Chase Manhattan Bank, N.A., as Trustee S 7,800,000 Term Loan Agreement, dated as of May 21, 1979, as amended and restated by amendment dated May 25, 1979 | - - '. | ||
$ 24,000,000 | , | ||
} kl k | By | ||
-.2 O SENIOR DEBT DOCUMENT AMOUNT CURRENTLY OUTSTANDING Other Lona Term Debt Amendment No. 3, dated as of May 20, 1977 to Agreement, dated as of February 16, 1970 with Brown Boveri Corporation | /j ' - f. W ~- - | ||
$ 18,362,170 Mg First Mortcage Bonds Indenture, dated November 1, 1944 to Morgan Guaranty Trust Company of New York ( formerly Guaranty Trust Company of New York) as Trustee | ' | ||
$463,098,377 Debentures | Vice P,res id ant 399 Park Avenue New York, New York 10043 Attention: Energy-East Department, National Banking Group | ||
$ 84,560,000 EE First Mortcage Bonds Mortgage and Deed of Trust dated as of January 1, 1942 to Bankers Trust Company of New York as Trustee | $50,000,000 CIIEMICAL BANK, Individually and as,.Co-Acent | ||
$579,397,895 Indenture, dated as of January 1, 1945 of Northern Pennsylvania Power Co.S 500,000 Indenture dated as of November 1, 1919 of Erie County Electric Company S 74,000 3474 052 | - * ' | ||
..3 SENIOR DEBT DOCUllENT AMOUNT CURRENTLY OUTSTANDING Debentures Indenture, dated as of June 1, 1961 to Chemical Bank (formerly Chemical Bank New York Trust Company) as Trustee S 72,680,000 1, ki k O. | # /.;, Ls:7 A < !/ if,f | ||
..SCHEDLT E II Outstarding Indebtedness Under 2,ines As At May 31, 1979 | / /!, | ||
Total Name of Bank GPU JCP&L Met-Ed Penelec System New York | . s1 ! o/ | ||
$11,400 S 9,120$ 5,000- | / | ||
--- | p,, [. ,q/ /, D'/i;y,9' | ||
4,000 5,152 2,000- | :' / (- 7 | ||
- | ' | ||
4,500 4,352 2,000- | Vice Presicent g 277 Park Avenue New York, New York 10017 Attention: Public Utili-ties District S | ||
--- | (Name of Bank) | ||
4,000 9,352 3,000-Frcedem National Bank | ' | ||
----- | By Title: | ||
$26,400 S53,300 S22,000-New Jersey | Address: | ||
Telex No.: | |||
. | |||
1474 050 e | |||
- | |||
--- | . | ||
- | SCHEDULE I SENIOR DEST SENIOR DEBT DOCUMENT AMOUNT CURRENTLY OUTSTANDING GPU Loan Agreement dated as of November 15, 1976, as amended by amendment thereto, dated March 30, 1979 S 39,000,000 3C First Mortcace Bonds Indenture, dated as of March 1, 1946, to Citibank, N.A. (formerly Citibank Farmers Trust Company) as Trustee $690,560,000 Mortgage and Deed of Trust, dated as of March 1, 1944 from New Jersey Power & Light Company to Morgan Guaranty Trust Company of New York (formerly Guaranty Trust Company of New York) as Trustee S 39,200,000 Debentures Indenture, dated as of October 1, 1963, to Irving Trust Company, as Trustee S 74,203,000 Indenture, dated as of July 1, 1964 f rom New J e rsey Powe r '& Light Company to The Chase Manhattan Bank, N.A., as Trustee S 7,800,000 Term Loan Agreement, dated as of May 21, 1979, as amended and restated by amendment dated May 25, 1979 $ 24,000,000 | ||
-- | } kl k | ||
-- | - | ||
-2,000 2,000 New Jersey Naticnal Bmk | . | ||
--- | 2 O | ||
-- | SENIOR DEBT DOCUMENT AMOUNT CURRENTLY OUTSTANDING Other Lona Term Debt Amendment No. 3, dated as of May 20, 1977 to Agreement, dated as of February 16, 1970 with Brown Boveri Corporation $ 18,362,170 Mg First Mortcage Bonds Indenture, dated November 1, 1944 to Morgan Guaranty Trust Company of New York ( formerly Guaranty Trust Company of New York) as Trustee $463,098,377 Debentures Indenture, dated as of June 1, 1965, to the Marine Midland Bank e | ||
- | (formerly The Marine Midland Trust Company of New York) as Trustee $ 84,560,000 EE First Mortcage Bonds Mortgage and Deed of Trust dated as of January 1, 1942 to Bankers Trust Company of New York as Trustee $579,397,895 Indenture, dated as of January 1, 1945 of Northern Pennsylvania Power Co. S 500,000 Indenture dated as of November 1, 1919 of Erie County Electric Company S 74,000 | ||
---First Nat. State Bark of New Jersey | - | ||
-- | 3474 052 | ||
---2,000 | . | ||
- | . . | ||
--- | 3 SENIOR DEBT DOCUllENT AMOUNT CURRENTLY OUTSTANDING Debentures Indenture, dated as of June 1, 1961 to Chemical Bank (formerly Chemical Bank New York Trust Company) as Trustee S 72,680,000 1, ki k O | ||
,1,000-- | . | ||
-- | . . | ||
_$42,100 S -S -S J2,100 | SCHEDLT E II Outstarding Indebtedness Under 2,ines As At May 31, 1979 (Amounts in Thcusands) g Total Name of Bank GPU JCP&L Met-Ed Penelec System New York Citibark, N.A. $11,400 S 9,120 $ 5,000 - $ 25,520 The Chese Manhattan Bark, N.A. - 17,788 - - | ||
.Page 2 of 3 S3EDU:E II Outstanding Indabtedness Under Lines As At May 31, 1979 (Amounts in Thcusands) | 17,788 Chanical Bark 2,500 4,704 5,000 - 12,204 Marine Midlan$ BarA - N.Y. 4,000 5,152 2,000 - | ||
Total Name of Bank GPU JCP&L Met-Ed Penelec System Pennsylvania Mellon National Bank, N.A. | 11,152 Barkers Trust Co. - | ||
S 2,000$S 2,000 S 4,000 | 1,416 1,000 - 2,416 Manufacturers Hancver Trust Co. 4,500 4,352 2,000 - | ||
4,000 4,000 | 10,852 Morgan Guaranty Tn:st Co. of N.Y. -- 1,416 4,000 - 5,416 Irving Trust Co. 4,000 9,352 3,000 - | ||
2,000 4,000-6,000 | 16,352 Frcedem National Bank - - - - - | ||
of Pennsylvania 5,000- | Tot.01 Nea York $26,400 S53,300 S22,000 - $101,700 New Jersey Fidelity Unicn Trust slo. - S 3,000 - - S 3,000 Midlantic National Bark - | ||
2,000-2,000 | 3,000 - - 3,000 Nea Jersey Bark, N.A. - | ||
2,000 2,000 | 3,000 - - | ||
1,000 1,000 | 3,000 $ | ||
1,000 1,000 | Naticnal Cc:= unity Bark - | ||
---2,000 2,000 FlYft Valley Bark | 3,000 - - 3,000 United Jersey Bark - 4,000 - - 4,000 The Central Jersey Bark & Trust - | ||
-----Northeastern Bark of Penrsylvania | 3,000 - - | ||
-----Northsest Pa. Bark & Trust (Penna.)-----Pennsylvania Bark & Trust (Perna.) | 3,000 The First Jersey National Bark - | ||
-----Security - Pecples Trust Co. - | 1,500 - - 1,500 Heritage Bark North, N.A. - | ||
Erie (Perna. ) | 2,500 - - 2,500 The Nat. Stata Bark of Eli::abeth - | ||
1,000 1,000 | 2,500 - - 2,500 Colonial First Naticnal Bark - 2,000 - - | ||
-----CCiB Bark , N. A. | 2,000 New Jersey Naticnal Bmk - 2,000 - - | ||
250-250 | 2,000 The Bank of Nea Jersey - | ||
---400 400 Nazareth National Bank & Trust Co. | 1,000 - - | ||
-----Central Ccunties Bark of Altocna | 1,000 United Counties Trust Co. - | ||
-----Clearfield Bark & Trust Co. | 1,500 - - 1,500 First Nat. State Bark of West Jersey - 2,000 - - | ||
-----Unicn Bank & Trust (Perna.) | 2,000 | ||
-----E.:n Naticnal Bank & Trust Co. | - - - | ||
-----Fact.ers Bark & Trust Co. | First Nat. State Bark of New Jersey - - | ||
of Hanover | First Merchants Naticnal Bank - 500 - - | ||
-----1474 055 Page 3 of 3 SCHEDCLE II Outstanding Indebtedness Under Lines | 500 Frarklin State Bark - 2,000 - - | ||
Short-Term Debt Outstandina 9 5/31/79 Total Name of Bank GPU JCP&L Met-Ed Penelec System Pennsvivania (cent'd) | 2,000 Summit and Elizabeth Trust Co. - 1,000 - - 1,000 American Naticnal Bark & Trust - 2,000 - - 2,000 First Naticnal Bank of Solth Jersey - | ||
,1,000 - - 1,000 The Hunterden Ccunty National Bark of Flemin; ten - 700 - - | |||
700 First National State Bark of Northwest Jersey - | |||
-----Mansfield (Penra.) | 500 - - | ||
-----The Moxhcm Naticnal BarA,----- | 500' Ocean Ccunty Nat .onal Bank of i | ||
---Warren National BarA (Penna.; | Point Pleasant - 400 - - | ||
-----Lebanon Ccunty Trust Co. | __ | ||
-----Penn Central Naticnal Bark - | 400 | ||
-----Huntimdon-----The Merchants Naticnal Bank | '1btal New Jersey S - _$42,100 S - S - S J2,100 974 09 | ||
----- | |||
-----Keystone National BarA | . | ||
-----Dale Naticnal Bank | Page 2 of 3 S3EDU:E II Outstanding Indabtedness Under Lines As At May 31, 1979 (Amounts in Thcusands) | ||
-----The Savings and Trust Co. - | Total Name of Bank GPU JCP&L Met-Ed Penelec System Pennsylvania Mellon National Bank, N.A. S 2,000 $ - | ||
-----Indiara (Penna.) | S | ||
-----Unicn Naticnal Bark & | - | ||
-----Trust Co. Huntingten (Penna. ) | S 2,000 S 4,000 Pittsburgh National BarA (Penna.) - - - | ||
-----The Valley Trust Co. of Palmyra | 4,000 4,000 First Penrsylvania Bark, N.A. 2,000 - | ||
-----Unibank Bark & Trust Co. | 4,000 - | ||
-----Deposit Naticnal Bank | 6,000 Arerican Bark atd Trust Cc. | ||
-----Hollidaysburg Trust Co. | of Pennsylvania - - | ||
-----Smerset Trust Co. | 5,000 - | ||
-----Union Barking & Trust Co. | 5,000 The Fidelity Bark 2,000 - | ||
-----Dubois (Perna.) | 3,000 - | ||
-----Hmer City State Ban'c | 5,000 National Cent .al Bank - - | ||
-----National Bark of Western | 2,500 - | ||
-----Pernsylvania - BAerlin | 2,500 Provident Ma*icnal Bank - - | ||
-----Hartley National BarA - | 2,000 - | ||
-----Bedford-----Total Fernsylvania S 6,000 S-$21,700$14,700 S 42,4t'0 Other Hartford Nation Bark | 2,000 Bark of Pernsylvania - - | ||
& Trust Co. | 1,000 - | ||
S -S 1,000 S S -S 1,000 | 1,000 Industrial Valley Bark & | ||
$32,400 S96,400 S43,7g$14,700 J187,200 1474 0 % | Trust Co. - - | ||
--EXHIBIT A-1 PROMISSORY NOTE | 2,000 - | ||
* Dated 1 9__, | 2,000 Equibark, N. A. - - - | ||
2,000 2,000 United States Natienal (Perna.) - - - | |||
The " Alternate Base Rate" means the higher of: (a)The base rate of Citibank, N.A. | 1,000 1,000 The York Bark ard Trust Co. - - | ||
on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b)1/2 of one percent above the latest three-week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, The date or the initial Borrowing or the appropriate | 1,000 - | ||
1,000 F g Naticnal of Pa. - Eria - - - | |||
2,000 2,000 FlYft Valley Bark - - - - - | |||
, | Northeastern Bark of Penrsylvania - - | ||
..2 | 500 - | ||
This Promissory Note is one.of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borrcwer, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A., as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. | 500 Mid -State Bark & Trust (Perna. ) - - - - - | ||
The Credit Agreement, among other th ings , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. | Northsest Pa. Bark & Trust (Penna.) - - - - - | ||
GENERAL PUBLIC UTILITIES g | Pennsylvania Bark & Trust (Perna.) - - - | ||
.EXHIBIT A-2 PROMISSORY NOTE | 500 500 First Seneca Bank & Trust (Penna. ) - - - - - | ||
*Duted 19__ | Johnstcwn Bark & Trust Co. | ||
the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** | (Penna.) - - - | ||
1,000 1,000 The National Bank of Bcyertcwn - - - - - | |||
Security - Pecples Trust Co. - | |||
on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b)1/2 of one percent above the latest three- | Erie (Perna. ) - - - | ||
~ week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New Srk or, if such publication shall be suspen?.ed or terL nated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next | 1,000 1,000 The W5cnirg Naticnal Bark of Wilkes Barre - - - - - | ||
-higher 1/4 of one percent, 1474 059*The date of the initial Borrowing or the appropriate New Note Issue Date. | CCiB Bark , N. A. - - | ||
**October 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981, or October 1, 1981, as appropriate. | 250 - | ||
.2 | 250 Lebarrn Valley Naticnal Bank - - | ||
This Promissory Note is onc of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borr,wer, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A., as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. | 250 - | ||
The Credit Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. | 250 Laurel National Bank - - - | ||
JERSEY CENTRAL POWER & LIGHT g COMPANY W By Title:!474 080 0 | 500 500 National Bark of the Ccr=creeealth - - - | ||
-__- | 400 400 Nazareth National Bank & Trust Co. - - - - - | ||
.* Dated 19__ | Central Ccunties Bark of Altocna - - - - - | ||
19__, | Clearfield Bark & Trust Co. - - - - - | ||
Unicn Bank & Trust (Perna.) - - - - - | |||
on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b)1/2 of one percent above the latest three-week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, 74 061*The date of the initial Borrowing or the appropriate | E. :n Naticnal Bank & Trust Co. - - - - - | ||
, New Note Issue Date. | Fact.ers Bark & Trust Co. | ||
**October 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981, or October 1, 1981, as appropriate. | of Hanover - - - - - | ||
-..2 | 1474 055 | ||
This Promissory Note is one of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borrower, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A., as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. | |||
The Credit Agreement, among other things , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. | Page 3 of 3 SCHEDCLE II Outstanding Indebtedness Under Lines As At May 31, 1979 h | ||
METROPOLITAN EDISON COMPANY By Title:.!474 062.O | (Amounts in Thcurands) | ||
.-__..EXHIBIT A-4 PROMISSORY NOTE | Short-Term Debt Outstandina 9 5/31/79 Total Name of Bank GPU JCP&L Met-Ed Penelec System Pennsvivania (cent'd) | ||
.* Dated 19 _ | Lafayette Trust Bark $ - | ||
19__, | S - | ||
S | |||
}October 1, 1979, April 1, 1980, October 1, 1980, | - | ||
__.2 O but in no event higher than the maximum race permitted by law.Both principal and interest are payable in lawful money of the United States of America to Citibank, N. A. , as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds. | S - | ||
This Promissory Nc'e is one of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 ( the " Credit Agreement"), among the Borrower, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A., as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Locn Documents referred to therein. | S | ||
The Credit Agreement, among other things , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments en account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. | - | ||
Ccresanwealth Bank & Trust Co. - - - - - | |||
Mansfield (Penra.) - - - - - | |||
PRELI:1INARY STATEMENT. | The Moxhcm Naticnal BarA, - - - - - | ||
[The Banks, the Agent and the Co-Agent have entered into a Revolving Credit Agreement, dated as of J' ne | Johnstcwn (Penna.) - - - | ||
It is a condition precedent to the obligation of the Banks to make Advances under the Credit Agreement that the Guarantor, as the beneficial owner of 100 percent of the outstanding shares of common stock of JC, ME and PE, shall have executed and delivered this Guaranty.] | 300 300 Warren National BarA (Penna.; - - - - - | ||
[ Hartford National Bank and Citibank, N.A., have agreed, in anticipation of this Guaranty, to modify the terms of the indebtedness of GPU Service Corporation ("ServCo") to them pursuant to that certain Letter of Intent, dated April 4, 1978, from ServCo to Hartford National Bank and Citibank, N.A., with respect to the acquisition and improvement of certain property in Parsippany, New Jersey (the "Parsippany Agreement"). | Lebanon Ccunty Trust Co. - - - - - | ||
Pursuant to that certain Loan Agreement, dated December 31, 1973, as amended by an Amendment, dated November 30, 1977, between ServCo and The Fidelity Bank with respect to the acquisition and improvement of certain property in Reading, Pennsylvania, ServCo is indebted to The Fidelity Bank (the " Read ing Agreement"; together with the Parsippany Agreement, the " Credit Agreement", the promissory notes isued under the Credit Agreement being the " Notes").] | Penn Central Naticnal Bark - - - - - - | ||
Huntimdon - - - - - | |||
The Merchants Naticnal Bank - - - - - | |||
of Bangor - - | |||
200 - | |||
200 Cu.eunwealth National Bank - - - - - | |||
Keystone National BarA - - - - - | |||
Dale Naticnal Bank - - - - - | |||
The Savings and Trust Co. - - - - - - | |||
Indiara (Penna.) - - - - - | |||
Unicn Naticnal Bark & - - - - - | |||
Trust Co. Huntingten (Penna. ) - - - - - | |||
The Valley Trust Co. of Palmyra - - - - - | |||
Unibank Bark & Trust Co. - - - - - | |||
Deposit Naticnal Bank - - - - - | |||
Hollidaysburg Trust Co. - - - - - | |||
Smerset Trust Co. - - - - - | |||
Union Barking & Trust Co. - - - - - | |||
Dubois (Perna.) - - - - - | |||
Hmer City State Ban'c - - - - - | |||
National Bark of Western - - - - - | |||
Pernsylvania - BAerlin - - - - - | |||
Hartley National BarA - - - - - - | |||
Bedford - - - - - | |||
Total Fernsylvania S 6,000 S- $21,700 $14,700 S 42,4t'0 Other Hartford Nation Bark | |||
& Trust Co. S - S 1,000 S - | |||
S - S 1,000 Total othar S - S 1,000 S - | |||
S - S 1,C00 | |||
@ | |||
Total Short-Term Debt $32,400 S96,400 S43,7g $14,700 J187,200 1474 0 % | |||
- - | |||
EXHIBIT A-1 PROMISSORY NOTE | |||
* Dated , 1 9__, | |||
FOR VALUE RECEIVED, GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the " Borrower"), | |||
HEREBY PROMISES TO PAY to the order of [NAME OF BANK] (the | |||
" Bank") the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** , | |||
19__, together with interest on the principal amount from ti,me to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to (a) 105G of the Alternate Base Rate on that portion of such principal amount which is not in excess of the Bank's Percentage (as defined in the Credit Agreement) of $30,000,000, (b) 108% of the Alternate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $30,000,000 but not in excess of the Bank's Percentage of $60,000,000 and (c) 111% of the Alter-nate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $60,000,000. | |||
The " Alternate Base Rate" means the higher of: | |||
(a) The base rate of Citibank, N.A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, | |||
* The date or the initial Borrowing or the appropriate New Note Issue Date. | |||
** October 1, 1979, April 1, 1980, October 1, 1980, 474 057 April 1, 1981, or October 1, 1981, as appropriate. | |||
, | |||
. . | |||
2 but in no event higher than the maximum rate permitted by O | |||
law. | |||
Both principal and interest are payable in lawful money of the United States of America to Citibank, N. A. , as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds. | |||
This Promissory Note is one.of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borrcwer, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A., | |||
as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. The Credit Agreement, among other th ings , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. | |||
GENERAL PUBLIC UTILITIES CORPORATION g | |||
By Title: | |||
1474 058 O | |||
. | |||
EXHIBIT A-2 PROMISSORY NOTE | |||
*Duted , | |||
19__ | |||
FOR VALUE RECEIVED, JERSEY CENTRnL POWER & LIGHT COMPANY, a New Jersey corporation (the " Borrower"), HEREBY PROMISES TO PAY to the order of [NAME OF BANK] (the " Bank") | |||
the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** , | |||
19__, tegether with interest on the principal amount from time to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to (a) 105% of the Alternate Base Rate on that portion of such principal amount which is not in excess of the Bank's Percentage (as defined in the Credit Agreement) of $35,000,000, (b) 108% of the Alternate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $35,000,000 but not in excess of the Bank's Percentage of $70,000,000 and (c) 111% of the Alter-nate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of S70,000,000. The | |||
" Alternate Base Rate" means the higher of: | |||
(a) The base rate of Citibank, N. A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three- | |||
~ week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New Srk or, if such publication shall be suspen?.ed or terL nated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next | |||
- | |||
higher 1/4 of one percent, 1474 059 | |||
* The date of the initial Borrowing or the appropriate New Note Issue Date. | |||
** October 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981, or October 1, 1981, as appropriate. | |||
. | |||
2 but in no event higher than the maximum rate permitted by O | |||
law. | |||
Both principal and interest are payable in lawful money of the United States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds. | |||
This Promissory Note is onc of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borr,wer, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A., | |||
as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. The Credit Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. | |||
JERSEY CENTRAL POWER & LIGHT g COMPANY W By Title: | |||
!474 080 0 | |||
- __ | |||
. - | |||
EXHIBIT A-3 PROMISSORY NOTE | |||
. | |||
* Dated , | |||
19__ | |||
FOR VALUE RECEIVED, METROPOLITAN EDISON COMPANY, a Pennsylvania corporation (the " Borrower"), HEREBY PROMISES TO PAY to the order of [NAME OF BANK] (the " Bank") the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** , 19__, | |||
together with interest on the principal amount from time to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to (a) 105% of the Alternate Base Rate on that portion of such principal amount which is not in excess of the Bank's Percentage (as defined in the Credit Agreement) of $25,000,000, (b) 108% of the Alternate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $25,000,000 but not in excess of the Bank's Percentage of S50,000,000 and (c) 111% of the Alter-nate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $50,000,000. The | |||
" Alternate Base Rate" means the higher of: | |||
(a) The base rate of Citibank, N.A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, 74 061 | |||
* The date of the initial Borrowing or the appropriate | |||
, | |||
New Note Issue Date. | |||
** October 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981, or October 1, 1981, as appropriate. | |||
- | |||
. | |||
. | |||
2 but in no event higher than the maximum rate permitted by O | |||
law. | |||
Both principal and interest are payable in lawful money of the United States of America to Citibank, N. A. , as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds. | |||
This Promissory Note is one of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borrower, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A., | |||
as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. The Credit Agreement, among other things , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. | |||
METROPOLITAN EDISON COMPANY By Title: | |||
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!474 062 | |||
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O | |||
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EXHIBIT A-4 PROMISSORY NOTE | |||
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* Dated , | |||
19 _ | |||
FOR VALUE RECEIVED , PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation (the " Borrower"), HEREBY PROMISES TO PAY to the order of [NAME OF BANK] (the " Bank") the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** , 19__, | |||
together with interest on the principal amount from time to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to (a) 105% of the Alternate Base Rate on that portion of such principal amount which is not in excess of the Bank's Percentage (as defined in the Credit Agreement) of $10,000,000, (b) 108% of the Alternate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of S10,000,000 but not in excess of the Bank's Percentage of $20,000,000 and (c) 111% of the Alter-nate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of S20,000,000. The | |||
" Alternate Base Rate" means the higher of: | |||
(a) The base rate of Citibank, N.A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of Jew York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, | |||
* The date of the initial Borrowing or the appropriate New Note Issue Date. | |||
} | |||
** October 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981, or October 1, 1981, as appropriate. | |||
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2 O | |||
but in no event higher than the maximum race permitted by law. | |||
Both principal and interest are payable in lawful money of the United States of America to Citibank, N. A. , as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds. | |||
This Promissory Nc'e is one of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 ( the " Credit Agreement"), among the Borrower, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A., | |||
as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Locn Documents referred to therein. The Credit Agreement, among other things , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments en account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. | |||
PENNSYLVANIA ELECTRIC COMPANY h By Title: | |||
1,474 064 O | |||
_ __. | |||
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. EXHIBIT B GUARANTY GUARANTY, dated as of June 20, 1979, made by GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the | |||
" Guarantor"), in favor of [the Banks (the " Banks") parties to the Credit Agreement (as defined below), CITIBANK, N.A., as agent (the " Agent") for the Banks and CHEMICAL BANK, as co-agent (the "Co-Agent") for the Banks] [ Hartford National Bank and The Fidelity Bank (the " Banks").] | |||
PRELI:1INARY STATEMENT. [The Banks, the Agent and the Co-Agent have entered into a Revolving Credit Agreement, dated as of J' ne 15, 1979 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the | |||
" Credit Agreement", the terms defined therein and not other-wise defined herein being used herein as therein defined), | |||
with the Guarantor, JERSEY CENTRAL PCNER & LIGHT COMPANY, a New Jersey corporation, METROPOLITAN EDISON COMPANY, a Pennsylvania corporation, and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation. It is a condition precedent to the obligation of the Banks to make Advances under the Credit Agreement that the Guarantor, as the beneficial owner of 100 percent of the outstanding shares of common stock of JC, ME and PE, shall have executed and delivered this Guaranty.] | |||
[ Hartford National Bank and Citibank, N.A., have agreed, in anticipation of this Guaranty, to modify the terms of the indebtedness of GPU Service Corporation ("ServCo") to them pursuant to that certain Letter of Intent, dated April 4, 1978, from ServCo to Hartford National Bank and Citibank, N.A., with respect to the acquisition and improvement of certain property in Parsippany, New Jersey (the "Parsippany Agreement"). Pursuant to that certain Loan Agreement, dated December 31, 1973, as amended by an Amendment, dated November 30, 1977, between ServCo and The Fidelity Bank with respect to the acquisition and improvement of certain property in Reading, Pennsylvania, ServCo is indebted to The Fidelity Bank (the " Read ing Agreement"; together with the Parsippany Agreement, the " Credit Agreement", the promissory notes isued under the Credit Agreement being the " Notes").] | |||
NOW, THEREFORE, in consideration of the premises (and in order to induce the Banks to make Advances under the Credit Agreement] , the Guarantor hereby agrees as follows: | NOW, THEREFORE, in consideration of the premises (and in order to induce the Banks to make Advances under the Credit Agreement] , the Guarantor hereby agrees as follows: | ||
} $] h 2 O SECTION 1. | } $] h | ||
Guarantv.The Guarantor hereby uncon-ditionally guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of (JC] (ME] [PE] [GPU Service Corporation] (the"Obligor") now or hereafter existing under the Credit Agree-ment and the Notes, whether for principal, interest, fees, expenses or otherwise (such obligations being the "Obliga-tions"), and any and all expenses incurred by (the Agent, the Co-Agent or] the Banks in enforcing any rights under this Guaranty][; provided, however, that the Guarantor shall make no payment witn respect to tne Obligations under this Guar-anty, so long as the Guarantor shall have any obligations with respect to the JC Guaranty, the MC Guaranty or the PE Guaranty (as each such term is defined in that certain Revolving Credit Agreement, dated as of June 15, 1979, among the Guarantor, Jersey Central Power & Light Company, Metro-politan Edisen Company and Pennsylvania Electric Company, the banks parties thereto and Citibank, as Agent and Chemical Bank, as Co-Agent for such Banks) as the same may from time to time be amended, modified or supplemented). | |||
SECTION 2. | 2 O | ||
Guarantv Absolnte. | SECTION 1. Guarantv. The Guarantor hereby uncon-ditionally guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of (JC] (ME] [PE] [GPU Service Corporation] (the "Obligor") now or hereafter existing under the Credit Agree-ment and the Notes, whether for principal, interest, fees, expenses or otherwise (such obligations being the "Obliga-tions"), and any and all expenses incurred by (the Agent, the Co-Agent or] the Banks in enforcing any rights under this Guaranty][; provided, however, that the Guarantor shall make no payment witn respect to tne Obligations under this Guar-anty, so long as the Guarantor shall have any obligations with respect to the JC Guaranty, the MC Guaranty or the PE Guaranty (as each such term is defined in that certain Revolving Credit Agreement, dated as of June 15, 1979, among the Guarantor, Jersey Central Power & Light Company, Metro-politan Edisen Company and Pennsylvania Electric Company, the banks parties thereto and Citibank, as Agent and Chemical Bank, as Co-Agent for such Banks) as the same may from time to time be amended, modified or supplemented). | ||
The Guarantor cuar-antees that the Obligations will oe paid strictly in accord- | SECTION 2. Guarantv Absolnte. The Guarantor cuar-antees that the Obligations will oe paid strictly in accord-ance with the terms of the Credit Agreement and the Notes. lll The liability of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of: | ||
The liability of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of: (i)any lack of validity or enforceability of the Credit Agreement, the Notes or any other agreement or instrument relating thereto;(ii)any change ir. the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from the Credit Agreement or the Notes;(iii)any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations; or (iv)any other circumstance which might otherwise constitute a defense available to, or a discharge of,'the Obligor in respect of the Obligations or the Guaran-tor in respect of this Guaranty, O 1474 Ob6 | (i) any lack of validity or enforceability of the Credit Agreement, the Notes or any other agreement or instrument relating thereto; (ii) any change ir. the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from the Credit Agreement or the Notes; (iii) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations; or (iv) any other circumstance which might otherwise constitute a defense available to, or a discharge of, | ||
.3 except to the extent tha this Guaranty may finally be deter-mined to be unenforceable as contrary to public policy. | ' | ||
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by | the Obligor in respect of the Obligations or the Guaran-tor in respect of this Guaranty, O | ||
1474 Ob6 | |||
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3 except to the extent tha this Guaranty may finally be deter-mined to be unenforceable as contrary to public policy. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by | |||
[the Agent, the Co-Agent or) any Bank upon the insolvency, bankruptcy or reorganization of the Obligor or otherwise, all as though such paydent had not been made. | [the Agent, the Co-Agent or) any Bank upon the insolvency, bankruptcy or reorganization of the Obligor or otherwise, all as though such paydent had not been made. | ||
SECTION 3. | SECTION 3. Waiver. The Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guar-anty and any requirement that [the Agent, the Co-Agent or] | ||
Waiver.The Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guar-anty and any requirement that [the Agent, the Co-Agent or] | |||
any Bank exhaust any right or take any action against the obligor or any other Person or any collateral. | any Bank exhaust any right or take any action against the obligor or any other Person or any collateral. | ||
SECTION 4. | SECTION 4. Subrocation. The Guarantor will not exercise any rights whien it may acquire by way of subroga-tion under this Guaranty, by any payment made hereunder or otherwise, until all the Obligations shall have been paid in full. If any amount shall be paid to ".he Guarantor on ac-count of such subrogation rights at any time when all the Ob-ligations shall not have been paid in full, such amount shall be held in trust for the benefit of [the Agent, the Co-Agent and] the Banks and shall forthwith be paid to the [ Agen t] | ||
Subrocation. | [ Banks] to be credited and applied upon the Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement. If (i) the Guarantor shall make payment to [the Agent, the Co-Agent or] the Banks of all or any part of the Obligations and (ii) all the obligations shall be paid in full, [the Agent, the Co-Agent and] the Banks will, at the Guarantor's request, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting from such payment by ;he Guarantor. | ||
The Guarantor will not exercise any rights whien it may acquire by way of subroga-tion under this Guaranty, by any payment made hereunder or otherwise, until all the Obligations shall have been paid in full.If any amount shall be paid to ".he Guarantor on ac-count of such subrogation rights at any time when all the Ob-ligations shall not have been paid in full, such amount shall be held in trust for the benefit of [the Agent, the Co-Agent and] the Banks and shall forthwith be paid to the [ Agen t] | SECTION 5. Amendments, Etc. No amendment or waiv~er of any provision of this Guaranty nor consent to any departure by the Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by | ||
[ Banks] to be credited and applied upon the Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement. | |||
If (i) the Guarantor shall make payment to [the Agent, the Co-Agent or] the Banks of all or any part of the Obligations and (ii) all the obligations shall be paid in full, [the Agent, the Co-Agent and] the Banks will, at the Guarantor's request, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting from such payment by ;he Guarantor. | |||
SECTION 5. | |||
Amendments, Etc. | |||
No amendment or waiv~er of any provision of this Guaranty nor consent to any departure by the Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by | |||
[the Agent, the Co-Agent and] the Banks. | [the Agent, the Co-Agent and] the Banks. | ||
!474 067 | !474 067 | ||
..4-.SECTION 6. | |||
Addresses for Notices. | . | ||
All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Guarantor, mailed or telegraphed or delivered to it, addressed to it at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention of Vice President and Chief Financial Officer, if to [the Agent, the Co-Agent or] any Bank, mailed or delivered to it, addressed to it at the address of [the Agent, the Co-Agent or] such Bank (as the case may be) specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Sectien. | . | ||
All such notices and other communications shall, when mailed or telegraphed, respectively, be effective when deposited in the mails or delivered to the telegraph company, respectively, addressed as aforesaid. | 4 | ||
SECTION 7. | - | ||
No Waiver; Remedies. | . | ||
No f ailure on the part of [the Agent, the Co-Agent or) any Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. | SECTION 6. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Guarantor, mailed or telegraphed or delivered to it, addressed to it at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention of Vice President and Chief Financial Officer, if to [the Agent, the Co-Agent or] any Bank, mailed or delivered to it, addressed to it at the address of [the Agent, the Co-Agent or] such Bank (as the case may be) specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Sectien. All such notices and other communications shall, when mailed or telegraphed, respectively, be effective when deposited in the mails or delivered to the telegraph company, respectively, addressed as aforesaid. | ||
The remedies herein provided are cumulative and not exclusive of any reme-dies provided by law. | SECTION 7. No Waiver; Remedies. No f ailure on the part of [the Agent, the Co-Agent or) any Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any reme-dies provided by law. | ||
SECTION 8. | SECTION 8. Richt_of Set-off. Upon [(i)] the occur-rence and during the continuance of any Event of Default [and (ii) the making of the request or the granting of the consent specified by Section 6.01 of the Credit Agreement to author-ize the Agent to declare the Notes due and payable pursuant to the provisions of said Section 6.01], each Bank is hereby authorized at any time and from time to time, without notice to the Guarantor (any such notico being expressly waived by the Guarantor), to set off and apply any ar.a all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Guaran-tor against any and all of the obligations of the Guarantor now or hereafter existing under this Guaranty, irrespective of whether or not such Bank shall have made any demand under this Guaranty and although such obligations may be contingent and unmatured. Each Bank agrees promptly to notify the Guar-antor after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-of f and application. The rights of each Bank under this Section are in addition to other rights and remedies ( intiud ing , without limitat ion , | ||
Richt_of Set-off. | - | ||
Upon [(i)] the occur-rence and during the continuance of any Event of Default [and (ii) the making of the request or the granting of the consent specified by Section 6.01 of the Credit Agreement to author-ize the Agent to declare the Notes due and payable pursuant to the provisions of said Section 6.01], each Bank is hereby authorized at any time and from time to time, without notice to the Guarantor (any such notico being expressly waived by the Guarantor), to set off and apply any ar.a all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Guaran-tor against any and all of the obligations of the Guarantor now or hereafter existing under this Guaranty, irrespective of whether or not such Bank shall have made any demand under this Guaranty and although such obligations may be contingent and unmatured. | other rights of set-off) which such Bank may have. | ||
Each Bank agrees promptly to notify the Guar-antor after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-of f and application. | llh TA7A Ob8 | ||
The rights of each Bank under this Section are in addition to other rights and remedies ( intiud ing , without limitat ion , | |||
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..5 SECTION 9. | . | ||
Continuino Guaranty- Transfer of Notes. | 5 SECTION 9. Continuino Guaranty- Transfer of Notes. | ||
This Guaranty is a continuing guaranty and shall (i) remain in full force and ef fect until payment in full [(after the Termination Date)] of the Obligations and all other amounts payable under this Guaranty, (ii) be binding upon the Guaran-tor, its successors and assigns, and (iii) inure to the bene-fit of and be enf orceable by the Banks [, the Agent, the Co-Agent] and their respective successors, transferees and assigns.Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note held by it to any other Person, and such other Person shall thereupon become vested with all the rights in respect thereof granted to sucn Bank herein or otherwise[, subject, however, to the provisions of Article VII (concerning the Agent) of the Credit Agreement] . | This Guaranty is a continuing guaranty and shall (i) remain in full force and ef fect until payment in full [(after the Termination Date)] of the Obligations and all other amounts payable under this Guaranty, (ii) be binding upon the Guaran-tor, its successors and assigns, and (iii) inure to the bene-fit of and be enf orceable by the Banks [, the Agent, the Co-Agent] and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note held by it to any other Person, and such other Person shall thereupon become vested with all the rights in respect thereof granted to sucn Bank herein or otherwise[, subject, however, to the provisions of Article VII (concerning the Agent) of the Credit Agreement] . | ||
SECTION 10. | SECTION 10. Governinc Law. This Guaranty shall be governed my, and construed in accordance with, the laws of the State of New York. | ||
Governinc Law. | |||
This Guaranty shall be governed my, and construed in accordance with, the laws of the State of New York. | |||
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its of ficer thereunto duly authorized as of the date first above written. | IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its of ficer thereunto duly authorized as of the date first above written. | ||
GENERAL PUBLIC UTILITIES CORPORATION By Title: 1474 069. | GENERAL PUBLIC UTILITIES CORPORATION By Title: | ||
.EXHIBIT C PLEDGE AGREEMENT dated as of June 20, 1979, made by GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corpora-tion (the "Pledgor"), to CHEMICAL BANK as agent (the " Agent") | 1474 069 | ||
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EXHIBIT C PLEDGE AGREEMENT dated as of June 20, 1979, made by GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corpora-tion (the "Pledgor"), to CHEMICAL BANK as agent (the " Agent") | |||
for the banks parties to the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement (each as hereinafter defined); | for the banks parties to the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement (each as hereinafter defined); | ||
PRELIMINARY STATEMENTS: | PRELIMINARY STATEMENTS: | ||
(1)The Pledgar is the owner of the shares (the" Pledged Shares") of stock described in Schedule I hereto and issued by the corporations named therein. | (1) The Pledgar is the owner of the shares (the | ||
(2)Certain banks, CITIBANK, N.A., as agent (the" Credit Agreement Agent") and CHEMICAL BANK, as co-agent, have entered into a Revolving Credit Agreement, dated as of June 15, 1979 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the " Credit Agreement", the terms defined therein and not otherwise de-fined herein being used herein as therein defined), with the Pledgor, JERSEY CENTRAL PCWER & LIGHT COMPANY, a New Jersey corporation, METROPOLITAN EDISON CCMPANY, a Pennsylvania cor-poration, and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation; certain banks and Citibank, N. A. , as agent, (the"GPU Loan Agreement Agent") are parties to the GPU Loan Agree-ment.Hartford National Bank is a party to that certain Letter of Intent, dated April 4, 1978, as amended, from GPU Service Corporation ("ServCo'') with respect to the acquis i-tion and improvement of certain property located in Parsippany, New Jersey (the "Parsippiny Agreement"); and The Fidelity Bank is a party to that certain Loan Agreement, dated Decem-ber'31, 1973, as amended bi an Amendment, dated November 30, 1977, with ServCo with respect to the acquisition and improve-ment of certain property located in Reading, Pennsylvania (the" Reading Agreement") (the banks parties to one or more of the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement being the " Banks"). | " Pledged Shares") of stock described in Schedule I hereto and issued by the corporations named therein. | ||
It is a condition precedent to the obligations of the Banks to make Advances to the Borrowers under the Credit Agreement and to the effectiveness of the GPU Loan Agreement Restatement that the Pledgor shall have made the pledge contemplated by this Agreement. | (2) Certain banks, CITIBANK, N.A., as agent (the | ||
The Parsippany Agreement has been modified in anticipation of the pledge contemplated by this Agreement. | " Credit Agreement Agent") and CHEMICAL BANK, as co-agent, have entered into a Revolving Credit Agreement, dated as of June 15, 1979 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the " Credit Agreement", the terms defined therein and not otherwise de-fined herein being used herein as therein defined), with the Pledgor, JERSEY CENTRAL PCWER & LIGHT COMPANY, a New Jersey corporation, METROPOLITAN EDISON CCMPANY, a Pennsylvania cor-poration, and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation; certain banks and Citibank, N. A. , as agent, (the "GPU Loan Agreement Agent") are parties to the GPU Loan Agree-ment. Hartford National Bank is a party to that certain Letter of Intent, dated April 4, 1978, as amended, from GPU Service Corporation ("ServCo'') with respect to the acquis i-tion and improvement of certain property located in Parsippany, New Jersey (the "Parsippiny Agreement"); and The Fidelity Bank is a party to that certain Loan Agreement, dated Decem-ber'31, 1973, as amended bi an Amendment, dated November 30, 1977, with ServCo with respect to the acquisition and improve-ment of certain property located in Reading, Pennsylvania (the | ||
Pursuant to the Reading Agreement, Se rvCo , a wholly-owned subsidiary of the Pledgor, is indebted to The Fidelity Bank.)h]$ | " Reading Agreement") (the banks parties to one or more of the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement being the " Banks"). It is a condition precedent to the obligations of the Banks to make Advances to the Borrowers under the Credit Agreement and to the effectiveness of the GPU Loan Agreement Restatement that the Pledgor shall have made the pledge contemplated by this Agreement. The Parsippany Agreement has been modified in anticipation of the pledge contemplated by this Agreement. | ||
.._- | Pursuant to the Reading Agreement, Se rvCo , a wholly-owned subsidiary of the Pledgor, is indebted to The Fidelity Bank. | ||
SECTION 1. | )h]$ | ||
Pledge.The Pledgor hereby pledges to the Agent for its benefit, the benefit of the Credit Agree-ment Agent, the GPU Loan Agreement Agent and the ratable (in accordance with the Indebtedness of the Borrowers to the Banks outstanding under the Credit Agreement, the GPU Loan Agreement the Parsippany Agreement and the Reading Agreement) benefit of the Banks, and grants to the Agent for its benefit, the benefit of the Credit Agreement Agent, the GPU Loan Agree-ment Agent and the ratable benefit of the Banks a security interest in, the following (the " Pledged Collateral"): (i)the Pledged Shares and the certificates repre-senting the Pledged Shares, and all dividends, cash, in-struments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares;(ii)all additional shares of stock of any issuer of the Pledged Shares from time to time acquired by the Pledgor in any manner, and the certif icates representing such additional shares, and all dividends, cash, instru-ments and other property from time to time received, re-ceivable or otherwise distributed in respect of or in exchange for any or all of such shares; and (iii) any and all proceeds of the foregoing. | |||
SECTION 2. | . ._ | ||
Security for Oblications. | . - | ||
This Agree-ment secures the payment of all obligations of the Borrowers now or hereafter existing under the Credit Agreement, the notes issued thereunder, the GPU Loan Agreement, the promis-sory notes issued thereunder, the Parsippany Agreement, the promissory note issued thereunder, the Reading Agreement and the premissory note issued thereunder (all such premissory notes being referred to herein, collectiv ely , as the " Notes"), whether for principal, interest, fees, expenses or otherwise, and all obligations of the Pledgor now or hereaf ter existing under the Guaranties or this Agreement (all such obligations of the Borrower and the Pledgor being the " Obligations"). | 2 | ||
SECTION 3. | - | ||
Deliverv of Pledced Collateral. | . | ||
All certificates or instruments representing or evicencing the Pledged Collateral shall be delivered to and held by or on behalf of the Agent pursuant hereto and shall be in suitable j kl k | NOW, THEREFORE, in consideration of the premises, the Pledgor hereby agrees with the Agent for its benefit, the benefit of the Co-Agent and the ratable benefit of the Banks as follows: | ||
.3 O form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form ano substance satisfactory to the Agent. The Agent shall have the right, at any time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Agent or any of its nc.ninees any or all of the Pledged Collateral, subject only to the receipt of the appropriare orders referred to in Section 4.02(c), below, and to the revocable rights specified in Section 6(a). | SECTION 1. Pledge. The Pledgor hereby pledges to the Agent for its benefit, the benefit of the Credit Agree-ment Agent, the GPU Loan Agreement Agent and the ratable (in accordance with the Indebtedness of the Borrowers to the Banks outstanding under the Credit Agreement, the GPU Loan Agreement the Parsippany Agreement and the Reading Agreement) benefit of the Banks, and grants to the Agent for its benefit, the benefit of the Credit Agreement Agent, the GPU Loan Agree-ment Agent and the ratable benefit of the Banks a security interest in, the following (the " Pledged Collateral"): | ||
In addi-tion, the Agent shall '. ave the right at any time to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations. | (i) the Pledged Shares and the certificates repre-senting the Pledged Shares, and all dividends, cash, in-struments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; (ii) all additional shares of stock of any issuer of the Pledged Shares from time to time acquired by the Pledgor in any manner, and the certif icates representing such additional shares, and all dividends, cash, instru-ments and other property from time to time received, re-ceivable or otherwise distributed in respect of or in exchange for any or all of such shares; and (iii) any and all proceeds of the foregoing. | ||
SECTION 4. | SECTION 2. Security for Oblications. This Agree-ment secures the payment of all obligations of the Borrowers now or hereafter existing under the Credit Agreement, the notes issued thereunder, the GPU Loan Agreement, the promis-sory notes issued thereunder, the Parsippany Agreement, the promissory note issued thereunder, the Reading Agreement and the premissory note issued thereunder (all such premissory notes being referred to herein, collectiv ely , as the " Notes"), | ||
Recresentations and Warranties. | whether for principal, interest, fees, expenses or otherwise, and all obligations of the Pledgor now or hereaf ter existing under the Guaranties or this Agreement (all such obligations of the Borrower and the Pledgor being the " Obligations"). | ||
The Pledgor represents and warrants as follows: (a)All of the outstanding common stock of JC, ME, PE, and GPU Service Corporation has been validly issued, is fully paid and non-assessable and is owned by the Pledgor free and clear of all mortgages, deeds of trust, pledges, liens, security interests and other charges or encumbra: | SECTION 3. Deliverv of Pledced Collateral. All certificates or instruments representing or evicencing the Pledged Collateral shall be delivered to and held by or on behalf of the Agent pursuant hereto and shall be in suitable j kl k | ||
's, other than those created by this Agreement and the Pledged g Shares constitute 100% of the outstanding common stock of JC, W ME, PE and GPU Service Corporation. | |||
GPU is the record and beneficial owner of all of the Pledged Shares, except for twelve shares of the common stock of ME which are nominally registered in the names of certain employees of ME for convenience in the conduct of meetings of shareholders, but which are beneficially owned by GPU.(b)The pledge of the Pledged Shares pursuant to this Agreement creates a valid and perfected first priority security interest in the Pledged Shares, securing the payment of the Obligations.(c)Except for any appropriate order of .ae SEC under the Utility Act, of the NJSPU as to the shares of JC constituting Pledged Shares and of the PaPUC as to the shares of ME and PE constituting Pledged Shares (all of which orders are in full force and effect), no authorization, approval, or other action by, and no notice to or filing with, any govern-mental authority or regulatory body is required for the pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of the Agreement by the Pledgor. | . | ||
O!474 072 | 3 O | ||
- - ...4 SECTION 5. | form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form ano substance satisfactory to the Agent. The Agent shall have the right, at any time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Agent or any of its nc.ninees any or all of the Pledged Collateral, subject only to the receipt of the appropriare orders referred to in Section 4.02(c), below, and to the revocable rights specified in Section 6(a). In addi-tion, the Agent shall '. ave the right at any time to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations. | ||
Further Assurances. | SECTION 4. Recresentations and Warranties. The Pledgor represents and warrants as follows: | ||
The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Agent may re-quest, in order to perfect and protect any security interest grar.ted or purported to be granted hereby or to enable tne Agent to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral. | (a) All of the outstanding common stock of JC, ME, PE, and GPU Service Corporation has been validly issued, is fully paid and non-assessable and is owned by the Pledgor free and clear of all mortgages, deeds of trust, pledges, liens, security interests and other charges or encumbra: 's, other than those created by this Agreement and the Pledged g Shares constitute 100% of the outstanding common stock of JC, W ME, PE and GPU Service Corporation. GPU is the record and beneficial owner of all of the Pledged Shares, except for twelve shares of the common stock of ME which are nominally registered in the names of certain employees of ME for convenience in the conduct of meetings of shareholders, but which are beneficially owned by GPU. | ||
SECTION 6. | (b) The pledge of the Pledged Shares pursuant to this Agreement creates a valid and perfected first priority security interest in the Pledged Shares, securing the payment of the Obligations. | ||
Votinc Richts; Dividends: Etc.(a) So long as no Event of Dcfault or event wnien, with the giving of notice or the lapse of time, or both, would become an Event of Default shall have occurred and be continuing: (i) The Pledgor shall be entitled to enercise any and all voting and other consensual rights pertaining to the Pledged Collateral or any part thereof for any pur-pose not inconsistent with the terms of this Agreement or the Credit Agreement; orovided, however, that the Pledgor shall not exercise or refrain from e::ercising any such right if, in the Agent's judgment, such action would have a material adverse effect on the value of the Pledged Collateral or any part thereof, and, provided, further, that the Pledgor shall give the Agent at least five days' written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right.(ii)The Pledgor shall be entitled to receive and retain any and all dividends and interest paid in re-spect of the Pledged Collateral, provided, however, that any and all (A)dividends and interest paid or payable other than in cash in respect of, and instruments and other property received, receivable or other-wise distributed in respect of, or in ex.:hange for, any Pledged Collateral, (B)dividends and other distributions paid or payable in cash in respect of any Pledged Collat-eral in connection with a partial or total liquida-tion or dissolution or in connection with a reduc-tion of capital, capital surplus or paid-in-surplus, and (C)cash paid, payable or otherwise dis-tributed in exchange for, any Pledged Collateral,. | (c) Except for any appropriate order of .ae SEC under the Utility Act, of the NJSPU as to the shares of JC constituting Pledged Shares and of the PaPUC as to the shares of ME and PE constituting Pledged Shares (all of which orders are in full force and effect), no authorization, approval, or other action by, and no notice to or filing with, any govern-mental authority or regulatory body is required for the pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of the Agreement by the Pledgor. | ||
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!474 072 | |||
-SECTION 7. | |||
Transfers and Other Liens; Add it ional Shares.(a) The Pledgor agrees that it will not (i) sell or | - - . | ||
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Acent Apuointed Attornev-in-Fact. | . | ||
The Pledgor hereby appoints the Agent the Pledgor's attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, from time to time in the Agent's discretion to take any action and to execute any instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, indorse and col-lect all instruments made payable to the Pledgor representing any dividend, payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full dis-charce for the same. | 4 SECTION 5. Further Assurances. The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Agent may re-quest, in order to perfect and protect any security interest grar.ted or purported to be granted hereby or to enable tne Agent to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral. | ||
SECTION 9. | SECTION 6. Votinc Richts; Dividends: Etc. (a) So long as no Event of Dcfault or event wnien, with the giving of notice or the lapse of time, or both, would become an Event of Default shall have occurred and be continuing: | ||
Acent Mav Perform. | (i) The Pledgor shall be entitled to enercise any and all voting and other consensual rights pertaining to the Pledged Collateral or any part thereof for any pur-pose not inconsistent with the terms of this Agreement or the Credit Agreement; orovided, however, that the Pledgor shall not exercise or refrain from e::ercising any such right if, in the Agent's judgment, such action would have a material adverse effect on the value of the Pledged Collateral or any part thereof, and, provided, further, that the Pledgor shall give the Agent at least five days' written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right. | ||
If the Pledgor fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Pledgor under Section 13. | (ii) The Pledgor shall be entitled to receive and retain any and all dividends and interest paid in re-spect of the Pledged Collateral, provided, however, that any and all (A) dividends and interest paid or payable other than in cash in respect of, and instruments and other property received, receivable or other-wise distributed in respect of, or in ex.:hange for, any Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Pledged Collat-eral in connection with a partial or total liquida-tion or dissolution or in connection with a reduc-tion of capital, capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise dis-tributed in exchange for, any Pledged Collateral, | ||
SECTION 10. | . | ||
Reasonable Care. | |||
The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collareral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which Chemical Bank accords its own property, it being understood that neither the Agent, the Credit Agree-ment Agent, the GPU Loan Agreement Agent nor any Bank shall have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenaecs or other matters relative to any Pledged Collateral, whether or not the Agent, the Credit Agreement Agent, the GPU Loan Agreement Agent or any Bank has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral. | . | ||
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-.7 O SECTION 11. | 5 shall be, and shall forthwith delivered to the Agent to O | ||
Remedies uoan Default. | hold as, Pledged Collateral and shall, if received by the Pledgor, be received in trust for the benefit of the Agent, be segregated frca the other property or funds of the Pledgor, and be forthwith delivered to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement). | ||
If any Event of Default shall have occurred and ce continuing and subject to any required approval or consent of the SEC under the Utility Act, of the NJBPU and of the PaPUC: (a)The Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for hcrein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Cc:cmercial Code (the " Code") | (iii) The Agent shall execute and deliver (or cause to be executed and delivered) to the Pledgor all such proxies and other instruments as the Pledgor may reasonably request for the purpose of enabling the Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments which it is authorized to receive and retain pursuant to para-graph (ii) above. | ||
in effec: in the State of New York at that time, and the Agent may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Agent's offices or elsewhere, for cash, on credit or tor future delivery, and at such price or prices and upon such other terms as the Agent may deem commercially reasonable. | (b) Upon the occurrence and during the continuance of an Event of Default or an event which, with the giving of notice or the lapse of time, or both, would become an Event of Default: | ||
The Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notifi- | (i) Subject to any required approval or consent of the SEC under the Utility Act, of the NJBPU and of the lll PaPUC, all rights of the Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) may, at the election of the Majority Banks, and all rights of the Pledgor to receive the dividends and payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall, cease, and all such rights shall thereupon become vested in the Agent who shall thereupon have the sole right to exercise such voting and other ccnsensual rights and to receive and hold as Pledged Collateral such dividends and payments. | ||
The Agent may adjourn any public or private sale from time to time by announce-ment at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.(b)Any cash held by the Agent as Pledged Col-lateral and all cash proceeds received by the Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Col-lateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 13) in whole or in part by the Agent first for the ratable (in accordance with the Indebtedness of the Borrowers to the Banks outstanding under the Credit Agreement and the GPU Loan Agreement) benefit of the Banks against all or any part of the Obligations existing in respect of the Credit Agreement and the GPU Loan Agreement until all such Obligations shall have been paid in full and, thereafter, for the ratable benefit of the Banks party to the Parsippany Agreement and the Reading Agreement | (ii) All dividends and payments which are re-ceived by the Pledgor contrary to the provisions of paragraph (i) of this Section 6(b) shall be received in trust for the benefit of the Agent, shall be segregated from other funds of the Pledgor and shall be forthwith paid over to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement). | ||
-..8 respect of the Parsippany Agreement and the Reading Agreement until all such Obligations shall have been paid in full. | - SECTION 7. Transfers and Other Liens; Add it ional Shares. (a) The Pledgor agrees that it will not (i) sell or otherwise dispose of, or grant any option with respect to, ggg 3 47 A 074 | ||
Any surplus of such cash or cash proceeds held by the Agent and remaining af ter payment in full of all the Obligations shall be paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus. | |||
SECTION 12. | _ __ | ||
Recistration Richts. | . - | ||
If the Agent shall determine to exercise its rignt to sell all or any of the Pledged Collateral pursuant to Section 11, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its own expense: (a)execute and deliver, and cause each issuer of the Pledged Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such ins truments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of the Agent, advisable to register such Pledged Collateral under the provisions of the Securities Act of 1933, as from time to time amended (the " Securities Act"), and to cause the registration statement relating thereto to become ef fective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of the Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto;(b)use its best efforts to qualify the Pledged Collateral under the state securities cr " Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Pledged Collateral, as recuested by the Agent;(c)cause each such issuer to make available to its security holders , as soon as practicable, an earn-ing statement which will satisfy the provisions of Section ll(a) of the Securities Act; and (d)do or cause to be done all such other acts and things as may be necessary (including, without limitation, obtaining any necessary or desirable approval of the SEC under the Utility Act and of the 1474 077 | 6 any of the Pledged Collateral, or (ii) create or permit to exist any lien, security interest, or other charge or encum-brance upon or with respect to any of the Pledged Collateral, except for the security interest under this Agreement. | ||
.9 NJBPU and the PaPUC) to make such sale of the Pledged Collateral or any part thereof valid and binding and in compliance with applicable law. | (b) The Pledgor agrees that it will (i) cause each issuer of the Pledged Shares not to issue any common stock in addition to, or issue any stock or other securities in sub-stitution for, the Pledged Shares issued by such issuer, except to the Pledgor and (ii) pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all additional shares of common stock and any and all such stock or other securities of each issuer of the Pledged Shares. | ||
SECTION 8. Acent Apuointed Attornev-in-Fact. The Pledgor hereby appoints the Agent the Pledgor's attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, from time to time in the Agent's discretion to take any action and to execute any instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, indorse and col-lect all instruments made payable to the Pledgor representing any dividend, payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full dis-charce for the same. | |||
SECTION 9. Acent Mav Perform. If the Pledgor fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Pledgor under Section 13. | |||
SECTION 10. Reasonable Care. The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collareral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which Chemical Bank accords its own property, it being understood that neither the Agent, the Credit Agree-ment Agent, the GPU Loan Agreement Agent nor any Bank shall have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenaecs or other matters relative to any Pledged Collateral, whether or not the Agent, the Credit Agreement Agent, the GPU Loan Agreement Agent or any Bank has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral. | |||
3A74 075 | |||
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SECTION 11. Remedies uoan Default. If any Event of Default shall have occurred and ce continuing and subject to any required approval or consent of the SEC under the Utility Act, of the NJBPU and of the PaPUC: | |||
(a) The Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for hcrein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Cc:cmercial Code (the " Code") | |||
in effec: in the State of New York at that time, and the Agent may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Agent's offices or elsewhere, for cash, on credit or tor future delivery, and at such price or prices and upon such other terms as the Agent may deem commercially reasonable. The Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notifi-cation. The Agent shall not be obligated to make any ll) sale of Pledged Collateral regardless of notice of sale having been given. The Agent may adjourn any public or private sale from time to time by announce-ment at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. | |||
(b) Any cash held by the Agent as Pledged Col-lateral and all cash proceeds received by the Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Col-lateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 13) in whole or in part by the Agent first for the ratable (in accordance with the Indebtedness of the Borrowers to the Banks outstanding under the Credit Agreement and the GPU Loan Agreement) benefit of the Banks against all or any part of the Obligations existing in respect of the Credit Agreement and the GPU Loan Agreement until all such Obligations shall have been paid in full and, thereafter, for the ratable benefit of the Banks party to the Parsippany Agreement and the Reading Agreement againsu all or any part of the Obligations existing in lh 1A74 076 | |||
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8 respect of the Parsippany Agreement and the Reading Agreement until all such Obligations shall have been paid in full. Any surplus of such cash or cash proceeds held by the Agent and remaining af ter payment in full of all the Obligations shall be paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus. | |||
SECTION 12. Recistration Richts. If the Agent shall determine to exercise its rignt to sell all or any of the Pledged Collateral pursuant to Section 11, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its own expense: | |||
(a) execute and deliver, and cause each issuer of the Pledged Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such ins truments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of the Agent, advisable to register such Pledged Collateral under the provisions of the Securities Act of 1933, as from time to time amended (the " Securities Act"), and to cause the registration statement relating thereto to become ef fective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of the Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto; (b) use its best efforts to qualify the Pledged Collateral under the state securities cr " Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Pledged Collateral, as recuested by the Agent; (c) cause each such issuer to make available to its security holders , as soon as practicable, an earn-ing statement which will satisfy the provisions of Section ll(a) of the Securities Act; and (d) do or cause to be done all such other acts and things as may be necessary (including, without limitation, obtaining any necessary or desirable approval of the SEC under the Utility Act and of the 1474 077 | |||
. | |||
9 NJBPU and the PaPUC) to make such sale of the Pledged Collateral or any part thereof valid and binding and in compliance with applicable law. | |||
The Pledgor further ackncwledges the impossibility of ascer-ta ining the amount of damages which would be suf fered by the Agent, the Credit Agreement Agent, the GPU Loan Agreement perform any of the covenants contained in this Section and, consequently, agrees that, if the Plegdor shall f ail to per-form any of such covenants, it shall pay, as liquidated dam-ages and not as a penalty, an amount equal to the value of the Pledged Collateral on the date the Agent shall demand compliance with this Section. | The Pledgor further ackncwledges the impossibility of ascer-ta ining the amount of damages which would be suf fered by the Agent, the Credit Agreement Agent, the GPU Loan Agreement perform any of the covenants contained in this Section and, consequently, agrees that, if the Plegdor shall f ail to per-form any of such covenants, it shall pay, as liquidated dam-ages and not as a penalty, an amount equal to the value of the Pledged Collateral on the date the Agent shall demand compliance with this Section. | ||
SECTION 13. | SECTION 13. Excenses. The Pledgor will upon de-mand pay to the Agent the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, or the sale of, collection frem, or other realization upon, any of the Pledged Collateral, (iii) the exercise or enforcamen' of any of the rights of .he Agent, the Credit Agreement Agent, the GPU Loan Aareemenc Acent or the Banks hereunder or (iv) the | ||
Excenses.The Pledgor will upon de-mand pay to the Agent the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, or the sale of, collection frem, or other realization upon, any of the Pledged Collateral, (iii) the exercise or enforcamen' of any of the rights of .he Agent, the Credit Agreement Agent, the GPU Loan Aareemenc Acent or the Banks hereunder or (iv) the f ailure by the Pledgor to perform or observe any of the pro-llh | ~ | ||
SECTION 14. | f ailure by the Pledgor to perform or observe any of the pro- llh visions hereof. | ||
Security Interest Absolute. | SECTION 14. Security Interest Absolute. All rights of the Agent and security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of: | ||
All rights of the Agent and security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of: (i)any lack of validity or enforceability of any Principal Agreement (meaning the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement) , the Notes or any other agree-ment or instrument relating thereto;(ii)any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from any Principal Agreement or the Notes;(iii) any exchange, release or non-perfection of any other collateral, or any release or amendment or | (i) any lack of validity or enforceability of any Principal Agreement (meaning the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement) , the Notes or any other agree-ment or instrument relating thereto; (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from any Principal Agreement or the Notes; (iii) any exchange, release or non-perfection of any other collateral, or any release or amendment or | ||
-waiver of or consent to departure f rom any guaranty, for all or any of the Obligations; or 9!474/8 | - waiver of or consent to departure f rom any guaranty, for all or any of the Obligations; or 9 | ||
..10 (iv)any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Borrower in respect of the Obligations or the Pledgor in respect of this Agreement, except to the extent that this Agreement may finally be deter-mined to be unenforceabla as contrary to public policy. | !474 0 /8 | ||
SECTION 15. | |||
Amendments, Etc. | . . | ||
No amendnent or waiver of any provision of this Agreement nor consent to any departure by the Pledgor herefrom, shall in any event be effective unless the same snall be in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given. | 10 (iv) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Borrower in respect of the Obligations or the Pledgor in respect of this Agreement, except to the extent that this Agreement may finally be deter-mined to be unenforceabla as contrary to public policy. | ||
SECTION 16. | SECTION 15. Amendments, Etc. No amendnent or waiver of any provision of this Agreement nor consent to any departure by the Pledgor herefrom, shall in any event be effective unless the same snall be in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given. | ||
Addresses for Motices. | SECTION 16. Addresses for Motices. All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Pledgor, mailed or telegraphed or delivered to it, addressed to it at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention of Vice President ar.d Chief Finan-cial Officer, if to the Agent, mailed or delivered to it, addressed to it at the address of the Agent specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. All such notices and other communications shall, when mailed or telegraphed, respec-tively, be effective when deposited in the mails or de-livered to the telegraph company, respectively, addressed as aforesaid. | ||
All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Pledgor, mailed or telegraphed or delivered to it, addressed to it at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention of Vice President ar.d Chief Finan-cial Officer, if to the Agent, mailed or delivered to it, addressed to it at the address of the Agent specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. | SECTION 17. Continuing Securitv Interest: Transfer of Notes. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until payment in full (in respect of the Credit Agreement, after the Termination Date) of the Goligations, (ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure, together with the rights and remed_es of the Agent hereunder, to the benefit of the Agent, the Credit Agreement Agent, the GPU Loan Agreement Agent, the Ba nk s , and their respective successors, transferees and a s s ig.'s . Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note head by it to any other person or entity, and such other person oc entity shall thereupon become vested with all the benefits i.n respect thereof granted to such Bank herein or othe rw ise , subject, however, to the provisions of Article VII TA74 079 | ||
All such notices and other communications shall, when mailed or telegraphed, respec-tively, be effective when deposited in the mails or de-livered to the telegraph company, respectively, addressed as aforesaid. | |||
SECTION 17. | . | ||
Continuing Securitv Interest: Transfer of Notes. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until payment in full (in respect of the Credit Agreement, after the Termination Date) of the Goligations, (ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure, together with the rights and remed_es of the Agent hereunder, to the benefit of the Agent, the Credit Agreement Agent, the GPU Loan Agreement Agent, the Ba nk s , and their respective successors, transferees and a s s ig.'s . | 11 O | ||
Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note head by it to any other person or entity, and such other person oc entity shall thereupon become vested with all the benefits i.n respect thereof granted to such Bank herein or othe rw ise , subject, however, to the provisions of Article VII TA74 079 | (concerning the Agent and the Co-Agent thereunder) of the Credit Agreement and of Article VI (concerning the Agent thereunder) of the GPU Loan Agreement with respect to the Notes issued thereunder. Upon the payment in full (in re-spect of the Credit Agreemont, after the Termination Date) of the Obligations, the Pledgor shall be entitled to the return, upon its request and at its expense, of such of the Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof. | ||
.11 O (concerning the Agent and the Co-Agent thereunder) of the Credit Agreement and of Article VI (concerning the Agent thereunder) of the GPU Loan Agreement with respect to the Notes issued thereunder. | SECTION 18. Governinc Law: Te r:ns . This Agreement shall be governed by and construed in accordance with the laws of the Stace of New York, except as required by mandatory provision of law and except to the extent that the validity or perfection of the security interest hereunder, or remedies hereunder, in respect of any particular Fledgca Collateral are governed by the laws of a jurisdiction other than the State of New York. Unless otherwise defined herein or in the Credit Agreement, terms defined in Article 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined. | ||
Upon the payment in full (in re-spect of the Credit Agreemont, after the Termination Date) of the Obligations, the Pledgor shall be entitled to the return, upon its request and at its expense, of such of the Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof. | |||
SECTION 18. | |||
Governinc Law: Te r:ns . | |||
This Agreement shall be governed by and construed in accordance with the laws of the Stace of New York, except as required by mandatory provision of law and except to the extent that the validity or perfection of the security interest hereunder, or remedies hereunder, in respect of any particular Fledgca Collateral are governed by the laws of a jurisdiction other than the State of New York. | |||
Unless otherwise defined herein or in the Credit Agreement, terms defined in Article 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined. | |||
IN WITNESS WHEREOF, the Pledgor has caused thi.' | IN WITNESS WHEREOF, the Pledgor has caused thi.' | ||
Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. | Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. | ||
GENERAL PUBLIC UTILITIES CORPORATION By Title: CHEMICAL BANK, | GENERAL PUBLIC UTILITIES CORPORATION By Title: | ||
.SCllEDULE I | . CHEMICAL BANK, as Agent By Vice President O | ||
1474 080 | |||
.._ _ ..EXHIBIT D g PLEDGE AGREEMENT dated as of June 20, 1979, between [ JERSEY CENTRAL PONER & LIGHT COMPANY] [ METROPOLITAN EDISON COMPANY] a [New Jersey] [ Pennsylvania] corporation (the "Pledgor"), and CHEMICAL BANK as agent (the " Agent") | |||
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SCllEDULE I . | |||
Attached to and forming a part of that certain Pledge Agreement dated as of June 20, 1979, by General Public Utilities Corporation, as Pledgor, to Chemical Bank, as Agent Stock Certificate Number Stock Issuer Class of Stock No(s). Par Value of Shares Jersey Central Power Nos. C-30 6,978,770 | |||
& Li9ht Company Common C-31 $10 8,392,500 lietropolitan Edison Company Common Nos. 291 none 859,488 294 2 297 2 300 2 301 2 303 2 304 2 Pennsylvania Electric Nos. A-30 $20 5,290,591 Company Common A-34 5 GPU Service Corporation Common No. 1 $10 5,000 | |||
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EXHIBIT D g | |||
PLEDGE AGREEMENT dated as of June 20, 1979, between [ JERSEY CENTRAL PONER & LIGHT COMPANY] [ METROPOLITAN EDISON COMPANY] a [New Jersey] [ Pennsylvania] corporation (the "Pledgor"), and CHEMICAL BANK as agent (the " Agent") | |||
for the banks (the " Banks") parties to the Credit Agreement (as hereinafter defined); | for the banks (the " Banks") parties to the Credit Agreement (as hereinafter defined); | ||
PRELIMINARY STATEMENT: | PRELIMINARY STATEMENT: | ||
The Banks, CITIBANK, N.A., as agent (the " Credit Agreement Agent") and CHEMICAL BANK- as co-agent, have entered into a Revolving Credir Agreement, dated as of June 15, 1979 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the"Credir Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined), with GENERAL PUBLIC UTILITIES CORPORATION, the Pledgor, [ JERSEY CENTRAL PCUER & LIGHT COMPANY, a New Jersey corporation,) [ METROPOLITAN EDISON COMPANY, a Pennsylvania corporation,] and PENNSYLVANIA ELECTRIC COMPANY, a Pennsyl-vania corporation. | The Banks, CITIBANK, N.A., as agent (the " Credit Agreement Agent") and CHEMICAL BANK- as co-agent, have entered into a Revolving Credir Agreement, dated as of June 15, 1979 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the "Credir Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined), with GENERAL PUBLIC UTILITIES CORPORATION, the Pledgor, [ JERSEY CENTRAL PCUER & LIGHT COMPANY, a New Jersey corporation,) [ METROPOLITAN EDISON COMPANY, a Pennsylvania corporation,] and PENNSYLVANIA ELECTRIC COMPANY, a Pennsyl-vania corporation. It is a condition precedent to the obligations of the Banks to make and maintain Advances to the Pledgor under the Credit Agreement that the Pledgor shall have made the pledge contemplated by this Agreement. | ||
It is a condition precedent to the obligations of the Banks to make and maintain Advances to the Pledgor under the Credit Agreement that the Pledgor shall have made the pledge contemplated by this Agreement. | |||
NOW, THEREFORE, in consideration of the premises and in order to induce the Banks to make Advances to the Pledgor under the Credit Agreement, the Pledgor hereby agrees with the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks as follows: | NOW, THEREFORE, in consideration of the premises and in order to induce the Banks to make Advances to the Pledgor under the Credit Agreement, the Pledgor hereby agrees with the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks as follows: | ||
SECTION 1. | SECTION 1. Pledge. The Pledgor hereby pledges to the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks, and grants to the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks a security interest in, the following (the " Pledged Collateral"): | ||
Pledge.The Pledgor hereby pledges to the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks, and grants to the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks a security interest in, the following (the " Pledged Collateral"): (i)the Bonds 'the " Pledged Bonds") described in Schedule I hereto and the certificates representing the Pledged Bonds, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of vr in exchange for any or all of the Pledged Bonds; | (i) the Bonds 'the " Pledged Bonds") described in Schedule I hereto and the certificates representing the Pledged Bonds, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of vr in exchange for any or all of the Pledged Bonds; lll 347A 082 | ||
SECTION 2. | _ __ | ||
Security for Oblicaticns. | . | ||
This Agree-ment secures the payment of all obligations of the Pledgor now or hereafter enisting under the Credit Agreement and the Notes, whether for principal, interest, fees, expenses or otherwise (except such obligations of the Pledgor to | . | ||
2 (ii) all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Bonds; and (iii) any and all proceeds of the foregoing. | |||
SECTION 2. Security for Oblicaticns. This Agree-ment secures the payment of all obligations of the Pledgor now or hereafter enisting under the Credit Agreement and the Notes, whether for principal, interest, fees, expenses or otherwise (except such obligations of the Pledgor to | |||
[Citibank) [ Morgan Guaranty Trust Company of New York] ), and all obligations of the Pledgor now or hereafter existing under this Agreement (all such obligations of the Pledgor being the " Obligations") . | [Citibank) [ Morgan Guaranty Trust Company of New York] ), and all obligations of the Pledgor now or hereafter existing under this Agreement (all such obligations of the Pledgor being the " Obligations") . | ||
SECTION 3. | SECTION 3. Delivery of Pledaed Collateral. All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to and held by or on | ||
Delivery of Pledaed Collateral. | ' | ||
All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to and held by or on | behalf of the Agent pursuant hereto and shall be, in the case of the Pledged Bonds, registered in the name of the Agent or in the name of such nominee as the Agent shall select and, in the case of Pledged Collateral other than mhe Pledged Bonds, shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instru-ments of transfer or assignment in blank, all in form and substance satisfactory to the Agent. The Agent shall have the right, at any time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Agent or any cf its nominees any or all of the Pledged Collateral, subject only to the revocable rights specified in Section 6(a) and to the requirements of the [JC] [ME] | ||
'behalf of the Agent pursuant hereto and shall be, in the case of the Pledged Bonds, registered in the name of the Agent or in the name of such nominee as the Agent shall select and, in the case of Pledged Collateral other than mhe Pledged Bonds, shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instru-ments of transfer or assignment in blank, all in form and substance satisfactory to the Agent. The Agent shall have the right, at any time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Agent or any cf its nominees any or all of the Pledged Collateral, subject only to the revocable rights specified in Section 6(a) and to the requirements of the [JC] | Indenture. In addition, the Agent shall have the right at any time to exchange certificates or instruments represent-ing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations. | ||
[ME]Indenture. | SECTION 4. Reoresentations and Warranties. The Pledgor represents and warrants as follows: | ||
In addition, the Agent shall have the right at any time to exchange certificates or instruments represent-ing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations. | (a) The pledge of the Pledged Bcads pursuant to this Agreement creates a valid and perfected first priority security interest in the Pledged Bonds, securing the payment o,f the Obligations. | ||
SECTION 4. | (b) Except for any appropriate order of the SEC under the Utility Act and of the [NJBPU) [PaPUC] | ||
Reoresentations and Warranties. | }k k | ||
The Pledgor represents and warrants as follows: (a)The pledge of the Pledged Bcads pursuant to this Agreement creates a valid and perfected first priority security interest in the Pledged Bonds, securing the payment o,f the Obligations.(b)Except for any appropriate order of the SEC under the Utility Act and of the [NJBPU) | |||
[PaPUC]}k k | . . | ||
..3 O (all of which orders are in full force and effect), no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by the Pledgor.SECTION 5. | 3 O | ||
Further Assurances. | (all of which orders are in full force and effect), no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by the Pledgor. | ||
The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further inctruments and documents, and take all further action, that may be necessary or desirable, or that the Agent may request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Agent to exercise and enforce its rights and remedies hereunder with respect to any Pledged Ccilateral. | SECTION 5. Further Assurances. The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further inctruments and documents, and take all further action, that may be necessary or desirable, or that the Agent may request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Agent to exercise and enforce its rights and remedies hereunder with respect to any Pledged Ccilateral. | ||
SECTION 6. | SECTION 6. Votinc Rights: Etc. (a) So long as no Event of Default (meaning, for purposes of this Agreement, J | ||
Votinc Rights: Etc.(a) So long as no Event of Default (meaning, for purposes of this Agreement, J an Event of Default as to the Pledgor under Section 6.01 of the Credit Acreement) or event which, with the giving of | an Event of Default as to the Pledgor under Section 6.01 of the Credit Acreement) or event which, with the giving of notice or the lapse of time, or both, would become an Event lll of Default shall have occurred add be continuing: | ||
..-....4-.and other property received , receivable or other-wise distributed in respect of, or in exchange for, any Pledged Collateral, (B)dividends and other distributions paid or payable in cash in respect of any Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (C)cash paid, payable or othewise dis-tributed in exchange for, any Pledge Collateral, shall be, and shall forthwith be delivered to the Agent to hold as, Pledged Collateral and shall, if received by the Pledgor, be received in trust for the benefit of the Agent, be segregated from the other property or funds of the Pledgor, and be forthwith delivered to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement). | (i) The Pledger shall be entitled to exercise any and all voting and other consensual rights which it may have, if any, pertaining to the Pledged Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Credit Agreement; provided, however, that the Pledgor shall not exercise or refrain from axercising any such right if: in the Agent's j udgment, such action would have a material adverse effect on the value of the Pledged Collateral or any part thereof, and, provided, further, that the Pledgor shall give the Agent at least five days' written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right. | ||
'iii)The Agent shall execute and deliver (cr cause to be executed and delivered) to the Pledgor all such proxies and other instruments as the Pledgor may reasonably request for the purpose of enabling the-Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments which it is authorized to receive and retain pursuant to paragraph (ii) above.(b)Upon the occurrence and during the continuance of an Event of Default or an event which, with the giving of notice or the lapse of time, or both, would become an Event of Defau?.t: (i)Subj ect to any required approval tr consent of the SEC under the Utility Act, of the NJbPU and of the PaPUC, all rights of the Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) may, at the election of the Majority Banks, and all rights of the Pledgor to receive the dividends and payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall, cease, and all such rights shall thereupon become 1A7A 085 | (ii) The Pledgor shall be entitled to receive and retain any and all dividends and interest paid in respect of the Piedged Collateral, provided, however, that any and all (A) dividends and interest paid or payable other than in cash in respect of, and instruments llh 3A7A GBA | ||
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SECTION 7. | .. -.. | ||
Transfers and Other Liens- Additional Shares.The Pledgor agrees tnat it will not (i) sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collcteral, or (ii) create or permit to exist any lien, security interest, or other charge or encun.brance upon or with respect to any of the Pledged Collateral, except for the security interest under this Agreement. | . | ||
SECTION 8. | . | ||
Agent Appointed Attornev-in-Fact. | 4 | ||
The Pledgor hereby appoints the Agent the Pledgor's attorney-g in-fact, witn full authority in the place and stead of the W Pledcor and in the name of the Pledgor or otherwise, from ri.ne to time in the Agent's discretion to take any action and to execute any instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, in-dorse and collect all instruments made payable to the Pledgor representing any dividend, payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same. | - | ||
SECTION 9. | . | ||
Agent May Perform. | and other property received , receivable or other-wise distributed in respect of, or in exchange for, any Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (C) cash paid, payable or othewise dis-tributed in exchange for, any Pledge Collateral, shall be, and shall forthwith be delivered to the Agent to hold as, Pledged Collateral and shall, if received by the Pledgor, be received in trust for the benefit of the Agent, be segregated from the other property or funds of the Pledgor, and be forthwith delivered to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement). | ||
If the Pledgor fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Pledgor under Section 13. | 'iii) The Agent shall execute and deliver (cr cause to be executed and delivered) to the Pledgor all such proxies and other instruments as the Pledgor may reasonably request for the purpose of enabling the-Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments which it is authorized to receive and retain pursuant to paragraph (ii) above. | ||
SECTION 10. | (b) Upon the occurrence and during the continuance of an Event of Default or an event which, with the giving of notice or the lapse of time, or both, would become an Event of Defau?.t: | ||
Reasonable Care. | (i) Subj ect to any required approval tr consent of the SEC under the Utility Act, of the NJbPU and of the PaPUC, all rights of the Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) may, at the election of the Majority Banks, and all rights of the Pledgor to receive the dividends and payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall, cease, and all such rights shall thereupon become 1A7A 085 | ||
The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possescion if the Pledged Collateral is accorded treatment substantially equal to that which Chemical Bank accords its own property, it being understood that neither the Agent, the Credit Agree-ment Agent nor any Bank shall have responsibility for (1) | |||
. --.6 the Credit Agreement Agent or any Bank has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral. | . . | ||
SECTION 11. | 5 vested in the Agent who shall thereupon have the sole O | ||
Remedies upon Default. | right to exercise such voting and other consensual rights and to receive and hold as Pledged Collateral such dividends and payments. | ||
If any Event of Default shall have occurred and be continuing and subject to any required approval or consent of the SEC under the Utility Act or of the [NJBPU) [PaPUC]: (a)The Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code (the " Code") | (ii) All dividends and payments which are received by the Pledgor contrary to the provisions c,f paragraph (1) of this Section 6(b) shall be received in trust for the benefit of the Agent, shall be segregated from other funds of the Pledgor and shall be forthwith paid over to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement). | ||
in effect in the State of New York at that time, and the Agent may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Agent's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Agent may deem commercially reasonable. | SECTION 7. Transfers and Other Liens- Additional Shares. The Pledgor agrees tnat it will not (i) sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collcteral, or (ii) create or permit to exist any lien, security interest, or other charge or encun.brance upon or with respect to any of the Pledged Collateral, except for the security interest under this Agreement. | ||
The Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notifi-cation.The Agent shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. | SECTION 8. Agent Appointed Attornev-in-Fact. | ||
The Agent may adjourn any public or private sale from time to time by announce-ment at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.(b)Any cash held by the Agent as Pledged Col-lateral and all cash proceeds received by the Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Col-lateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 13) in whole or in part by the Agent for the ratable benefit of obligees of the Obligations against, all or any part of the obligations in such order as the Agent shall elect. | The Pledgor hereby appoints the Agent the Pledgor's attorney- g in-fact, witn full authority in the place and stead of the W Pledcor and in the name of the Pledgor or otherwise, from ri.ne to time in the Agent's discretion to take any action and to execute any instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, in-dorse and collect all instruments made payable to the Pledgor representing any dividend, payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same. | ||
} kl k | SECTION 9. Agent May Perform. If the Pledgor fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Pledgor under Section 13. | ||
SECTION 10. Reasonable Care. The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possescion if the Pledged Collateral is accorded treatment substantially equal to that which Chemical Bank accords its own property, it being understood that neither the Agent, the Credit Agree-ment Agent nor any Bank shall have responsibility for (1) ascertaining or taking action with respect to calls, conver-sions, exchanges, maturities, tenders or other matters rela-llg tive to any Pledged Collateral, whether or not the Agent, | |||
Reaistration Richts. | }k k | ||
If the Agent shall determine to exercise its right to sell all or any of the Pledged Collateral pursuant to Section 11, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its cwn expens e: (a)execu te and deliver, and cause each issuer of the Pledged Collateral contemplated to be sold and the directors and of ficers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessa ry or, in the opinion of the Agent, advisable to register such Pledged Collateral under the provisions of the Securities Act of 1933, as from time to time amended (the " Securities Act"), and to cause the registration statement relating thereto to become effective and to remain ef fective for such ceriod as | |||
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6 the Credit Agreement Agent or any Bank has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral. | |||
SECTION 11. Remedies upon Default. If any Event of Default shall have occurred and be continuing and subject to any required approval or consent of the SEC under the Utility Act or of the [NJBPU) [PaPUC]: | |||
(a) The Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code (the " Code") | |||
in effect in the State of New York at that time, and the Agent may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Agent's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Agent may deem commercially reasonable. The Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notifi-cation. The Agent shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The Agent may adjourn any public or private sale from time to time by announce-ment at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. | |||
(b) Any cash held by the Agent as Pledged Col-lateral and all cash proceeds received by the Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Col-lateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 13) in whole or in part by the Agent for the ratable benefit of obligees of the Obligations against, all or any part of the obligations in such order as the Agent shall elect. | |||
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Any surplus of such cash or cash proceeds held by the Agent and remaining after payment in full of all the Obligations shall be paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus. | |||
SECTION 12. Reaistration Richts. If the Agent shall determine to exercise its right to sell all or any of the Pledged Collateral pursuant to Section 11, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its cwn expens e: | |||
(a) execu te and deliver, and cause each issuer of the Pledged Collateral contemplated to be sold and the directors and of ficers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessa ry or, in the opinion of the Agent, advisable to register such Pledged Collateral under the provisions of the Securities Act of 1933, as from time to time amended (the " Securities Act"), and to cause the registration statement relating thereto to become effective and to remain ef fective for such ceriod as prospectuses are required by law to be furn'ished, and to make all amendments and supplements thereto and to lll the related prospectus which, in the opinion of the Agent, are necessary or advisable, all in conformity with the recuirements of the Securities Act and the rules and regulations of the SEC applicable thereto; (b) use its best ef forts to qualify the Pledged Collateral under the state securities or " Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Pledged Collateral, as requested by the Agent; (c) cause each such issuer to make available to its security holders , as soon as practicable, an earn-ing statement which will satisfy the provisions of Section ll(a) of _ the Securities Act; and (d) do or cause to be done all such other acts and things as may be necessary (including, without limitation, obtaining any necessary or desirable approval of the SEC under the Utility Act or of the | |||
[NJBPU] [PaPUC]) to make such sale of the Pledged Collateral or any part thereof valid and binding and in compliance with applicable law. | [NJBPU] [PaPUC]) to make such sale of the Pledged Collateral or any part thereof valid and binding and in compliance with applicable law. | ||
3A7A 0B3 | 3A7A 0B3 | ||
....8 The Pledgor further acknowledges the impossibility of ascer-taining the amount of damages which would be suf fered by the Agent, the Credit Agreement Agent or the Banks by reason of the failure by the Pledgor to perform any of the covenants contained in this Section and, consequently, agrees that, if the Pledgor shall fail to perform any of such covenants, it shall pay, as liquidated damages and not as a penalty, an amount equal to the value of the Pledged Collateral on the date the Agent shall demand compliance with this Section. | |||
SECTION 13. | . . | ||
Expenses.The Pledgor will upin de-mand pay to the Agent the amount of any and all reat mable expenses, including the reasonable fees and e::penses of its counsel and of any experts and agents, which the Agent may incur in connection with (i) the administration of this Agree-ment, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Pledged Collateral, (iii) the exercise or enforcement of any of the rights of the Agent, the Credit Agreement Agent or the Banks hereunder or (iv) the failure by the Pledgor to perform or observe any of the provisions hereof. | . | ||
SECTICN 14. | . | ||
Security Interest Absolute. | 8 The Pledgor further acknowledges the impossibility of ascer-taining the amount of damages which would be suf fered by the Agent, the Credit Agreement Agent or the Banks by reason of the failure by the Pledgor to perform any of the covenants contained in this Section and, consequently, agrees that, if the Pledgor shall fail to perform any of such covenants, it shall pay, as liquidated damages and not as a penalty, an amount equal to the value of the Pledged Collateral on the date the Agent shall demand compliance with this Section. | ||
All rights of the Agent and security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of: (i)any lack of validity or enforceability of the Credit Agreement, tne Notes or any other agreement or instrument relating thereto;(ii)any change in the time, manner or ace of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement or the Notes;(iii) any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations; or (iv)any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Borre'er in respect of the Obligations or the Pledgor in respect of this E.greement, except to the extent tha t this Agreement may finally be determined to be unenforceable as contrary to public policy. | SECTION 13. Expenses. The Pledgor will upin de-mand pay to the Agent the amount of any and all reat mable expenses, including the reasonable fees and e::penses of its counsel and of any experts and agents, which the Agent may incur in connection with (i) the administration of this Agree-ment, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Pledged Collateral, (iii) the exercise or enforcement of any of the rights of the Agent, the Credit Agreement Agent or the Banks hereunder or (iv) the failure by the Pledgor to perform or observe any of the provisions hereof. | ||
1474 089 ,. | SECTICN 14. Security Interest Absolute. All rights of the Agent and security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of: | ||
..9-.SECTION 15. | (i) any lack of validity or enforceability of the Credit Agreement, tne Notes or any other agreement or instrument relating thereto; (ii) any change in the time, manner or ace of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement or the Notes; (iii) any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations; or (iv) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Borre'er in respect of the Obligations or the Pledgor in respect of this E.greement, except to the extent tha t this Agreement may finally be determined to be unenforceable as contrary to public policy. | ||
Amendments, Etc. | 1474 089 | ||
No amendment or waiver of any provision of this Agreement nor consent to any departure by the Pledgor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given. | , | ||
SECTION 16. | . | ||
Addresses for Notices. | |||
All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Pledgor, mailed or telegraphed or delivered to it, addressed to it at its address specified in the Credit Agreement, if to the Agent, mailed or delivered to it, addressed to it at the address of the Agent specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. | . . | ||
All such notices and other communications shall, when mailed or telegraphed, respectively, be effective when deposited in the mails or delivered to the telegraph | 9 | ||
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I SECTION 17. | . | ||
Continuing Security Interest; Transfer of Notes. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until payment in full (after the Ter-mination Date) of the Obligations, (ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Agent, the Credit Agreement Agent, the Banks, and their respective successors, transferees and assigns. | SECTION 15. Amendments, Etc. No amendment or waiver of any provision of this Agreement nor consent to any departure by the Pledgor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given. | ||
Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note held by it to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Bank herein or otherwise, subject, however, to the provisions of Article VII (concerning the Cre-dit Agreement Agent) of the Credit Agreement. | SECTION 16. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Pledgor, mailed or telegraphed or delivered to it, addressed to it at its address specified in the Credit Agreement, if to the Agent, mailed or delivered to it, addressed to it at the address of the Agent specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. All such notices and other communications shall, when mailed or telegraphed, respectively, be effective | ||
Upon the pay-ment in full (after the Termination Date) of the Obligations, the Pledgor shall be entitled to the return, upon its reauest and at its expense, of such of the Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof.-SECTION 18. | , when deposited in the mails or delivered to the telegraph company, respectively, addressed as aforesaid. | ||
Payment of Obligations. | I SECTION 17. Continuing Security Interest; Transfer of Notes. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until payment in full (after the Ter-mination Date) of the Obligations, (ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Agent, the Credit Agreement Agent, the Banks, and their respective successors, transferees and assigns. | ||
So long as the Pledcor shall make due and punctual cavment of all of the Obligations, the Agent or any holder'of, or any other llh | Without limiting the generality of the foregoing clause (iii), | ||
any Bank may assign or otherwise transfer any Note held by it to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Bank herein or otherwise, subject, however, to the provisions of Article VII (concerning the Cre-dit Agreement Agent) of the Credit Agreement. Upon the pay-ment in full (after the Termination Date) of the Obligations, the Pledgor shall be entitled to the return, upon its reauest and at its expense, of such of the Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof. | |||
Release of Pledged Bonds. | - SECTION 18. Payment of Obligations. So long as the Pledcor shall make due and punctual cavment of all of the Obligations, the Agent or any holder'of, or any other | ||
In the event that the Pledgor snall sell any or its First Mortgage Bonds to Persons other than the Banks, the Agent will release a like principal amount of the Pledged Bonds from the pledge and security interest granted hereby against receipt by it from the purchaser of the purchase price of such First Mortgage Bonds. | ~ | ||
SECTION 20. | llh 1474 090 | ||
Governing Law: Terms. | |||
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as required by mandatory provision of law and except to the extent that the validity or perfection of the security interest hereunder, or remedies hereunder, in respect of any particular Pledged Collateral are governed by the laws of a j urisdiction other than the State of New York. | _ __ | ||
Unless otherwise defined herein or in the Credit Agreement, terms defined in Article 9 of the Uniform Commcrcial Code in the State of New York are used herein as therein defined. | . . | ||
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.(JERSEY CENTRAL POWER & LIGHT COMPANY][ METROPOLITAN EDISON COMPANY] | 10 Person who has acquired any interest in, the Pledged Bonds shall have no right to and shall not demand, collect or receive any principal of or interest on any of the Pledged Bonds. | ||
By Title: CHEMICAL BANK, as Agent By Vice President 1A7A 09I SCilEDULE I | SECTION 19. Release of Pledged Bonds. In the event that the Pledgor snall sell any or its First Mortgage Bonds to Persons other than the Banks, the Agent will release a like principal amount of the Pledged Bonds from the pledge and security interest granted hereby against receipt by it from the purchaser of the purchase price of such First Mortgage Bonds. | ||
.Attached to and forming a part of that certain Pltdge Agreement dated as of June 20, 1979, by [Jersev Central Power & Light Company] | SECTION 20. Governing Law: Terms. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as required by mandatory provision of law and except to the extent that the validity or perfection of the security interest hereunder, or remedies hereunder, in respect of any particular Pledged Collateral are governed by the laws of a j urisdiction other than the State of New York. Unless otherwise defined herein or in the Credit Agreement, terms defined in Article 9 of the Uniform Commcrcial Code in the State of New York are used herein as therein defined. | ||
[ Metropolitan Edison] , as Pledgor 9 Chemical Bank, as Agent Bonds Principal Amount Certificate No's) | IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. | ||
_-'N 4 C W N.O O O- | (JERSEY CENTRAL POWER & LIGHT COMPANY] | ||
....EXHIBIT E AMENDMENT Dated as of June 20, 1979 GENERAL PUBLIC UTILITIES CORPORATION, a Pennsyl-vania corporation (the " Borrower"), and certain Banks are parties to the Loan Agreemcat, dated as of November 15, 1976, as amended by an Agreement made as of March 20, 1979 (the "GPU Loan Agreement"), pursuant to which such Banks lent an aggregate of S50,000,000 principal amount to the Borrower, of which S39,000,000 principal amount remains out-standing.It is proposed that the GPU Loan Agreement be amended and restated to modify the repayment schedule thereunder, to change the applicable interest rate and to effect certain other changes. | [ METROPOLITAN EDISON COMPANY] | ||
By Title: | |||
CHEMICAL BANK, as Agent By Vice President 1A7A 09I | |||
SCilEDULE I | |||
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Attached to and forming a part of that certain Pltdge Agreement dated as of June 20, 1979, by [Jersev Central Power & Light Company] | |||
[ Metropolitan Edison] , as Pledgor 9 Chemical Bank, as Agent Bonds Principal Amount Certificate No's) | |||
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EXHIBIT E AMENDMENT Dated as of June 20, 1979 GENERAL PUBLIC UTILITIES CORPORATION, a Pennsyl-vania corporation (the " Borrower"), and certain Banks are parties to the Loan Agreemcat, dated as of November 15, 1976, as amended by an Agreement made as of March 20, 1979 (the "GPU Loan Agreement"), pursuant to which such Banks lent an aggregate of S50,000,000 principal amount to the Borrower, of which S39,000,000 principal amount remains out-standing. It is proposed that the GPU Loan Agreement be amended and restated to modify the repayment schedule thereunder, to change the applicable interest rate and to effect certain other changes. | |||
Accordingly, it is hereby agreed that the GPU Loan Agreement is, subject to the satisfaction of the conditions specified in Section 3.01 and Section 3.02 of the Revolving Credit Agreement, dated as of June 15, 1979, among the Borrower, Jersey Central Power & Light Company, Metropolitan Edison Company, Pennsylvania Electric Company, certain Banks and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, hereby amended and restated to read in its entirety as set forth in Exhibit A hereto; such amendment and restatement shall be effective as of the date of the satisfaction of such conditions. | Accordingly, it is hereby agreed that the GPU Loan Agreement is, subject to the satisfaction of the conditions specified in Section 3.01 and Section 3.02 of the Revolving Credit Agreement, dated as of June 15, 1979, among the Borrower, Jersey Central Power & Light Company, Metropolitan Edison Company, Pennsylvania Electric Company, certain Banks and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, hereby amended and restated to read in its entirety as set forth in Exhibit A hereto; such amendment and restatement shall be effective as of the date of the satisfaction of such conditions. | ||
This Amendment shall be governed by and construed in accordance with the laws of the State of New York and shall be effective when a counterpart hereof has been executed and delivered by each of the parties hereto. | This Amendment shall be governed by and construed in accordance with the laws of the State of New York and shall be effective when a counterpart hereof has been executed and delivered by each of the parties hereto. | ||
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written. | IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written. | ||
GENERAL PUBLIC UTILITIES CORPORATION By CITIBANK, N.A., CHEMICAL BANK Individually and as Agent 1A74 093 By By Title: Tit 1c: | GENERAL PUBLIC UTILITIES CORPORATION By CITIBANK, N.A., CHEMICAL BANK Individually and as Agent 1A74 093 By By Title: Tit 1c: | ||
..2 IRVING TRUST COMPANY MARINE 111DLAND BANK By By Tit.e: Title- | |||
......EXHIBIT A TO GPU LOAM AGREEMENT RESTATEMENT | . | ||
-.LOAN AGREEMENT Dated as of November 15, 1976, As Amended and Restated Pursuant to The Amendment, Dated as of June 20, 1979 GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the " Borrower"), CITIBANK, N.A., CHEMICAL BANK, IRVING TRUST COMPANY, MANUFACTURERS HANOVER TRUST COMPANY AND MARINE MIDLAND BANK (the " Banks"), and CITIBA"K, N.A.("Citibank") as agent (the " Agent") for the Banks hereunder, agree as follows: | . | ||
ARTICLE I DEFINITIONS SECTION 1.01. | 2 IRVING TRUST COMPANY MARINE 111DLAND BANK By By Tit.e: | ||
Certain Defined Terms. | 1 Title-MANUFACTURERS HANOVER TRUST COMPANY By Title: | ||
As used in this Agreement, the following terms snall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): " Amendment" means the Amendment, dated as of June 20, 1979, hereto." Business Dav" means any day other than a Saturday, Sunday or day on which commercial banks in the State of New York are authorized by law to close." Event of Default" shall have the meaning assigned to that term in Section 5.01." Indebtedness" of any Person means (i) indebted-ness for borrowed money or for the deferred purchase price of property or services in respect of which such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which such Person otherwise assures a creditor against loss, (ii) obligations under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases in respect of which obligations such Person is liable, contingently or otherwise, as obligor, guaran- | O 1,474 094 O | ||
....2 tor or otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss, and (iii) unfunded vested benefits under each plan maintained for employees of such Person and covered by Title IV of the Employee Retirement Income Security Act of 1974." Loan" means, as to any Bank, the principal amount of the Indebtedness of the Borrower to such Bank outstanding from time to time hereunder." Loan Documents" means this Agreement, the Notes, and the Stock Pledge Agreement." Majority Banks" means at any time Banks holding at least 66 2/3% of the then aggregate unpaid princi-pal amount of the Notes held by Banks." Note" means each promissory note of the Borrower to the orcer of a Bank evidencing the Indebtedness of the Borrower hereunder to such Bank in substantially the form of Exhibit A-1 to the Amendment." Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or other judicial entity, or a govern-ment or any agency or political subdivision thereof." Revolving Credit Acreement" means the Revolving Credit Agreement among tne Borrower, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, the banks parties thereto and Citibank, as Agent, and Chemical Bank, as Co-Agent for such Banks, as the same may from time to time be amended, modified or supplemented."SEC" means the Securities and Exchange Commission." Stock Pledce Aareement" shall have the meaning assigned to tnat term in the Revolving Credit Agreement." Utility Act" means the Public Utility Holding Company Act of 1935. | .. .. | ||
SECTION 1.02. | . | ||
Accounting Terms. | . | ||
All accounting terms not specifically defined herein snall be construed in accordance with generally accepted accounting principles con-sistently applied. | EXHIBIT A TO GPU LOAM AGREEMENT RESTATEMENT | ||
O 1474 096 | - | ||
..-.3 ARTICLE II THE LOANS SECTION 2.01. | . | ||
The Notes and Recavmen,1 The Loans are evidenced by, and the Borrcwer shall repay the principal of each Loan and interest thereon in accordance with, the Notes received by the Banks. | LOAN AGREEMENT Dated as of November 15, 1976, As Amended and Restated Pursuant to The Amendment, Dated as of June 20, 1979 GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the " Borrower"), CITIBANK, N.A., CHEMICAL BANK, IRVING TRUST COMPANY, MANUFACTURERS HANOVER TRUST COMPANY AND MARINE MIDLAND BANK (the " Banks"), and CITIBA"K, N.A. | ||
SECfION 2.02. | ("Citibank") as agent (the " Agent") for the Banks hereunder, agree as follows: | ||
Ootional Precayments. | ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms snall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): | ||
Tne Bor-rower may, upon at least five Business Days' written notice to the Agent signed by a duly authorized officer of such Borrcwer, prepay the Notes in whole or ratably in part with accrued interest to the date of such prepayment on the amount prepaid, provided that each partial prepayment shall be in an aggregate principal amount not less than S5,000,000. | " Amendment" means the Amendment, dated as of June 20, 1979, hereto. | ||
SECTION 2.03. | " Business Dav" means any day other than a Saturday, Sunday or day on which commercial banks in the State of New York are authorized by law to close. | ||
Payments and Comoutations. | " Event of Default" shall have the meaning assigned to that term in Section 5.01. | ||
The Borrower shall make each payment unoer any Loan Document not later than 12:00 ncon (New York City time) on the day when due in lawful money of the United States of America to the Agent at its address referre' to in Section 7.02 in immediately available funds. | " Indebtedness" of any Person means (i) indebted-ness for borrowed money or for the deferred purchase price of property or services in respect of which such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which such Person otherwise assures a creditor against loss, (ii) obligations under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases in respect of which obligations such Person is | ||
The Agent will promptly thereaf ter distribute to each Bank its ratable share of each such payment received by it for the account of the Banks. | , liable, contingently or otherwise, as obligor, guaran-3474 095 | ||
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2 tor or otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss, and (iii) unfunded vested benefits under each plan maintained for employees of such Person and covered by Title IV of the Employee Retirement Income Security Act of 1974. | |||
" Loan" means, as to any Bank, the principal amount of the Indebtedness of the Borrower to such Bank outstanding from time to time hereunder. | |||
" Loan Documents" means this Agreement, the Notes, and the Stock Pledge Agreement. | |||
" Majority Banks" means at any time Banks holding at least 66 2/3% of the then aggregate unpaid princi-pal amount of the Notes held by Banks. | |||
" Note" means each promissory note of the Borrower to the orcer of a Bank evidencing the Indebtedness of the Borrower hereunder to such Bank in substantially the form of Exhibit A-1 to the Amendment. | |||
" Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or other judicial entity, or a govern-ment or any agency or political subdivision thereof. | |||
" Revolving Credit Acreement" means the Revolving Credit Agreement among tne Borrower, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, the banks parties thereto and Citibank, as Agent, and Chemical Bank, as Co-Agent for such Banks, as the same may from time to time be amended, modified or supplemented. | |||
"SEC" means the Securities and Exchange Commission. | |||
" Stock Pledce Aareement" shall have the meaning assigned to tnat term in the Revolving Credit Agreement. | |||
" Utility Act" means the Public Utility Holding Company Act of 1935. | |||
SECTION 1.02. Accounting Terms. All accounting terms not specifically defined herein snall be construed in accordance with generally accepted accounting principles con-sistently applied. | |||
O 1474 096 | |||
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3 ARTICLE II THE LOANS SECTION 2.01. The Notes and Recavmen,1 The Loans are evidenced by, and the Borrcwer shall repay the principal of each Loan and interest thereon in accordance with, the Notes received by the Banks. | |||
SECfION 2.02. Ootional Precayments. Tne Bor-rower may, upon at least five Business Days' written notice to the Agent signed by a duly authorized officer of such Borrcwer, prepay the Notes in whole or ratably in part with accrued interest to the date of such prepayment on the amount prepaid, provided that each partial prepayment shall be in an aggregate principal amount not less than S5,000,000. | |||
SECTION 2.03. Payments and Comoutations. The Borrower shall make each payment unoer any Loan Document not later than 12:00 ncon (New York City time) on the day when due in lawful money of the United States of America to the Agent at its address referre' to in Section 7.02 in immediately available funds. The Agent will promptly thereaf ter distribute to each Bank its ratable share of each such payment received by it for the account of the Banks. | |||
The Borrower hereby authorizes each Bank, if and to the extent payment owed to such Bank is not made when due under any Loan Document, to charge from time to time against any account of the Borrower with such Bank any amount so due. | The Borrower hereby authorizes each Bank, if and to the extent payment owed to such Bank is not made when due under any Loan Document, to charge from time to time against any account of the Borrower with such Bank any amount so due. | ||
All computations of interest under the Notes hereunder shall be made on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days (including the first day but excluding the last day) elapsed. | All computations of interest under the Notes hereunder shall be made on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days (including the first day but excluding the last day) elapsed. | ||
SECTION 2.04. | SECTION 2.04. Payment on Non-Business Davs. When-ever any payment to be made hereunder or under the Notes shall be stated to be due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be in-cluded in the computation of payment of interest. | ||
Payment on Non-Business Davs. | SECTION 2.05. Sharina of Payments, Etc. If any Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Notes held by it in excess of its ratable share of p'.yments on account of the Notes obtained by all | ||
When-ever any payment to be made hereunder or under the Notes shall be stated to be due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be in-cluded in the computation of payment of interest. | . | ||
SECTION 2.05. | 1474 097 | ||
Sharina of Payments, Etc. | |||
If any Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Notes held by it in excess of its ratable share of p'.yments on account of the Notes obtained by all | . | ||
.1474 097 | . | ||
..4 O the Banks, such Bank shall purchase from the other Banks such participations in the Notes held by them as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them, crovided, however, that if all or any portion of such excess payment is thereafter recovered from sucn purchasing Bank, the purchase shall be rescinded and the purchase price restored to the extent of such recovery , bu t wi thout interest. | 4 O | ||
The Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.05 may exercise all its righ ts of payment (including the right of set-off) with respect to such participation as fully as if such Bank were the direct creditor of the Borrower in the amount of such pa rt icipa tion. | the Banks, such Bank shall purchase from the other Banks such participations in the Notes held by them as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them, crovided, however, that if all or any portion of such excess payment is thereafter recovered from sucn purchasing Bank, the purchase shall be rescinded and the purchase price restored to the extent of such recovery , bu t wi thout interest. The Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.05 may exercise all its righ ts of payment (including the right of set-off) with respect to such participation as fully as if such Bank were the direct creditor of the Borrower in the amount of such pa rt icipa tion. | ||
ARTICLE III REPRESENTATIONS AND WARR/WTIES SECTION 3.01. | ARTICLE III REPRESENTATIONS AND WARR/WTIES SECTION 3.01. Reoresentations and Warranties of the Borrower. The Borrower represents and warrants that: | ||
Reoresentations and Warranties of the Borrower. | (a) It is a corporation duly incorporated, validly existing and in good standing under the lll laws of the Commonwealth of Pennsylvania. | ||
The Borrower represents and warrants that: (a)It is a corporation duly incorporated, | (b) The execution, delivery and performance by the Borrewer of each Loan Document to wh.ch it is a par *.y are within the Borrcwer's corporate powers, have been duly authorized by all necessary corporate action, do not contravene (i) the Borrower's charter or by-laws or (ii) law or any contractual restriction binding on or affecting the Borrower, and do not re-sult in or require the creation of any lien, security interest or other charge or encumbrance (other than pursuant to the Stock Pledge Agreement) upon or with respect to any of its properties. | ||
..a-..5 (d)This Agreement is, and each other Loan Document to which the Borrower is to be a party when delivered will be, legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. | (c) No authorization or approval or other action by, and no notice to or filing with, any goverraental authority or regulatory body is required for the due execu tion, delivery and performance by the Borrower of any Loan Document to which it is or is to be a party except for appropriate orders of the SEC under the Utility Act, each of which orders has been obtained, is in full force and effect and is sufficient for its purpose. | ||
ARTICLE IV COVENANT OF THE BORROWER SECTION 4.01. | 1 'A 098 | ||
Covenant of the Borrower. | |||
The Borrower covenants that it will, so long as any Note shall remain unpaid, unless the Majority Banks shall otherwise consent in writing, pe rf o rm , observe and adhere to each and every covenant of the Borrower contained in Article V of the Revolving Credit Agreement (provided, however, that references in respect of such covenants to " Notes" shall mean the Notes as defined herein and to " Majority Banks" shall mean the Majority Banks as defined herein) just as if each and every such covenant were set out herein and, by this reference, such covenants (together with the definitions of the defined terms used therein) are hereby incorporated herein. | .. a-. | ||
In the event that the Revolving Credit Agreement shall for any reason (including by reason of the final payment in full of all obligations of the Borrowers thereunder), terminate or cease to be binding upon the Borrcwer, then the covenants contained in Article V of the Revolving Credit Agreement (together with the definitions of the defined terms used therein) as in effect on the date of such termination or cessation, shall be deemed to be set out herein and, by this reference, such covenants are hereby incorporated herein. | . | ||
ARTICLE V EVENTS OF DEFAULT SECTION 5.01. | 5 (d) This Agreement is, and each other Loan Document to which the Borrower is to be a party when delivered will be, legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. | ||
Events of Default. | ARTICLE IV COVENANT OF THE BORROWER SECTION 4.01. Covenant of the Borrower. The Borrower covenants that it will, so long as any Note shall remain unpaid, unless the Majority Banks shall otherwise consent in writing, pe rf o rm , observe and adhere to each and every covenant of the Borrower contained in Article V of the Revolving Credit Agreement (provided, however, that references in respect of such covenants to " Notes" shall mean the Notes as defined herein and to " Majority Banks" shall mean the Majority Banks as defined herein) just as if each and every such covenant were set out herein and, by this reference, such covenants (together with the definitions of the defined terms used therein) are hereby incorporated herein. In the event that the Revolving Credit Agreement shall for any reason (including by reason of the final payment in full of all obligations of the Borrowers thereunder), terminate or cease to be binding upon the Borrcwer, then the covenants contained in Article V of the Revolving Credit Agreement (together with the definitions of the defined terms used therein) as in effect on the date of such termination or cessation, shall be deemed to be set out herein and, by this reference, such covenants are hereby incorporated herein. | ||
If any of the following events | ARTICLE V EVENTS OF DEFAULT SECTION 5.01. Events of Default. If any of the following events (" Events of Def ault") shall occur and be continuing: | ||
(" Events of Def ault") shall occur and be continuing: (a)The Borrower shall f ail to make any payment of principal of, or interest on, any Note when due; or.(b)Any representation or warranty or statement made by the Borrower (or any of its officers) in or.n 1474 099 | (a) The Borrower shall f ail to make any payment of principal of, or interest on, any Note when due; or | ||
-~ . ...6 O connection with any Loan Document or the Revolving Credit Agreement or in any schedule, certificate or other document delivered pursuant to or in connection with any Loan Document (as defined herein and in the Revolving Credit Agreement) shall prove to have been incorrect in any material respect when made; or (c)The Borrower shall f ail to perform or observe any other term, covenant or agreement contained or incorporated by reference in any Loan Document on its part to be performed or observed and any such failure shall remain unremedied for 10 days af ter written notice thereof shall have been given to the Borrower by the Agent or any Bank; or (d)The Borrower shall (i) fail to pay any Indebtedness (other than Indebtedness evidenced by the Notes) of such Borrower, or any interest or premium thereon, when due (whether by scheduled maturity, re-quired prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, or (ii) fail to perf orm or observe any term, covenant or condition on its part to be performed or observed under any agreement or instrument relating to any such Indebted-ness, when required to be performed or observed, and such failure shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such failure to perform or observe is to accelerate, or to permit the accelera-tion of, the maturity of such Int -bt ed nes s ; or any such Indebtedness shall be declarud to be due and pay-able, or required to be prepaid (other than by a regu-larly scheduled required prepayment) , prior to the stated maturity thereof; or (e)The Borrower shall generally fail to pay its debts as they become due or shall admit in writing its inabilitf to pay its debts or shall make a general assignme nt for the benefit of creditors or shall institute any proceeding or voluntary case s eek ing to ad j ud icate it a bankrupt or insolvent or seek ing reorganiz a tio n , arrangement, ad j u stment , protection, relief, or composition of it or its debts under any law O 1A74 100 | . | ||
.._...7 relating to bankruptcy, insolvency or reorganization or relief or protection of debtors or seeking the entry of an order for relief or the appointment of a receiver, trusteo, custodian or e her similar official for it or for any substantial part of its property or such Borrower or any of its subsidiaries shall take any corporate action to authorize any of the actions described in this subsection (e); or (f)Any proceeding shall be instituted against such Borrower seeking to adjudicate it a bankrupt or insolvent or seeking reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insol-vency or reorganization or relief or protection of debtors or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property; or (g)There shall have occurred change in the fi-nancial condition or prospects of the Borrower since May 29, 1979, which, in the opinion of the Majority Banks, is material and adverse and substantially in-creases the risk that the Notes will not be repaid when due; or (h)A final juagment or order for the payment of money in excess of S1,000,000 shall be rendered against the Borrower and such judgment or order shall continue unsatisfied and in effect for a period of 30 consecu-tive days (excluding therefrom any period during which enforcement of such jcdgment or order shall be stayed, whether by pendency of appeal or otherwise); or (i)If any provision of the Stock Pledge Agreement after delivery thereof shall for any reason cease to be valid and binding on the Borrower, or, except to the extent permitted by the terms thereof, cease to create a valid and perfected first priority security interest in any of the collateral purported to be covered thereby, or the Borrower shall so state in writing; then, and in any such event described in subsections (a)-(d) and ( f)- { i) , abere, the Agent shall at the request, or may with the consent, of the Majority Banks, by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement by the Borrower to be immediately due and payable, whereupon the | (b) Any representation or warranty or statement made by the Borrower (or any of its officers) in or .n 1474 099 | ||
\474\0\ | |||
...8 O Notes, all such interest and all such amounts shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower (orovided however, that no such declaration shall or may be made unless prior thereto or concurrently therewith the promissory notes of the Borrower issued under the Revolving Credit Agreement shall have been or shall be declared to be due and payable pursuant to Section 6.01 of the Revolving Credit Agreement, and in any such event deceribed in subsection (e), above, the Hotes, all interest thereon and all other amounts payable under this Agreement by the Borrower shall become and be immedictely due and payable, without presentment, demand, protest or nocice of any kind, all of which are hereby expressly waived by the Borrower. | - ~ . . | ||
ARTICLE VI THE AGENT SECTION 6.01. | . . | ||
Authorization and Action. | 6 O | ||
Each g Bank hereby 6ppoints and authorizes tne Agent to take such W action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto. | connection with any Loan Document or the Revolving Credit Agreement or in any schedule, certificate or other document delivered pursuant to or in connection with any Loan Document (as defined herein and in the Revolving Credit Agreement) shall prove to have been incorrect in any material respect when made; or (c) The Borrower shall f ail to perform or observe any other term, covenant or agreement contained or incorporated by reference in any Loan Document on its part to be performed or observed and any such failure shall remain unremedied for 10 days af ter written notice thereof shall have been given to the Borrower by the Agent or any Bank; or (d) The Borrower shall (i) fail to pay any Indebtedness (other than Indebtedness evidenced by the Notes) of such Borrower, or any interest or premium thereon, when due (whether by scheduled maturity, re-quired prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, or (ii) fail to perf orm or observe any term, covenant or condition on its part to be performed or observed under any agreement or instrument relating to any such Indebted-ness, when required to be performed or observed, and such failure shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such failure to perform or observe is to accelerate, or to permit the accelera-tion of, the maturity of such Int -bt ed nes s ; or any such Indebtedness shall be declarud to be due and pay-able, or required to be prepaid (other than by a regu-larly scheduled required prepayment) , prior to the stated maturity thereof; or (e) The Borrower shall generally fail to pay its debts as they become due or shall admit in writing its inabilitf to pay its debts or shall make a general assignme nt for the benefit of creditors or shall institute any proceeding or voluntary case s eek ing to ad j ud icate it a bankrupt or insolvent or seek ing reorganiz a tio n , arrangement, ad j u stment , protection, relief, or composition of it or its debts under any law O | ||
As to any matters not expressly pro-vided for by the Loan Documents (including, without limita-tion, enforcement or collection of the Notes or the Stock Pledge Agreement) , the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining frcm acting) upon the instructions of the Majority Banks, and such instructions shall be binding upon all Banks and all holders of Notes; crovided, however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to any Loan Document or applicable law.SECTION 6.02. | 1A74 100 | ||
Reliance of Acent. | |||
Neither the Agent nor any of its directors, otficers, agents or employees shall be liable for any action taken or emitted to be taken by any of them under or in connection with any Loan Docu-ment, except for its or their own gross negligence or wilful misconduct. | .. _. | ||
Without limitation of the generality of the foregoing, the Agent: (i)"may treat the payee of any Note | . . | ||
..9 notice of the assignment or transfer thereof signed by such payee and in form satisf actory to the Agent; (ii) may con-sult with legal counsel (including counsel for the Borrower), independent public accountants (including the Borrower's independent public accountants) and other experts selected by the Agent and shall not be liable for any action taken or omitted to be taken in good f aith by either of them in accordance with the advice of such counsel, accountants or experts; (iii) make no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties or representations made in or in connection with any Loan Document; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the t e rms , covenants or conditions of any Loan Document or to inspect the property (including the books and records) of the Borrower; (v) shall not be re-spons ible to any Bank for the due execution, legality, valid i ty , enforceability, genuineness, sufficiency or value of any Loan Document or collateral covered thereby or any other instrument or document furnished pursuant thereto; and (vi) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consant, cer-tificate or other instrument or writir.g (which may be by telegram, canle or telex) believed by the recipient to be genuine and signed or sent by the proper party or parties. | 7 relating to bankruptcy, insolvency or reorganization or relief or protection of debtors or seeking the entry of an order for relief or the appointment of a receiver, trusteo, custodian or e her similar official for it or for any substantial part of its property or such Borrower or any of its subsidiaries shall take any corporate action to authorize any of the actions described in this subsection (e); or (f) Any proceeding shall be instituted against such Borrower seeking to adjudicate it a bankrupt or insolvent or seeking reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insol-vency or reorganization or relief or protection of debtors or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property; or (g) There shall have occurred change in the fi-nancial condition or prospects of the Borrower since May 29, 1979, which, in the opinion of the Majority Banks, is material and adverse and substantially in-creases the risk that the Notes will not be repaid when due; or (h) A final juagment or order for the payment of money in excess of S1,000,000 shall be rendered against the Borrower and such judgment or order shall continue unsatisfied and in effect for a period of 30 consecu-tive days (excluding therefrom any period during which enforcement of such jcdgment or order shall be stayed, whether by pendency of appeal or otherwise); or (i) If any provision of the Stock Pledge Agreement after delivery thereof shall for any reason cease to be valid and binding on the Borrower, or, except to the extent permitted by the terms thereof, cease to create a valid and perfected first priority security interest in any of the collateral purported to be covered thereby, or the Borrower shall so state in writing; then, and in any such event described in subsections (a)-(d) and ( f)- { i) , abere, the Agent shall at the request, or may with the consent, of the Majority Banks, by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement by the Borrower to be immediately due and payable, whereupon the | ||
SECTION 6.03. | \474 \0\ | ||
Citibank and Its Affiliates. | |||
With respect to its Loan and the Note issued to it, C i t ibank shall have the same rights and powers under the Loan Documents as any other Bank and may exercise the same as though it were not the Agent; and the term " Bank" or " Banks" shall, unless otherwise expressly indicated, include Citibank in its individual capacity. | . | ||
Citibank and its affiliates may accept deposits frem, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrcwer, any of its subsidiaries and any person or entity who may do business with or own securities of any Borrower or any of its subsidiaries, all as if Citibank were not the Agent and without any duty to account there for to the Banks. | . . | ||
SECTION 6.04. | 8 O | ||
Bank Credit Decision. | Notes, all such interest and all such amounts shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower (orovided however, that no such declaration shall or may be made unless prior thereto or concurrently therewith the promissory notes of the Borrower issued under the Revolving Credit Agreement shall have been or shall be declared to be due and payable pursuant to Section 6.01 of the Revolving Credit Agreement, and in any such event deceribed in subsection (e), above, the Hotes, all interest thereon and all other amounts payable under this Agreement by the Borrower shall become and be immedictely due and payable, without presentment, demand, protest or nocice of any kind, all of which are hereby expressly waived by the Borrower. | ||
Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the Amendment. | ARTICLE VI THE AGENT SECTION 6.01. Authorization and Action. Each g Bank hereby 6ppoints and authorizes tne Agent to take such W action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly pro-vided for by the Loan Documents (including, without limita-tion, enforcement or collection of the Notes or the Stock Pledge Agreement) , the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining frcm acting) upon the instructions of the Majority Banks, and such instructions shall be binding upon all Banks and all holders of Notes; crovided, however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to any Loan Document or applicable law. | ||
Each Bank also acknowledges that it will, independently and without reliance upon the Agent | SECTION 6.02. Reliance of Acent. Neither the Agent nor any of its directors, otficers, agents or employees shall be liable for any action taken or emitted to be taken by any of them under or in connection with any Loan Docu-ment, except for its or their own gross negligence or wilful misconduct. Without limitation of the generality of the foregoing, the Agent: (i)"may treat the payee of any Note as the holder thereof until the Agent receives written g | ||
}k7k | 1474 102 | ||
..10 or any other Bank and based on such documents and informa tion as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. | |||
SECTION 6.05. | . . | ||
Indemnification. | 9 notice of the assignment or transfer thereof signed by such payee and in form satisf actory to the Agent; (ii) may con-sult with legal counsel (including counsel for the Borrower), | ||
The Banks agree to indemnify the Agent (to the extent not reimbursed by the Borrcwer), ratably according to the respective principal amount of the Note then held by each of them, frcm and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of the Loan Documents, or any of them, or any action taken or omitted by the Agent under the Loan Documents, or any of them, provided that no Bank shall be liable for any portion of such lia-bilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements result-ing from the gross negligence or wilful misconduct of the indemnitee. | independent public accountants (including the Borrower's independent public accountants) and other experts selected by the Agent and shall not be liable for any action taken or omitted to be taken in good f aith by either of them in accordance with the advice of such counsel, accountants or experts; (iii) make no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties or representations made in or in connection with any Loan Document; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the t e rms , covenants or conditions of any Loan Document or to inspect the property (including the books and records) of the Borrower; (v) shall not be re-spons ible to any Bank for the due execution, legality, valid i ty , enforceability, genuineness, sufficiency or value of any Loan Document or collateral covered thereby or any other instrument or document furnished pursuant thereto; and (vi) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consant, cer-tificate or other instrument or writir.g (which may be by telegram, canle or telex) believed by the recipient to be genuine and signed or sent by the proper party or parties. | ||
Without limitation of the foregoing, each Bank agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Acent in connection with the preparation, execu tion , administration, or enforcement of, h or legal advice in respect of rights or responsibilities under, the Loan Documents, or any of them, to the extent that the Agent is not reimbursed for such expenses by the Borrower. | SECTION 6.03. Citibank and Its Affiliates. With respect to its Loan and the Note issued to it, C i t ibank shall have the same rights and powers under the Loan Documents as any other Bank and may exercise the same as though it were not the Agent; and the term " Bank" or " Banks" shall, unless otherwise expressly indicated, include Citibank in its individual capacity. Citibank and its affiliates may accept deposits frem, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrcwer, any of its subsidiaries and any person or entity who may do business with or own securities of any Borrower or any of its subsidiaries, all as if Citibank were not the Agent and without any duty to account there for to the Banks. | ||
SECTION 6.06. | SECTION 6.04. Bank Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the Amendment. Each Bank also acknowledges that it will, independently and without reliance upon the Agent | ||
Successor Acent. | \ | ||
The Agent may resign at any time as Agent under the Loan Documents by giving written notice thereof to the Banks and the Borrcwer and may be removed as Agent under the Loan Documents at any time with or without cause by the Majority Banks. | }k7k | ||
Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Agent thereunder. | |||
If no successor Agent shall have been so appointed by the Majority Banks, and shall have accepted such appointment, within 30 days af ter the giving of notice of resignation or the Majority Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least SS,000,000. | . . | ||
Upon the acceptanco of any appointment as Agent under the Loan Documents by a successor Agent, such 9 4,4 104 | 10 or any other Bank and based on such documents and informa tion as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. | ||
..11 successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under the Loan Documents. | SECTION 6.05. Indemnification. The Banks agree to indemnify the Agent (to the extent not reimbursed by the Borrcwer), ratably according to the respective principal amount of the Note then held by each of them, frcm and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of the Loan Documents, or any of them, or any action taken or omitted by the Agent under the Loan Documents, or any of them, provided that no Bank shall be liable for any portion of such lia-bilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements result-ing from the gross negligence or wilful misconduct of the indemnitee. Without limitation of the foregoing, each Bank agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Acent in connection with the preparation, execu tion , administration, or enforcement of, h or legal advice in respect of rights or responsibilities under, the Loan Documents, or any of them, to the extent that the Agent is not reimbursed for such expenses by the Borrower. | ||
SECTION 6.06. Successor Acent. The Agent may resign at any time as Agent under the Loan Documents by giving written notice thereof to the Banks and the Borrcwer and may be removed as Agent under the Loan Documents at any time with or without cause by the Majority Banks. Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Agent thereunder. If no successor Agent shall have been so appointed by the Majority Banks, and shall have accepted such appointment, within 30 days af ter the giving of notice of resignation or the Majority Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least SS,000,000. Upon the acceptanco of any appointment as Agent under the Loan Documents by a successor Agent, such 9 | |||
4,4 104 | |||
. | |||
. | |||
11 successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under the Loan Documents. | |||
Af ter any retiring Agent's resignation or removal as Agent under the Loan Documents, the provisions of this Article VI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under the Loan Documents. | Af ter any retiring Agent's resignation or removal as Agent under the Loan Documents, the provisions of this Article VI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under the Loan Documents. | ||
ARTICLE VII MISCELLANECUS SECTION 7.01. | ARTICLE VII MISCELLANECUS SECTION 7.01. Amendments, Etc. No amendment or waiver of any provision of any Loan Document, nor consent to any departure by the Borrower therefrom, shall in any event be ef fective unless the same shall be in writing and signed by the Majority Banks, and then such waiver or con-sent shall be effective only in the specific instance and for the specific purpose for which given; orovided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Banks, do any of the follow-ing: (a) subject the Banks to any additional obligations, (b) reduce the principal of, or interest on, the Notes, (c) postpone any date fixed for any payment of principal of, or interest on, the Notes, (d) release any collateral except as shall be otherwise provided in any Loan Document or (e) change the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under any Loan Docume nt. | ||
Amendments, Etc. | SECTION 7.02. Notices, Etc. All notices and other communications provided for hereunder shall be in writing (including telegraphic ccmmunication) and mailed or telegraphed or delivered, if to the Borrower, at its address at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention: | ||
No amendment or waiver of any provision of any Loan Document, nor consent to any departure by the Borrower therefrom, shall in any event be ef fective unless the same shall be in writing and signed by the Majority Banks, and then such waiver or con-sent shall be effective only in the specific instance and for the specific purpose for which given; orovided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Banks, do any of the follow-ing: (a) subject the Banks to any additional obligations, (b) reduce the principal of, or interest on, the Notes, (c) postpone any date fixed for any payment of principal of, or interest on, the Notes, (d) release any collateral except as shall be otherwise provided in any Loan Document or (e) change the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under any Loan Docume nt. | Vice President and Chief Financial Of ficer; if to any Bank, at its address set forth under its name on the signa-ture pages of the Revolving Credit Agreement; and if to the Agent, at its address at 399 Park Avenue, New York, New York 10043, Attention: Energy-East Department, National Banking Group; or as to each party, at such other address as shall be designated by such party in a written notice to the other p'a rt i e s . All such notices and communications stall, when mailed or telegraphed, be ef fective when deposited in the | ||
SECTION 7.02. | \414 \Db | ||
Notices, Etc. | |||
All notices and other communications provided for hereunder shall be in writing (including telegraphic ccmmunication) and mailed or telegraphed or delivered, if to the Borrower, at its address at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention: | . . | ||
Vice President and Chief Financial Of ficer; if to any Bank, at its address set forth under its name on the signa-ture pages of the Revolving Credit Agreement; and if to the Agent, at its address at 399 Park Avenue, New York, New York 10043, Attention: Energy-East Department, National Banking Group; or as to each party, at such other address as shall be designated by such party in a written notice to the other p'a rt i e s . | 12 | ||
All such notices and communications stall, when mailed or telegraphed, be ef fective when deposited in the | , | ||
\414\Db | O mails or delivered to the telegraph company, re spe ct ively , | ||
..12 , O mails or delivered to the telegraph company, re spe ct ively , except th at notices and communications to the Agent pursuant to Article VI shall not be effective until received by the Agent as the case may be. | except th at notices and communications to the Agent pursuant to Article VI shall not be effective until received by the Agent as the case may be. | ||
SECTION 7.03. | SECTION 7.03. No Waiver- Remedies. No f ailure on the part of any Bank ar the Agent to exercise, and no delay in exercising, any right under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in the Loan Documents are cumul ative and not exclusive of any remedies provided by law. | ||
No Waiver- Remedies. | SECTION 7.04. Costs, Excences and Taxes. The Borrower agrees to pay on cemand all costs and expenses in connection with the preparation, execu tion, delive ry , | ||
No f ailure on the part of any Bank ar the Agent to exercise, and no delay in exercising, any right under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right. | filing, recording, and administration of the Loan Documents and the other documents to be delivered under the Loan Do cumen ts , including, without limitation, the reasonable rees and out-of-pocket expenses of counsel for the Agent and special counsel for the Banks, and local counsel who may be retained by said counsel, with respect thereto and with respect to advising the Agent as to its righ ts and respons i-lll bilities under the Loan Documents, and all costs and expenses, if any, in connection with the enforcement of the Loan Documents and the other documents to be delivered under the Loan Documents. In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, d elive ry , | ||
The remedies provided in the Loan Documents are cumul ative and not exclusive of any remedies provided by law. | of this Agreement, the Amendment, the Notes and the other documents delivered hereunder, and agrees to save the Agent and each Bank harmless frcm and against any and all liabili-ties with respect to or resulting from any delay in paying or omission to pay such taxes. | ||
SECTION 7.04. | SECTION 7.05. Richt of Set-off. Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the making of the reauest or the granting of the consent specified by Section 5.01 to authorize the Agen.t to declare the Notes due and payable pursuant to the provisions of Section 5.01, each Bank is hereby authorized at any time and f rcm time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower), to set of f and apply any and all deposits (general or special, time or demand, provisional or f. al) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Borrower | ||
Costs, Excences and Taxes. | !474 106 | ||
The Borrower agrees to pay on cemand all costs and expenses in connection with the preparation, execu tion, delive ry , filing, recording, and administration of the Loan Documents and the other documents to be delivered under the Loan Do cumen ts , including, without limitation, the reasonable rees and out-of-pocket expenses of counsel for the Agent and special counsel for the Banks, and local counsel who may be | |||
In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, d elive ry , of this Agreement, the Amendment, the Notes and the other documents delivered hereunder, and agrees to save the Agent and each Bank harmless frcm and against any and all liabili-ties with respect to or resulting from any delay in paying or omission to pay such taxes. | . | ||
SECTION 7.05. | . | ||
Richt of Set-off. | 13 against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Note held by such Bank, irrespective of whether or not such Bank shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Bank agrees promptly to notify the Borrower after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Bank may have. | ||
Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the making of the reauest or the granting of the consent specified by Section 5.01 to authorize the Agen.t to declare the Notes due and payable pursuant to the provisions of Section 5.01, each Bank is hereby authorized at any time and f rcm time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower), to set of f and apply any and all deposits (general or special, time or demand, provisional or f. | SECTION 7.06. Binding Effect; Governing Law. | ||
al) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Borrower | This Agreement shall be binding upon and inure to the benefit of the Borrower, the Agent and each Bank and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Banks. This Agreement and the Notes shall be governed by, and construed in accordance with, t .ie laws of the State of New York. | ||
!474 106 | IN WITNESS WHEREOF, the parties 1.9reto have caused this Agreerent to be executed by their respective officers thereunto duly authorized, as of the date first above written. | ||
..13 against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Note held by such Bank, irrespective of whether or not such Bank shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. | GENERAL PUBLIC UTILITIES CORPORATION By | ||
Each Bank agrees promptly to notify the Borrower after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-off and application. | * CITIBANK, N.A., Individually and as Agent By | ||
The rights of each Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Bank may have. | * CHEMICAL BANK By * | ||
SECTION 7.06. | ) h] $ | ||
Binding Effect; Governing Law. | * Executed through execution of the Amendment. | ||
This Agreement shall be binding upon and inure to the benefit of the Borrower, the Agent and each Bank and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Banks.This Agreement and the Notes shall be governed by, and construed in accordance with, t .ie laws of the State of New York.IN WITNESS WHEREOF, the parties 1.9reto have caused this Agreerent to be executed by their respective officers thereunto duly authorized, as of the date first above written. | |||
GENERAL PUBLIC UTILITIES CORPORATION By*CITIBANK, N.A., Individually and as Agent By*CHEMICAL BANK By*) h] $* Executed through execution of the Amendment. | . . | ||
..14 O IRVING TRUST COMPAN' By*MANUFACTURERS HANOV-COMPANY By*MARINE MIDLAND BANK By*O un\@*~ Execu ted through execution of the Amendment. | 14 O | ||
O | IRVING TRUST COMPAN' By | ||
..__...EXHIBIT A-1 TO GPU LOAN AGREEMENT RESTATEMENT PROMISSORY NOTE | * MANUFACTURERS HANOV-COMPANY By | ||
$Dated 19__ | * MARINE MIDLAND BANK By | ||
* O un \@ | |||
"=#.e.The " Alternate Base Rate" means the higher of: (a)The base rate of Citibank, N.A.on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b)1/2 of one percent above the latest three-week moving average of secordary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspeaded or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, but in no event higher than the maximum rate permitted by law.Both principal and interest are payable in lawful money of the United States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, Nes York 10043, in immediately tvailable funds. | *~ Execu ted through execution of the Amendment. | ||
All payments made on account of principal hereof shall, prior to any transfer hereof, be endorsed on the grid attached hereto which is part of this Promissory Note. | O | ||
1474 109 | |||
..2 O This Promissory Note is one of the Notes referred to in and is entitled to the benefits of, the Loan Agree-ment, dated as of November 15, 1976, as amended and restated pursuant to an Amendment, dated as of June 20, 1979 (the" Credit Agreement") amond the Borrower, the Bank, certain other banks parties thereto and Citibank, N. A. , as Agent for the Bank and such other banks, and the Loan Documents re-ferred to therein. | .. __. | ||
The Credit Agreement, amont other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of prit.cipal hereof prior to the maturity hereof upon the terms and conditions therein specified. | . . | ||
GENERAL PUBLIC UTILITIES CORPORATION By Title: O i474 i10.O | EXHIBIT A-1 TO GPU LOAN AGREEMENT RESTATEMENT PROMISSORY NOTE | ||
* | $ Dated , | ||
19__ | |||
..-...EXHIBIT F[ AMENDED AND RESTATED] SECURITY AGREEMENT, dated | FOR VALUE RECEIVED, GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the " Borrower"), | ||
[as of May 21, 1979, as amended and restated) as of June 20, 1979, made by [ JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey corporation] [ METROPOLITAN EDISON CORPOPATIONc a Pennsylvania corporation] (the "Oorrower"), to CHEMICAL BANK, as agent (the " Agent") for the Banks (as defined below);PRELIMINARY STATEMENT. | HEREBY PRO:tISES TO PAY to the order of [NAME OF BANK] (the | ||
The Banks have agreed to make, subject to certain terms and conditions, certain Advancas (the " Advances") to the Borrower pursuant to the Revolving Credit Agreement, dated as of June 15, 1979, among tha Borrower, General Public Utilities Corporation,[ Jersey Central Power & Light Company] | " Bank") the amount of S ( Dollars) on October 1, 1981, , together with interest on the principal amount from time to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to 108% of the Alternate Base "=#.e. | ||
[ Metropolitan Edison Company), Pennsylvania Electric Company, the Banks parties thereto (the " Banks"), Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent (the " Credit Agreement"). | The " Alternate Base Rate" means the higher of: | ||
[The proceeds of such Advances will be applied in part to pay the indebted-ness of the Borrower to certain of the Banks under the Term Loan Agreement, dated as of May 21, 1979, as amended and restated as of May 25, 1979, among the Borrower, certain of | (a) The base rate of Citibank, N.A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-week moving average of secordary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspeaded or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, but in no event higher than the maximum rate permitted by law. | ||
It in a condition precedent to the making of such Advances by the Banks that the Borrower shall have | Both principal and interest are payable in lawful money of the United States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, Nes York 10043, in immediately tvailable funds. All payments made on account of principal hereof shall, prior to any transfer hereof, be endorsed on the grid attached hereto which is part of this Promissory Note. | ||
1474 109 | |||
. . | |||
2 O | |||
This Promissory Note is one of the Notes referred to in and is entitled to the benefits of, the Loan Agree-ment, dated as of November 15, 1976, as amended and restated pursuant to an Amendment, dated as of June 20, 1979 (the | |||
" Credit Agreement") amond the Borrower, the Bank, certain other banks parties thereto and Citibank, N. A. , as Agent for the Bank and such other banks, and the Loan Documents re-ferred to therein. The Credit Agreement, amont other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of prit.cipal hereof prior to the maturity hereof upon the terms and conditions therein specified. | |||
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EXHIBIT F | |||
[ AMENDED AND RESTATED] SECURITY AGREEMENT, dated | |||
[as of May 21, 1979, as amended and restated) as of June 20, 1979, made by [ JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey corporation] [ METROPOLITAN EDISON CORPOPATIONc a Pennsylvania corporation] (the "Oorrower"), to CHEMICAL BANK, as agent (the " Agent") for the Banks (as defined below); | |||
PRELIMINARY STATEMENT. The Banks have agreed to make, subject to certain terms and conditions, certain Advancas (the " Advances") to the Borrower pursuant to the Revolving Credit Agreement, dated as of June 15, 1979, among tha Borrower, General Public Utilities Corporation, | |||
[ Jersey Central Power & Light Company] [ Metropolitan Edison Company), Pennsylvania Electric Company, the Banks parties thereto (the " Banks"), Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent (the " Credit Agreement"). [The proceeds of such Advances will be applied in part to pay the indebted-ness of the Borrower to certain of the Banks under the Term Loan Agreement, dated as of May 21, 1979, as amended and restated as of May 25, 1979, among the Borrower, certain of such Banks and Citibank, N.A., as Agent (the " Term Loan lll Agreement").] It in a condition precedent to the making of such Advances by the Banks that the Borrower shall have | |||
[ confirmed and] granted the security interest contemplated by this Agreement. | [ confirmed and] granted the security interest contemplated by this Agreement. | ||
NOW, THE RE FORE , in consideration of the premises and in order to induce the Banks to make such Advances, the Borrower hereby agrees with the Agent for its benefit and the ratable benefit of the Banks as follows: | NOW, THE RE FORE , in consideration of the premises and in order to induce the Banks to make such Advances, the Borrower hereby agrees with the Agent for its benefit and the ratable benefit of the Banks as follows: | ||
SECTION 1. | SECTION 1. Grant of Securitv. The Borrower hereby assigns and pledges to the Agent for its benefit and the ratable benefit of the Banks, and hereby (confirms and] | ||
Grant of Securitv. | grants to the Agent for its benefit and the ratable benefit of the Banks a security interest in all of the Borrower's | ||
The Borrower hereby assigns and pledges to the Agent for its benefit and the ratable benefit of the Banks, and hereby (confirms and] | -i-ht, title and interest in and to the fo. '.owing (the | ||
grants to the Agent for its benefit and the ratable benefit of the Banks a security interest in all of the Borrower's-i-ht, title and interest in and to the fo. '.owing (the" Collateral"): (a)All right, title and interest of the Bor-rower in, to and under the Contract for Conversion Services, dated January 30, 1975, among the Borrower,[ Jersey Central Power & 'fqht Company] [ Metropolitan Edison Company] and Pennsylvania Electric Company, each | " Collateral"): | ||
\414\\2 | (a) All right, title and interest of the Bor-rower in, to and under the Contract for Conversion Services, dated January 30, 1975, among the Borrower, | ||
.2 (b)All right, title and interest of the Borrower in " concentrates" and "UF " (each as defined in the Contract) under the Contr$ct (the Borrower's interest in concentrates and UF6 pursuant to the Contract being the " Uranium"); and (c)All proceeds of the Collateral and, to the extent not otherwise included, all payments under insur-ance (whether or not the Agent is the loss payee thereof), or any indemnity, warranty or guaranty, payable by rea-son of loss or damage to or otherwise with resrect to the Collateral or any other property covered thereby. | [ Jersey Central Power & 'fqht Company] [ Metropolitan Edison Company] and Pennsylvania Electric Company, each acting through GPU Service Corporation, and Kerr-McGee jg Nuclear Corporation (the " Contract"); | ||
SECTION 2. | \414 \\2 | ||
Zecurier for Cbligations. | |||
This Agreement secures the payment of all obligations of the Borrower to the Banks now or hereafter existing under (i) the [ Term Loan Agreement and the promissory notes of the Borrower evidencing the '7debtedness of the borrower to the respective Banks under the Term Loan Agreement and (ii) the] | . | ||
2 (b) All right, title and interest of the Borrower in " concentrates" and "UF " (each as defined in the Contract) under the Contr$ct (the Borrower's interest in concentrates and UF6 pursuant to the Contract being the " Uranium"); and (c) All proceeds of the Collateral and, to the extent not otherwise included, all payments under insur-ance (whether or not the Agent is the loss payee thereof), | |||
or any indemnity, warranty or guaranty, payable by rea-son of loss or damage to or otherwise with resrect to the Collateral or any other property covered thereby. | |||
SECTION 2. Zecurier for Cbligations. This Agreement secures the payment of all obligations of the Borrower to the Banks now or hereafter existing under (i) the [ Term Loan Agreement and the promissory notes of the Borrower evidencing the '7debtedness of the borrower to the respective Banks under the Term Loan Agreement and (ii) the] | |||
Credit Agreement and the Notes, whether for principal, interest, expenses or otherwise, and [(iii)] [(ii)] all obligations of the Borrower now or hereaf ter enisting ander this Agreement (all such oblif . ions of the Bo: rower being the " Obligations"). | Credit Agreement and the Notes, whether for principal, interest, expenses or otherwise, and [(iii)] [(ii)] all obligations of the Borrower now or hereaf ter enisting ander this Agreement (all such oblif . ions of the Bo: rower being the " Obligations"). | ||
SECTION 3. | SECTION 3. Borrower Remains Liable. Anything herein to the contrary notwithstanding, (a) the Borrower shall remain liable under the Contract to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Agent of any of the rights hereunder shall not release the Borrower from any of its duties or obligations under the Contract and (c) neither the Agent nor any Bank shall have any obligation or liability under the Contract by reason of this Agre'3-ment, nor shall the Agent or any Bank be obligated to per-form any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. | ||
Borrower Remains Liable. | SECTION 4. Representations and Warranties. The Borrower represents and warrants as follows: | ||
Anything herein to the contrary notwithstanding, (a) the Borrower shall remain liable under the Contract to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Agent of any of the rights hereunder shall not release the Borrower from any of its duties or obligations under the Contract and (c) neither the Agent nor any Bank shall have any obligation or liability under the Contract by reason of this Agre'3-ment, nor shall the Agent or any Bank be obligated to per-form any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. | (a) The chief place of business and chief execu-tive office of the Borrower and the office where the Borrower keeps its records concerning accounts and con- | ||
SECTION 4. | , | ||
Representations and Warranties. | tract rights is located at [ Madison Avenue at Punch 1474 1iT | ||
The Borrower represents and warrants as follows: (a)The chief place of business and chief execu-tive office of the Borrower and the office where the Borrower keeps its records concerning accounts and con- | |||
, tract rights is located at [ Madison Avenue at Punch 1474 1iT | . | ||
..3 Bowl Road, Morristown, New Jersey 07960] [2800 Pottsville Pike, Muhlenberg Township, Berks County, Pennsylvania]; | . | ||
all Uranium which is owned by the Borrower or in which the Borrower has an interest pursuant to the Contract is located at Gore, Oklahoma.(b)The Borrower has not assigned or otherwise transferred or encumbered the Contract or any interest in or related to the Contract or the Uranium, except for the security interest created by this Agreement; no ef fective financing statement or other instrument similar in effect covering the Contract or any interest in or related to the Contract or the Uranium or any account or contract righ t is on file in any office [, excep t such as may have been filed in favor of the Agent relating to this Agreement] .(c)This Agreement creates a valid and a perf ected first priority security interest in the Collateral, securing the payment of the Obligations. | 3 Bowl Road, Morristown, New Jersey 07960] [2800 Pottsville Pike, Muhlenberg Township, Berks County, Pennsylvania]; | ||
SECTION 5. | all Uranium which is owned by the Borrower or in which the Borrower has an interest pursuant to the Contract is located at Gore, Oklahoma. | ||
Further Assurances.(a)The Borrower agrees that f rcm time to t im e , at the expense of the Borrower, the Borrower will promp' ly execute and deliver all further | (b) The Borrower has not assigned or otherwise transferred or encumbered the Contract or any interest in or related to the Contract or the Uranium, except for the security interest created by this Agreement; no ef fective financing statement or other instrument similar in effect covering the Contract or any interest in or related to the Contract or the Uranium or any account or contract righ t is on file in any office [, | ||
Without limiting the generality of the foregoing, the Borrower will execute and file such financing or continuation staements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Agent may request, in order to per-fect and preserve the security interests granted or pur-ported to be granted hereby.(b)The Borrower hereby authorizes the Agent to file one or more notices and financing or continuatic. | excep t such as may have been filed in favor of the Agent relating to this Agreement] . | ||
statements, and amendments thereto, relative to all or any pa rt of the Collateral without the signature of the Borrower where permitted g law.(c)The Borrower will furnish to the Agent fccm time to time statements and schedules and such other reports in connection with the Collateral as the Agent may reason-ably request, all in reasonable detail. | (c) This Agreement creates a valid and a perf ected first priority security interest in the Collateral, securing the payment of the Obligations. | ||
)414\\0 | SECTION 5. Further Assurances. (a) The Borrower agrees that f rcm time to t im e , at the expense of the Borrower, the Borrower will promp' ly execute and deliver all further instruments and documentc, and take all further action, that may be necessary or desirable, or that the Agent may request, ll) in order to perf ect and protect any security interest granted or purported to be granted hereby or to enable the Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, the Borrower will execute and file such financing or continuation staements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Agent may request, in order to per-fect and preserve the security interests granted or pur-ported to be granted hereby. | ||
..4 (d)The Borrower will take no action under or in respect of the Contract or the Uranium (other than a sale permitted by the Credit Agreement) which might aaversely affect the rights of the Banks or the protections intended to be afforded hereby without the prior consent of the Agent; the Borrower will not cause or permit any Uranium to be delivered by Kerr-McGee Nuclear Corporation to any person without the prior written consent of the Agent. | (b) The Borrower hereby authorizes the Agent to file one or more notices and financing or continuatic. | ||
SECTION 6. | statements, and amendments thereto, relative to all or any pa rt of the Collateral without the signature of the Borrower where permitted g law. | ||
Transfers and Other Liens. | (c) The Borrower will furnish to the Agent fccm time to time statements and schedules and such other reports in connection with the Collateral as the Agent may reason-ably request, all in reasonable detail. | ||
The Borrower shall not: (a)Sell, assign (by operation of law or other-wise) or otherwise dispose of any of the Collateral or any interest in or related to the Contract; or (b)Create or suffer to exist any lien, security interest or other charge or encumbrance upon or with respect to any of the Collateral except for the secur-ity interest created by this Agreement. | )414 \\0 | ||
SECTION 7. | |||
Agent Appointed Attorney-in-Fact. | . | ||
. | |||
4 (d) The Borrower will take no action under or in respect of the Contract or the Uranium (other than a sale permitted by the Credit Agreement) which might aaversely affect the rights of the Banks or the protections intended to be afforded hereby without the prior consent of the Agent; the Borrower will not cause or permit any Uranium to be delivered by Kerr-McGee Nuclear Corporation to any person without the prior written consent of the Agent. | |||
SECTION 6. Transfers and Other Liens. The Borrower shall not: | |||
(a) Sell, assign (by operation of law or other-wise) or otherwise dispose of any of the Collateral or any interest in or related to the Contract; or (b) Create or suffer to exist any lien, security interest or other charge or encumbrance upon or with respect to any of the Collateral except for the secur-ity interest created by this Agreement. | |||
SECTION 7. Agent Appointed Attorney-in-Fact. | |||
The Borrower hereby irrevocaoly appoints the Agent the Borrower's attorney-in-fact, with full authority in the place and stead of the Bocrower and in the name of the Borrower or otherwise, from time to time in the Agent's discretion, to take any action and to execute any instru-ment which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement. | The Borrower hereby irrevocaoly appoints the Agent the Borrower's attorney-in-fact, with full authority in the place and stead of the Bocrower and in the name of the Borrower or otherwise, from time to time in the Agent's discretion, to take any action and to execute any instru-ment which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement. | ||
SECTION 8. | SECTION 8. Agent May Perform. If the Borrcwer fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Borrower under Section 15. | ||
Agent May Perform. | SECTION 9. The Acent's Duties. The powers con-ferred on the Agent hereunder are solely to protect its in-terest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its pos. session and the accounting for moneys actually received by it hereunder, the Agent shall have no duty as to the Contract or any Collateral. | ||
If the Borrcwer fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Borrower under Section 15. | SECTION 10. Remedies. If any Event of Default (meaning, for purposes of this Agreement, an Event of De-fault as to the Borrower under 6.01 of the Credit Agree-c | ||
SECTION 9. | ~ | ||
The Acent's Duties. | \ h] h | ||
The powers con-ferred on the Agent hereunder are solely to protect its in-terest in the Collateral and shall not impose any duty upon it to exercise any such powers. | |||
Except for the safe custody of any Collateral in its pos. session and the accounting for moneys actually received by it hereunder, the Agent shall have no duty as to the Contract or any Collateral. | . | ||
SECTION 10. | . | ||
Remedies.If any Event of Default (meaning, for purposes of this Agreement, an Event of De-fault as to the Borrower under 6.01 of the Credit Agree-c\ h] h | 5 ment) shall have occurred and be continuing, the Agent may, subject to obtaining any recuired approvals and licenses of and from the United States Government, exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code (whether or not the Code applies to the affected Collateral) and all cash proceeds received oy the Agent in respect of any sale of,* collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 11 or 15) in whole or in part by the Agent for the ratable benefit of the Banks against, all or any part of the Obligations in such order as the Agent shall elect. Any surplus of such cash or cash proceeds held by the Agent and remaining after payment in full of all the Obligations shall be paid over to the Borrower or to whom-soever may be lawfully entitled to receive such surplus. | ||
..5 ment) shall have occurred and be continuing, the Agent may, subject to obtaining any recuired approvals and licenses of and from the United States Government, exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code (whether or not the Code applies to the affected Collateral) and all cash proceeds received oy the Agent in respect of any sale of,* collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 11 or 15) in whole or in part by the Agent for the ratable benefit of the Banks against, all or any part of the Obligations in such order as the Agent shall elect.Any surplus of such cash or cash proceeds held by the Agent and remaining after payment in full of all the Obligations shall be paid over to the Borrower or to whom-soever may be lawfully entitled to receive such surplus. | SECTION 11. Indemnitv by Borrower. The Borrower agrees to indemnify the Agent and eacn Bank from and against any and all claims, losses and liabilities growing out of or resulting from this Agreement (including, without limitation, ggg enforcement of this Agreement), except claims, losses or liabilities resulting from the Agent 's gross negligence or wilful misconduct. | ||
SECTION 11. | SECTION 12. Amendments; Etc. No amendment or waiver of any provision of tnia Agreement nor consent to any departure by the Borrower herefrom, shall in any event be effective unless the same shall ce in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given. | ||
Indemnitv by Borrower. | SECTION 13. Addresses for Notices. All notices and other communications provided for nereunder shall be in writing (including telegraphic communication) and, if to the Borrower or the Agent, mailed or delivered to it, addressed to it at its address specified in the Credit Agreement, or as to either party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. All such notices and other communications shall, when mailed or telegraphed, respectively, be effec-tive when deposited in the mails or delivered to the tele-graph company, respectively, addressed as aforesaid. | ||
The Borrower agrees to indemnify the Agent and eacn Bank from and against any and all claims, losses and liabilities growing out of or resulting from this Agreement (including, without limitation, ggg enforcement of this Agreement), except claims, losses or liabilities resulting from the Agent 's gross negligence or wilful misconduct. | O | ||
SECTION 12. | ,r,s \\6 | ||
Amendments; Etc. | |||
No amendment or waiver of any provision of tnia Agreement nor consent to any departure by the Borrower herefrom, shall in any event be effective unless the same shall ce in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given. | - . | ||
SECTION 13. | 6 SECTION 14. Continuing Security Interest: Trans-fer of Notes. This Agreement shall create a continuing se-curity interest in the Collateral and shall (i) remain in full force and effect until the final payment in full of the Obligations after the Termination Date (as defined in the Credit Agreement), (ii) be binding upon the Borrower, its successors and assigns and (iii) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Agent, the Banks and their respective successors, trans-ferees and assigns; crovided, however, that the security interest created and confirmed hereoy shall terminate in the event and to the extent that the Borrower shall sell or assign all or part of the Collateral for fair market value and shall apply the net cash proceeds from the sale or sales of such Collateral in accordance with Section 2.07 of the Credit Agreement. Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note held by it to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Bank herein or otherwise. Upon the payment in full of the Obligations, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the Borrower. Upon any such termination, the Agent will, at the Borrower's expense, execute and de-liver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. | ||
Addresses for Notices. | SECTION 15. Costs, Excenses and Taxes. The Borrower agrees to pay on comand all costs and expenses in connection with the preparation, execution, delivery, filing, recording, and administration of this Agreement and the other documents to be delivered hereunder, in-cluding, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent, and local counsel who may be retained by said counsel, with respect thereto and with respect to advising the Agent as to its rights and responsibilities hereunder, and all costs and expenses, if any, in connection with the enforcement of the Loan Docu-ments and the other documents to be delivered under this Agreement. | ||
All notices and other communications provided for nereunder shall be in writing (including telegraphic communication) and, if to the Borrower or the Agent, mailed or delivered to it, addressed to it at its address specified in the Credit Agreement, or as to either party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. | SECTION 16. Governinc Law: Terms. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as required by manda-tory provisions of law and except to the extent that the validity or perfection of the security interest hereunder, | ||
All such notices and other communications shall, when mailed or telegraphed, respectively, be effec-tive when deposited in the mails or delivered to the tele-graph company, respectively, addressed as aforesaid. | ) h] h | ||
O ,r,s\\6 | |||
-.6 SECTION 14. | . | ||
Continuing Security Interest: Trans-fer of Notes. | 7 or remedies hereunder, in respect of any particular Collat- llh eral are governed by the laws of a jurisdiction other than the State of New York. Unless otherwise defined herein or in the Credit Agreement, terms used in Article 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined. | ||
This Agreement shall create a continuing se-curity interest in the Collateral and shall (i) remain in full force and effect until the final payment in full of the Obligations after the Termination Date (as defined in the Credit Agreement), (ii) be binding upon the Borrower, its successors and assigns and (iii) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Agent, the Banks and their respective successors, trans-ferees and assigns; crovided, however, that the security interest created and confirmed hereoy shall terminate in the event and to the extent that the Borrower shall sell or assign all or part of the Collateral for fair market value and shall apply the net cash proceeds from the sale or sales of such Collateral in accordance with Section 2.07 of the Credit Agreement. | |||
Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note held by it to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Bank herein or otherwise. Upon the payment in full of the Obligations, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the Borrower. | |||
Upon any such termination, the Agent will, at the Borrower's expense, execute and de-liver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. | |||
SECTION 15. | |||
Costs, Excenses and Taxes. | |||
The Borrower agrees to pay on comand all costs and expenses in connection with the preparation, execution, delivery, filing, recording, and administration of this Agreement and the other documents to be delivered hereunder, in-cluding, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent, and local counsel who may be retained by said counsel, with respect thereto and with respect to advising the Agent as to its rights and responsibilities hereunder, and all costs and expenses, if any, in connection with the enforcement of the Loan Docu-ments and the other documents to be delivered under this Agreement. | |||
SECTION 16. | |||
Governinc Law: Terms. | |||
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as required by manda-tory provisions of law and except to the extent that the validity or perfection of the security interest hereunder,) h] h | |||
.7 or remedies hereunder, in respect of any particular Collat-llh eral are governed by the laws of a jurisdiction other than the State of New York. | |||
Unless otherwise defined herein or in the Credit Agreement, terms used in Article 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined. | |||
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. | IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. | ||
[ JERSEY CENTRAL POWER & LIGHT COMPANY][ METROPOLITAN EDISON COMPANY] | [ JERSEY CENTRAL POWER & LIGHT COMPANY] | ||
[ METROPOLITAN EDISON COMPANY] | |||
By Vice President ACKNCWLEDGED: | By Vice President ACKNCWLEDGED: | ||
GPU SERVICE CORPORATION PENNSYLVANIA ELECTRIC COMPANY | GPU SERVICE CORPORATION PENNSYLVANIA ELECTRIC COMPANY By _ | ||
[ METROPOLITAN EDISON COMPANY) | By Executive Vice President Vice President | ||
[ JERSEY CENTRAr POWER & | [ METROPOLITAN EDISON COMPANY) [ JERSEY CENTRAr POWER & | ||
LIGHT CCP ' | LIGHT CCP ' .] | ||
.]By | By By ___ | ||
} h] 4 0. | Vice President Vice President | ||
.. | } h] 4 | ||
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EXHIBIT G | |||
[ Letterhead of Messrs. Berlack, Israels & Libe rman] | |||
[Date of initial Borrowings] | [Date of initial Borrowings] | ||
To each of the Banks parties to: (a) the Revolving Credit Agreement dated as of June 15, 1979, among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company , said Banks and Citibank, N. A. , as Agent, and Chemical Bank, as Co-Agent, for said Banks; and (b) the Loan Agreement, dated as of November 15, 1976, as amended and restated effective as of the date hereof, among General Public Utilities Corpo-ration, said Banks and Citibank, N.A., as Agent, and to Citibank, N.A., as Agent, and to Chemical Bank, as Co-Agent General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Comoany and Pennsylvania Electric Company Gentlemen: | To each of the Banks parties to: (a) the Revolving Credit Agreement dated as of June 15, 1979, among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company , | ||
This opinion is furnished to you pursuant to Section 3.01(vi)(p) of the Revolving Credit Agreement, d ated as of June 15, 1979 (the " Credit Agreement") among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, the Banks parties thereto and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, for said Banks.Terms defined in the Credit Agreement are used herein as therein defined unless otherwise defined here-in; the Loan Documents, together with the GPU Loan Agree-ment, the GPU Loan Agreement Restatement, the New GPU Notes and the Supplemental Indenture (as 49 fined below), are from time to time referred to hereinaf tt a9 the " Bas ic Documents" . | said Banks and Citibank, N. A. , | ||
\414\\4 | as Agent, and Chemical Bank, as Co-Agent, for said Banks; and (b) the Loan Agreement, dated as of November 15, 1976, as amended and restated effective as of the date hereof, among General Public Utilities Corpo-ration, said Banks and Citibank, N.A., as Agent, and to Citibank, N.A., as Agent, and to Chemical Bank, as Co-Agent General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Comoany and Pennsylvania Electric Company Gentlemen: | ||
.2 O We have acted as counsel for the Borrowers in con-nection wi.th tha preparation, execution and delivery of, and the init.al Borrowings made under, the Credit Agreement. | This opinion is furnished to you pursuant to Section 3.01(vi)(p) of the Revolving Credit Agreement, d ated as of June 15, 1979 (the " Credit Agreement") among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, the Banks parties thereto and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, for said Banks. Terms defined in the Credit Agreement are used herein as therein defined unless otherwise defined here-in; the Loan Documents, together with the GPU Loan Agree-ment, the GPU Loan Agreement Restatement, the New GPU Notes and the Supplemental Indenture (as 49 fined below), are from time to time referred to hereinaf tt a9 the " Bas ic Documents" . | ||
\414 \\4 | |||
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We have acted as counsel for the Borrowers in con-nection wi.th tha preparation, execution and delivery of, and the init.al Borrowings made under, the Credit Agreement. | |||
In that connection we have examined: | In that connection we have examined: | ||
(1)The Credit Agreement. | (1) The Credit Agreement. | ||
(1)The documents furnished by the Borrowers pursuant to Article III of the Credit Agreement. | (1) The documents furnished by the Borrowers pursuant to Article III of the Credit Agreement. | ||
(3)The Indenture, dated November 1, 1944, by ME to Morgan Guaranty Trust Company of New York and all Supplemental Indentures thereto (the " Indenture"), in-cluding the Supplemental Indenture, dated as of June 1, 1979, pursuant to which the ME Bonds have been issued (the " Supplemental Indenture '), and the ME Bonds. | (3) The Indenture, dated November 1, 1944, by ME to Morgan Guaranty Trust Company of New York and all Supplemental Indentures thereto (the " Indenture"), in-cluding the Supplemental Indenture, dated as of June 1, 1979, pursuant to which the ME Bonds have been issued (the " Supplemental Indenture '), and the ME Bonds. | ||
(4)The Articles or the Certificate of Incorpora-tion of each Borrower and all amendments thereto (such Borrower's " Charter"). | (4) The Articles or the Certificate of Incorpora-tion of each Borrower and all amendments thereto (such Borrower's " Charter"). | ||
(5)The by-laws of eaca Borrower and all amend-ments thereto (such Borrower's "Jy-laws"). | (5) The by-laws of eaca Borrower and all amend-ments thereto (such Borrower's "Jy-laws"). | ||
lll(6)A certificate of the Secretary of the Common-wealth of Pennsylvania, dated 1979, at- | lll (6) A certificate of the Secretary of the Common-wealth of Pennsylvania, dated , 1979, at-testing to the continued corporate existence and good standing of each Borrower (other than Jersey Central Power & Light Company) in that Commo nwealth . | ||
(7)A certificate of the Secretary of State of New Jersey, dated 1979, attesting to the | (7) A certificate of the Secretary of State of New Jersey, dated , 1979, attesting to the continued corporate existence and good standing of Jersey Central Power & Light Company in that State. | ||
We have also made such further investigation as we have deemed necessary as a basis for this opinion. We have relied, as to all matters covered hereby which are governed by the laws of New Jersey, Pennsylvania or Oklahoma, on the attached opinions of Robert O. Brokaw, Esq., Messrs. Ryan, Russell & McConaghy and Messrs. Ballard, Spahr, Andrews & Ingersoll and Messrs. | |||
We have also made such further investigation as we have deemed necessary as a basis for this opinion. | Lawrence, Scott & Lamb, respectively, upon which opinions we believe you and we are justified in relying. he have assumed the due execution and delivery, pursuant to due authorisation, of the Amendment and the Credit Agreement by the Banks and the Agent. | ||
We have relied, as to all matters covered hereby which are governed by the laws of New Jersey, Pennsylvania or Oklahoma, on the attached opinions of Robert O. | \ | ||
Brokaw, Esq., Messrs. Ryan, Russell & McConaghy and Messrs. Ballard, Spahr, Andrews & Ingersoll and Messrs. | Qh | ||
Lawrence, Scott & Lamb, respectively, upon which opinions we believe you and we are justified in relying. | |||
he have assumed the due execution and delivery, pursuant to due authorisation, of the Amendment and the Credit Agreement by the Banks and the Agent. | . . | ||
Qh | 3 Based upon the foregoing and upon such investiga-tion as we have deemed necessary, we are of the opinion that: | ||
..3 Based upon the foregoing and upon such investiga-tion as we have deemed necessary, we are of the opinion that: | : 1. Each Borrower is a corporation duly incorpor-ated validly existing and in good standing under the laws of its jurisdiction of incorp ora t ion. | ||
1.Each Borrower is a corporation duly incorpor-ated validly existing and in good standing under the laws of its jurisdiction of incorp ora t ion. | : 2. The execution, delivery and performance by each Borrower of each Basic Document to which it is a party are within such Borrcwer's corporate powers, have been duly authorized by all necessary corporate action, do not contravene (i) such Borrower's Charter or By-laws or (ii) law or any contractual restriction binding on or affecting such Dorrower, and do not, except as created thereunder, result in or recuire the creation of any lien, se curity interest or other charge or encumbrance upon or with respect to any of its properties. | ||
2.The execution, delivery and performance by each Borrower of each Basic Document to which it is a party are within such Borrcwer's corporate powers, have been duly authorized by all necessary corporate action, do not contravene (i) such Borrower's Charter or By-laws or (ii) law or any contractual restriction binding on or affecting such Dorrower, and do not, except as created thereunder, result in or recuire the creation of any lien, se curity interest or other charge or encumbrance upon or with respect to any of its properties. | : 3. No authorization or approval or other action by, and no notice to or filing with, any goverr; mental authority or regulatory body is required for the due execution, delivery and performance by each Borrower of any Basic Document to which it is a party except for (i) in the case of each Borrower, appropriate orders of the SEC unoer the Utility Act, ( i i) in the case of JC an appropriate order of the NJBPU and (iii) in the case of each of ME and PE, an appropriate order of the PaPUC, all of which orders have been obtained, are in full force and effect and are sufficient for their purpose. | ||
3.No authorization or approval or other action by, and no notice to or filing with, any goverr; mental authority or regulatory body is required for the due execution, delivery and performance by each Borrower of any Basic Document to which it is a party except for (i) in the case of each Borrower, appropriate orders of the SEC unoer the Utility Act, ( i i) in the case of JC an appropriate order of the NJBPU and (iii) in the case of each of ME and PE, an appropriate order of the PaPUC, all of which orders have been obtained, are in full force and effect and are sufficient for their purpose.4.The Credit Agreement and each other Basic Document is the legal, valid and binding obligation of each Borrower which is a party thereto, enforceable against such Borrower in accordance with its respe ct ive terms.5.The Pledged Shares (as defined in the Stock Pledge Agreement) constitute 100% of the outstanding common stock of each of JC, ME, PE and GPU Service Corporation and 100% of the capital stock having ordinary voting rights of each of JC, ME, PE and GPU Service Corporation and the Pledged Shares have been duly and validly issued and are fully paid and non-assessable. | : 4. The Credit Agreement and each other Basic Document is the legal, valid and binding obligation of each Borrower which is a party thereto, enforceable against such Borrower in accordance with its respe ct ive terms. | ||
GPU is the record and beneficial owner of all of the Pledged Shares, except for twelve shares of the common stock of ME which are nominally registered | : 5. The Pledged Shares (as defined in the Stock Pledge Agreement) constitute 100% of the outstanding common stock of each of JC, ME, PE and GPU Service Corporation and 100% of the capital stock having ordinary voting rights of each of JC, ME, PE and GPU Service Corporation and the Pledged Shares have been duly and validly issued and are fully paid and non-assessable. GPU is the record and beneficial owner of all of the Pledged Shares, except for twelve shares of the common stock of ME which are nominally registered | ||
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6.The pledge of the Pledged Shares pursuant to the Stock Pledge Agreement creates a valid and perfected first priority security interest in the collateral in existence on the date hereof subject to, or purported to be subject to, the Stock Pledge Agreement securing the payment of the Obligations (as defined in the Stock Pledge Agreement). | . . | ||
7.The ME Bonds have been duly and validly issued, and the Indenture effectively creates a valid first lien on all property owned by ME purported to be covered thereby for the benefit of the holders of all bonds issued thereunder, including the ME Bonds, subject to restrictions, easements, leases, covenants, reservations, the lien of current taxes and minor encumbrances and defects which are common to properties of the character and size of that of ME, none of which in our opinion is material. | 4 in the names of certain employees of ME for convenience e | ||
9.The JC Security Agreement and the ME Security Agreement and the filing of the Financing Statements (copies of which were delivered to the Agent pursuant to Sections 3.01(vi)(i)(i) and 3.01 (vi)(h)( i), respec-tively, of the Credit Agreement) create valid and per-fected fire priority security interests (subject, in the case of the JC Security Agreement and as to priority only, to the filing of termination statements with respect to the financing statement filed with the Secretary of State of the State of New Jersey on May 22, 1979 (File No. 545939) and the financing statement filed with the County Clerk of Oklahoma County, Okla-homa on May 22, 1979 (File No. 146216)) in and to the | in the conduct of meetings of shareholders, but which are beneficially owned by GPU. | ||
- | : 6. The pledge of the Pledged Shares pursuant to the Stock Pledge Agreement creates a valid and perfected first priority security interest in the collateral in existence on the date hereof subject to, or purported to be subject to, the Stock Pledge Agreement securing the payment of the Obligations (as defined in the Stock Pledge Agreement). | ||
The opinions set forth above are subject to the following qualifications: (a)The enforceability of each Borrower's obligations under the Credit Agreement and the other Basic Documents to which it is a party is subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and the remedies of the Banks under the Security Agreements and the ME Bond Pledge Agreement are subject to the effect of the Atomic Energy Act of 1954, as amended, and the regulations thereunder.(b)The anforceability of each Borrower's obligations under the Credit Agreement and the other Basic Documents to which it is a party may be sub]ect to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).(c)We express no opinion as to (.) Section 2.10 of the Credit Agreement or Section 2.05 of the GPU Loan Agreement insofar as they provide that any Bank purchasing a participation from another Bank pursuant thereto may exercise set-of f or similar rights with respect to such participation, (ii) Section 8.05 of the Credit Agreement or Section 7.05 of the GPU Loan Agreement insof ar as they authorize each Bank to set off and apply any deposits at any time held, and any other indebtedness at any time owing, by such Bank to or for the account of the Borrower and (iii) the effect of the law of any jurisdiction other than the State of New York wherein any Bank may be located or wherein enforcement of the Credit Agreement, the Notes, the GPU Loan Agreement or the New GPU Notes may be sought which limits the rates of interest legally chargeable or collectible. | : 7. The ME Bonds have been duly and validly issued, and the Indenture effectively creates a valid first lien on all property owned by ME purported to be covered thereby for the benefit of the holders of all bonds issued thereunder, including the ME Bonds, subject to restrictions, easements, leases, covenants, reservations, the lien of current taxes and minor encumbrances and defects which are common to properties of the character and size of that of ME, none of which in our opinion is material. | ||
-(d)The Borrowers' indemnification obligations under the third sentence of Section 8.04 of the Credit Agreement may be unenforceable as contrary to public policy.n | : 8. The pledge of the ME Bonds pursuant to the ME 4h Bond Pledge Agreement creates a valid and perfected first pricrity security interest in the collateral in existence on the date hereof subject to, or purported to be subject to, the ME Bond Pledge Agreement securing the payment of the Obligations (as defined in the ME Bond Pledge Agreement), and to the extent of the principal amount of the ME Bonds, the Banks are entitled to the benefits of the Indenture in respect of the obligations of ME under the Credit Agreement and its Notes. | ||
..6 O We also wish to call to your attention that remedies available to the Agent and the Banks under the Stock Pledge Agreement and the JC Security Agreement and the ME Security Agreement may be limited in that: (a) the consent of the SEC may be required prior to the transfer of the shares of JC, ME or PE or to the exercise of rights in respect of such shares;(b) the consent of the NJBPU is required prior to the transfer of the shares of JC or to the exercise of rights in respect of such shares; (c) the consent of Kerr-McGee Nuclear Corpora-tion may be required prior to the assignment of any rights in respect of the Contract (as defined in the JC Security Agree-ment and the ME Secur4.ty Agreement); and (d) the consent of the Department of Energy may be required in respect of any action purporting to af fect the Uranium (as defined in the Contract). | : 9. The JC Security Agreement and the ME Security Agreement and the filing of the Financing Statements (copies of which were delivered to the Agent pursuant to Sections 3.01(vi)(i)(i) and 3.01 (vi)(h)( i), respec-tively, of the Credit Agreement) create valid and per-fected fire priority security interests (subject, in the case of the JC Security Agreement and as to priority only, to the filing of termination statements with respect to the financing statement filed with the Secretary of State of the State of New Jersey on May 22, 1979 (File No. 545939) and the financing statement filed with the County Clerk of Oklahoma County, Okla-homa on May 22, 1979 (File No. 146216)) in and to the Collateral (as defined in the JC Security Agreement and llh 347A | ||
Very truly yours, O 1A7A 124<" | \22 | ||
.EXHIBIT H[ Letterhead of Shearman & Sterling] | |||
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the MB Security Agreement, respectively) securing the payment of the obligations purported to be secured thereby, and all actions necessary to perfect and protect such security interests have been taken and completed. | |||
The opinions set forth above are subject to the following qualifications: | |||
(a) The enforceability of each Borrower's obligations under the Credit Agreement and the other Basic Documents to which it is a party is subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and the remedies of the Banks under the Security Agreements and the ME Bond Pledge Agreement are subject to the effect of the Atomic Energy Act of 1954, as amended, and the regulations thereunder. | |||
(b) The anforceability of each Borrower's obligations under the Credit Agreement and the other Basic Documents to which it is a party may be sub]ect to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). | |||
(c) We express no opinion as to (.) Section 2.10 of the Credit Agreement or Section 2.05 of the GPU Loan Agreement insofar as they provide that any Bank purchasing a participation from another Bank pursuant thereto may exercise set-of f or similar rights with respect to such participation, (ii) Section 8.05 of the Credit Agreement or Section 7.05 of the GPU Loan Agreement insof ar as they authorize each Bank to set off and apply any deposits at any time held, and any other indebtedness at any time owing, by such Bank to or for the account of the Borrower and (iii) the effect of the law of any jurisdiction other than the State of New York wherein any Bank may be located or wherein enforcement of the Credit Agreement, the Notes, the GPU Loan Agreement or the New GPU Notes may be sought which limits the rates of interest legally chargeable or collectible. | |||
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(d) The Borrowers' indemnification obligations under the third sentence of Section 8.04 of the Credit Agreement may be unenforceable as contrary to public policy. | |||
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We also wish to call to your attention that remedies available to the Agent and the Banks under the Stock Pledge Agreement and the JC Security Agreement and the ME Security Agreement may be limited in that: (a) the consent of the SEC may be required prior to the transfer of the shares of JC, ME or PE or to the exercise of rights in respect of such shares; (b) the consent of the NJBPU is required prior to the transfer of the shares of JC or to the exercise of rights in respect of such shares; (c) the consent of Kerr-McGee Nuclear Corpora-tion may be required prior to the assignment of any rights in respect of the Contract (as defined in the JC Security Agree-ment and the ME Secur4.ty Agreement); and (d) the consent of the Department of Energy may be required in respect of any action purporting to af fect the Uranium (as defined in the Contract). | |||
Very truly yours, O | |||
1A7A 124 | |||
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EXHIBIT H | |||
[ Letterhead of Shearman & Sterling] | |||
[ Closing Date] | [ Closing Date] | ||
To the Confirming Banks (as defined in the Revolving Credit Agreement referred to below) to Citibank, N.A., as Agent thereunder, and Chemical Bank, as Co-Agent thereunder. | To the Confirming Banks (as defined in the Revolving Credit Agreement referred to below) to Citibank, N.A., as Agent thereunder, and Chemical Bank, as Co-Agent thereunder. | ||
General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsvlvania Electric Company Gentlemen: | General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsvlvania Electric Company Gentlemen: | ||
We have acted as your special counsel in connection with the preparation, execution and delivery of, and the ini-tial Borrowings made under, the Revolving Credit Agreement, dated as of June 15, 1979 ( the " Credit Agreement") , among Gen-eral Public Utilities Corporation, Jersey Central Power & | We have acted as your special counsel in connection with the preparation, execution and delivery of, and the ini-tial Borrowings made under, the Revolving Credit Agreement, dated as of June 15, 1979 ( the " Credit Agreement") , among Gen-eral Public Utilities Corporation, Jersey Central Power & | ||
Light Company, Metropolitan Edison Company and Pennsylvania Electric Company , each of you , Citibank , N. A. , as Agent, and Chemical Bank, as Co-Agent. | Light Company, Metropolitan Edison Company and Pennsylvania Electric Company , each of you , Citibank , N. A. , as Agent, and Chemical Bank, as Co-Agent. Unless otherwise indicated, terms defined in the Credit Agreement are used herein and in Schedule I hereto as therein defined. | ||
Unless otherwise indicated, terms defined in the Credit Agreement are used herein and in Schedule I hereto as therein defined. | |||
In this connection we have examined the documents listed on Schedule I hereto [being the Loan Documents and the other documents delivered pursuant to Article III of the Credit Agreement] . | In this connection we have examined the documents listed on Schedule I hereto [being the Loan Documents and the other documents delivered pursuant to Article III of the Credit Agreement] . | ||
In our examination of the documents listed on such Schedule I, we have assumed the authen*i. city of all such documents submitted to us as originals, the genuineness of all signatures, the due authority of the parties execut-ing such documents and the conf ormity to the originals of | In our examination of the documents listed on such Schedule I, we have assumed the authen*i. city of all such documents submitted to us as originals, the genuineness of all signatures, the due authority of the parties execut-ing such documents and the conf ormity to the originals of | ||
.1474 123 | . | ||
. | 1474 123 | ||
We have relied, as to factual matters, on the documents we have examined and, as to the matters of law covered by the opinion of counsel listed in Item __ of such Schedule I, on such opinion. | |||
We are qualified to practice law in the State o' New York and we do not purport to be experts on, or to express any opinions herein concerning, the law of any other jurisdiction. | . | ||
Based upon and subject to the foregoing and while we have not independently considered the matters covered by the opinion listed in Item __ of such ScheduJ e I to the extent necessary to enable us to express the conclusions stated therein, we are of the opinion that (i) such opinion, the Credit Agreenent and other documents listed in such Schedule I appear to be in substantially acceptable legal form, and (ii) the documents listed in such Schedule I furnished pursuant to Article II of the Credit Agreement (except the orders of the SEC, the NJBPU and the PaPUC listed in Items and respectively, of | 2 all such documents submitted to us as copies. We have llh relied, as to factual matters, on the documents we have examined and, as to the matters of law covered by the opinion of counsel listed in Item __ of such Schedule I, on such opinion. We are qualified to practice law in the State o' New York and we do not purport to be experts on, or to express any opinions herein concerning, the law of any other jurisdiction. | ||
Based upon and subject to the foregoing and while we have not independently considered the matters covered by the opinion listed in Item __ of such ScheduJ e I to the extent necessary to enable us to express the conclusions stated therein, we are of the opinion that (i) such opinion, the Credit Agreenent and other documents listed in such Schedule I appear to be in substantially acceptable legal form, and (ii) the documents listed in such Schedule I furnished pursuant to Article II of the Credit Agreement (except the orders of the SEC, the NJBPU and the PaPUC listed in Items , , and , respectively, of such Schedule I, as to wh.ch we express no opinion) are substantially responsive to the requirements of the Credit Agreement. | |||
Very truly yourc, SHEARMAN & STERLING 1474 126 O | Very truly yourc, SHEARMAN & STERLING 1474 126 O | ||
..EXHIBIT I[ Letterhead of Messrs. Berlack, Israels & Liberman] | |||
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EXHIBIT I | |||
[ Letterhead of Messrs. Berlack, Israels & Liberman] | |||
[Date of the JC Pledge Agreement] | [Date of the JC Pledge Agreement] | ||
To each of the Banks parties to the Revolving Credit Agreement dated as of June 15, 1979, ancng General Public Utiliries Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, said Banks and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, for said Banks, and to Citibank, N.A., as Agent, and to Chemical Bank, as Co-Agent Jersey Central Pcuer | To each of the Banks parties to the Revolving Credit Agreement dated as of June 15, 1979, ancng General Public Utiliries Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, said Banks and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, for said Banks, and to Citibank, N.A., as Agent, and to Chemical Bank, as Co-Agent Jersey Central Pcuer | ||
& Light Comcany Gentlemen: | & Light Comcany Gentlemen: | ||
This opinion is furnished to you it. connection with the execution and delivery of that certain Pledge Agreement, dated as of June 20, 1979 | This opinion is furnished to you it. connection with the execution and delivery of that certain Pledge Agreement, dated as of June 20, 1979 (' he "JC Bond Pledge Agreement") , | ||
(' he "JC Bond Pledge Agreement") , made by Jersey Central Power & Light Company ("JC") to Citi-bank, G.A., as your Agent (the " Agent"), in connection with the Revolving Credit Agreement, dated as of Junc 15, 1979 (the " Credit Agreement") among General Public Utilities Corporation, JC, Metropolitan Edison Company and Pennsylvania Electric Company, each of you and Citibank, N.A., as your Agent, and Chemical Bawnk, as your Co-Agent. | made by Jersey Central Power & Light Company ("JC") to Citi-bank, G.A., as your Agent (the " Agent"), in connection with the Revolving Credit Agreement, dated as of Junc 15, 1979 (the " Credit Agreement") among General Public Utilities Corporation, JC, Metropolitan Edison Company and Pennsylvania Electric Company, each of you and Citibank, N.A., as your Agent, and Chemical Bawnk, as your Co-Agent. Terms defined in the Credit Agreement are used herein as therein defined unless otherwise defined herein. | ||
Terms defined in the Credit Agreement are used herein as therein defined unless otherwise defined herein. | |||
We have acted as counsel for JC in connection with the preparation, execution and delivery of the JC Bond Pledge Agreement. | We have acted as counsel for JC in connection with the preparation, execution and delivery of the JC Bond Pledge Agreement. | ||
, In that connection we have examined (1)The JC Bond Pledge Agreement. | , | ||
\474\21 | In that connection we have examined (1) The JC Bond Pledge Agreement. | ||
..2 (I) | \474 \21 | ||
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(I) | |||
(2) The Indenture, dated March 1, 1946, from JC to Citibank, N.A., as Trustee, and all Supplemental Inden-tures thereto (the "JC Indenture"), including the Supple-mental Indenture, dated as of June __, 1979, pursuant to which the JC Bonds have been irsued (the "JC Supplemental Indenture"), and the JC Bonds-(3) Orders of the SEC and the NJBPU, authorizing the JC Bond Pledge Agreement and the JC Supplemental Indenture and the transactions contemplated thereby. | |||
(4) The Articles or the Certificate of Incorpora-tion of JC and all amendments thereto (JC's " Charter"). | (4) The Articles or the Certificate of Incorpora-tion of JC and all amendments thereto (JC's " Charter"). | ||
(5)The by-laws of JC and all amendments thereto (JC's "By-laws"). | (5) The by-laws of JC and all amendments thereto (JC's "By-laws"). | ||
(6)A certificate of the Secretary of State of New Jersey, dated 1979, attesting to the continued | (6) A certificate of the Secretary of State of New Jersey, dated , 1979, attesting to the continued corporate existence and good standing of JC in that State. | ||
We have also nade such further investigation as we have deemed necessary as a basis for tnis opinion. We have relied, as to all matters covered hereby which are governed by the laws of New Jersey, on the attached opinion of Robert O. Brokaw, Esq., upon which opinion we believe you and we are justified in relying. | |||
We have relied, as to all matters covered hereby which are governed by the laws of New Jersey, on the attached opinion of Robert O.Brokaw, Esq., upon which opinion we believe you and we are justified in relying. | |||
Based upon the foregoing and upon such investiga-tion as we have deemed necessary, we are of the opinion that: | Based upon the foregoing and upon such investiga-tion as we have deemed necessary, we are of the opinion that: | ||
1.JC is a corporaticn duly incorporated, validly existing and in good standing under the laws of New Jersey.2.The execution, delivery and performance by JC of the JC Bond Pledge Agreement and the JC Supplemental Indenture are within JC's corporate powers, have been duly authorized by all necessary corporate action, do not contravene ( i) JC 's Charter or By-laws or ( ii) law or any contractual restriction binding on or af fecting JC, and do not, except as created thereunder, result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties. | : 1. JC is a corporaticn duly incorporated, validly existing and in good standing under the laws of New Jersey. | ||
2..Jo authorization or approval or other action by, | : 2. The execution, delivery and performance by JC of the JC Bond Pledge Agreement and the JC Supplemental Indenture are within JC's corporate powers, have been duly authorized by all necessary corporate action, do not contravene ( i) JC 's Charter or By-laws or ( ii) law or any contractual restriction binding on or af fecting JC, and do not, except as created thereunder, result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties. | ||
.--...3 delivery and performance by JC of the JC Bond Pledge Agreement or the JC Supplemental Indenture except for (i) appropriate orders of the SEC under the Utility Act and (ii) an appropriate order of the NJSPU, each of which orders has been obtained, is in full force and effect and is suf ficient for their purpose. | : 2. .Jo authorization or approval or other action by, and no no-ice to or filing with, any governmental author-llh ity or regulatory body is required for the due execution, 1474 128 | ||
4.The JC Bond Pledge Agreement is the legal, valid and binding obligation of JC, enforceable against JC in accordance with its terms. | |||
5.The JC Bonds nave been duly and validly issued, and the JC Indenture effectively creates a valid first lien on all property owned by JC purported to bc owned thereby for the benefit of the holders of all bonds issued thereunder, including the JC Bonds, subject to restrictions, easements, leases, covenants, reserva-tions, the lien of current taxes and minor encumbrances and defects which are common to properties of the character and size of that of JC, none of which in our opinion is material. | . --. | ||
6.The pledge of the JC Bonds pursuant to the JC Bond Pledge Agreement creates a valid and perfected first priority security interest in the collateral in existence on the date hereof subject to, or purported to be subject to, the JC Bond Pledge Agreement securing the payment of the Obligations (as defined in the JC Bond Pledge Agreement), and to the extent of the principal amount of the JC Bonds, the Banks are entitled to the benefits of the JC Indenture in respect of the obliga-tions of JC under the Credit Agreement and its Notes. | . | ||
The opinions set forth above are subject to the following qualif ications : (a)The enforceability of JC's obligations under the JC Bond Pledge Agreement is subject to the effect of any applicable bankruptcy, insolvency, reorg a n iza t ion , moratorium or other similar laws affecting creditors' rights generally and the remedies of the Banks under the JC Bond Pledge Agreement are subject to the effect of the Atomic Energy Act of 1954, as amended, and the regu-lations thereunder.(b)The enforceability of JC's obligations under the JC Bond Pledge Agreement may be subject to general principles of equity (regardless of whether such enforce-ability is considered in a proceeding in equity or at law).Very truly yours, 147A 129 | . | ||
3 delivery and performance by JC of the JC Bond Pledge Agreement or the JC Supplemental Indenture except for (i) appropriate orders of the SEC under the Utility Act and (ii) an appropriate order of the NJSPU, each of which orders has been obtained, is in full force and effect and is suf ficient for their purpose. | |||
[date]Citibank, N.A., as Agent 399 Park Avenue New York, New York, 10043 Attention: Energy-East Department National Banking Group Gentlemen: | : 4. The JC Bond Pledge Agreement is the legal, valid and binding obligation of JC, enforceable against JC in accordance with its terms. | ||
Reference made to that certain Revolving Credit Agreement, dated as of June 15, 1979, among the undersigned, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company (the " Borrowers"), the Banks parties thereto, yourselves as Agent and Chemical Bank, as Co-Agent (the " Credit Agreemant"; terms defined | : 5. The JC Bonds nave been duly and validly issued, and the JC Indenture effectively creates a valid first lien on all property owned by JC purported to bc owned thereby for the benefit of the holders of all bonds issued thereunder, including the JC Bonds, subject to restrictions, easements, leases, covenants, reserva-tions, the lien of current taxes and minor encumbrances and defects which are common to properties of the character and size of that of JC, none of which in our opinion is material. | ||
[The undersigned hereby requests that, in accordance with the definition of Loan Limit contained in Section 1.01 of the Credit Agreement, that the Loan Limit of the under-signed be increased from S75,000,000 to S or such | : 6. The pledge of the JC Bonds pursuant to the JC Bond Pledge Agreement creates a valid and perfected first priority security interest in the collateral in existence on the date hereof subject to, or purported to be subject to, the JC Bond Pledge Agreement securing the payment of the Obligations (as defined in the JC Bond Pledge Agreement), and to the extent of the principal amount of the JC Bonds, the Banks are entitled to the benefits of the JC Indenture in respect of the obliga-tions of JC under the Credit Agreement and its Notes. | ||
[The undersigned hereby requests on behalf of each of the Borrowers that, in accordance with the provisions of Section 2.01(b)(ii) of the Credit Agreement, the Final Aggregate Total Commitment be increased f rom the amount thereof available on the date hereof to S or such lesser amount as the Super Majority Banks shall consent to in writing, effective [date].] | The opinions set forth above are subject to the following qualif ications : | ||
(a) The enforceability of JC's obligations under the JC Bond Pledge Agreement is subject to the effect of any applicable bankruptcy, insolvency, reorg a n iza t ion , | |||
moratorium or other similar laws affecting creditors' rights generally and the remedies of the Banks under the JC Bond Pledge Agreement are subject to the effect of the Atomic Energy Act of 1954, as amended, and the regu-lations thereunder. | |||
(b) The enforceability of JC's obligations under the JC Bond Pledge Agreement may be subject to general principles of equity (regardless of whether such enforce-ability is considered in a proceeding in equity or at law). | |||
Very truly yours, 147A 129 | |||
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EXHIBIT J COMMITMENT INCREASE REQUEST | |||
[date] | |||
Citibank, N.A., as Agent 399 Park Avenue New York, New York, 10043 Attention: Energy-East Department National Banking Group Gentlemen: | |||
Reference made to that certain Revolving Credit Agreement, dated as of June 15, 1979, among the undersigned, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company (the " Borrowers"), | |||
the Banks parties thereto, yourselves as Agent and Chemical Bank, as Co-Agent (the " Credit Agreemant"; terms defined therein being used herein as therein defined). lll | |||
[The undersigned hereby requests that, in accordance with the definition of Loan Limit contained in Section 1.01 of the Credit Agreement, that the Loan Limit of the under-signed be increased from S75,000,000 to S , or such lesser amount as the Majority Banks shall consent to in writing, effective on [date].] | |||
[The undersigned hereby requests on behalf of each of the Borrowers that, in accordance with the provisions of Section 2.01(b)(ii) of the Credit Agreement, the Final Aggregate Total Commitment be increased f rom the amount thereof available on the date hereof to S or such lesser amount as the Super Majority Banks shall consent to in writing, effective [date].] | |||
Very truly yours, GENERAL PUBLIC UTILITIES CO RPO RATION | Very truly yours, GENERAL PUBLIC UTILITIES CO RPO RATION | ||
.i474 130 By Chief Financial Of ficer | . | ||
..[ Execution Copy) | i474 130 By Chief Financial Of ficer | ||
LETTER At1ENDMENT As of October 10, 1979 To the Banks parties to the Revolving Credit Agreement dated as of June 15, 1979, among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company, Pennsylvania Electric Company, said Banks, Citibank, N.A., as agent for said Banks, and Chemical Bank, as co-agent for said Banks | |||
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Credit Agreement | [ Execution Copy) | ||
"(g)(Section 5.01(g) deleted inten-tionally.)" (b)Section 5.02(b)(vi) shall read as follo. .s : | LETTER At1ENDMENT As of October 10, 1979 To the Banks parties to the Revolving Credit Agreement dated as of June 15, 1979, among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company, Pennsylvania Electric Company, said Banks, Citibank, N.A., as agent for said Banks, and Chemical Bank, as co-agent for said Banks We refer to the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among as youreach agentof(the the undersigned, each of you, Citibank, N.A., | ||
"(vi)Indebtedness of such Borrower under External Lines; provided, however, that the aggregate principal amount of such Indebtedness shall not exceed at any time | " Agent") and Chemical Bank, as your the co-agent (the "Co-Agent"). | ||
}k7k | terms defined in the Unless otherwise defined herein,shall be used herein as therein defined. | ||
., 2 outstanding $7,500,000 in the case of JC, | Credit Agreement is hereby agreed by you and us as follows: | ||
On and after the effective date of this letter amend-ment, each reference in the Credit Agreement to "this Agree-ment", " hereunder", " hereof", or vords of like import referring to the Credit Agreement, and each reference in the other Basic Documents to' " the Credi t Ag reemen t" , " thereunder", "thereof", or words of like import referring to the Credit Agreement, shall mean the Credit Agreement as amended by this letter amendment. | It The Credit Agreement is, effective the date first above written, hereby amended so that: | ||
The Credit Agreement, as amended by this letter amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. | (a) Section 5.01(g) shall read as follows: | ||
This letter amendment may be executed in any nuraber 3 of counterparts and by any combination of the parties hereto W in separate counterparts, each of which counterparts shall be an original and all of which taken together shall concti-tute one and the same letter amendment. | "(g) (Section 5.01(g) deleted inten-tionally.)" | ||
(b) Section 5.02(b)(vi) shall read as follo. .s : | |||
"(vi) Indebtedness of such Borrower under External Lines; provided, however, that the aggregate principal amount of such Indebtedness shall not exceed at any time | |||
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2 outstanding $7,500,000 in the case of JC, | |||
$5,000,000 in the case of GPU, $5,000,000 g | |||
in the case of ME and $5,000,000 in the case of PE, and provided, further, that the aggregate principal amount of such Indeoted-ness of all Borrowers shall not exceed at any time outstanding S15,000,000;" | |||
(c) The words "the Florence Mining Company" appearing in clause (ii) of Section 5.02(d) shall be deleted and the words "The Rochester & Pittsburgh Coal Company" substituted therefor. | |||
On and after the effective date of this letter amend-ment, each reference in the Credit Agreement to "this Agree-ment", " hereunder", " hereof", or vords of like import referring to the Credit Agreement, and each reference in the other Basic Documents to' " the Credi t Ag reemen t" , " thereunder", "thereof", | |||
or words of like import referring to the Credit Agreement, shall mean the Credit Agreement as amended by this letter amendment. The Credit Agreement, as amended by this letter amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. | |||
This letter amendment may be executed in any nuraber 3 of counterparts and by any combination of the parties hereto W in separate counterparts, each of which counterparts shall be an original and all of which taken together shall concti-tute one and the same letter amendment. | |||
If you agree to the terms and provisions hereof, please evidence your agreement by executing and returning at least two counterparts of this letter amendment to Citibank, N.A., 399 Park hvenue, New York, New York 10043, Attention: | If you agree to the terms and provisions hereof, please evidence your agreement by executing and returning at least two counterparts of this letter amendment to Citibank, N.A., 399 Park hvenue, New York, New York 10043, Attention: | ||
Energy-East Department, National Banking Group. | Energy-East Department, National Banking Group. This letter amendment shall become effective as of the date first above written when and if counterparts of this letter amendment shall have been executed by us and the Majority Banks and the consent attached hereto shall have been executed by GPU, as guarantor. | ||
This letter amendment shall become effective as of the date first above written when and if counterparts of this letter amendment shall have been executed by us and the Majority Banks and the consent attached hereto shall have been executed by GPU, as guarantor. | |||
Very truly yours, GENE RAL PUBLIC UTILITIES CORPORATION | Very truly yours, GENE RAL PUBLIC UTILITIES CORPORATION | ||
/6f By/t ga b | / 6f By | ||
..3 JEr1SEf CENTitAL P0dE rs & | ' | ||
LIGilT COMPai1Y By A:w'Vice President METROPOLITAN EDISON COMPANY By/es(m _ | /t ga b Vice President h | ||
CITIBANi:, N.A., Indivi.-ually and as Agent By Vice President Ci!EiiI C AL BANK, Individ-ually and as Co-Agent By Vice President | t474 i32 | ||
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3 JEr1SEf CENTitAL P0dE rs & | |||
LIGilT COMPai1Y By A:w | |||
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Vice President METROPOLITAN EDISON COMPANY By / es(m _ | |||
Vice Presioent | |||
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PUtJNSYLVANIA ELECTRIC COMPANY By ,W ^' | |||
/ Vice'Presicent Agreed as of the date first above written: | |||
CITIBANi:, N.A., Indivi.- | |||
ually and as Agent By Vice President Ci!EiiI C AL BANK, Individ-ually and as Co-Agent By Vice President | |||
[t:AMC OF 3ANK] | [t:AMC OF 3ANK] | ||
BY__[TITLEJ | BY__ | ||
-, CONSENT The undersigned, as Guarantor under those certain Guaranties, dated as of June 20, 1979 (the " Guaranties"), in favor of the Banks parties to the Credit Agreement referrea to in the foregoing letter amendment, hereby consents to said letter amendment and hereby confirms and agrees that the Guaranties are, and shall continue to be, in full force and effect and are hereby confirmed and ratified in all respects except that, upon the effectiveness of, and on and after the date of, said letter amendment, all references in the Guaranties to the Credit Agreement, " thereunder", "there-of", or words of like import referring to the Credit Agree-ment shall mean the Credit Agreement as amended by raid letter amendment. | [TITLEJ | ||
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CONSENT The undersigned, as Guarantor under those certain Guaranties, dated as of June 20, 1979 (the " Guaranties"), in favor of the Banks parties to the Credit Agreement referrea to in the foregoing letter amendment, hereby consents to said letter amendment and hereby confirms and agrees that the Guaranties are, and shall continue to be, in full force and effect and are hereby confirmed and ratified in all respects except that, upon the effectiveness of, and on and after the date of, said letter amendment, all references in the Guaranties to the Credit Agreement, " thereunder", "there-of", or words of like import referring to the Credit Agree-ment shall mean the Credit Agreement as amended by raid letter amendment. | |||
GEN E RAL PUBLIC UTILITIES CORPORATION | GEN E RAL PUBLIC UTILITIES CORPORATION | ||
////k p,w g h | // | ||
!474 134.O | By //k p,w g _ | ||
.-[ EXECUTION COPY) | Vice President h | ||
!474 134 | |||
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[ EXECUTION COPY) | |||
AMENDMENT NO. 2 Dated as of November 1, 1979 This AMENDMENT among GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation ("GPU"), JERSEY C ENTRAL POWER & LIGHT COMPANY, a New Jersey corporation | AMENDMENT NO. 2 Dated as of November 1, 1979 This AMENDMENT among GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation ("GPU"), JERSEY C ENTRAL POWER & LIGHT COMPANY, a New Jersey corporation | ||
("JC"), METROPOLITAN EDISON COMPANY, a Pennsylvania cor-poration ("ME"), and PENNSYLVANIls ELECTRIC COMPANY, a Pennsylvania corporation ("PE") (GPU, JC, ME and PE being, collectively, the " Borrowers" and each, individually, a" Borrower"), the banks. parties to the Credit Agreement referred to below (the " Banks"), CITIBANK, N.A., as agent (the " Agent") for the Banks, and CHEMICAL DANK as co-agent (the "Co-Agent"). | ("JC"), METROPOLITAN EDISON COMPANY, a Pennsylvania cor-poration ("ME"), and PENNSYLVANIls ELECTRIC COMPANY, a Pennsylvania corporation ("PE") (GPU, JC, ME and PE being, collectively, the " Borrowers" and each, individually, a | ||
F RELIMIli ARY STATEMENT. | " Borrower"), the banks. parties to the Credit Agreement referred to below (the " Banks"), CITIBANK, N.A., as agent (the " Agent") for the Banks, and CHEMICAL DANK as co-agent (the "Co-Agent"). | ||
The Borrowers, the Banks. | F RELIMIli ARY STATEMENT. The Borrowers, the Banks. | ||
the Agent and the Co-Agent have entered into a Revolving Credit Agreement, dated as of June 15, 1979, and a Letter Amendment thereto, dated as of October 10, 1979 (said Credit Agreement as so amended being the " Credit Agreement", the terms defined therein being used herein as therein defined unless otherwise defined herein). | the Agent and the Co-Agent have entered into a Revolving Credit Agreement, dated as of June 15, 1979, and a Letter Amendment thereto, dated as of October 10, 1979 (said Credit Agreement as so amended being the " Credit Agreement", the terms defined therein being used herein as therein defined unless otherwise defined herein). It has been proposed that the Credit Agreement be further amended upon tne conditions hereinafter set forth in order to permit the First National State Bank of New Jersey and the Farmers Bank and Trust Company of Hanover (each a "New Bank" and collec-tively the "New Banks") to become parties thereto. | ||
It has been proposed that the Credit Agreement be further amended upon tne conditions hereinafter set forth in order to permit the First National State Bank of New Jersey and the Farmers Bank and Trust Company of Hanover (each a "New Bank" and collec-tively the "New Banks") to become parties thereto. | NOW THEREFORE, the parties agree as follows SECTION 1. Amendments to Credit Agreement. The Credit Agreennent is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, hereby amended so that: | ||
NOW THEREFORE, the parties agree as follows SECTION 1.Amendments to Credit Agreement. | (a) The term " dank" in Section 1.01 thereof shall be defined as follows: | ||
The Credit Agreennent is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, hereby amended so that: (a)The term " dank" in Section 1.01 thereof shall be defined as follows: " Bank" means, (i) prior to the Closing Date, each bank which has, together with tne Borrowers, the Agent and Co-Agent, executed a counterpart nereof on or prior to the date hereaf, (ii) as at i474 135 | " Bank" means, (i) prior to the Closing Date, each bank which has, together with tne Borrowers, the Agent and Co-Agent, executed a counterpart nereof on or prior to the date hereaf, (ii) as at i474 135 | ||
-.2 the Closing Date, each Confirming Bank and, (iii) lh suosequent to the Closing Date, each Confirming Bank and each New Bank; collectively, the " Banks".(b)The term " Confirming Bank" in Section 1.01 thereof shall be defined as follows: " Confirming Bank" means (i) each Bank which, prior to the closing Date, has confirmed, orally or in writing (including by telex, cable or telegram), to the Agent or the Co-Agent that the Rate Orders are satisfactory to it and (ii) each New Bank; collectively, the " Con f i rm in_c Banks".(c)The following defined term shall be udded to Section 1.01 thereof: "Second Amendment" means the Amendment, dateo as of November 1, 1979, hereto."New Banks" means, upon the offectiveness of the Second Amendment with respect to such bank, the First National State Bank of New Jersey and the Farmers Bank and Trust Company of Hanover, g each individually a "New Bank" . | |||
W (d)The following shall be inserted at the end of the definition of the term " Note" in Section 1.01 thereof: "or pursuant to the Secona Amendment" (e)The third sentence of Section 2.01 (a) thereof shall read in full as follows: "Except as provided in bection 2.01(c) and Section 2.03(b), each Eorrowing shall consist of Advances made on the same day by the Banks, each in the amount of their respective Percentages of the aggregate amount of such Borrowing." (f)Scotion 2.03 thereof is hereby amended by in-serting after the heading thereof the designation "(a)" and inserting at the end of such section, the tollowing: | - . | ||
."(b)Notwithstanding the proviciens of Section 2.03(a), with respect to each Borrower, the | 2 the Closing Date, each Confirming Bank and, (iii) lh suosequent to the Closing Date, each Confirming Bank and each New Bank; collectively, the " Banks". | ||
.-3 amount of the Advances outstanding, if any, to such Borrower immediately prior to such effective-ness.Such Borrower shall, notwithstanding the provisions of Section 2.00 of this Agreement, apply the proceeds of eacn such Advance forthwith to the ratable prepayment of the Advances, if any, of the Banks (other than *he Neu Bank) to such Borrower (the Agent nereby being authorizea to effect such applications).(g)The following shall be inserted imnediately after the phrase "the obligation of each Bank to make its initial Advance" occurring in the third line of Section 3.01 thereof: | (b) The term " Confirming Bank" in Section 1.01 thereof shall be defined as follows: | ||
"(other than a first Advance by a New Bank)" SECTION 2. | " Confirming Bank" means (i) each Bank which, prior to the closing Date, has confirmed, orally or in writing (including by telex, cable or telegram), to the Agent or the Co-Agent that the Rate Orders are satisfactory to it and (ii) each New Bank; collectively, the " Con f i rm in_c Banks". | ||
Conditions of Effectiveness. | (c) The following defined term shall be udded to Section 1.01 thereof: | ||
This Amendment snall become effective as of the date first above written with respect to a New Bank when, and only when,' the Agent shall have received: (i) counterparts of this Amend-ment duly executed by the Borrowers, the Agent, the Co-Agent, and the Super Majority Banks; (ii) counterparts of the ereoit Agreement, the Letter Amendment, dated as of October 10, 1979, thereto and this Amendment, duly executed by such New Bank (cy such execution, each New Bank agreeing , sub]ect to the terms and conditions nereof, to be bound by all the provisions of the Credit Agreement as so amended as if it were an original Bank party thereto); (iii) all of the following documents, each document (unless otherwise indi-cated) being dated the date first written above and otherwise in form and substance satisfactory to the Agent and in sufficient copies for each Bank (including the New Bank): (a)Certified copies of the resolutions of the Board of Directors (or an authorized Executive Committee thereof) of each Borrower approving this Amendment and the New Bank Notes (as definec below);(b)Certificates of the Secretary or Assistant Secretary of each Borrower, certifying the names and true signatures of the officers of such Borrower authorized to sign this Amendment, the New Dank Notes and the other accuments contemplated hereby;(c)Certified copies of all necessary governmental authorizations and approvals, if any, with respect to 1474 137 | "Second Amendment" means the Amendment, dateo as of November 1, 1979, hereto. | ||
.4 this Amendment and the Bank Notes, other than the order of the Securities ud Exchange Commission re-ferred to in Section 5 hereof;(d)A favorable opinion of Messrs. Berlack, Israels & Liberman, counsel for the Borrowers, to the effect that this laaendment and the New Bank Notes have been duly authorized, executed and delivered by the Borrowers and confirming the opinion of sucn counsel dated June 20, 1979, furnished pursuant to Section 3.01(vi)(p) of the Credit Agreement with references therein to each of the Loan Documents to mean the Loan Documents as amended by the Letter Amendment, dated as of October 10, 1979, thereto and this Amendment and with references therein to the Notes to include the New Bank Notes;(iv) the Agent shall have received for the account of the New Bank on or prior to the date first above written all of the following documents, c'ch (unless otherwise indicated) | "New Banks" means, upon the offectiveness of the Second Amendment with respect to such bank, the First National State Bank of New Jersey and the Farmers Bank and Trust Company of Hanover, g each individually a "New Bank" . W (d) The following shall be inserted at the end of the definition of the term " Note" in Section 1.01 thereof: | ||
..S be made on the date first written aoove unless all other | "or pursuant to the Secona Amendment" (e) The third sentence of Section 2.01 (a) thereof shall read in full as follows: | ||
SUCTION 3. | "Except as provided in bection 2.01(c) and Section 2.03(b), each Eorrowing shall consist of Advances made on the same day by the Banks, each in the amount of their respective Percentages of the aggregate amount of such Borrowing." | ||
Representations and Warranties of the Borrowers. | (f) Scotion 2.03 thereof is hereby amended by in-serting after the heading thereof the designation "(a)" | ||
Each Borrower represents and warrants as follows: (a)Each Dorrower is a corporation duly incor-porated, validly existing and in good standing under the laws of its jurisdiction of incorporation;(b)The execution, delivery and performance | and inserting at the end of such section, the tollowing: | ||
i474 139 | . | ||
*, 6 O SECTION 4. | "(b) Notwithstanding the proviciens of Section 2.03(a), with respect to each Borrower, the first Advance by a tiew Bank shall be in an amount equal to such New Bank's Percentage (giving effeet g | ||
Reference to and Effect on the Loan Documents.(a)Upon tne effectiveness of Section i here-of, eacn reference in the Credit Agreement to "this Agree-ment", " hereunder", " hereof", "herein" or words of like import, and each reference in the other Loan Documents to tne Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in the Loan Documents to the Notes, shall mean and be a refer-ence to the Notes including the New Bank Notes.(b)Except as specifically amended above the Credit agreement and the Notes, and all other Loan Docu-ments, shall remain in full force and effect and are nereby ratified and confirmed.(c)The execution, de''very and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Bank, the Agent or the Co-Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. | to the Second Amendment) of the agg reg a te pr inci pal 1474 156 | ||
Costs, Expences and Taxes. | . | ||
- | |||
!474 140 | 3 amount of the Advances outstanding, if any, to such Borrower immediately prior to such effective-ness. Such Borrower shall, notwithstanding the provisions of Section 2.00 of this Agreement, apply the proceeds of eacn such Advance forthwith to the ratable prepayment of the Advances, if any, of the Banks (other than *he Neu Bank) to such Borrower (the Agent nereby being authorizea to effect such applications). | ||
*% | (g) The following shall be inserted imnediately after the phrase "the obligation of each Bank to make its initial Advance" occurring in the third line of Section 3.01 thereof: | ||
Execution in Counterparts. | "(other than a first Advance by a New Bank)" | ||
This Amend-ment may be executed in cny number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which tal:en together shall constitute but one and the same instrument. | SECTION 2. Conditions of Effectiveness. This Amendment snall become effective as of the date first above written with respect to a New Bank when, and only when,' the Agent shall have received: (i) counterparts of this Amend-ment duly executed by the Borrowers, the Agent, the Co-Agent, and the Super Majority Banks; (ii) counterparts of the ereoit Agreement, the Letter Amendment, dated as of October 10, 1979, thereto and this Amendment, duly executed by such New Bank (cy such execution, each New Bank agreeing , sub]ect to the terms and conditions nereof, to be bound by all the provisions of the Credit Agreement as so amended as if it were an original Bank party thereto); (iii) all of the following documents, each document (unless otherwise indi-cated) being dated the date first written above and otherwise in form and substance satisfactory to the Agent and in sufficient copies for each Bank (including the New Bank): | ||
SECTION 7. | (a) Certified copies of the resolutions of the Board of Directors (or an authorized Executive Committee thereof) of each Borrower approving this Amendment and the New Bank Notes (as definec below); | ||
Governing Lau. | (b) Certificates of the Secretary or Assistant Secretary of each Borrower, certifying the names and true signatures of the officers of such Borrower authorized to sign this Amendment, the New Dank Notes and the other accuments contemplated hereby; (c) Certified copies of all necessary governmental authorizations and approvals, if any, with respect to 1474 137 | ||
This Amendment shall be governed by and construed in accordance with the laws of tne State of New Yor1:. | |||
SECTION 8. | . | ||
I!eadings. | 4 this Amendment and the Bank Notes, other than the order of the Securities ud Exchange Commission re-ferred to in Section 5 hereof; (d) A favorable opinion of Messrs. Berlack, Israels & Liberman, counsel for the Borrowers, to the effect that this laaendment and the New Bank Notes have been duly authorized, executed and delivered by the Borrowers and confirming the opinion of sucn counsel dated June 20, 1979, furnished pursuant to Section 3.01(vi)(p) of the Credit Agreement with references therein to each of the Loan Documents to mean the Loan Documents as amended by the Letter Amendment, dated as of October 10, 1979, thereto and this Amendment and with references therein to the Notes to include the New Bank Notes; (iv) the Agent shall have received for the account of the New Bank on or prior to the date first above written all of the following documents, c'ch (unless otherwise indicated) dated the date first writ .i above and otherwise in form and substance satisfactory to the Agent and the Co-Agent: | ||
Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of tnis Amendment for any other purpose. | (a) A Note of each Borrower payable to the order (gg of such New Bank (a "New Bank Note"); | ||
(b) Counterparts of the JC Guaranty, the ME Guaranty, the PE Guaranty and the Stock Pledge Agree-ment, each dated as of June 20, 1979, duly executed by GPU; (c) Counterparts of tne ME Bond Pledge Agreenent, and the ME Security Agreement, each dated as of June 2 0., 1979, duly executed by ME; (d) Counterparts of the JC Security Agreement, dated as of May 21, 1979, as amended and restated as of June 20, 1979, duly executed by JC; (c) Federal Reserve Forms U-1 provided for in Regulation U issued by the Board of Governors of the Federal Reserve System, the statements made in which shall be such, in the opinion of the Agent, as to permit tne transactions contemplated hereby in accordance with said Regulation U; and (v) the New Bank shall.have made its first Advance to be applied as provided in Section 2.03(b) of the Credit Agree- lll ment, as amended nereby, which such first Advance shall 1474 }38 | |||
. . | |||
S be made on the date first written aoove unless all other conditions of effectiveness with respect to s2ch New Bank have not been met on or before such cate in which event such first Advance snall be made on the first day of tne next succeeding calendar mont a . | |||
SUCTION 3. Representations and Warranties of the Borrowers. | |||
Each Borrower represents and warrants as follows: | |||
(a) Each Dorrower is a corporation duly incor-porated, validly existing and in good standing under the laws of its jurisdiction of incorporation; (b) The execution, delivery and performance by such Borrower of this Amendment, the New Bank Notes and the Loan Documents as amended by the Letter Amend-ment dated as of October 10, 1979, thereto an 3 by this Amendment to which it is or is to be a party are within such Borrower's corporate powers, have been duly author-ized by all necessary corporate action and do not contravene (i) sucn Borrower's enarter or by-laws, or (ii) law or any contractual restriction oinding on or affecting such corrow-r, and da not result in, or require the creation of any lien, security interest or other charge or encumbrance (other than pursuant to the Collateral Agreements to which it is a party) upon or with respect to any of its properties; (c) No authorization, approval or other action by any governmental authority or regulatory body is required for the due execution, deliverythe and New performance Bank Notes by sucn Borrower of this Amendment, or any of the Loan Documents, as amc.Med by the Letter Amendment, dated as of October 10, 1979, thereto and by this Amendment except for (i) such authorizations on andor approvals which have been delivered to t! e Agent prior to the date first written above, and (ii) an appropriate order of the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935 authorizing payment by the Borrowers of certain costs, expenses and other fees as provided in Section 5 hereof; and (d) This Amendment, the New Bank Notes and each of the other Loan Documents, as amended by the Letter Amendment, dated October 10, 1979, thereto and by this-Amendment, to whien each Borrower is a party constitute legal, valid and binding obligations of each Borrower enforceable against each Dorrower in cccordance with their respective tarms. | |||
i474 139 | |||
* , | |||
6 O | |||
SECTION 4. Reference to and Effect on the Loan Documents. (a) Upon tne effectiveness of Section i here-of, eacn reference in the Credit Agreement to "this Agree-ment", " hereunder", " hereof", "herein" or words of like import, and each reference in the other Loan Documents to tne Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in the Loan Documents to the Notes, shall mean and be a refer-ence to the Notes including the New Bank Notes. | |||
(b) Except as specifically amended above the Credit agreement and the Notes, and all other Loan Docu-ments, shall remain in full force and effect and are nereby ratified and confirmed. | |||
(c) The execution, de''very and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Bank, the Agent or the Co-Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. | |||
SECTION 5. Costs, Expences and Taxes. The O | |||
Borrowers agrce to pay on demand all costs ano expenses of the Agent in connection with the preparation, reproduction, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder or thereunder, including the reasonable fees and out-of-pocket expenses of Messrs. Shearman & Sterling, special counsel for the Banks, with respect thereto and of local counsel, if any, who may be retained by said special counsel with respect thereto. In addition, the Borrower snall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery, filing or recording of this Amendment and the other instru-ments and documents to be delivered hereunder or thereunder, and agree to save the Agent and each Bank harmless from and against any and all liabilities with respect to ot resulting from any delay in paying or omission to pay suen taxes or fees. Tne Borrowers agree promptly to take all action necessary and appropriate to obtain an appropriate order of the Securities and Exchange Commission under the Public 0,tility Holding Company Act of 1935 authorizing and approving the payment by them of such costs, expenses and other fees provided for in this Section 5. | |||
!474 140 | |||
e * % | |||
7 SECTIO:1 6. Execution in Counterparts. This Amend-ment may be executed in cny number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which tal:en together shall constitute but one and the same instrument. | |||
SECTION 7. Governing Lau. This Amendment shall be governed by and construed in accordance with the laws of tne State of New Yor1:. | |||
SECTION 8. I!eadings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of tnis Amendment for any other purpose. | |||
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written. | IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written. | ||
GENEllAL PUBLIC UTILITlES CORPORATION *.. | GENEllAL PUBLIC UTILITlES CORPORATION *.. | ||
!\, h, , < ,A | By | ||
' | |||
! \, h, , < ,A V i c'e'f r e s id e n t JEllSEY CENTRAL POWER & | |||
LIGliT COMPANY | LIGliT COMPANY | ||
-/By))bbm | - | ||
.*As Borrower and as the Guarantor under the JC Guaranties, Tne ME Guaranties and the PE Guaranties. | / | ||
14 p\ {\ | By ' | ||
@e.8 O PEN:JSYLVANIA ELECTRIC Cor1PAIPI///$7s 8l6 % ' | ) )bbm Vice President liETRCTO:.7AN EDISON COc1 pat 1Y f / | ||
Ry | |||
' | |||
CITIDAtli;, N.A., Individ-ually and as Agent | /\Vice President i | ||
BY[ TITLE]O | .. | ||
...ME/PN Exhibit A-2 Witnesses: | M&d. /% | ||
J. G. Grahan; F. D. Hafer | / | ||
-RYAN, RusscLL & McCor:AoHY | . | ||
* As Borrower and as the Guarantor under the JC Guaranties, Tne ME Guaranties and the PE Guaranties. | |||
"'"O'OJ | 14 p | ||
i \ {\ | |||
' . ' . " . | @ e | ||
E[h$} v | . | ||
: v. Metropolitan Edison Company and Pennsylvania Electric Company, Respondents Docket No. I-79040308 , . | 8 O | ||
PEN:JSYLVANIA ELECTRIC Cor1PAIPI | |||
/ | |||
By ' | |||
// $7s 8l6 % ' | |||
Vice Precident Agreed as of the date first above written: | |||
CITIDAtli;, N.A., Individ-ually and as Agent By_ _ . _ _ | |||
Vice President g CHEMICAL BANK, Individ-ually and as Co-Agent By - | |||
Vice President 1474 142 (tJAME OF 3 Ai4 K) | |||
BY | |||
[ TITLE] | |||
O | |||
. .. | |||
ME/PN Exhibit A-2 Witnesses: J. G. Grahan; u . F. D. Hafer | |||
. | |||
Law orriccs | |||
- | |||
" ' | |||
, RYAN, RusscLL & McCor:AoHY | |||
~' | |||
530 PCNN SCUARC CCNTCM SAMurL t. ausstLL 8''"O'## | |||
P. C. B O X 6 9 9 "'"O'OJ | |||
, , * | |||
., ratognica ' ntsots | |||
* f , W. towsN CoctN | |||
. .LRicL.S.armAMN 215-372 476 JCMN S.McCCNAGMT | |||
?, ALAN MICMark SELTttR CQWNSCL | |||
. | |||
November 1, 1979 | |||
'.'.". | |||
. | |||
E[h$} v Mr. William P. Thierfelder, Secretary NOV1 1979 Pennsylvania Public Utility Commission P. O. Box 3265 SECRETARY'S OmCE Harrisburg, PA 17120 EMb!!c Utility Commissicn Re: Pennsylvania Public Utility Cc.r.ission at al. | |||
: v. Metropolitan Edison Company and Pennsylvania Electric Company, Respondents Docket No. I-79040308 | |||
.. , . | |||
==Dear Sir:== | ==Dear Sir:== | ||
. | . | ||
Very truly yours, RYAN, RUSSELL 5 McC0"AGHY SBR: | Enclosed herewith for fi'.ing are an original and three copies of the petition of Metrcpolitan Edison Comcany for a modification of the Order entered by the Ccamissiian on June 19, 1979 in the above proceeding. | ||
,*1474\43.P001ORIBikAL | Very truly yours, RYAN, RUSSELL 5 McC0"AGHY SBR:ph | ||
....BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION O | _ _ . | ||
et al.:: v.: Docket No . | cc: Chairman W. Wilson Goode Commissioner Michael Johnson | ||
: I-79040308 Metropolitan Edison Company and | ,* | ||
1474 \43 | |||
. | |||
(" Met-Ed" or" Petitioner"), pursuant to 52 Pa. Code 53.291, hereby petitions the Commission for modification of the Order entered in the above proceeding on June 19, 1973, and in support thereof respectfully represente lh that: 1.Petitioner is Metropolitan Edison Company, 2800 Pottsville Pike, Reading, Pennsylvania. | P001ORIBikAL | ||
2.By Order entered June 19, 1979 at I-79040308, the Commission permitted Met-Ed to put into effect a levelized energy cost adj us tment charge of 8.8 mills /KWH to recover 8.4 mills of energy costs and certain demand costs and | |||
.4 mills of the associated Pennslyvania gross receipts tax under its net energy adj ustment clause, for a period of 18 months comnencing July 1, 1979.)474}44 3.On June 22, 1979, Met-Ed filed an Addendum to Rider B of its Tariff Electric Pa.P.U.C.No . 42 (a copy of Rider B, Energy Cost Adj us t=en t Clause, and t :ic Addendum thereto is included in the attached Appendix A) in compliance | . . | ||
. | . | ||
.' | . | ||
4.The Addendum to Rider B permits interim reviews of the operation of the levelized charge to be made if " requested by the company or directed by the Pa.P.U.C." 5.There is attached as part of Appendix Aa statement of the infor=ation with respect to the operation of the levelized charge for the three-month period ended September 30, 1979, as required by items (a) through (c) of the third paragraph of that Addendum. | BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION | ||
6.The unrecovered balanc e of energy costs which Me t-Ed has incurred and deferred for subsequent c o lle c t io n under the 8.8 mill levelized charge nas increased rapidly since July 1, 1979 and is continuing to increase rapidly. | - O Pennsylvania Public Utility Commission, : | ||
Unless the 8.8 mill charge prescribed by the above Order is modified to permit Met-Ed to recover currently from its customers a greater amount of the energy costs which it is incurring currently to serve those customers, Met-Ed expec ts that by mid-1980 the unrecovered balanc e of such costs will exceed its capability to borrow funds to finance such costs, as shown by Figure 1 and Table 1 contained it the attached Appendix B.7.Included among the assumptions upon which the aforesaid 8.8 mills levelized charge pr esc rib ed by the above Order was predicated were the following: | et al. : | ||
474 145 (a) Met-Ed (and the other TMI owners) would | : | ||
: v. : Docket No . | |||
. | : I-79040308 Metropolitan Edison Company and : | ||
Pennsylvania Electric Company, : | |||
Respondents : | |||
PETITION OF METROPOLITAN EDISON COMPANY FOR MODIFICATION OF C OM:!IS S I O N ORDER ENTERED JUNE 19, 1979 Metropolitan Edison Company (" Met-Ed" or " Petitioner"), | |||
pursuant to 52 Pa. Code 53.291, hereby petitions the Commission for modification of the Order entered in the above proceeding on June 19, 1973, and in support thereof respectfully represente lh that: | |||
: 1. Petitioner is Metropolitan Edison Company, 2800 Pottsville Pike, Reading, Pennsylvania. | |||
: 2. By Order entered June 19, 1979 at I-79040308, the Commission permitted Met-Ed to put into effect a levelized energy cost adj us tment charge of 8.8 mills /KWH to recover 8.4 mills of energy costs and certain demand costs and .4 mills of the associated Pennslyvania gross receipts tax under its net energy adj ustment clause, for a period of 18 months comnencing July 1, 1979. )474 }44 | |||
: 3. On June 22, 1979, Met-Ed filed an Addendum to Rider B of its Tariff Electric Pa.P.U.C. No . 42 (a copy of Rider B, Energy Cost Adj us t=en t Clause, and t :ic Addendum thereto is included in the attached Appendix A) in compliance | |||
. | |||
. | |||
' | |||
.- | |||
2 _ | |||
. | |||
with th e above Order authorizing the 8.8 mills /KWH levelized net energy clause charge. | |||
: 4. The Addendum to Rider B permits interim reviews of the operation of the levelized charge to be made if " requested by the company or directed by the Pa.P.U.C." | |||
: 5. There is attached as part of Appendix Aa statement of the infor=ation with respect to the operation of the levelized charge for the three-month period ended September 30, 1979, as required by items (a) through (c) of the third paragraph of that Addendum. | |||
: 6. The unrecovered balanc e of energy costs which Me t-Ed has incurred and deferred for subsequent c o lle c t io n under the 8.8 mill levelized charge nas increased rapidly since July 1, 1979 and is continuing to increase rapidly. | |||
Unless the 8.8 mill charge prescribed by the above Order is modified to permit Met-Ed to recover currently from its customers a greater amount of the energy costs which it is incurring currently to serve those customers, Met-Ed expec ts that by mid-1980 the unrecovered balanc e of such costs will exceed its capability to borrow funds to finance such costs, as shown by Figure 1 and Table 1 contained it the attached Appendix B. | |||
: 7. Included among the assumptions upon which the aforesaid 8.8 mills levelized charge pr esc rib ed by the above Order was predicated were the following: | |||
474 145 | |||
, (a) Met-Ed (and the other TMI owners) would be able to find alternatives to normal purchases of | |||
. | |||
. | |||
interchange from the Pennsylvania-New Jersey-Maryland Interconnection ("PJM") on a split-savings basis.to h reduce, by about 25%, Met-Ed's then estimated share | |||
($10 million per month for the April 1 - December 31, 1979 period) of the cost of replacing the energy from the Three Mile Island nuclear generating station | ($10 million per month for the April 1 - December 31, 1979 period) of the cost of replacing the energy from the Three Mile Island nuclear generating station | ||
("TMI");(b) Three Mile Island Unit No . 1 ("TMI-1") | ("TMI"); | ||
would resume power operation on January 1, 1980;and (c) For a period of six months (July 1, 1979 until January 1, 1980), as an in c e n t iv e to enter into such alternate purchase arrangements for TMI replace-ment energy, Met-Ed would be permitted to include as part of the recoverable costs under its levelized adj us tmen t charge the demand or reserve c ap ac ity charges associated with such purchases. | (b) Three Mile Island Unit No . 1 ("TMI-1") | ||
8.Me t- Ed and its affiliates have ag g r e s s iv e ly pursued alternative sources of purchased power and have effected substantial alternative power purchases both before and since the aforesaid Order entered June 19, 1979 9.The petition for a declaratory order, which was filed by Met-Ed and its affiliate, Pennsylvania Electric 1474 146 9 | would resume power operation on January 1, 1980; and (c) For a period of six months (July 1, 1979 until January 1, 1980), as an in c e n t iv e to enter into such alternate purchase arrangements for TMI replace-ment energy, Met-Ed would be permitted to include as part of the recoverable costs under its levelized adj us tmen t charge the demand or reserve c ap ac ity charges associated with such purchases. | ||
: 8. Me t- Ed and its affiliates have ag g r e s s iv e ly pursued alternative sources of purchased power and have effected substantial alternative power purchases both before and since the aforesaid Order entered June 19, 1979 | |||
(" Jersey Central"), to achieve net energy cost savings by means of purchase power agreements and to minimize the net cost of energy purchased from PJM.That petition is incorporated herein by reference, pursuant to 1 Pa. Code 233 3. | : 9. The petition for a declaratory order, which was filed by Met-Ed and its affiliate, Pennsylvania Electric 1474 146 9 | ||
- - | |||
.. %. | |||
- 4 - | |||
Company ("Penelec"), with your Commission on October 10, 1979 in the above proceeding, sets forth in detail various efforts made by them and their New Jersey affiliate, Jersey Central Power and Light Company (" Jersey Central"), to achieve net energy cost savings by means of purchase power agreements and to minimize the net cost of energy purchased from PJM. That petition is incorporated herein by reference, pursuant to 1 Pa. Code 233 3. | |||
: 10. A detailed statement of the efforts made by Met-Ed and its affiliates to obtain authorization to return TMI-1 to power operation at the earliest date consistent with public health and safety is set forth in the answer to the Commissions's Order to Show Cause entered in the above proceeding on September 21, 1979 filed by Met-Ed and Penelee with your Commission on October 11, 1979. That answer is incorporated herein by reference, pursuant to 1 Pa. Code 333.3. | : 10. A detailed statement of the efforts made by Met-Ed and its affiliates to obtain authorization to return TMI-1 to power operation at the earliest date consistent with public health and safety is set forth in the answer to the Commissions's Order to Show Cause entered in the above proceeding on September 21, 1979 filed by Met-Ed and Penelee with your Commission on October 11, 1979. That answer is incorporated herein by reference, pursuant to 1 Pa. Code 333.3. | ||
: 11. In view of the fact that TMI-1 will not resume power operation by January 1, 1980, despite the many e f f o rt s by Me t-Ed to obtain authorization for such operation, and in view of fuel and energy cost increases that have occurred since the Commission's determination of the 8.8 mill level charge in I-79040308, such charge | : 11. In view of the fact that TMI-1 will not resume power operation by January 1, 1980, despite the many e f f o rt s by Me t-Ed to obtain authorization for such operation, and in view of fuel and energy cost increases that have occurred since the Commission's determination of the 8.8 mill level charge in I-79040308, such charge | ||
. | . | ||
.... . . ..-. | |||
12 Met-Ed is therefore petitioning the Commission to increase th e 8.8 mill level charge, but by only the minimum amount necessary to keep Met-Ed's short-term debt within manageable limits, as shown by Figure 2 of Appendix B.The requested increase is 6.9 mills (6.854 mills, when calculated to the nearest thousandth of a mill, pursuant to Met-Ed's Tariff), to become effective with bills | . .. . . . . . - | ||
1474 i48 O.-.. . - - | . | ||
..6- | .. | ||
(. f January 1, 1980, the proposed effective date of the clause increase, would require an increase in the 8.8 mill factor of 7.7 mills, as shown by Table 7 of Appendix B.A " full cost recovery" increase, essentially replicating the Commission's I-79040308 determination of the 8.8 mill level charge, would be 10.4 mills, as shown by Table 8 of Appendix B.WHEREFORE, Petitioner Metropolitan Ed iso n Company, prays that the Commission modify the aforesaid Order entered in the above proceeding on June 19, 1979 so as to authorize a levelized net energy cost adj us tmen t charge increase of at least 6 9 mills /KWH, effective January 1, 1980 or at the earliest possible date, and extending the time within which Pe tit ione r will be permitted to include (as part of the recoverable costs under its net energy clause) the demand or reserve capacity costs associat ed wi tn al terna tive sources of purchased power. | has not been and will not be sufficient to recover the energy costs Met-Ed is incurring to serve its customers. | ||
METROPOLITAN EDISON COMPANY (S r | (Summaries of Met-Ed's actual and p roj ec ted fuel and energy costs are attached as Figures 3, 4 and 5, and Tables 3, 4 and 5 of Appendix B) . | ||
WN/1474 i50 | 12 Met-Ed is therefore petitioning the Commission to increase th e 8.8 mill level charge, but by only the minimum amount necessary to keep Met-Ed's short-term debt within manageable limits, as shown by Figure 2 of Appendix B. | ||
The requested increase is 6.9 mills (6.854 mills, when calculated to the nearest thousandth of a mill, pursuant to Met-Ed's Tariff), to become effective with bills rendered on and after January 1, 1980. llh | |||
: 13. This increase, if granted, would increase Me t- Ed 's overall charges to retail customers by 15.7%, | |||
and increase charges to the typical residential customer using 500 Kwh per month by 12.5%, as shown by Tables 10 and 9 of Appendix B, respectively. With the 6 9 mill increase, Me t-Ed 's charges to this same residential customer would still be below those experienced by a substantial number of other Pennsylvania utility customers, as shown by Figure 6 of Appendix B. The increase would provide Met-Ed with approximately $55 million of additional retail revenue, of which $52 million would be for energy costs and $3 million for additional revenue taxes. | |||
1474 i48 O | |||
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: 14. The 69 mill requested increase is reasonable based on the level of energy costs experienced by Met-Ed since July 1, 1979 Me t-Ed 's energy costs are expected to continue at this level well into 1980 d t.e to the unavaila-bility of TMI-1, as shown by Table 3 of Appendix B. If Met-Ed's request were based on its July through September 1979 energy cost experience, an increase of 8.2 mills would be indicated, as shown by Table 6 of Appendix B. Alterna-tively, a surcharge to recover Met-Ed's balance of energy costs proj ec ted to be unrecovered as (. f January 1, 1980, the proposed effective date of the clause increase, would require an increase in the 8.8 mill factor of 7.7 mills, as shown by Table 7 of Appendix B. A " full cost recovery" increase, essentially replicating the Commission's I-79040308 determination of the 8.8 mill level charge, would be 10.4 mills, as shown by Table 8 of Appendix B. | |||
WHEREFORE, Petitioner Metropolitan Ed iso n Company, prays that the Commission modify the aforesaid Order entered in the above proceeding on June 19, 1979 so as to authorize a levelized net energy cost adj us tmen t charge increase of at least 6 9 mills /KWH, effective January 1, 1980 or at the earliest possible date, and extending the time within which Pe tit ione r will be permitted to include (as part of the recoverable costs under its net energy clause) the demand or reserve capacity costs associat ed wi tn al terna tive sources of purchased power. | |||
METROPOLITAN EDISON COMPANY (S r J ~~4 s | |||
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1474 149 By F.J. Smith | |||
/Senio r Vic e President | |||
O Commonwealth of Pennsylvania County of Berks F. J. Smith, being duly sworn according to law, deposes and says that he is a Senior Vice President of Metropolitan Edison Company; that he is authorized to and does make this affidavit on its behalft and that the facts set forth in the foregoing petition are true and correct to the best of his knowledge, information and belief. | |||
- O F J. SMITH Sworn to and subscribed before me this 1st day of No v em b e r , 1979. | |||
WN / | |||
Notary Public 1474 i50 RITA M. POWERS No'ary Put!.c. MW:nvrg Tap. Berks Co My Comrnission Ex., ires sep.emter 30, / y'f1 0 | |||
CERTIFICATE CF SERVICE I hereby certify that I have this day served the foregoing document upon all parties of record in this pro-ceeding in accordance with the requirements of 1 Pa. Code 833.32 (relating to service by a participant). | CERTIFICATE CF SERVICE I hereby certify that I have this day served the foregoing document upon all parties of record in this pro-ceeding in accordance with the requirements of 1 Pa. Code 833.32 (relating to service by a participant). | ||
Dated this 1st day of November, 1979. | Dated this 1st day of November, 1979. | ||
Aa ~ | |||
k) Y | |||
-Attorneys for Metropolitan Edison Company 1474 151. | : f. ~s .. - ,,: -~.sr- | ||
.APPENDIX A O METROPOLITAN EDISON CO:!PA!,"I Petition for Increase in Levelized Enernv Cost Adjustment Charge | .a 9. | ||
*Rider B, Energy Cost Adjustment Clause, and Addendum to Rider B. | ..,f4 > | ||
*State =ent of Energy Clause Revenues, Expenses and Deferrals for the 3 Months Ended September 30, 1979 1474 iS2 O.O.. | m .4-1 | ||
.Electric Pa. P.U.C. No. 42 (Supp. L i METRCPOLITAN EDISON CCMPANY First Revisad Page 39 Superseding Original Page 89 RIDER 3 ENERGY COST ADJUSTMENT CLAUSE An energy clause shall be applied to each kilowatthour supplied under this tariff.This energy clause factor determined to the nearest one-thousandth of 1 mill per kilevatthour in accordance with the for=ula set forth below, shall be applied to all kilowatthours billed during the billing month: | / Kyan ,'.hussell 5 dcConaghy | ||
h -- Ec x f | - | ||
Attorneys for Metropolitan Edison Company 1474 151 | |||
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APPENDIX A O | |||
METROPOLITAN EDISON CO:!PA!,"I Petition for Increase in Levelized Enernv Cost Adjustment Charge | |||
* Rider B, Energy Cost Adjustment Clause, and Addendum to Rider B. | |||
* State =ent of Energy Clause Revenues, Expenses and Deferrals for the 3 Months Ended September 30, 1979 1474 iS2 O | |||
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Electric Pa. P.U.C. No. 42 (Supp. L i METRCPOLITAN EDISON CCMPANY First Revisad Page 39 Superseding Original Page 89 RIDER 3 ENERGY COST ADJUSTMENT CLAUSE An energy clause shall be applied to each kilowatthour supplied under this tariff. This energy clause factor determined to the nearest one-thousandth of 1 mill per kilevatthour in accordance with the for=ula set forth below, shall be applied to all kilowatthours billed during the billing month: | |||
? = | |||
h- - Ec x 1 f T Where A = Adjustment factor in mills per kilowatthour to be applied to each kilowatthour supplied under this tarif f. | |||
F = The energy-related cost of net energy generated in the Company's fossil and nuclear generating stations, excluding tne cost of energy generated and sold to other utilities on a firm basis, plus the Company's energy-related cost of energy purchased anc' net energy interchanged in the current (c) and base (b) periods, defined as follows: | F = The energy-related cost of net energy generated in the Company's fossil and nuclear generating stations, excluding tne cost of energy generated and sold to other utilities on a firm basis, plus the Company's energy-related cost of energy purchased anc' net energy interchanged in the current (c) and base (b) periods, defined as follows: | ||
Fossil Generation - the costs charged to fuel Accounts 501 and 547 which are computed on the basis of the cos t of fuel delivered to the generating site at which it is consumed, plus the cost of disposing of solid waste from sulfur oxide re= oval devices. | Fossil Generation - the costs charged to fuel Accounts 501 and 547 which are computed on the basis of the cos t of fuel delivered to the generating site at which it is consumed, plus the cost of disposing of solid waste from sulfur oxide re= oval devices. | ||
Nuclear Generation - the costs charged to fuel Accounts 518 and 521 which are co=puted on the basis of the cost of such fuel delivered at the generating site at which it is to be consu=ed af ter deducting therefrom the present . salvage or reuse value of such fuel. | Nuclear Generation - the costs charged to fuel Accounts 518 and 521 which are co=puted on the basis of the cost of such fuel delivered at the generating site at which it is to be consu=ed af ter deducting therefrom the present . salvage or reuse value of such fuel. | ||
Net Energy Purchases - the a=ounts charged or credited to Account 555, excluding demand charges. | Net Energy Purchases - the a=ounts charged or credited to Account 555, excluding demand charges. | ||
Net Energy Interchanged - the amounts charged or credited to Account 555, excluding charges or credits for reserve capacity transactions. | Net Energy Interchanged - the amounts charged or credited to Account 555, excluding charges or credits for reserve capacity | ||
* transactions. | |||
.14 t i53.Issued October 17, 1978 Ef fective September 13, 1978 | Ec = A factor expressed in mills per kwh to adjust for any over and under collection of energy cost that resulted frco the operation of this clause in the prior six months, ending with the second month preceding the billing month. | ||
.Electric Pa. P.U.C. No. 42 (Supp. 9) | . | ||
Second Revised Page 90 Superseding METF.0POLITAN EDISON CG:GANY First Revised Page 90 The Ec factor, expressed in mills per kwh, shall be determined by dividing (a) the revenues (excluding revenues for gross receipt taxas) produced by the energy cir.use less the related energy costs recoverable by the clause, both determined as of the end of the second conth creceding the billing =onth, by (b) the six conth retail sales. | 14 t i53 | ||
S = The Ccepany's total k',;h sales to Custc=ers, excluding firm (C)sales to other utilities and energy pecduced from facilities undergoing operational tests prior to being placed into com-cercial operation, in the current (c) and base (b) periods. | . | ||
Issued October 17, 1978 Ef fective September 13, 1978 | |||
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Electric Pa. P.U.C. No. 42 (Supp. 9) | |||
Second Revised Page 90 Superseding METF.0POLITAN EDISON CG:GANY First Revised Page 90 The Ec factor, expressed in mills per kwh, shall be determined by dividing (a) the revenues (excluding revenues for gross receipt taxas) produced by the energy cir.use less the related energy costs recoverable by the clause, both determined as of the end of the second conth creceding the billing =onth, by (b) the six conth retail sales. | |||
S = The Ccepany's total k',;h sales to Custc=ers, excluding firm (C) sales to other utilities and energy pecduced from facilities undergoing operational tests prior to being placed into com-cercial operation, in the current (c) and base (b) periods. | |||
Fb g - Base energy cost of 8.000 mills per kilowatthour T = The Pennsylvania gross receipts tax race in effect during the billing =onth, expressed in d. .asal form. | Fb g - Base energy cost of 8.000 mills per kilowatthour T = The Pennsylvania gross receipts tax race in effect during the billing =onth, expressed in d. .asal form. | ||
The "Fe" and "Sc" factors shall be deter =ined as the six conth totals for the period ending with the second =onth preceding the Lilling conth. | The "Fe" and "Sc" factors shall be deter =ined as the six conth totals for the period ending with the second =onth preceding the Lilling conth. | ||
This clause shall be applied to all kilowatthours supplied and such charge shall be an addition to any minimu=s applicable. | This clause shall be applied to all kilowatthours supplied and such charge shall be an addition to any minimu=s applicable. | ||
At least ten days prior to the beginning of each billing =cnth, the Company will fila with the Pennsylvania Public Utility Cocnission in such form as tne Commission shall have prescribed, (a) a copy of the computation of the energy clause to be applied during such =onth, and (b) such other information per-taining thereto as the Cc= mission cay require. | At least ten days prior to the beginning of each billing =cnth, the Company will fila with the Pennsylvania Public Utility Cocnission in such form as tne Commission shall have prescribed, (a) a copy of the computation of the energy clause to be applied during such =onth, and (b) such other information per-taining thereto as the Cc= mission cay require. | ||
The application of this clause shall be subject to continuous review and to audit by the Cc==ission at such intervals as the Cc= mission shall determine. | The application of this clause shall be subject to continuous review and to audit by the Cc==ission at such intervals as the Cc= mission shall determine. The Cc= mission shall continuously review the reasonableness and lawfulness of the a=ounts of the surcharges produced by the energy cost adjust =ent clause and the charges included therein. | ||
The Cc= mission shall continuously review the reasonableness and lawfulness of the a=ounts of the surcharges produced by the energy cost adjust =ent clause and the charges included therein. | If frc= such audit it shall be determined, by final order entered after notice and hearing, that this clause has been erroneously or improperly utilized, the Ccepany will rectify such error or impropriety, and in accordance with the te us of this order apply credits against future energy clauses for such revenuas as shall have been errcneously or i= properly collected. The Commission's order shall be subject to the ri;ht of appeal. | ||
If frc= such audit it shall be determined, by final order entered after notice and hearing, that this clause has been erroneously or improperly utilized, the Ccepany will rectify such error or impropriety, and in accordance with the te us of this order apply credits against future energy clauses for such revenuas as shall have been errcneously or i= properly collected. | 1474 % | ||
The Commission's order shall be subject to the ri;ht of appeal. | O (C) Change Issued Augu n 16, 1979 Effective September 15, 1979 | ||
1474%O (C) Change Issued Augu n 16, 1979 Effective September 15, 1979 Electric Pa. | |||
P.U.C..No. 42 (Supp. 8) | Electric Pa. P.U.C..No. 42 (Supp. 8) | ||
METROPO!.ITAN EDISON CCMPANY Original Page 90.1 ADDENOUM TO RIDPR B (C)In lieu of the cdjustment factor otherwise chargeable via the operation of this Rider B during the eighteen month period commencing July 1, 1979 and ending Decc=ber 31, 1930, a levelized adjusteent factor of 8.8 mills per kilowatt-hour shall be applied during such period to each kilowatthour supplied under this tariff, on account of costs (as hereinafter identified) incurred by the Company and not reccvered through its base rates. | METROPO!.ITAN EDISON CCMPANY Original Page 90.1 ADDENOUM TO RIDPR B (C) | ||
Such costs shall consist of (a) the unrecovered balance at June 30, 1979 of er rgy costs incurred and deferred by the Company for collection via the operation of this Rider 3, (b) the energy costs incurred and deferred during such eighteen -onth period for recovery via the | In lieu of the cdjustment factor otherwise chargeable via the operation of this Rider B during the eighteen month period commencing July 1, 1979 and ending Decc=ber 31, 1930, a levelized adjusteent factor of 8.8 mills per kilowatt-hour shall be applied during such period to each kilowatthour supplied under this tariff, on account of costs (as hereinafter identified) incurred by the Company and not reccvered through its base rates. Such costs shall consist of (a) the unrecovered balance at June 30, 1979 of er rgy costs incurred and deferred by the Company for collection via the operation of this Rider 3, (b) the energy costs incurred and deferred during such eighteen -onth period for recovery via the | ||
.operation of this Rider B, (c) the de=ana or capacity costs incurred by the Company during the period of July 1,1979 through January 1, 1980 in connection with purchased power agreements entered into by it to provide energy needed to serve the Cc=pany's customers during the continuing outage of Units 1 and 2 (or of Unit 2 alone) of the Three Mile Island nuclear generating station and (d) applicable gross receipts taxes. | . | ||
All such costs (exclusive of gross receipts tax) shall be reflected in the appropriate deferred debit (or credit) account of the Company. | operation of this Rider B, (c) the de=ana or capacity costs incurred by the Company during the period of July 1,1979 through January 1, 1980 in connection with purchased power agreements entered into by it to provide energy needed to serve the Cc=pany's customers during the continuing outage of Units 1 and 2 (or of Unit 2 alone) of the Three Mile Island nuclear generating station and (d) applicable gross receipts taxes. All such costs (exclusive of gross receipts tax) shall be reflected in the appropriate deferred debit (or credit) account of the Company. | ||
Unless otherwise directed by the Pa.P.U.C., this Addendum to this Rider B shall cease and determine ef fective December 31, 1980, and this Rider B shall resu=e operation effective January 1, 1981 in accordance with its terms, subject, however, to such modification as may be directed by the Pa.P.U.C. as a result of any hereinaf ter mentioned accounting. | Unless otherwise directed by the Pa.P.U.C., this Addendum to this Rider B shall cease and determine ef fective December 31, 1980, and this Rider B shall resu=e operation effective January 1, 1981 in accordance with its terms, subject, however, to such modification as may be directed by the Pa.P.U.C. as a result of any hereinaf ter mentioned accounting. | ||
On or before February 1, 1981 (and on or before the first day of the second month following a shorter accounting period, if an earlier accounting is requested by the company or directed by the Pa. | On or before February 1, 1981 (and on or before the first day of the second month following a shorter accounting period, if an earlier accounting is requested by the company or directed by the Pa. P.U.C.), the Company shall file with the Pa.P.U.C., | ||
P.U.C.), the Company shall file with the Pa.P.U.C., in such form as the latter may prescribe, a statement showing as of December 31, 1980 (or as of the end of such other accounting p=riod) (a) the respective amounts and the aggregate total of the aforesaid r>sts incurred as of the end of such accounting period, (b) the revenues derived- a result of the aforesaid levelized adjustment factor during such accounting per. 4, (c) the balance of such deferred debit (or credit) account as of the end of such accounting period (less the portion of such costs to be collected via the normal o rration of this Rider B subsequent to December 31, 1980), (d) the ef forts made by the Compar.y during s'uch pericd to achieve net savings by means of purchased power agreements and (e) such other information as to the Company's efforts to minimize the net ,:ost of obtaining the energy needed to serve its customers during such period as the Pa.P.U.C. may require. | in such form as the latter may prescribe, a statement showing as of December 31, 1980 (or as of the end of such other accounting p=riod) (a) the respective amounts and the aggregate total of the aforesaid r>sts incurred as of the end of such accounting period, (b) the revenues derived - a result of the aforesaid levelized adjustment factor during such accounting per. 4, (c) the balance of such deferred debit (or credit) account as of the end of such accounting period (less the portion of such costs to be collected via the normal o rration of this Rider B subsequent to December 31, 1980), (d) the ef forts made by the Compar.y during s'uch pericd to achieve net savings by means of purchased power agreements and (e) such other information as to the Company's efforts to minimize the net ,:ost of obtaining the energy needed to serve its customers during such period as the Pa.P.U.C. may require. After notice and hearing, if the Pa.P.U.C. shall determine that the Company has utilized diligence and reasonable ef forts to minimize the. net cost of obtaining such energy during such period, the Company shall, be permitted to recover from (or credit to) its customers, such undercollection (or overcollection) of the costs, including said demand or capacity costs , incurred and deferred as aforesaid and not recovered (or overrecovered) during the above eighteen month period (or other applicable accounting period) via the levelized adjustment factor, as are found to be reasonable. | ||
After notice and hearing, if the Pa.P.U.C. shall determine that the Company has utilized diligence and reasonable ef forts to minimize the. net cost of obtaining such energy during such period, the Company shall, be permitted to recover from (or credit to) its customers, such undercollection (or overcollection) of the costs, including said demand or capacity costs , incurred and deferred as aforesaid and not recovered (or overrecovered) during the above eighteen month period (or other applicable accounting period) via the levelized adjustment factor, as are found to be reasonable.(C) Change Issued June 22, 1979 Effective with bills rendered during the billing conth of July 1979. | (C) Change Issued June 22, 1979 Effective with bills rendered during the billing conth of July 1979. | ||
}k)k METRCPOLITA.N EDISCN COMPANY Statement of Retail Energy Clause Reve:*ues. Txpenses and DeferralsIl) . | }k)k | ||
3 Months Ended Sepre ser 30 1979 3 Months September Jule Autust Se:tember 1979 , Sales and Revenues Pennsylvania Retail Sales (Cwn) 582 613 625 1820 Level Energy Cost Adjustment Charge | |||
METRCPOLITA.N EDISCN COMPANY Statement of Retail Energy Clause Reve:*ues. Txpenses and DeferralsIl) . | |||
($ millions) | 3 Months Ended Sepre ser 30 1979 3 Months September Jule Autust Se:tember 1979 , | ||
$ 5.1$ 5.4$ 5.5$16.0 Billing Adjustments (0.0)0.0 0.0 (0.0)Clause Revenues as Adjusted | Sales and Revenues Pennsylvania Retail Sales (Cwn) 582 613 625 1820 Level Energy Cost Adjustment Charge 8.8 8.8 8.8 8.8 (mills /Kwn) [ | ||
$5.1$5.4$5.5$16.0 (Less): Pa. Cross Receipts Tax G 4.52 (0.2)(0.2)(0.3)(0.7)Retail Clause Revenues for Energy Costs S 4.9 S 5.2 S 5.2 S15.3 Expenses Total System Energy Costs ($ millions)(2) | Clause Revenues Before Billing Adjustments | ||
$15.5$16.6$14.7$46.8 Total System Sales (Cwh) 619 654 662 1935 Energy Costs per K:.*i 'old (mills) 25.1 25.4 22 2 24.2 (1,e ss) : Energy Costs per Kwh Included in Retail Base Rates (8.0)(8.0)(8.0)(8.0)Energy Costs per Kwh above Base 17 1 17.4 14.2 16.2 Energy Costs (above Level Recovered by Base Rates) Applicable to Retail Sales (Costs per Kwh Times Retail Sales) | ($ millions) $ 5.1 $ 5.4 $ 5.5 $16.0 Billing Adjustments (0.0) 0.0 0.0 (0.0) | ||
$10.0$10.7 S 8.3$29.5 Deferrals Balance of Retail Energy Costs Deferred at Beginning of Month ($ millions) | Clause Revenues as Adjusted $5.1 $5.4 $5.5 $16.0 (Less): Pa. Cross Receipts Tax G 4.52 (0.2) (0.2) (0.3) (0.7) | ||
$28.1$33 2$38.7$28.1 Plus Current moth's Deferra1(3) 10.0 10.7 8.8 29.5 (Lese): (.usrent Month's Ratail Clause Revenues for Energy Costs (4.9)(5.2)(5.2)(15 3)Balance of Retail Energy Costs Deferred at End of natch S33.2 S39.7$42.3$42.3 (1) as reported monthly to the Commission (2) includes de::and component of cost of TMI-related short-term power purchases ($ 5.5 million for 3 months ended Septecber 30, 1979). | Retail Clause Revenues for Energy Costs S 4.9 S 5.2 S 5.2 S15.3 Expenses Total System Energy Costs ($ millions)(2) $15.5 $16.6 $14.7 $46.8 Total System Sales (Cwh) 619 654 662 1935 Energy Costs per K:.*i 'old (mills) 25.1 25.4 22 2 24.2 (1,e ss) : Energy Costs per Kwh Included in Retail Base Rates (8.0) (8.0) (8.0) (8.0) | ||
Energy Costs per Kwh above Base 17 1 17.4 14.2 16.2 Energy Costs (above Level Recovered by Base Rates) Applicable to Retail Sales (Costs per Kwh Times Retail Sales) $10.0 $10.7 S 8.3 $29.5 Deferrals Balance of Retail Energy Costs Deferred at Beginning of Month ($ millions) $28.1 $33 2 $38.7 $28.1 Plus Current moth's Deferra1(3) 10.0 10.7 8.8 29.5 (Lese): (.usrent Month's Ratail Clause Revenues for Energy Costs (4.9) (5.2) (5.2) (15 3) | |||
Balance of Retail Energy Costs Deferred at End of natch S33.2 S39.7 $42.3 $42.3 (1) as reported monthly to the Commission (2) includes de::and component of cost of TMI-related short-term power purchases ($ 5.5 million for 3 months ended Septecber 30, 1979). | |||
(3) includes dessand component of cost of TMI-related short-term power purchases ($5.2 million | (3) includes dessand component of cost of TMI-related short-term power purchases ($5.2 million | ||
' for 3 months ended September 30, 1979). | ' for 3 months ended September 30, 1979). | ||
O 1474 156. | O 1474 156 | ||
.APPE!! DIX 3 METROPOLITAN EDISON COMPANY Petition for Increase in Levelized Ener2v Cost Adj us tment Charge Supporting Material: | . | ||
'FIGURE 1 - Proj ected Short-Term Debt Balances, No Revision in 8.8 Mill Level Charge | |||
'TABLE 1- Data for Figure 1 | . | ||
'FIGURE 2 - Proj ected Short-Ters Debt Balances, 8.8 Mill Level Charge Increased by 6.9 Mills Ef fective 1/1/80'TABLE 2- Data for Figure 2 | APPE!! DIX 3 METROPOLITAN EDISON COMPANY Petition for Increase in Levelized Ener2v Cost Adj us tment Charge Supporting Material: | ||
'TABLE 3- System Energy Costs and Saler, July 1979 - | ' | ||
FIGURE 1 - Proj ected Short-Term Debt Balances, No Revision in 8.8 Mill Level Charge | |||
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TABLE 1 - Data for Figure 1 | |||
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FIGURE 2 - Proj ected Short-Ters Debt Balances, 8.8 Mill Level Charge Increased by 6.9 Mills Ef fective 1/1/80 | |||
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TABLE 2 - Data for Figure 2 | |||
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TABLE 3 - System Energy Costs and Saler, July 1979 - | |||
December 1980 | December 1980 | ||
'FIGURE 3 - Actual and Proj ected Cost of Coal, 1970-1980 | ' | ||
'TABLE 4- Data for Figure 3 | FIGURE 3 - Actual and Proj ected Cost of Coal, 1970-1980 | ||
'EIGURE 4 - Actual and Proj ected Cost of 011, 1970-1980 | ' | ||
'TABLE 5- Data for Figure 4 | TABLE 4 - Data for Figure 3 | ||
'FIGURE 5 - Average Annual PJM Running Rate , 1970-1979 | ' | ||
'TABLE 6- Indicated Increase in Level Charge Based on Energy Costs Experienced in July, August and September, 1979 | EIGURE 4 - Actual and Proj ected Cost of 011, 1970-1980 | ||
'TABLE 7- Increase in Level Charge That would be Required to Recover during 1980 the Energy Costs Proj ected to be Unrecovered as of December 31, 1979 | ' | ||
'" Full Cost Recovery" Increase in Level Charge | TABLE 5 - Data for Figure 4 | ||
'FIGURE 6 - Residential Rate Ccaparisons, Met-Ed (Including Clause Increase) vs. Other Pennsylvania Utilities | ' | ||
'TABLE 10 - Overall Increase to All Retail Customers | FIGURE 5 - Average Annual PJM Running Rate , 1970-1979 | ||
.METROPOLITAN EDISON COMPANY Projected Short-Term Debt Ita l anc es , No Revision in 8.8 Mill I.evel Charge i I I I I I I I I I I | ' | ||
TABLE 6 - Indicated Increase in Level Charge Based on Energy Costs Experienced in July, August and September, 1979 | |||
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TABLE 7 - Increase in Level Charge That would be Required to Recover during 1980 the Energy Costs Proj ected to be Unrecovered as of December 31, 1979 | |||
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=120- | TABLE 8 - | ||
" Full Cost Recovery" Increase in Level Charge | |||
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TABLE 9 - Residential Rate Comparison, Current Level Charge vs. Proposed Increase | |||
Requirements Total Other Than Deferred Projected De fe rred Energy Short-Tern Ener,, Costs Costs (1)Debt Oct. 1979$28.8$ 62.4 S 91.2 Nov.30.4 66.3 96.7 Dec.12.4 71.5 83.9 Jan. 1980$ 7.8$ 81.4$ 89.2 Feb.4.6 88.8 93.4 Mar.9.0 94.2 103.2 Apr.22.5 99.1 121.6 May 20.7 105.1 125.8(2)June 27.9 108.9 136.2 " July 23.8 112.9 136.7 " Aug.20.8 119.7 140.5 " Sept.31.3 116.8 148,1 " Oct.25.8 115.6 141.4 " Nov.30.9 112.5 143.4 " Dec.18.3 112.2 130.5 " (1) includes unamortized "old clause" balance recoverable by base rates. | ' | ||
FIGURE 6 - Residential Rate Ccaparisons, Met-Ed (Including Clause Increase) vs. Other Pennsylvania Utilities | |||
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TABLE 10 - Overall Increase to All Retail Customers c | |||
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3 47 A | |||
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METROPOLITAN EDISON COMPANY Projected Short-Term Debt Ita l anc es , | |||
No Revision in 8.8 Mill I.evel Charge i I I I I I I I I I I I l l l 160 - _ | |||
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_ Total Short- _ | |||
Debt Limit Term Debt 140 - | |||
Under Revolving _ | |||
Credit Agreement | |||
_ | |||
o ........................ .......................... | |||
=120 - | |||
_ | |||
d. | |||
- _..............._.... . . . . . . . . . . . ................... . _ | |||
vs. , | |||
' 100 - | |||
Margin of r, rety - | |||
5 | |||
,% | |||
o | |||
_ ($15 Million) - | |||
@ | |||
o $ | |||
g 80 - | |||
_ ~ | |||
o 7 | |||
- | |||
Deferred _ | |||
nergy Costs | |||
$ 60 | |||
.c | |||
- | |||
_ | |||
m _ | |||
_ | |||
40 - | |||
_ | |||
- | |||
_ | |||
_ | |||
{ | |||
0 - | |||
_ | |||
( 311 Other | |||
_ | |||
_ | |||
O I I I I I I I l l I l l I | |||
# | |||
0 N D J F M A M J J A S 0 N D | |||
- | |||
1979 1980 o' | |||
OD e O O | |||
TABLE 1 METROPOLITA EDISO:; COMPA.W Projected Short-Ters Debt Balances, No Revision in 8.8 Mill Level Charge (S Millions) | |||
Requirements Total Other Than Deferred Projected De fe rred Energy Short-Tern Ener,, Costs Costs (1) Debt Oct. 1979 $28.8 $ 62.4 S 91.2 Nov. 30.4 66.3 96.7 Dec. 12.4 71.5 83.9 Jan. 1980 $ 7.8 $ 81.4 $ 89.2 Feb. 4.6 88.8 93.4 Mar. 9.0 94.2 103.2 Apr. 22.5 99.1 121.6 May 20.7 105.1 125.8(2) | |||
June 27.9 108.9 136.2 " | |||
July 23.8 112.9 136.7 " | |||
Aug. 20.8 119.7 140.5 " | |||
Sept. 31.3 116.8 148,1 " | |||
Oct. 25.8 115.6 141.4 " | |||
Nov. 30.9 112.5 143.4 " | |||
Dec. 18.3 112.2 130.5 " | |||
(1) includes unamortized "old clause" balance recoverable by base rates. | |||
(2) exceeds $123 million limit under revolving credit agreement. | (2) exceeds $123 million limit under revolving credit agreement. | ||
. | |||
METROPOLITAN EDISON COMPANY Projected Short-Term Debt Balances, 8.8 Hill Level Charge Increa,ed by 6.9 Mills (Total Charge of 15.7 !!!11s) l I I I I l l 1 1 I I I i l iso - | |||
Debt Limit 140 - Under Revolving - | |||
g Credit Agreement O - - | |||
[ .................................................... | |||
O120 | |||
: | |||
- - | |||
m -................... ....... .................. - | |||
a Margin of Safety y 100 - | |||
(sjs niijinn) p7 -- | |||
g g _ Total Short- __ | |||
Q Term Debt M fi 80 - - " | |||
S 3 - - | |||
.5 | |||
* so - 3 2 | |||
- | |||
,g Deferred - | |||
>m Energy Costs 40 - | |||
22 UN | |||
- | |||
0-3v | |||
- | |||
_ | |||
__ | |||
w 20 D% | |||
~ | |||
- | |||
r All- | |||
- | |||
- | |||
3 | |||
- | |||
\( Other - | |||
" I I I I I I I I I I I I I | |||
#" O O N D J F M A M J J A S O N D | |||
- | |||
1979 1980 7 | |||
CD 9 9 e | |||
. | |||
METROPOLITAN EDISON COMPANY Projected Short-Term Debt 11alances 8.8 Mill Level Charge Increased by 6.9 Mills (Total Charge of 15.7 Mills), Ef fective 1/1/80 | |||
($ Millions) | |||
Requirements Deferred Energy Costs | |||
* Total Other Than No Revision Iteduction Balance Projected Deferred Energy in 8.8 Mill Due to 6.9 Reflecting Short-Term Costs Level Charge Mill Increase 6.9 Mill Increase Debt Oct. 1979 $28.8 $ 62.4 S | |||
- | |||
$62.4 S 91.2 Nov. 30.4 66.3 - | |||
66.3 96.7 Dec. 12.4 71.5 - | |||
71.5 83.9 Jan. 1980 $ 7.8 $ 81.4 $ (4.8) $76.6 S 84.4 Feb. 4.6 88.8 (9.6) 79.2 83.8 Mar. 9.0 94.2 (14.3) 79.9 88.9 g Apr. 22.5 99.1 (18.7) 80.4 102.9 g; May 20.7 105.1 (22.8) 82.3 103.0 p; June 27.9 108.9 (26.8) 82.1 110.0 ,, | |||
July 23.8 112.9 (30.8) 82.1 105.9 Aug. 20.8 119.7 (35.0) 84.7 105.5 Sept. 31.3 116.8 (39.3) 7/.5 108.8 Oct. 25.8 115.6 (43.4) 72.2 98.0 Nov. 30.9 112.5 (47.6) 64.9 95.8 Dec. 18.3 112.2 (52.1) 60.1 78.4 | |||
* includes unamortized "old clause" balance recoverable by base rates. | |||
.- | |||
4 | |||
.P- | |||
/ | |||
$ | |||
- | |||
TABLE 3 MEIROPOLITAN EDISO:; COMPA:nf System Enerev Cests and Sales, July 1979 - December 1986 Energy Total Retail Sales Costs Sales | |||
* of | |||
($ millions) (Gwh) mills /Kwh Gwh Total Sales July 1979 (actual) S 15.5 619 25.1 582 94.0% | |||
" | |||
Aug. 16.6 654 25.4 613 93. 7 | |||
" | |||
Sept. 14.7 662 22.2 625 94.4 Oct. (forecast) | |||
" | |||
17.0 642 26.5 607 94.5 Nov. 15.6 664 23.5 625 94.1 | |||
" | |||
Dec. 17.8 712 25.0 666 93.5 6 Months Dec. 1979 $ 97.2 3 953 24.6 3 718 94.1* | |||
Average Month $ 16.2 659 24.6 620 9 4.1 *. | |||
Jan. 1980 (forecast) $ 24.0 785 30.6 733 93 4% | |||
" | |||
Feb. 21.4 789 27.1 738 93 5 | |||
" | |||
Mar. 18.2 738 24.7 717 97 2 | |||
" | |||
Apr. 16.7 683 24.5 666 97.5 | |||
" | |||
May 17.0 635 26.8 621 97.8 | |||
" | |||
June 14.7 633 23.2 618 97.6 | |||
" | |||
July 14 9 629 23.7 614 97.6 | |||
" | |||
Aug. 18.3 662 27.6 646 97.6 g | |||
" | |||
Sept. 8.5 670 12.7 655 97 8 w | |||
" | |||
Oct. 9.8 645 15.2 631 97.8 | |||
" | |||
Nov. 8.3 666 12.5 648 97.3 | |||
" | |||
Dec. 11.8 709 16.6 685 96.6 12 Months Dec. 1980 $183.6 8 244 22.3 7 972 96.7% | |||
Average Month $ 15.3 687 22.3 664 96.7% | |||
18 Months Dec. 1980 $280.8 12 197 23.0 11 690 95.8* | |||
Average 1buch $ 15.6 678 23.0 649 95.8% | |||
Assueptions | |||
' | |||
' | |||
TMI-1 returns to service 9/1/80. | |||
" Cost plus 10%" pricing of. GPU's TMI-related purchases f rom PJM ef fective 11/1/79. | |||
' | |||
Other economic TMI-related purchases (Ontario, Jamestown, APS) continue for forecast period. | |||
' | |||
Demand component of cost of TMI-related purchases included for full forecast period. | |||
' | |||
15% oil price escalation, Dec. 1980 over Dec. 1979. | |||
O 1474 162 | |||
. | |||
. | |||
METROPOLITAN EDISON COMPANY Actual and Forecast Cost of Coal, 1970-1980 50 ~; g i ; i i l : i 45 - - | |||
40 - - | |||
$34/ | |||
(1979)Ton l lk , | |||
35 - | |||
3/ 'd - | |||
/ | |||
, $36/ Ton 30 - | |||
(1980) -- | |||
8 | |||
" | |||
- | |||
? | |||
8 t | |||
n. | |||
25 - - | |||
A to 44 a 20 - - | |||
T C | |||
15 - - | |||
10 - | |||
Actual - | |||
Forecast | |||
. | |||
g _ _ | |||
-> | |||
x=- | |||
" O I I I I I I I I I I I 3" 1970 1971 1972 1973 1974 1975 197G 1977 1978 1979 1980 | |||
- | |||
& | |||
TABLE 4 , | |||
METROPOLITA: EDISO:; CO"PA:;Y Actual and Projected Cost of Coal, 1970 - 1980 Tons Purchased Cos t Year (000's) (S millions) S/ ton 1970 2 454 S25.6 S10.44 1971 2 108 24.0 11.40 1972 2 271 28.4 12.50 1973 2 356 32.6 13.86 1974 2 341 61.1 26.09 1975 2 000 60.4 30.22 1976 2 046 57.0 27.88 1977 2 212 63.1 28.51 1978 1 884- 63.0 33.43 1979 Jan. 130 $ 4.3 $32.96 Feb. 81 2.8 34.49 Mar. 197 6.9 35.30 Apr. 189 6.3 33.50 g May 147 5.1 34.76 W June 138 4.5 32.84 July 168 6.0 35.56 Aug. 159 5.4 33.91 Sept. 138 4.9 35.32 Oct. (forecast) | |||
" | |||
130 4.5 34.33 Nov. | |||
" | |||
133 4.6 34.34 Dec. 197 6.8 34.68 Year 1 807 $62.1 S34,37 1980 Jan. (forecast) | |||
" | |||
205 $ 7.1 S34.84 Feb. 182 6.4 35.08 | |||
" | |||
Mar. | |||
" | |||
200 7.1 35.35 Apr. | |||
" | |||
180 6.4 35.57 May 172 6.1 35.72 | |||
" | |||
June | |||
" | |||
199 7.2 36.13 July 207 7.5 36.40 | |||
" | |||
Aug. 192 7.1 36.81 | |||
" | |||
Sept. 168 6.2 36.96 | |||
" | |||
Oct. 164 6.1 36.97 | |||
" | |||
Nov. 199 7.4 37.43 | |||
" | |||
Dec. 204 7.7 37.68 Year 2 272 $82.3 S36.24 O | |||
!474 i64 | |||
. | |||
METROPOLITAN EDISON COMPANY Actual and Projected Cost of oil, 1970-1980 45 g g j g i i i g g g 40 - - | |||
~ | |||
35 - - | |||
' | |||
30 - | |||
. | |||
- | |||
T U 3 E! 25 - | |||
Projected for Year 1979 , | |||
" '_ @ | |||
Based on 9 Months Actual g | |||
p. | |||
(S24. 65 /bb1) "h#/ | |||
p f 4 | |||
M y | |||
e 20 - | |||
~ | |||
- | |||
O July Eudget Y Revision A | |||
15 - - | |||
f (S26.65/bb1) - | |||
10 - - | |||
- | |||
_ps Actual N | |||
.p> | |||
5 - | |||
~ | |||
- - - - - Forecast - | |||
o I I I I I I I I I I I O | |||
en 1970 1971 1972 1973 1974 1975 197G 1977 1978 1979 1980 | |||
. | |||
TABLE 5 | |||
$ | |||
METROPOLITAN EDISON CO:!PANY Actual and Pro jected Cost of oil, 1970 - 1980 Barrels Purchased Cost Year (000's) (S millions) S/ bbl 1970 323 S 1.4 S 4.41 1971 961 4.9 5.06 1972 1 332 6.8 5.09 1973 1 341 8.7 6.52 1974 1 457 19.0 13.01 1975 636 8.5 13.37 1976 403 5.8 14.34 1977 683 11.0 16.04 1978 668 10.9 16.26 1979 Jan. 57 $ 1.0 $17.94 Feb. 48 0.9 18.87 Fu r . 28 0.5 19.80 Apr. 20 0.4 20.32 May June 24 16 0.5 0.4 21.91 23.49 g | |||
July 53 1.4 25.92 Aug. 37 1.0 26.13 Sept. 19 0.5 27.88 Oct. (forecast) | |||
" | |||
40 1.0 24.12 Nov. 41 1.0 24.52 | |||
" | |||
Dec. 55 1.4 25.46 Year 436 $10.0 $22.82 1980 Jan. (forecast) | |||
" | |||
39 $ 1.0 $25.56 Feb. | |||
" | |||
31 0.8 25.33 Mar. | |||
" | |||
29 0.7 25.21 Apr. | |||
" | |||
30 0.8 25.65 May | |||
" | |||
27 0.7 25.72 June 29 0.8 26.37 | |||
" | |||
July | |||
" | |||
30 0.8 26.57 Aug. 30 0.8 26.84 | |||
" | |||
Sept. 27 0.7 27.06 | |||
" | |||
Oct. 30 0.8 27.55 | |||
" | |||
Nov. 28 G.8 27.94 | |||
" | |||
Dec. 42 1.2 29.26 Year 372 S 9.9 S26.65 | |||
. | |||
O 1474 166 | |||
. . | |||
METROPOLITAN EDISON COMPANY Average Annual PJM Running Rate, 1970-1979 50 g ; ; ; i l l l l | |||
, | |||
45 - - | |||
40 - | |||
, | |||
- | |||
35 - | |||
31.7 - | |||
(Ent.) %, | |||
' | |||
a 30 - - | |||
3 G 's u m | |||
: a. 2 5 - - = | |||
' | |||
0 E 20 - - | |||
' | |||
15 - - | |||
n w | |||
" | |||
10 - - | |||
- 7_ - | |||
a- | |||
% 5 - - | |||
I I I I I I I I I I 0 | |||
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Mills er IG,*ll-P 7. 8 9.3 8.5 10.5 24.5 20.0 19.8 24.6 25.2 | |||
TABLE 6 METF.0POLITA!! EDISO CC:!PA :Y Indicated Increase in 8.8 Mill Level Charge Based on Ener7v Costs Experience.d to Date 1979 Actual 3 Months Julv Aug Sept Sept Total System Energy Costs * | |||
($ millions) $15.5 $16.6 $14.7 $46.8 Total System Sales (G*iH) 619 654 662 1,935 Mills /lciH of Sales 25.1 25.4 22.2 24.2 (Less): Total Re tail Charges for Energy Costs (8 mills base, 8.4 mills claus 2, excl. taxes) _(16.4) | |||
Increase in Energy Costs Over Level Provided for by Currently Ef f ective Re tail Es tes 7.6 Indicared Increase in Level Charge (above X 1.047 . | |||
revenue tax fac tor) 8.2 | |||
* includes demand component of cost of TMI-related short-term power purchases. | |||
1474 168 | |||
.. | |||
O | |||
.. w. | |||
FICL'RE 6 METROPOLITXi EJISO:' COMPM.'Y | |||
. | |||
ilyr,",.ow aa] C ,m ;_ u ., ~. o, . u u n o | |||
. | |||
ra., | |||
Lv .. . u,.,m,1:,, a e w . _ Q ,L, -. .a2 m e. .m. | |||
: ,on Rataa in Effect Scptember 1,1979 Recidentic! No V!ctor Hecting 500 lOf1HR.lonth 35 - 33.47 p30.85 With - | |||
i ~~ 31.24 31.21 V 6.9 Mill Increase 30 - | |||
,' | |||
~~- | |||
27.73 - | |||
<a i 2 ;-A2 s 25 - | |||
l, 23J6 22.77 ro | |||
, | |||
, | |||
;. i . . | |||
p-3 20 | |||
' | |||
- | |||
- | |||
* I O ' | |||
l-15 - - | |||
' | |||
' | |||
10 . - | |||
5 - - | |||
0 | |||
%, #4 %o *4o ''&q d *!p | |||
. . s | |||
' | |||
1474 109 | |||
. | |||
TABLE 7 METROPOLITAN EDISON COMPA!.T Increase in 3.8 ".ill Level Charge That Would be Required to Recover During 1980 the Energy Costs Proj ected to be Unrecovered (Deferred) | |||
As of December 31, 1979 h | |||
Deferred Enargy Costs as of 9/30/79* | |||
(actual; $ =illions) $42.3 Estimated Additional Unrecovered Energy Costs through 12/31/79 16.3 Proj ected Balance as of Propos ad 1/1/80 Ef fective Date of Clause Revision $58.6 Retail Sales Proj ected for the Period January 1980 - December 1980 (Gwh) 7,972 Amortization Rate per Kwh, Excluding Revenue Taxes 7.4 Increase in Currently Effective 8.8 Mill Level Charge (a*vove x 1.047 revenue tax f actc,c) 7 .7 O | |||
* excludes unamortized "old clause" balance recoverable by base rates ($14 4 million). | |||
1474 170 | |||
. | |||
O | |||
. | |||
TABLE 8 METROPOLITA:. EDISON COMPA'iY | |||
" Full Cost Recovery" Increase in 8.8 Mill Level Charge, Assuming Return to 6-Month Historical Clause Effective 1/1/81 S Millions Total energy costs projected for the 18-month period July 1979 - December 1980 (July - | |||
September 1979 actual, TM1-1 back 9/1/80, | |||
" cost plus 10%" PJM pricing effective 11/1/79, APS, Ontario and Jamestown purchases, 15% oil price escalation) $281 Amount applicable to retail sales (above X 0.958, ratio of retail to total sales, July 1979 - | |||
December 1980) $269 Plus. Energy costs deferred under retail clause in effect prior to shift to level clause on July 1, 1979 (actual balance of costs deferred under 6-month historical clause as of June 30, 1979) 28 (Less): Energy costs incurred in 1980 that would be recovered in 1981 by 6-month historical clause if that clause were reinstated effective January 1, 1981 (26) | |||
Retail energy costs recoverable during 18-month period July 1979 - December 1980, assuming re-turn to 6-month historical clause effective January 1, 1981 $271 (Less): Retail revenues for. energy costs, July 1979 - | |||
December 1980, at current rates (8 mills base, 8.4 mills clause (excl. taxes); 16.4 mills X 11,690 G'!H retail sales projected for the period) (192) | |||
Unrecovered costs, no revision in current level charge $ 79 Increase in level charge required for complete re-covery, assuning increase is effective January 1, }k }}} | |||
1980 (above : 7,972 GWH retail sales projected for the period January 1980 - December 1980, X 1.047 revenue tax factor) 10.4 Mills /KWH | |||
. | |||
TABLE 9 tiETROPOLITAN EDISON CC:!PANY Monthly Bills Under Residential Ra te RS, Level Char 2e Currentiv in Effect vs. P ronosed Increase Monthly Present Rates Proposed Ra tes Usage (8.8 Mill Level (15. 7 Mill Level Increase ONh) Charge) Charge) Amount %_ | |||
200 $13.45 $14.82 $1.37 10.2% | |||
300 18.11 20.17 2.06 11.4 400 22.77 25.51 2.74 12.0 460 (average) 25.60 28.75 3.15 12.3 500 27.42 30.85 3.43 12.5 600 32.08 36.19 4.11 12.8 700 36.74 41.54 4.80 13.1 800 41.40 46.88 5.48 13.2 900 46.05 52.22 6.17 13.4 1 000 50.71 57.56 6.85 13.5 Note: Both present and proposed rates include 0.72 base rate tax surcharge currently in ef fect (surcharge may be revised pur-suant to Ac t No. 1979-27, as described in PaPUC's Secretarial letter dated 10/3/79.) | |||
1474 172 O | |||
." | |||
. -- | |||
. | . | ||
TABLE 10 METROPOLITAN EDISCN CCIPANY Total Charges to Custouers Reflecting Proposed Increase in 8.8 Mill Level Charce Normalized retail base revenues allowed in R.I.D. 434, including 5.42 mill " roll-in" of energy costs into base rates $237.7 Million. | |||
Normalized test year retail sales 6 872 Gwh Average retail revenue per Kwh | |||
($ 237.7 million t 6 872 Gwh) 34.590 mills /Kwh Plus: Tax adjustment surcharge currently in effect (34.590 mills /Kwh x .0072) 0.249 Plus: 8.8 Mill leveltzed energy cost adjustment charge allowed in I-79040308 8.800 Total average annual charges to retail customers 43.639 mills /Kwh Prope:cd increase in 8.8 mill level charge 6.854 mills /Kwh | |||
% Increase in total charges to retail customers 15.7% | |||
Annualized increase in retail revenues, 12 months ended December 31, 1980, based upon proj ected retail sales of 7,972 Gwh: | |||
Mills /Kuh $ Fullions For energy costs 6.546 $52.2 For revenue taxes (6.546 x .047) .308 2.4 Total 6.854 $54.6 | |||
\ 7 '' | |||
\ h14 | |||
: r. . | |||
Met-Ed/Penelec Statement B Witness: D. L. Huff Q. Would you please state your name and address? | |||
A. David L. Huf f, my business address is 2800 Pot t sville Pike Muhlenburg Twp. , | |||
Pennsylvania. | |||
Q. By whom are you employed and in what capacity? | |||
A. I am employed as an Assistant Comptroller by Metropolitan Edison Company, to which I shall trom time to time refer to as the " Company" or as " Met-Ed." | |||
Q. What is your educational and professional background? | |||
A. I was graduated from Husson College with a Bachelor of Science degree in Accounting and Rutgers University with an MBA degree in Economics and have over 14 years of accounting experience with the Company and its sister company, Jersey Central Power & Light Company. This is more fully described in the attached Appendix A. | |||
Q. miat are your duties and responsibilities with the Company? | |||
A. I am responsible to the Comptroller for the administration of the book-keeping, property records, accounts payable, special projects and tax sections of the Accounting Department, including rate case preparation. | |||
Q. Does the Company adhere to a system of accounts prescribed by the Pennsyl-vania Public Ut ility Commission ("PUC")? | |||
A. Yes. The Company's accouncing records are maintained in accordance with the Pennsylvania Public Ut ility Regulations at 52 Pa. Code, Sec. 57.41 et seq. | |||
$237.7 Million. | |||
Normalized test year retail sales 6 872 Gwh Average retail revenue per Kwh | |||
($ 237.7 million t 6 872 Gwh) 34.590 mills /Kwh Plus: Tax adjustment surcharge currently in effect (34.590 mills /Kwh x .0072) 0.249 Plus: 8.8 Mill leveltzed energy cost adjustment charge allowed in I-79040308 8.800 Total average annual charges to retail customers 43.639 mills /Kwh Prope:cd increase in 8.8 mill level charge 6.854 mills /Kwh | |||
% Increase in total charges to retail customers 15.7%Annualized increase in retail revenues, 12 months ended December 31, 1980, based upon proj ected retail sales of 7,972 Gwh: | |||
Mills /Kuh | |||
$ Fullions For energy costs 6.546$52.2 For revenue taxes (6.546 x .047) | |||
.308 2.4 Total 6.854$54.6 | |||
r..Met-Ed/Penelec Statement B Witness: D. L. Huff Q.Would you please state your name and address? | |||
A.David L. Huf f, my business address is 2800 Pot t sville Pike Muhlenburg Twp. , Pennsylvania. | |||
Q.By whom are you employed and in what capacity? | |||
A.I am employed as an Assistant Comptroller by Metropolitan Edison Company, to which I shall trom time to time refer to as the " Company" or as " Met-Ed." Q.What is your educational and professional background? | |||
A.I was graduated from Husson College with a Bachelor of Science degree in Accounting and Rutgers University with an MBA degree in Economics and have over 14 years of accounting experience with the Company and its sister company, Jersey Central Power & Light Company. | |||
This is more fully described in the attached Appendix A. | |||
Q.miat are your duties and responsibilities with the Company? | |||
A.I am responsible to the Comptroller for the administration of the book-keeping, property records, accounts payable, special projects and tax sections of the Accounting Department, including rate case preparation. | |||
Q.Does the Company adhere to a system of accounts prescribed by the Pennsyl-vania Public Ut ility Commission ("PUC")? | |||
A.Yes.The Company's accouncing records are maintained in accordance with the Pennsylvania Public Ut ility Regulations at 52 Pa. Code, Sec. 57.41 et seq. | |||
and in conformity with the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission ("FERC"), fomerly the Federal Power Commission ("FPC"), and adopted by the PUC. | and in conformity with the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission ("FERC"), fomerly the Federal Power Commission ("FPC"), and adopted by the PUC. | ||
_ _ | |||
..i Q.Are the Company's accounts audited? | \ | ||
A.Yes.They are audited at least annually by an independent certified public accounting firm; and, in addition, the FERC conducted compliance audits in 1964, 1971 and 1977 to ascertain that the Company is keeping its accounts in conformity with the Uniform System of Accounts. | |||
The PUC Staf f partici-pated in the review of the findings of the FERC Staff Audits. | . .i Q. Are the Company's accounts audited? | ||
Q.Has an original cost determinatien been made of the Company's utility plant?A.Yes.An original cost determination was made as of December 31, 1944, for which approval orders were issued by the PUC for Met-Ed on December 11, 1945 under EOC Docket No. 27 and for Edison Light and Power Company (which was subsequently merged witn Met-Ed) on November 12, 1946 under EOC Docket No. 11.In 1948, the Company filed with this Commission a basic plan for maintenance of its continuing property records. | A. Yes. They are audited at least annually by an independent certified public accounting firm; and, in addition, the FERC conducted compliance audits in 1964, 1971 and 1977 to ascertain that the Company is keeping its accounts in conformity with the Uniform System of Accounts. The PUC Staf f partici-pated in the review of the findings of the FERC Staff Audits. | ||
The PUC accepted and approved this plan on April 19, 1948. The Company has since that date maintained its continuing property records in accordance with the basic plan. | Q. Has an original cost determinatien been made of the Company's utility plant? | ||
Q.Mr. Huf f, I show you an exhibit which has been marked for identification as Met-Ed/Penelec Exhibit B-1 and ask you what parts thereof have been prepared by you or under your supervision? | A. Yes. An original cost determination was made as of December 31, 1944, for which approval orders were issued by the PUC for Met-Ed on December 11, 1945 under EOC Docket No. 27 and for Edison Light and Power Company (which was subsequently merged witn Met-Ed) on November 12, 1946 under EOC Docket No. 11. | ||
A.Met-Ed/Penelec Exhibit B-1 has basically been prepared under my supervision. | In 1948, the Company filed with this Commission a basic plan for maintenance of its continuing property records. The PUC accepted and approved this plan on April 19, 1948. The Company has since that date maintained its continuing property records in accordance with the basic plan. | ||
'Ihere are, however, other witnesses who have furnished various data to me and they will support that data with their testimony. | Q. Mr. Huf f, I show you an exhibit which has been marked for identification as Met-Ed/Penelec Exhibit B-1 and ask you what parts thereof have been prepared by you or under your supervision? | ||
Q.Would you please identify those witnesses who will support such data and the general areas of their testimony? | A. Met-Ed/Penelec Exhibit B-1 has basically been prepared under my supervision. | ||
'Ihere are, however, other witnesses who have furnished various data to me and they will support that data with their testimony. | |||
i.A.Yes.Mr. W. D. Garland will testify to calculated depreciation accrual rates and Mr. | Q. Would you please identify those witnesses who will support such data and the general areas of their testimony? - | ||
F. D. Hafer and Mr. J. G. Graham will jointly of fer testimony with respect to energy costs and related matters. | |||
Q.What is contained in Met-Ed/Peaelec Exhibit B-l? | i . | ||
A.Exhibit B-1 represents the projected budgeted and normalized statement of Met-Ed net utility operating income (the equivalent of utility " return" for racemaking purposes) for the test year ending December 31, 1980. | A. Yes. Mr. W. D. Garland will testify to calculated depreciation accrual rates and Mr. F. D. Hafer and Mr. J. G. Graham will jointly of fer testimony with respect to energy costs and related matters. | ||
The budgeted data which is the starting point of this exhibit was prepared in July of 1979 and reflects the austere expense - curtailed financial planning of the immediate post - TMI accident situation. | Q. What is contained in Met-Ed/Peaelec Exhibit B-l? | ||
Met-Ed's 1980 bud; ting process has been continuing and the official 1980 budget is exuected to be approved by the Board of Directors in late December of 1979 or early Januc y of 1980.The income statement is a key document in the quant ificat ion. of a utility's base revenue requirements for a given period. | A. Exhibit B-1 represents the projected budgeted and normalized statement of Met-Ed net utility operating income (the equivalent of utility " return" for racemaking purposes) for the test year ending December 31, 1980. The budgeted data which is the starting point of this exhibit was prepared in July of 1979 and reflects the austere expense - curtailed financial planning of the immediate post - TMI accident situation. Met-Ed's 1980 bud; ting process has been continuing and the official 1980 budget is exuected to be approved by the Board of Directors in late December of 1979 or early Januc y of 1980. | ||
All of the data is summarized on page 1. | The income statement is a key document in the quant ificat ion. of a utility's base revenue requirements for a given period. All of the data is summarized on page 1. The first column on that page displays Met-Ed's revenues, expenses and net income, as taken from the preliminary budget of the Company for the year ending December 31, 1980. The second column shows a minimum number of adjustments to normalize revenues and expenses, with the identi-fying adjustment numbers appearing adjacent to the respective items in column two. The normalizing adjustments in this presentation have been held to a minimum in order (a) to save time in the preparation of this presenta-tion for the present hurried proceedings and (b) to avoid areas of contro-versy (i.e. , to forego additional normalization adjustments which Met-Ed considers to be proper and appropriate for ratemaking purposes but which the staff and others have opposed in the past). The third column shows the situation after giving ef fect to such normalizing adjustments. The fourth | ||
The first column on that page displays Met-Ed's revenues, expenses and net income, as taken from the preliminary budget of the Company for the year ending December 31, 1980. | }k7k \76 | ||
The second column shows a minimum number of adjustments to normalize revenues and expenses, with the identi-fying adjustment numbers appearing adjacent to the respective items in column two. | |||
The normalizing adjustments in this presentation have been held to a minimum in order (a) to save time in the preparation of this presenta-tion for the present hurried proceedings and (b) to avoid areas of contro-versy (i.e. , to forego additional normalization adjustments which Met-Ed considers to be proper and appropriate for ratemaking purposes but which the staff and others have opposed in the past). | . . | ||
The third column shows the situation after giving ef fect to such normalizing adjustments. | and sixth columns show the budgeted expenses and related tax adjustments which would be necessary if one were to exclude TMI-2 and TMI-l expenses, h | ||
The fourth | re s pec t ively. The situation illustrating the exclusion of TMI-2 expenses Nith which Met-Ed does not agree) is reflected in the. fifth column and the situation illustrating the possible exclusion of both TMI-l and TMI-2 expenses (with which Met-Ed likewise does not agree) is reflected in the seventh column. Columns eight and nine are included on this schedule to provide a mechanism for adjusting base revenues to reflect a required rate of return under the applicable circumstances. | ||
}k7k\76 | Q. What is shown in Adjustment No. l? | ||
..and sixth columns show the budgeted expenses and related tax adjustments which would be necessary if one were to exclude TMI-2 and TMI-l expenses, h re s pec t ively. The situation illustrating the exclusion of TMI-2 expenses Nith which Met-Ed does not agree) is reflected in the. fifth column and the situation illustrating the possible exclusion of both TMI-l and TMI-2 expenses (with which Met-Ed likewise does not agree) is reflected in the seventh column. Columns eight and nine are included on this schedule to provide a mechanism for adjusting base revenues to reflect a required rate of return under the applicable circumstances. | A. This adjustment to operating revenues: | ||
Q.What is shown in Adjustment No. l? | (a) reduces base revenues by $1,255,000 to reflect the more recent revision of budgeted 1980 sales and revenues used in the Met-Ed energy clause increase filing (i.e. , the petition for modification of the levelized energy adjustment clause charge filed in the Commission Order entered June 19, 1979), (b) eliminates the 1980 budgeted revenues from Hershey Electric Company, of $1,942,000 for January and Februrry which will cease to be a FERC customer of Met-Ed on March 1, 1980, (c) reduces base revenues associated with FERC customers by $772,000 to reflect the proposed settlement of fer in the pending FERC rate case, (d) eliminates tax surcharge revenues of $17,894,000 and energy clausa revenues (exclusive of gross receipts tax) of $105,955,000 to eliminate non-base rate revenues from this base rate income statement presentation and (e) adjusts delayed payment charge revenues by $184,000 and other revenues by $305,000 to reflect the above mentioned revised projection of 1980 sales. | ||
A.This adjustment to operating revenues: (a) reduces base revenues by $1,255,000 to reflect the more recent revision of budgeted 1980 sales and revenues used in the Met-Ed energy clause increase filing (i.e. , the petition for modification of the levelized energy adjustment clause charge filed in the Commission Order entered June 19, 1979), (b) eliminates the 1980 budgeted revenues from Hershey Electric Company, of $1,942,000 for January and Februrry which will cease to be a FERC customer of Met-Ed on March 1, 1980, (c)reduces base revenues associated with FERC customers by $772,000 to reflect the proposed settlement of fer in the pending FERC rate case, (d) eliminates tax surcharge revenues of $17,894,000 and energy clausa revenues (exclusive of gross receipts tax) of $105,955,000 to eliminate non-base rate revenues from this base rate income statement presentation and (e) adjusts delayed payment charge revenues by $184,000 and other revenues by $305,000 to reflect the above mentioned revised projection of 1980 sales. | O | ||
O-'-1474 177 | -'- | ||
..Q.Please describe Adjustment No. 2. | 1474 177 | ||
A.In this adjustment, energy-related costs are adjusted to the level recover-able through base rates, (excluding sales to Hershey Electric which has been normalized out of the case). | |||
The retail energy clause base cost (i.e., the portion of energy costs recovered by retail base rates) of 8 mills per KW11 reflects the PUC Order at I.D. 214. | . . | ||
The FERC energy base cost of 11.303 mills per KWH reflects the rate proposed in the currently pending FERC rate filing , Docke t No. ER 79-58. | Q. Please describe Adjustment No. 2. | ||
A. In this adjustment, energy-related costs are adjusted to the level recover-able through base rates, (excluding sales to Hershey Electric which has been normalized out of the case). The retail energy clause base cost (i.e., the portion of energy costs recovered by retail base rates) of 8 mills per KW11 reflects the PUC Order at I.D. 214. The FERC energy base cost of 11.303 mills per KWH reflects the rate proposed in the currently pending FERC rate filing , Docke t No. ER 79-58. | |||
The net ef fect of this adjustment is to reduce the budgeted energy costs, exclusive of coal and ash handling, nuclear handling and reserve capacity costs, by $108,574,000 to the level of $66,243,000. | The net ef fect of this adjustment is to reduce the budgeted energy costs, exclusive of coal and ash handling, nuclear handling and reserve capacity costs, by $108,574,000 to the level of $66,243,000. | ||
Q.Wh at is Adjustment No. 3? | Q. Wh at is Adjustment No. 3? | ||
A.The first portion of this adjustment reflects the elimination of S96,000 of an area of controversy, namely, depreciation expense associated with the TMI-l ring girder (which was removed from measures of value under prior Commission orders). | A. The first portion of this adjustment reflects the elimination of S96,000 of an area of controversy, namely, depreciation expense associated with the TMI-l ring girder (which was removed from measures of value under prior Commission orders). Further, the depreciation expense accrual was reduced by $264,000 to reflect the dif ferences between it and the calculated depre-ciation expense prepared by Mr. W. D. Garland, who will of fer testimony supporting this adjustment. | ||
Further, the depreciation expense accrual was reduced by $264,000 to reflect the dif ferences between it and the calculated depre-ciation expense prepared by Mr. W. D. Garland, who will of fer testimony supporting this adjustment. | Q. Flease explain Adjustment No. 4. | ||
Q.Flease explain Adjustment No. 4. | A. In its State Tax Adjustment Procedure Order of March 10, 1970, the PUC permitted utilities to recover portions of certain taxes via a surcharge. | ||
A.In its State Tax Adjustment Procedure Order of March 10, 1970, the PUC permitted utilities to recover portions of certain taxes via a surcharge. | |||
Since the normalized revenues shown on page 1 do not include any revenues from that surcharge, this adjustment is necessary for the purpose of this base rate presentation, to remove ( from taxes other than income taxes) those items not recoverable via base rates (i.e., those items recoverable through the surcharges). | Since the normalized revenues shown on page 1 do not include any revenues from that surcharge, this adjustment is necessary for the purpose of this base rate presentation, to remove ( from taxes other than income taxes) those items not recoverable via base rates (i.e., those items recoverable through the surcharges). | ||
}]@' | }]@ | ||
..As detailed in this adjustment, 40% of the total rate for the Capital Stock Tax is subject to collection by the state tax surcharge, thus resulting in a normalizing adjustment of $2,400,000. | 4 | ||
' | |||
. . | |||
As detailed in this adjustment, 40% of the total rate for the Capital Stock Tax is subject to collection by the state tax surcharge, thus resulting in a normalizing adjustment of $2,400,000. | |||
The Public Utility Realty Tax of $5,590,000 and the City of York Gross Receipts Tax of $377,000 are fully recoverable through surcharges and are therefore totally eliminated. | The Public Utility Realty Tax of $5,590,000 and the City of York Gross Receipts Tax of $377,000 are fully recoverable through surcharges and are therefore totally eliminated. | ||
The Pennsylvania Cross Receipts Taxes were adjusted downward by $12,600,000 to normalize the income statement to reflect only the 2% rate recoverable through base rates. | The Pennsylvania Cross Receipts Taxes were adjusted downward by $12,600,000 to normalize the income statement to reflect only the 2% rate recoverable through base rates. | ||
In summary, the total adjustment to taxes other than income taxes is a reduction af $20,967,000. | In summary, the total adjustment to taxes other than income taxes is a reduction af $20,967,000. | ||
Q.Would you please describe briefly the computation of federal and state | Q. Would you please describe briefly the computation of federal and state income taxes in Adjustment No . 5? e A. This adjustment is shown on three separate pages in oraer to show the computation of federal and state income tax reflected in columns two, four and six, respectively, of page 1 of Exhibit B-1. The following is a descrip-tion of the format utilized on each of these three pages (i.e. pages 6.1, 6.2 and 6.3). | ||
A.This adjustment is shown on three separate pages in oraer to show the computation of federal and state income tax reflected in columns two, four and six, respectively, of page 1 of Exhibit B-1. | The schedule on each of such pages recaps the computation of the net operat-ing income before income taxes from data shown on page 1 of Exhibit B-1 (i.e., line 7 less line 23, of the respective columns on page 1 of Exhibit B-1). From this amount is deducted (on line no. 9) the interest charges that are computed by multiplying the adjusted measures of value by the rate of return associated with long-term debt (footnote (A) of this adjustment) | ||
The following is a descrip-tion of the format utilized on each of these three pages (i.e. pages 6.1, 6.2 and 6.3). | ) k ][{ \N | ||
The schedule on each of such pages recaps the computation of the net operat-ing income before income taxes from data shown on page 1 of Exhibit B-1 (i.e., line 7 less line 23, of the respective columns on page 1 of Exhibit B-1).From this amount is deducted (on line no. 9) the interest charges that are computed by multiplying the adjusted measures of value by the rate of return associated with long-term debt (footnote (A) of this adjustment)) k ][{\N | |||
..to determine net income before further adjustments to taxable income | . . | ||
,, for computing federal and state income taxes. | to determine net income before further adjustments to taxable income | ||
The next four adjustments are additions which increase taxable income. | ,, | ||
The first adj us tment (line no. 11) is the amount of federal income taxes paid on behalf of a lessor company which is not allowed as a deduction under the tax laws. | for computing federal and state income taxes. The next four adjustments are additions which increase taxable income. | ||
The next adjustment (line no. 12), taxes assumed on customer deposits, is not allowed under the tax laws. | The first adj us tment (line no. 11) is the amount of federal income taxes paid on behalf of a lessor company which is not allowed as a deduction under the tax laws. The next adjustment (line no. 12), taxes assumed on customer deposits, is not allowed under the tax laws. 'Ihe next adjustment (line no. | ||
'Ihe next adjustment (line no. | : 13) adds to taxable income the amortization of net salvage. Finally, the amortization of deferred energy costs (line no. 14) is added to taxable income because it had been taken as a deduction in prior years (this has no ef fect on rates to the customer because of a deferred tax credit). | ||
: 13) adds to taxable income the amortization of net salvage. | |||
Finally, the amortization of deferred energy costs (line no. 14) is added to taxable income because it had been taken as a deduction in prior years (this has no ef fect on rates to the customer because of a deferred tax credit). | |||
The remaining six adjustments to net income are deduct ions which reduce taxable income. | The remaining six adjustments to net income are deduct ions which reduce taxable income. | ||
The first of such adjustmenta reflects (on line no. 15) the adjustment of depreciation to a tax basis utilizing accelerated depreciation (SYD method and ADR short lives) where permitted on average eligible propercy. | The first of such adjustmenta reflects (on line no. 15) the adjustment of depreciation to a tax basis utilizing accelerated depreciation (SYD method and ADR short lives) where permitted on average eligible propercy. The next two items, payroll taxes capitalized and pension costs capitalized, are treated as current deductions in determining taxable income and eliminated from or olant accounts for tax purposes. The preferred dividend deduction and dividend re meived exclusion are deductions allowed by the tax laws. The cost of removal of retired facilities is treated as a current deduction for tax purposes in the year in which incurred. | ||
The next two items, payroll taxes capitalized and pension costs capitalized, are treated as current deductions in determining taxable income and eliminated from or olant accounts for tax purposes. | The net amount of these adjustments (line no. 21) is deducted from net income before income taxes (line no. 10) to determine the income subject to state income tax. The state and federal income tax calculations then | ||
The preferred dividend deduction and dividend re meived exclusion are deductions allowed by the tax laws. | _,_ \474 \80 | ||
The cost of removal of retired facilities is treated as a current deduction for tax purposes in the year in which incurred. | |||
The net amount of these adjustments (line no. 21) is deducted from net income before income taxes (line no. 10) to determine the income subject to state income tax. | . | ||
The state and federal income tax calculations then | . | ||
\474\ | fo llow. Pa. state income taxes are computed at a rate of 6.9767%, which reflects only that portion not recoverable by the surcharge. The federal income tax is then computed at a 46% rate with final adjustments to the federal tax computation to reflect the Job Development Tax credits and the deduction of the consolidated tax savings associated with the deduction .on a consolidated GPU System income tax return) of interest paid on GPU dabt (footnote (C) of this adjustment). | ||
..fo llow.Pa. state income taxes are computed at a rate of 6.9767%, which reflects only that portion not recoverable by the surcharge. | Q. What is normalization Adjustment No. 6? | ||
The federal income tax is then computed at a 46% rate with final adjustments to the federal tax computation to reflect the Job Development Tax credits and the deduction of the consolidated tax savings associated with the deduction.on a consolidated GPU System income tax return) of interest paid on GPU dabt (footnote (C) of this adjustment). | A. This adjustment reflects the elimination of several items frem the budgeted deferred income taxes as follows: | ||
Q.What is normalization Adjustment No. 6? | a) The elimination of deferred taxes associated with the elimination of deferred energy costs, reflecting a base rate presentation, b) The elimination of deferred taxes on post-1969 non-expansion property (as this relates only to FERC jrr'sdictional customers), 9 c) The elimination of deferred taxes associated with the PURTA refund received by Met-Ed with respect to prior years, and d) The elimination of deferred taxes associated with miscellaneous tax benefits which are taken as a current tax deduction in computing the federal and state income taxes. | ||
A.This adjustment reflects the elimination of several items frem the budgeted deferred income taxes as follows: | Q. What is shown in Adjustment No. 77 A. That adjustment of $135,000 reflecte past commission orders requiring the amortization over a 10 year period of income tax refunds including interest rec e ived . | ||
a) The elimination of deferred taxes associated with the elimination of deferred energy costs, reflecting a base rate presentation, b) The elimination of deferred taxes on post-1969 non-expansion | }h 4 | ||
Q.What is shown in Adjustment No. 77 A.That adjustment of $135,000 reflecte past commission orders requiring the amortization over a 10 year period of income tax refunds including interest rec e ived . | |||
}h 4 | . . | ||
..Q.Mr. Huff, are you familiar with Met-Ed 's budgeted level of administrative and general expenses as utilized in Exhibit B-l? | Q. Mr. Huff, are you familiar with Met-Ed 's budgeted level of administrative and general expenses as utilized in Exhibit B-l? | ||
A.Yes I am.Q.Wh at opinion, if any, do you have as to the budgeted level of such expenses? | A. Yes I am. | ||
A.In my opinion, such level of expenses is a conservative statement of what Met-Ed would be expected to incur during 1980. | Q. Wh at opinion, if any, do you have as to the budgeted level of such expenses? | ||
Q.Mr. Huff, I show you an exhibit which has been marked for identification as Met-Ed/Penelec Exhibit B-2 and ask you what parts thereof have been prepared by you or under your supervision? | A. In my opinion, such level of expenses is a conservative statement of what Met-Ed would be expected to incur during 1980. | ||
A.That exhibit has basically been prepared under my supervision. | Q. Mr. Huff, I show you an exhibit which has been marked for identification as Met-Ed/Penelec Exhibit B-2 and ask you what parts thereof have been prepared by you or under your supervision? | ||
There are, however, other witnesses who have furnished various data to me and they will support that data with their testimony. | A. That exhibit has basically been prepared under my supervision. There are, however, other witnesses who have furnished various data to me and they will support that data with their testimony. | ||
Q.Would you please identify those witnesses who will support such data and the general areas of their testimony. | Q. Would you please identify those witnesses who will support such data and the general areas of their testimony. | ||
A.Yes, Mr. W. D. Garland will testify as to the adjustments necessary to reflect a calculated depreciation reserve and Mr. F. D. Ha fer and Mr. J. G. | A. Yes, Mr. W. D. Garland will testify as to the adjustments necessary to reflect a calculated depreciation reserve and Mr. F. D. Ha fer and Mr. J. G. | ||
Graham will jointly sponsor testimony relative to energy costs and related matters.Mr. R. M. Klingaman will of fer testimony with respect to the desired coal and oil inventory levels. | Graham will jointly sponsor testimony relative to energy costs and related matters. Mr. R. M. Klingaman will of fer testimony with respect to the desired coal and oil inventory levels. | ||
Q.Please describe the contents of Met-Ed/Penelec Exhibit B-2? | Q. Please describe the contents of Met-Ed/Penelec Exhibit B-2? | ||
A.That Exhibit shows the Met-Ed budgeted 13 period average original cost measures of value for the year 1980, together with various normalization adjustments, including those required if Met-Ed's investment in TMI-2 and TMI-l were eliminated from the respective measures of value. | A. That Exhibit shows the Met-Ed budgeted 13 period average original cost measures of value for the year 1980, together with various normalization adjustments, including those required if Met-Ed's investment in TMI-2 and TMI-l were eliminated from the respective measures of value. As was the case with Mec-Ed's income statement (Exhibit B-1), the data used as the | ||
As was the case with Mec-Ed's income statement (Exhibit B-1), the data used as the | \k]h \ | ||
\k]h\ | |||
..6 tart ing point for Exhibit B-2 was derived from Met-Ed's preliminary 1980 budget.Q.Would you please describe what is contained on the first page of Exhibit B-2.^Page one summarizes (in column one) Met-Ed's 13 period average measures of | . . | ||
6 tart ing point for Exhibit B-2 was derived from Met-Ed's preliminary 1980 budget. | |||
Each adjustment is identified by a number appearing adjacent to the respec-tive items in column two. | Q. Would you please describe what is contained on the first page of Exhibit B-2. | ||
Further adjustments (in column four and column six) reflect the elimination, from measures of value, of '4et-Ed's 50% | ^ | ||
interest in TMI-2 (with which Met-Ed does not agree) and the possible elimination of Met-Ed's 50% interest in TMI-l (with wh ich Met-Ed likewise does not agree). | .. | ||
Column seven represents the year 1980 average measure of value excluding TMI-2 and TMI-1. | Page one summarizes (in column one) Met-Ed's 13 period average measures of vs.lue per budget for the year 1980, with a minimum number of normalization adjustments (in column two) to adjust several items for ratemaking purposes. | ||
As was the case with Met-Ed's income statement, normalizing adjustments in this presentation have been held to a minimum in order to save time and to avoid areas of controversy. | Each adjustment is identified by a number appearing adjacent to the respec-tive items in column two. Further adjustments (in column four and column six) reflect the elimination, from measures of value, of '4et-Ed's 50% | ||
Q.Please describe the first normalization adjustment. | interest in TMI-2 (with which Met-Ed does not agree) and the possible elimination of Met-Ed's 50% interest in TMI-l (with wh ich Met-Ed likewise does not agree). Column seven represents the year 1980 average measure of value excluding TMI-2 and TMI-1. As was the case with Met-Ed's income statement, normalizing adjustments in this presentation have been held to a minimum in order to save time and to avoid areas of controversy. | ||
A.In Adjustment No. 1, Met-Ed's budgeted average electric plant in service of | Q. Please describe the first normalization adjustment. | ||
$1,310,787,000 is sijusted downward by S3,150,000 to re flec t the elimination of TMI-l ring girder costs, in accordance with past Commission Orders, in order to avoid an area of controversy. | A. In Adjustment No. 1, Met-Ed's budgeted average electric plant in service of | ||
Q.What is reflected in Adjustment No. 2? | $1,310,787,000 is sijusted downward by S3,150,000 to re flec t the elimination of TMI-l ring girder costs, in accordance with past Commission Orders, in order to avoid an area of controversy. | ||
A.To eliminate another area of controversy adjustment No. 2 reduces the budgeted average balance of plant held for future use from $12,577,000 down to S984,000, the latter figure representing only those properties which are 9 | Q. What is reflected in Adjustment No. 2? | ||
..presently planned to be used in ten years or less, consistent with the Commission's Order that concluded Met-Ed's rate case at R.I.D. | A. To eliminate another area of controversy adjustment No. 2 reduces the budgeted average balance of plant held for future use from $12,577,000 down to S984,000, the latter figure representing only those properties which are 9 | ||
170 & 171. | |||
. . | |||
presently planned to be used in ten years or less, consistent with the Commission's Order that concluded Met-Ed's rate case at R.I.D. 170 & 171. | |||
Th is adjustment eliminates $11,593,000 from Met-Ed's rate base. | Th is adjustment eliminates $11,593,000 from Met-Ed's rate base. | ||
Q.What is reflected in Adjustment No. 3? | Q. What is reflected in Adjustment No. 3? | ||
A.Adjustment No. 3 shows a reduction in the average depreciation reserve of | A. Adjustment No. 3 shows a reduction in the average depreciation reserve of | ||
$11,945,000 which represents (a) $51? ,000 of depreciation reserve associated with the previously mentioned TMI-l ring girder costs and (b) a decrease of | $11,945,000 which represents (a) $51? ,000 of depreciation reserve associated with the previously mentioned TMI-l ring girder costs and (b) a decrease of | ||
$11,428,000 to reflect a calculated reserve level. | $11,428,000 to reflect a calculated reserve level. Mr. W. D. Garland will of fer testimony supporting this adjustment . | ||
Mr. W. D. Garland will of fer testimony supporting this adjustment . | Q. Please describe Adjustment No. 4. | ||
Q.Please describe Adjustment No. 4. | . | ||
That adj us tment normalizes the average coal inventory to the desired inven- | That adj us tment normalizes the average coal inventory to the desired inven-tory level at each coal plaat. The prices used to value this inventory are the average budgeted cost of coal in inventory at the respective stations during 1980 resulting in a nortslized investment in coal inventory of | ||
$11,856,000. As previously mentt7ned, Mr. R. M. Klingaman's testimony will support the desired levels of such coal inventory. | |||
The prices used to value this inventory are the average budgeted cost of coal in inventory at the respective stations during 1980 resulting in a nortslized investment in coal inventory of | Q. Please describe Adjustment No. 5. | ||
$11,856,000. | A. That adjustment normalizes the average oil inventory to reflect the desired levels of oil inventories. These desired levels were also utilized in Met-Ed's petition for modification of its levelized energy cost adjustment charge. The ef fect of this adjustment is to increase the level of oil inventory by $358,000, to an average of $2,906,000. | ||
As previously mentt7ned, Mr. R. M. Klingaman's testimony will support the desired levels of such coal inventory. | Q. Please describe Adjustment No. 6. | ||
Q.Please describe Adjustment No. 5. | A. That adjustment normalizes the average deferred energy cost balance to an average level that would result from the proposed increase in energy clause | ||
A.That adjustment normalizes the average oil inventory to reflect the desired levels of oil inventories. | )474 \84 | ||
These desired levels were also utilized in Met-Ed's petition for modification of its levelized energy cost adjustment charge.The ef fect of this adjustment is to increase the level of oil inventory by $358,000, to an average of $2,906,000. | |||
Q.Please describe Adjustment No. 6. | . . | ||
A.That adjustment normalizes the average deferred energy cost balance to an average level that would result from the proposed increase in energy clause | revenues requested in Met-Ed's petition for modification of its energy cost adjustment charge. The ef fect of this adjustment is to decrease the level of the average deferred balance by S20,726,000 to an average of $81,092,000. | ||
..revenues requested in Met-Ed's petition for modification of its energy cost adjustment charge. The ef fect of this adjustment is to decrease the level of the average deferred balance by S20,726,000 to an average of $81,092,000. | Q. Please describe Adjustment No. 7. | ||
Q.Please describe Adjustment No. 7. | A. In order to avoid an area of controversy, this adjustment of $2,469,000 includes in the measures of value a cash working capital requirement of only the amount allowed in R.I.D. 626. | ||
A.In order to avoid an area of controversy, this adjustment of $2,469,000 includes in the measures of value a cash working capital requirement of only the amount allowed in R.I.D. 626. | Q. Normalization Adjustment No. 8, addresses Accumulated Deferred Income Taxes. | ||
Q.Normalization Adjustment No. 8, addresses Accumulated Deferred Income Taxes. | |||
Would you please describe this adjustment? | Would you please describe this adjustment? | ||
A.les.This adjustment eliminates S823,000 for those deferred taxes asso-ciated only with FERC customers (capitalized taxes and poet-1969 non-expan-sion property) | A. les. This adjustment eliminates S823,000 for those deferred taxes asso-ciated only with FERC customers (capitalized taxes and poet-1969 non-expan-sion property) It also adjusts deferred taxes associated with deferred energy costs, in accordance with Adjustment No. 6 reflecting the proposed change in Met-Ed's energy cost adjustment charge. Finally a reduction in O the amount of S561,000 in the average deferrals associated with accelerated depreciation is made to reflect the maximum rate base deduction allowable in a future test year, according to IRS regulations under Section 1.167(1) - | ||
It also adjusts deferred taxes associated with deferred energy costs, in accordance with Adjustment No. 6 reflecting the proposed | (1)(h)(b) af the Internal Revenue Code. The total normalized accumulated de fe rred income tax balance deducted from measures of value af ter these adjustments is $111,700,000. | ||
Finally a reduction in the amount of S561,000 in the average deferrals associated with accelerated depreciation is made to reflect the maximum rate base deduction allowable in a future test year, according to IRS regulations under Section 1.167(1) - | Q. Mr. Huf f, does this complete your direct testimony? | ||
(1)(h)(b) af the Internal Revenue Code. | A. Yes, it does. | ||
The total normalized accumulated de fe rred income tax balance deducted from measures of value af ter these adjustments is $111,700,000. | 1474 185 0 | ||
Q.Mr. Huf f, does this complete your direct testimony? | |||
A.Yes, it does. | , | ||
1474 185 0 | . | ||
,.APPENDIX A Resume - Education and Experience of David L. Huff Education: | APPENDIX A Resume - Education and Experience of David L. Huff Education: | ||
1955 Bachelor of Science degree in Accounting - Husson College | 1955 1964 Bachelor of Science degree in Accounting - Husson College MBA degree in Economics - Rutgers University Other: | ||
6/55 - 2/65 Accountant and Supervisor-Chevron Oil Company 2/65 - 6/67 Employed as Accountant - Jersey Central Power & Light Company | 1966-67 Completed three courses in Mathematics at Fairleigh Dickenson University 1967 Professional Series of the Depreciarion Seminar at Western Michigan University 1968 Nuclear Fuel Management - short course at Purdue University Experience: | ||
("JCP&L")7/67 - 6/71 Senior Accountant - Depreciation and Nuclear Matters - JCP&L 6/71 - 7.*73 Senior Accountant - Budgets - JCP&L 7/73 - 6/76 Supervisor of Budgets - JCP&L 6/76 - Present Assistant Comptroller - Metropolitan Edison Company 1474 186 | 6/55 - 2/65 Accountant and Supervisor-Chevron Oil Company 2/65 - 6/67 Employed as Accountant - Jersey Central Power & Light Company | ||
.n.v .or r. | ("JCP&L") | ||
7/67 - 6/71 Senior Accountant - Depreciation and Nuclear Matters - JCP&L 6/71 - 7.*73 Senior Accountant - Budgets - JCP&L 7/73 - 6/76 Supervisor of Budgets - JCP&L 6/76 - Present Assistant Comptroller - Metropolitan Edison Company 1474 186 | |||
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Page 2 of 8 METROPOLITAN EDISON COMPANY O | |||
Normalization Adjustment No. 1 (S000) | |||
Adjustment To Operating Revenue s : | |||
To adjust revenues to re flect (1) the currently projected sales and revenue level, as shown in Met-Ed's petition for modification of the levelized energy adjustment clause, (2) for the loss of Hershey Electric Company as a FERC customer on March 1,1980, (3) to reflect proposed settlement rates with remaining FERC customers, (4) to eliminate tax surcharge and energy clause revenues which are not collected via base rates and should therefore be excit Jed from this base rate presentation and (5) to reflect the level of revenues for delayed payment charges and other revenues utilized in Met-Ed's petition for modification of its levelized energy cost adjustment charge. | To adjust revenues to re flect (1) the currently projected sales and revenue level, as shown in Met-Ed's petition for modification of the levelized energy adjustment clause, (2) for the loss of Hershey Electric Company as a FERC customer on March 1,1980, (3) to reflect proposed settlement rates with remaining FERC customers, (4) to eliminate tax surcharge and energy clause revenues which are not collected via base rates and should therefore be excit Jed from this base rate presentation and (5) to reflect the level of revenues for delayed payment charges and other revenues utilized in Met-Ed's petition for modification of its levelized energy cost adjustment charge. | ||
Line No.Description Revenues (1)(2)1 To adjust base revenues (excl. Hershey) to reflect the revised sales level used in Met-Ed's petition for modification of its levelized energy cost adjustment charge S (1,255)2 Hershey Electric base revenues budgeted (1,942)3 Budgeted base rate increase to FERC customers S 1,487 4 Percentage reflecting proposed settlement level 51.97.5 Fa te increase, FERC customers at proposed settlement level (772)6 Total adjustment to base revenues A (3,969)7 Adjustment to eliminate tax surcharge revenues S (17,894) 8 Adjustment to eliminate energy clause revenues S(105,955) 9 Adj ustme nt to delayed payment charge S 184 10 Ad j u stme nt to other revenues S 305 1474 i88 O | Line No. Description Revenues (1) (2) 1 To adjust base revenues (excl. Hershey) to reflect the revised sales level used in Met-Ed's petition for modification of its levelized energy cost adjustment charge S (1,255) 2 Hershey Electric base revenues budgeted (1,942) 3 Budgeted base rate increase to FERC customers S 1,487 4 Percentage reflecting proposed settlement level 51.97. | ||
..Page 3 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No . 2 (S000)Adjustment To Energy Costs Adjustment of energy-related costs to the level recoverable through base rates. | 5 Fa te increase, FERC customers at proposed settlement level (772) 6 Total adjustment to base revenues A (3,969) 7 Adjustment to eliminate tax surcharge revenues S (17,894) 8 Adjustment to eliminate energy clause revenues S(105,955) 9 Adj ustme nt to delayed payment charge S 184 10 Ad j u stme nt to other revenues S 305 1474 i88 O | ||
Line No.Desc ript ion Total Energy Costs (1)(2)1 Retail sales - MWH 7,972,349 2 Energy cost per MWH recoverable by retail base rates 8.000 3 Energy cost recoverable from retail customers (line 1 x line 2) | |||
S 63,779 4 Resale sales - MWH 272,025 5 Hershey Electric sales - MWH (54,045)6 Adjusted resale sales - MWH 217,980 7 Energy cost per MWH recoverable by resale base rates 11.303 8 Energy cost recoverable from resale customers (line 6 x line 7) 2,464 9 Total amount recoverable through base rates S 66,243 10 Less: energy-related costs per budget 174,817 11 Normalizing adjustment (line 9 - line 10) | . | ||
S(108,574) 1A74 189. | . | ||
8 | Page 3 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No . 2 (S000) | ||
Line No.Description Amount (1)(2)1 Elimination of TMI-1 ring girder | Adjustment To Energy Costs Adjustment of energy-related costs to the level recoverable through base rates. | ||
$(96)Adjustment of budgeted accrual to recalculated level: | Line No. Desc ript ion Total Energy Costs (1) (2) 1 Retail sales - MWH 7,972,349 2 Energy cost per MWH recoverable by retail base rates 8.000 3 Energy cost recoverable from retail customers (line 1 x line 2) S 63,779 4 Resale sales - MWH 272,025 5 Hershey Electric sales - MWH (54,045) 6 Adjusted resale sales - MWH 217,980 7 Energy cost per MWH recoverable by resale base rates 11.303 8 Energy cost recoverable from resale customers (line 6 x line 7) 2,464 9 Total amount recoverable through base rates S 66,243 10 Less: energy-related costs per budget 174,817 11 Normalizing adjustment (line 9 - line 10) S(108,574) 1A74 189 | ||
2 Recalculated accrual | . | ||
$38,495 (A)3 Less: Accrual per budget 38,759 4 Adjustment (264) | |||
1474 190 0 | e 8 Page 4 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 3 (S000) | ||
.., Page 5 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 4 (S000)Adjustment To Taxes Other Than Income Taxes To eliminate, from taxes other t'.income taxer, those portions of taxes recovered by surcharge. | Adjustment to Depreciation Expense To adjust the annual depreciation accrual from budgeted accrual to calculated accrual and to eliminate the TMI-l ring girder accrual consistent with ratemaking treatment in previous orders of this Commis-sion, in order to avoid an area of controversy. | ||
Line Taxes Other Than No.Description Income Taxes (1)(2)Capital Stock Tax 1 Capital Stock Tax budgeted S 6,000 2 Amount recoverable by surcharge (40%) | Line No. Description Amount (1) (2) 1 Elimination of TMI-1 ring girder $ (96) | ||
x.40$ (2,400)Public Utility Realty Tax 3 S5,590 is budgeted for this tax, all of which is recoverable through the surcharge (5,590)City of York Gross Receipts Tax 4$377 is budgeted for this tax, all of which is recoverable through the surcharge (377)Pennsylvania Gross Receipts Tax 5 Normalized revenues, including forfeited discounts$275,800 6 Less revenues exempt from t ax 5,643 7 Normalized tax base | Adjustment of budgeted accrual to recalculated level: | ||
$270,157 8 Portion of tax percent age recoverable through base rates. | 2 Recalculated accrual $ 38,495 (A) 3 Less: Accrual per budget 38,759 4 Adjustment (264) 5 Total normalizing adjustment S (360) | ||
x 2.0%9 Normalized Pa. Gross Receipts Tax collected through base rates S 5,404 10 Less budgeted amount 18,004 11 Normalizing adjustment for Pa Gross Receipts Tax (12,600)12 Total normalizing adjustment to taxes other than income taxes S (20,967) | O | ||
-* | . | ||
Taxes Line Be fo re No.Calculated Taxes Adj.Adjustment (1}(2)(3)(4)1 Total operating revenue S 284,556 2 Less: Total O&M expense S 151,852 3 Depreciation expense 38,399 4 Average aet salvage 132 5 Decommissioning 68 6 Taxes other than inc ome taxes 13,947 7 Total deductions 204,398 8 Net operating income be fore income taxes S 80,158 9 Less: Interest cha.ge s ( A) 42,229 10 Net income be fo re inc ome taxes S 37,929 Adjustment s to taxable income: | (A) TMI-2 accrual for 1980 is re flected in line 2. | ||
Add: 11 Accrued rent-Reading Elec. | 1474 190 0 | ||
Light & Power S 2 12 Taxes assumed on customer deposits 1 13 Average net salvage 132 14 Amortizat ion of de ferred energy costs 5,947 Deduc t : 15 Adjustment of booked depreciation to tax basis (B) 38,386 16 Payroll taxes capitalized 603 17 Pension costs capitalized 840 18 Preferred dividend deduction 134 19 Dividend received exclusion 2 20 Cost of removal 388 21 Net adjustment S (34,271) 22 Income subject to state income tax S 3,658 23 State income tax @ 6.9767% | |||
255 9-S ?SS 24 Income subject to federal inc ome tax | . . | ||
$3,403 25 Federal income tax (462 less $39) | , | ||
$1,526 26 Less JDTC (7 824)27 Total federal tax before consolidated savings S 9,350 28 Consolidated savings (C) 1,849 29 Total federal tax | Page 5 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 4 (S000) | ||
$7.5n1 S(26.498) S 13.459 (A) Computation of interest charges: | Adjustment To Taxes Other Than Income Taxes To eliminate, from taxes other t'. income taxer, those portions of taxes recovered by surcharge. | ||
Total measure of value | Line Taxes Other Than No. Description Income Taxes (1) (2) | ||
?85,585 In t er e s t compo nen t of rate of return 3.89%Interest expense | Capital Stock Tax 1 Capital Stock Tax budgeted S 6,000 2 Amount recoverable by surcharge (40%) x .40 $ (2,400) | ||
Public Utility Realty Tax 3 S5,590 is budgeted for this tax, all of which is recoverable through the surcharge (5,590) | |||
GPU interest allocated to Met-Ed S 4,020 Federal tax rate 46%Consolidated savings S 1.849 | City of York Gross Receipts Tax 4 $377 is budgeted for this tax, all of which is recoverable through the surcharge (377) | ||
~a-..Pate 6.2 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 5 (S000)Comput ation o f Federal & St ate Inc ome Taxes - TMI-2 Eliminated (Col. 4 o f Income Statement) | Pennsylvania Gross Receipts Tax 5 Normalized revenues, including forfeited discounts $275,800 6 Less revenues exempt from t ax 5,643 7 Normalized tax base $270,157 8 Portion of tax percent age recoverable through base rates. x 2.0% | ||
Taxes Line Be fo re No.Calculated Taxes Adj.Adjustment (1)(2)(3)(4)1 Total operating revenue S 284,556 2 Le s s : Total O&M expense | 9 Normalized Pa. Gross Receipts Tax collected through base rates S 5,404 10 Less budgeted amount 18,004 11 Normalizing adjustment for Pa Gross Receipts Tax (12,600) 12 Total normalizing adjustment to taxes other than income taxes S (20,967) | ||
$ 158,268 3 Depreciat ion expense 27,107 4 Average net salvage 132 5 Dec ommi s s ion ing 68 6 Taxes other than t' nc ome t axe s 13,947 7 iceal deduc t ions 199,522 8 Ne t operat ing income be fore income taxes S 85,034 9 Le s s : Interest charges (A) 28,959 10 Net income before inc ome t axe s S 56,075 Adjustment s to taxable income: | ' | ||
Ad d : 11 Accrued rent-Re ad ing Elec . | )h | ||
Light & Powe r S 2 12 Taxes assumed on customer de po s i t s 1 13 Average net salvage 132 14 Amortization of deferred energy costs 5,947 Deduc t : 15 Adjustment of booked depreciat ion to tax basis (B) 22,741 16 Payroll taxes capit alized 603 17 Pension cost s capitalized 840 18 Preferred dividend deduction 134 19 Dividend received exclusion 2 20 Cost cf removal 388 21 Ne t ad j ustmen t S (18,626) 22 Inc ome subject to state income tax S 37,449 23 State income tax @ 6.9 76 7% | |||
2.613 S 75%S2.35R 24 Income subject t o f ede r al inc ome tax | - | ||
$34,836 25 Federal income tax (46% less $39) | . | ||
$15,986 26 Le s s JDTC (7,824)27 Total federal t ax before consolidated savings S 23,810 28 Consolidated savings (C) 1,849 29 Total federal t ax S 71.961 S 7.501 S 14,4Ao (A) Comput ation of interest char ge s : | * Page 6.1 of 8 METROPOLITAN EDISON COMPANY Normalization Adj stment No. 5 (S000) | ||
Total measure of value | Computation of Federal & State Income Taxes - Normalized (Col. 2 o f Income Statement) | ||
$ 744,453 Interest c om ponen t of rate of return 3.89%Int er e s t expense S 28.953 (B) Adj. of booked depreciation to tax basis: | Taxes Line Be fo re No. Calculated Taxes Adj. Adjustment (1} (2) (3) (4) 1 Total operating revenue S 284,556 2 Less: Total O&M expense S 151,852 3 Depreciation expense 38,399 4 Average aet salvage 132 5 Decommissioning 68 6 Taxes other than inc ome taxes 13,947 7 Total deductions 204,398 8 Net operating income be fore income taxes S 80,158 9 Less: Interest cha.ge s ( A) 42,229 10 Net income be fo re inc ome taxes S 37,929 Adjustment s to taxable income: | ||
Tax depreciation | Add: | ||
$49,848 Book depreciation 27,107 | 11 Accrued rent-Reading Elec. | ||
Light & Power S 2 12 Taxes assumed on customer deposits 1 13 Average net salvage 132 14 Amortizat ion of de ferred energy costs 5,947 Deduc t : | |||
-, Page 6.3 of 8 METROPOLITAN EDISON COMPAh7 Normalization Adjustment No. 5 | 15 Adjustment of booked depreciation to tax basis (B) 38,386 16 Payroll taxes capitalized 603 17 Pension costs capitalized 840 18 Preferred dividend deduction 134 19 Dividend received exclusion 2 20 Cost of removal 388 21 Net adjustment S (34,271) 22 Income subject to state income tax S 3,658 23 State income tax @ 6.9767% 255 9 - | ||
($000)Computation of Federal & State Income Taxes-TMI-I & 2 Eliminated (Col. 6 of Income Statement) | S ?SS 24 Income subject to federal inc ome tax $ 3,403 25 Federal income tax (462 less $39) $ 1,526 26 Less JDTC (7 824) 27 Total federal tax before consolidated savings S 9,350 28 Consolidated savings (C) 1,849 29 Total federal tax $ 7.5n1 S(26.498) S 13.459 (A) Computation of interest charges: | ||
Taxes | Total measure of value ?85,585 In t er e s t compo nen t of rate of return 3.89% | ||
$ 160,041 3 Depreciation expense 20,727 4 Average net salvage 132 5 Dec ommi s s ioning | Interest expense (B) Adj. of booked depreciation to tax basis: | ||
S 42.224 j }w Tax depreciation )i { | |||
Add : 11 Accrued rent-Reading Elec . | S 76,785 Book depreciation 38,399 Depreciation adjustment S 3A . 398 (C) Computation of consolidated savings: | ||
Light & Power S 2 12 Taxes assumed on custemer deposits 1 13 Average net salvage 132 14 Amortization of deferred energy costs 5,947 Ded uc t : | GPU interest allocated to Met-Ed S 4,020 Federal tax rate 46% | ||
15 Adj us tme nt of booked depreciat ion to tax basis (B) 10,656 16 Payroll taxes capitalized 603 17 Pension costs capitalized 840 18 Preferred dividend deduction 134 19 0;vidend received exclusica 2 20 Cost of removal 388 21 Net ad j u s tme nt S (6,541)22 Income subject to state inc ome tax S 61,180 23 State income t ax @ 6.9767% | Consolidated savings S 1.849 | ||
4.26A$7.613 31.655 24 Income subject to federal inc ome tax | |||
$56,912 25 Federal income tax (46% less $39) | ~ | ||
$26,141 26 Le s s JDTC (7,824)27 Total federal tax be fore consolidated savings S 33,965 28 Consolidated savings (C) 1,849 29 Total federal tax S 12.116 S 21.961 s in,15s (A) Computation of interest charges: | a- | ||
Total measure of value S 565,256 Interest componen t of rate of return 3.89%In tere st e x pen se | . | ||
$21.4d8 (8) Adjustment of booked depreciation to t ax basis: | . | ||
Tax depreciation 3 31,383&)ok depreciation 20,727 j | Pate 6.2 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 5 (S000) | ||
GPU interest allocated to Met-Ed S 4,020 Federal t ax rate 46%Consolidated savings S 1.844 | Comput ation o f Federal & St ate Inc ome Taxes - TMI-2 Eliminated (Col. 4 o f Income Statement) | ||
..Page 7 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 6 | Taxes Line Be fo re No. Calculated Taxes Adj. Adjustment (1) (2) (3) (4) 1 Total operating revenue S 284,556 2 Le s s : Total O&M expense $ 158,268 3 Depreciat ion expense 27,107 4 Average net salvage 132 5 Dec ommi s s ion ing 68 6 Taxes other than t' nc ome t axe s 13,947 7 iceal deduc t ions 199,522 8 Ne t operat ing income be fore income taxes S 85,034 9 Le s s : Interest charges (A) 28,959 10 Net income before inc ome t axe s S 56,075 Adjustment s to taxable income: | ||
($000)Adjustment to Provision for Deferred Income Taxes Adjustment to the Provision for De ferred Income Taxes - Net - Federal, and Provision for Deferred In.ue Taxes - Net - State to reflect (1) the elimination of deferred taxes associated with deferred energy costs due to the elimination in normalization adjustment no. 1 of energy clause revenues, ( 2) the eliminat ion of de ferred taxes associated with accelerated depreciation of post-1969 non-expansion property, (associated with FERC jurisdictional customers) (3) the elimination of deferred taxes associated with the PURTA refund, and (4) the elimination of miscellaneous deferred tax benefits. | Ad d : | ||
Provision For Provision For Line De ferred Taxes Deferred Taxes No.D escript ion Net - Federal Net - State (1)(2)1 De ferred t axes per budge t , 12 months ended 12/31/80 | 11 Accrued rent-Re ad ing Elec . | ||
_S__39,078 S (541)Normalizing adjustments: | Light & Powe r S 2 12 Taxes assumed on customer de po s i t s 1 13 Average net salvage 132 14 Amortization of deferred energy costs 5,947 Deduc t : | ||
2 Deferred energy costs S(26,973)S (76)3 Post-1969 non-expansion property (241)-4 PURTA refund 836-5 Miscellaneous deferred tax benefits (340)(96)6 Normalizing adjustment S(26,718)S (172)7 Deferred taxes as adjusted for 12 months ended 12/31/80 S 12,360 S (713)(A)In accordance with the Tax Reform Act of 1969 and the Commission's Statement of Policy of June 24, 1970, in R.I.D. 64 the Commission allowed the Company to c.ormalize the tax reductive effect of liberalized depreciat ion on post-1969 plant additions that increase capacity, usin ADR short lives on post-1970 plant ad di t io ns .)h 4 | 15 Adjustment of booked depreciat ion to tax basis (B) 22,741 16 Payroll taxes capit alized 603 17 Pension cost s capitalized 840 18 Preferred dividend deduction 134 19 Dividend received exclusion 2 20 Cost cf removal 388 21 Ne t ad j ustmen t S (18,626) 22 Inc ome subject to state income tax S 37,449 23 State income tax @ 6.9 76 7% 2.613 S 75% S2.35R 24 Income subject t o f ede r al inc ome tax $ 34,836 25 Federal income tax (46% less $39) $ 15,986 26 Le s s JDTC (7,824) 27 Total federal t ax before consolidated savings S 23,810 28 Consolidated savings (C) 1,849 29 Total federal t ax S 71.961 S 7.501 S 14,4Ao (A) Comput ation of interest char ge s : | ||
.Page 8 of 8 METROPOLITAN EDISON COMPANY | Total measure of value $ 744,453 Interest c om ponen t of rate of return 3.89% | ||
64 and at R.I.D. | Int er e s t expense S 28.953 (B) Adj. of booked depreciation to tax basis: | ||
Tax depreciation $ 49,848 Book depreciation 27,107 Depreciation adjustment Q (C) Computation of consolidated savings: | |||
S 22.741 [ h / | |||
CPU interest allocated to' Met -Ed S 4,020 Federal t ax rate 46% | |||
Cor.solidated savings S l 8 49 | |||
- | |||
, | |||
Page 6.3 of 8 METROPOLITAN EDISON COMPAh7 Normalization Adjustment No. 5 | |||
($000) | |||
Computation of Federal & State Income Taxes-TMI-I & 2 Eliminated (Col. 6 of Income Statement) | |||
Line Taxes No. Be for e Calculated Taxes Adj. Adjustment (1) (2) (3) (4) 1 Total operating revenue S 284,556 2 Le s s : Total O&M expense $ 160,041 3 Depreciation expense 20,727 4 Average net salvage 132 5 Dec ommi s s ioning - | |||
6 Taxes other than income taxes 13,947 7 Total deductions 194,847 8 Net operating income before inc ome taxes S 89,709 9 Le s s : Intet est charges (A) 21,988 10 Net income before inc ome taxes S 67,721 Adjustment s to taxable inc ome : | |||
Add : | |||
11 Accrued rent-Reading Elec . | |||
Light & Power S 2 12 Taxes assumed on custemer deposits 1 13 Average net salvage 132 14 Amortization of deferred energy costs 5,947 Ded uc t : | |||
15 Adj us tme nt of booked depreciat ion to tax basis (B) 10,656 16 Payroll taxes capitalized 603 17 Pension costs capitalized 840 18 Preferred dividend deduction 134 19 0;vidend received exclusica 2 20 Cost of removal 388 21 Net ad j u s tme nt S (6,541) 22 Income subject to state inc ome tax S 61,180 23 State income t ax @ 6.9767% 4.26A $ 7.613 31.655 24 Income subject to federal inc ome tax $ 56,912 25 Federal income tax (46% less $39) $ 26,141 26 Le s s JDTC (7,824) 27 Total federal tax be fore consolidated savings S 33,965 28 Consolidated savings (C) 1,849 29 Total federal tax S 12.116 S 21.961 s in,15s (A) Computation of interest charges: | |||
Total measure of value S 565,256 Interest componen t of rate of return 3.89% | |||
In tere st e x pen se $ 21.4d8 (8) Adjustment of booked depreciation to t ax basis: | |||
Tax depreciation 3 31,383 | |||
&)ok depreciation Depreciation adjustment 20,727 j S lo.As6 l (C) Computation of consolidateo savings: | |||
GPU interest allocated to Met-Ed S 4,020 Federal t ax rate 46% | |||
Consolidated savings S 1.844 | |||
. . | |||
Page 7 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 6 | |||
($000) | |||
Adjustment to Provision for Deferred Income Taxes Adjustment to the Provision for De ferred Income Taxes - Net - Federal, and Provision for Deferred In .ue Taxes - Net - State to reflect (1) the elimination of deferred taxes associated with deferred energy costs due to the elimination in normalization adjustment no. 1 of energy clause revenues, ( 2) the eliminat ion of de ferred taxes associated with accelerated depreciation of post-1969 non-expansion property, (associated with FERC jurisdictional customers) (3) the elimination of deferred taxes associated with the PURTA refund, and (4) the elimination of miscellaneous deferred tax benefits. | |||
Provision For Provision For Line De ferred Taxes Deferred Taxes No. D escript ion Net - Federal Net - State (1) (2) 1 De ferred t axes per budge t , 12 months ended 12/31/80 _S__39,078 S (541) | |||
Normalizing adjustments: | |||
2 Deferred energy costs S(26,973) S (76) 3 Post-1969 non-expansion property (241) - | |||
4 PURTA refund 836 - | |||
5 Miscellaneous deferred tax benefits (340) (96) 6 Normalizing adjustment S(26,718) S (172) 7 Deferred taxes as adjusted for 12 months ended 12/31/80 S 12,360 S (713) | |||
(A) In accordance with the Tax Reform Act of 1969 and the Commission's Statement of Policy of June 24, 1970, in R.I.D. 64 the Commission allowed the Company to c.ormalize the tax reductive effect of liberalized depreciat ion on post-1969 plant additions that increase capacity, usin ADR short lives on post-1970 plant ad di t io ns . | |||
)h 4 | |||
. | |||
Page 8 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 7 O (S000) | |||
Adjustment for Income Tax Refunds This adjustment reflects the Commission's Orders at R.I.D. 64 and at R.I.D. | |||
170 & 171 requiring the amortization of income tax refunds over a 10 year period. | 170 & 171 requiring the amortization of income tax refunds over a 10 year period. | ||
Line Amortization No.Description Refunds of Refund (1)(2)1 Refunds received in 1971 & 1973 | Line Amortization No. Description Refunds of Refund (1) (2) 1 Refunds received in 1971 & 1973 $ 196 S (19) 2 Refunds received in 1976 & 1977 1,158 (116) 3 Total S 1,354 S (135) 4 Amortization of refunds budgeted - | ||
$196 S (19)2 Refunds received in 1976 & 1977 1,158 (116)3 Total S 1,354 S (135)4 Amortization of refunds budgeted | 5 Normalizing adjustment S (135) | ||
O 3474 196 O | |||
..METROPOLITAN EDISON COMPANY Average Measure of Valt,e, Year 1980, at Original Cost Normalized and Adjusted to Reflect Possible Fxclusion of TM1 t' nit s 1 & 2 | |||
($000) | . | ||
. | |||
Value (Col 3-Col 4) value ( | METROPOLITAN EDISON COMPANY Average Measure of Valt,e, Year 1980, at Original Cost Normalized and Adjusted to Reflect Possible Fxclusion of TM1 t' nit s 1 & 2 | ||
($000) | |||
1 Plant in service | Measure of Measure of 13 Month Average Normalized laes: Value Leae: Value Measure of TM1-2 Excluding TM1-1 Excluding Measure of Value Value Measure of TM1-2 Measure of TMI-I & TM1-2 Line Normalizing Adj. | ||
$ 1,310,787 | ( Co l 5-Co l 6 ) | ||
$(3,150)1$ 1,307,637 | No. Description Per Budget Adjustments No. (Col l+ Col 2) Value (Col 3-Col 4) value (1) (2) | ||
$360,157$947,480$205,976$ | ~ | ||
(3) (4) (5) (b) (7) | |||
$(14,743)$ 1,343,644 | Electric Plant: 741,504 1 Plant in service $ 1,310,787 $ (3,150) 1 $ 1,307,637 $ 360,157 $ 947,480 $ 205,976 $ | ||
$360,157$983,487$240,999$ | (11,593) 984 984 - 984 2 Plant held for future use 12,577 2 | ||
- | |||
3 Nuclear fuel in reactor 22,440 - 22,440 - 22,440 22,440 - | |||
12,583 12,583 12,583 12,583 - | |||
$ 1,090,679 | 4 Nuclear fuel-spare assemblies - | ||
$(2,798)$ 1,087,881 | - | ||
$357,313$730,568$198,126$532,442 Additions: | 742,488 5 Total electric plant $ "i~,3 58,38 7 $ (14,743) $ 1,343,644 $ 360,157 $ 983,487 $ 240,999 $ | ||
10 Coal inventories | Depreciation & Amortization Reserve: | ||
$12,679$(823)4$11,856$-$11,856$-$ | 6 259,891 $ (11,945) 3 $ 247,946 $ 2,844 $ 245,102 $ 35,056 $ 210.046 Plant in service $ | ||
-2 ,44,9 7 2,469 (1,303)3,772 (1.4311 | 7 Nuclear fuel in reactor 7,817 - 7,817 - 7,817 7,8I7 - | ||
8 Total depreciation & | |||
16 Customer deposits S 600$-S 600$-$600$-$ | (11,v45) $ 255,763 $ 2,844 $ 252,919 $ 42,873 $ 210,046 amort ization reserve $ 267,708 $ | ||
500- | 9 Net Electric Plant $ 1,090,679 $ (2,798) $ 1,087,881 $ 357,313 $ 730,568 $ 198,126 $ 532,442 Additions: 11,856 10 Coal inventories $ 12,679 $ (823) 4 $ 11,856 $ - | ||
$ 11,856 $ - | |||
$ | $ | ||
$(10.612) | 2,906 2,906 - 2,906 11 0i1 inventories 2,548 358 5 - | ||
14.513 14,513 9,288 5,225 12 Other M & S inventories 14,513 - - | |||
81,092 81,092 - 81,092 13 Deferred energy cost s 101,818 (20,726) 6 - | |||
5,203 14 Cash working capital - 2 ,44,9 7 2,469 (1,303) 3,772 (1.4311 131,558 $ (18,72f) $ 112,836 $ (1,303) 3 !!4,139 $ 7,857 $ 106,282 15 Total additions $ | |||
.Page 3 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 2 t$000)Adjustment To Plant Held For Future Use To avoid an area of controversy, plant held for future use has been reduced to include only items planned to be used in ten years or less, Year of Line Planned No.Description Use Amount (1)(2)1 Land - Weis substation 1985 S 7 2 Right of way - Germantown - Orrtanna 115 KV Line 1986 283 3 Right of way - Lynns substation to 230 KV number 1001 line 1983 190 4 Right of way - Germantown - Fairview 115 KV Line 1984 504 5 Total plant held for future use with projected dates of use within 10 years S 984 6 Average plant held for future use in 1980 12,577 7 Normalizing adjustment S(11,593) | Ded uc t ion s : 600 16 Customer deposits S 600 $ - | ||
..Page 4 of 9 METROPOLITAN EDISON COMPANY | S 600 $ - | ||
($000)Adjustment to Depreciation Reserve This adjustment reflects the exclusion of the depreciation reserve applicable to the previously mentioned TMI-l ring girder, and adjusts the budgeted reserve to a calculated basis for rate-making purposes.Line No.Description Amount (1)(2)1 Eliminate TMI-l ring girder S (517)Adjustment of budgeted reserve: | $ 600 $ - | ||
2 Calculated reserve S 248,463 3 Reserve per budget 259,891 4 Adjustment (11,428)5 Normalizing adjustment S(l1,945) | $ | ||
. | 500 - 500 - 500 17 Customer advances for constr. 500 - | ||
($000)Adjustment to Coal Inventories To adjust coal inventories to desired levels. | 18 Unamortised gain on 1,031 reaquired debt 1,031 - 1,031 - 1,031 - | ||
Average Cost of Coal De s i red Inventory Cost of Coal Line Inventory Year 1980 In Inventory No.S' at ion Level (Tons)(S/ Ton)(Col. I x Col. 2) | 19 Acc. de ferred investment ecg tax credit (32) 20 - 20 - 20 - 20 5* Zr 20 Acc. deferred income taxes 122,608 (10,908) 8 111,700 14,878 96,822 26,786 70,036 ,a k 1,031 - 1,031 - 1,031 .~ | ||
21 Income tax re f und s 1,0 31 - | |||
..Page 6 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 5 (S000)Adjustment to Oil Inventories To adjust oil inventories to reflect desired levels. | --. | ||
Line No.Description Amount 1 Adjusted average oil inventories S 2,906 2 Average oil inventories as budgeted 2,548 3 Normalizing adjustment S 358 O!474 202 0 | 4 22 Operating reserves - pensions 250 - | ||
.Page 7 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 6 | (10,908) 250 | ||
($000)Adjustment to Deferred Energy Costs To adjust deferred energy costs to the average level that would result from the level of revenues requested and energy costs assumed in Met-Ed's petition for modification of its levelized energy cost adjustment charge. | $ | ||
Line No.Desc ript ion Amount 1 Average deferred energy costs based on Fet-Ed's petition S 81,092 2 Avurage deferred energy costs per budget | - | ||
_101,818 3 Normalizing adjustment S(20,726)1474 203 | 14,878 $ | ||
<.Page 8 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 7 Adjustment to Cash Working Capital To avoid an area of controversy, this adjustment reflects a cash working capital claim of only $2,469,000 | 250 100,254 5 | ||
- | |||
26,iMb $ | |||
250 73,46A | |||
. | |||
e os | |||
'[ | |||
* q 23 Tot al deduc t ions $ 126,040 $ 5 l i 5,132 D (10.612) 341.132 $ 744AS,3, $ 179.192 $ % 5.2 % | |||
2- Measure of Value (Rate Base) $ 1.096.197 $ (1285.58_5 S EE | |||
" n. - | |||
. | |||
N ' | |||
,, | |||
. | |||
. | |||
Page 2 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 1 | |||
($000) | |||
Adjustment To Plant In Service To avoid an area of controversy, this adjustment eliminates the cost of the TMI-l ring girder repairs, consistent with ratemaking treat-ment in previous rate orders of this Commission. | |||
Line No. Description- Amount (1) 1 TMI-l ring girder S (3,150) | |||
O rs14 \98 9 | |||
. | |||
Page 3 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 2 t$000) | |||
Adjustment To Plant Held For Future Use To avoid an area of controversy, plant held for future use has been reduced to include only items planned to be used in ten years or less, Year of Line Planned No. Description Use Amount (1) (2) 1 Land - Weis substation 1985 S 7 2 Right of way - Germantown - Orrtanna 115 KV Line 1986 283 3 Right of way - Lynns substation to 230 KV number 1001 line 1983 190 4 Right of way - Germantown - Fairview 115 KV Line 1984 504 5 Total plant held for future use with projected dates of use within 10 years S 984 6 Average plant held for future use in 1980 12,577 7 Normalizing adjustment S(11,593) | |||
- e 14,,4 \}} | |||
1 | |||
. | |||
. | |||
Page 4 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 3 O | |||
($000) | |||
Adjustment to Depreciation Reserve This adjustment reflects the exclusion of the depreciation reserve applicable to the previously mentioned TMI-l ring girder, and adjusts the budgeted reserve to a calculated basis for rate-making purposes. | |||
Line No. Description Amount (1) (2) 1 Eliminate TMI-l ring girder S (517) | |||
Adjustment of budgeted reserve: | |||
2 Calculated reserve S 248,463 3 Reserve per budget 259,891 4 Adjustment (11,428) 5 Normalizing adjustment S(l1,945) | |||
'@ | |||
\O4 | |||
. | |||
O | |||
. | |||
. | |||
Page 5 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 4 | |||
($000) | |||
Adjustment to Coal Inventories To adjust coal inventories to desired levels. | |||
Average Cost of Coal De s i red Inventory Cost of Coal Line Inventory Year 1980 In Inventory No. ~ | |||
S' at ion Level (Tons) (S/ Ton) (Col. I x Col. 2) | |||
(1) (2) (3) 1 Conemrugh 93,000 S 35.37 $ 3,289 2 Titus 90,000 36.51 3,286 3 Portland 145,000 36.42 5,281 4 Co s t of coal inventory as adjusted S 11,856 5 Cost of coal inventory per budget 12,679 6 Normalizing adjustment S (82]) | |||
1474 20I | |||
. . | |||
Page 6 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 5 (S000) | |||
Adjustment to Oil Inventories To adjust oil inventories to reflect desired levels. | |||
Line No. Description Amount 1 Adjusted average oil inventories S 2,906 2 Average oil inventories as budgeted 2,548 3 Normalizing adjustment S 358 O | |||
!474 202 0 | |||
. | |||
Page 7 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 6 | |||
($000) | |||
Adjustment to Deferred Energy Costs To adjust deferred energy costs to the average level that would result from the level of revenues requested and energy costs assumed in Met-Ed's petition for modification of its levelized energy cost adjustment charge. | |||
Line No. Desc ript ion Amount 1 Average deferred energy costs based on Fet-Ed's petition S 81,092 2 Avurage deferred energy costs per budget _101,818 3 Normalizing adjustment S(20,726) 1474 203 | |||
< | |||
. | |||
Page 8 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 7 Adjustment to Cash Working Capital To avoid an area of controversy, this adjustment reflects a cash working capital claim of only $2,469,000 | |||
* hat was allowed by the Commission's Order at RID 626. | * hat was allowed by the Commission's Order at RID 626. | ||
O 3A7A 204 O | O 3A7A 204 O | ||
..Page 9 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 8 | |||
($000)Adjustment to Accumulated Deferred Income Taxes This adjustment (a) eliminates deferred income taxes associated with capitalized taxes and post-1969 non-expansion property, since these deferrals are associated only with FERC jurisdictional cus-tomers, (b) adjusts deferred taxes associated with deferred energy costs (see normalization adjustment No. 6) reflect the clause level proposed under Met-Ed's petition for modification of | . . | ||
Line No.Description Amount (1)(2)Eliminate deferred taxes associated with: | Page 9 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 8 | ||
1 Capitalized taxes S (70)2 Post-1969 non-expansion property (753)3 Deferred taxes on energy at the clause revenue level resulting from the requested modification of the levelized energy cost adjustment charge S38,000 4 Deferred taxes on energy per budget 47,524 5 Adjustment for deferred energy (9,524)6 Maximum allowable rate base deduction S74,329 7 Average deferred taxes associated with liberalized depreciation 74,890 8 Adjustment for maximum rate base deduction (561)9 Normalizing adjustment | ($000) | ||
$(10,908)1474 205 t Met-Ed/Penelec S ta te ment C Witness : F. A. Donofrio Q.Would you please state your name and address? | Adjustment to Accumulated Deferred Income Taxes This adjustment (a) eliminates deferred income taxes associated with capitalized taxes and post-1969 non-expansion property, since these deferrals are associated only with FERC jurisdictional cus-tomers, (b) adjusts deferred taxes associated with deferred energy costs (see normalization adjustment No. 6) reflect the clause revenue level proposed under Met-Ed's petition for modification of the levelized energy cost adjustment charge and (c) adjusts deferred taxes to reflect the maximum rate base deduction allownt under Section 1.167(1) - 1 (h)(6) of the Internal Revenue Code in con-nection with the use of liberalized depreciation. | ||
A.F. Allen Donof rio , 2123 Woodcrest Drive , Johnstown, Pennsylvania 15905 Q.By whom are you employed and in what capacity? | Line No. Description Amount (1) (2) | ||
A.I am Comptroller for Pennsylvania Electric Company, to which I shall f rom time to time refer to as the " Company" or as "Penelec ." Q.What is your educational and professional background? | Eliminate deferred taxes associated with: | ||
A.I was graduated f rom Fairleigh Dickinson University with a Bachelor of Science Degree in Accounting. I have been employed by the General Public Utilities Corporation since 1964, beginning my career with Penelec's sister company at Jersey Central Power and Light Com pany . | 1 Capitalized taxes S (70) 2 Post-1969 non-expansion property (753) 3 Deferred taxes on energy at the clause revenue level resulting from the requested modification of the levelized energy cost adjustment charge S38,000 4 Deferred taxes on energy per budget 47,524 5 Adjustment for deferred energy (9,524) 6 Maximum allowable rate base deduction S74,329 7 Average deferred taxes associated with liberalized depreciation 74,890 8 Adjustment for maximum rate base deduction (561) 9 Normalizing adjustment $(10,908) 1474 205 | ||
I have held various management positions throughout the GPU System until being elected Comptroller of Penelec on August 2, 1976. I am also a member of the Accounting Division Executive Committee of Edison Electric Institute. This is more fully described in the attached Appendix A. | |||
Q.What are your duties and responsibilities with the Company? | t Met-Ed/Penelec S ta te ment C Witness : F. A. Donofrio Q. Would you please state your name and address? | ||
A.As Comptroller, I am directly responsible for all accounting books ano records of the Company and for the accounting controls and procedures. | A. F. Allen Donof rio , 2123 Woodcrest Drive , Johnstown, Pennsylvania 15905 Q. By whom are you employed and in what capacity? | ||
Q.Does the Company adhere to a system of accounts prescribed by the Pennsylvania Public Utility Conmission ("PU C") ? | A. I am Comptroller for Pennsylvania Electric Company, to which I shall f rom time to time refer to as the " Company" or as "Penelec ." | ||
A.Yes. The Company's accounting records are maintained in acccrdance with the Pennsylvania Public Utility Regulations at 52 Pa . Code , S ec . 57.41 et . | Q. What is your educational and professional background? | ||
seq. and in conformity with the Uniform System of Accounts prescribed by both the Federal Energy Regulatory Commission | A. I was graduated f rom Fairleigh Dickinson University with a Bachelor of Science Degree in Accounting. I have been employed by the General Public Utilities Corporation since 1964, beginning my career with Penelec's sister company at Jersey Central Power and Light Com pany . I have held various management positions throughout the GPU System until being elected Comptroller of Penelec on August 2, 1976. I am also a member of the Accounting Division Executive Committee of Edison Electric Institute. This is more fully described in the attached Appendix A. | ||
(" FERC") and the PUC. | Q. What are your duties and responsibilities with the Company? | ||
1474 206 | A. As Comptroller, I am directly responsible for all accounting books ano records of the Company and for the accounting controls and procedures. | ||
A.Yes.They are audited at least annually by an independent certified public accounting firm; and, in addition, the FERC , f ormerl y F PC, conducted compliance udits in 1966, 1967, 1971 and in 1978. Also , in 1972, this Commission reviewed our plant accounts and procedures . | Q. Does the Company adhere to a system of accounts prescribed by the Pennsylvania Public Utility Conmission ("PU C") ? | ||
Q.Has an original cost determination been made of the Company's utility plant?A.Yes.An original cost determination was made as of December 31, 1943 by Order of this Commission dated January 15, 1945 at Docket Nos. EOC 32, MGPC 17, EOC 7, EOC 13, EOC 14, EOC 22 and EOC 44. | A. Yes. The Company's accounting records are maintained in acccrdance with the Pennsylvania Public Utility Regulations at 52 Pa . Code , S ec . 57.41 et . | ||
Original cost deter-minations were also made for the following major companies which were later merged into Penelec : Pennsylvania Edison Company at Docket Nos. EOC 31 and | seq. and in conformity with the Uniform System of Accounts prescribed by both the Federal Energy Regulatory Commission (" FERC") and the PUC. | ||
A.Yes, Exhibit C-1 has basically been prepared under my supervision. There are , however , other witnesses who have furnished to me various data used in preparing Exhibit C-1 and they will support that data with their testimony. | 1474 206 | ||
Q.Would you please identify those witnesses who will support such data and the general areas of their testimony? | |||
1A7A 207 | Q. A re the Company's accounts audited ? | ||
. | O A. Yes. They are audited at least annually by an independent certified public accounting firm; and, in addition, the FERC , f ormerl y F PC, conducted compliance udits in 1966, 1967, 1971 and in 1978. Also , in 1972, this Commission reviewed our plant accounts and procedures . | ||
Itafer and Mr. J. G. Graham will jointly of fer testimony with respect to def erred energy. | Q. Has an original cost determination been made of the Company's utility plant? | ||
Q.Please desc ribe what is contained in Exhibit C-1. | A. Yes. An original cost determination was made as of December 31, 1943 by Order of this Commission dated January 15, 1945 at Docket Nos. EOC 32, MGPC 17, EOC 7, EOC 13, EOC 14, EOC 22 and EOC 44. Original cost deter-minations were also made for the following major companies which were later merged into Penelec : Pennsylvania Edison Company at Docket Nos. EOC 31 and MCOC 16 by Order dated November 1, 1946 approving balances at July 2, 1946; 9 Northern Pennsylvania Power Company at Docket No. EOC 29 by Order dated January 2, 1946 approving balances at December 31, 1944; llome Electric Company at Doc ke t No. EOC 21 by Order dated August 20, 1945 approving balances at January 1, 1938. | ||
A.Exhibit C-1 is Penelec's proj ected budgeted income statement for the year ending December 31, 1980. The preliminary 1980 budgeted data which is the starting point of this exhibit was prepared in July of 1979 and reflects the austere , expense-curtailed financial planning of the immediate post-TMI accident situation. Penelec's 1980 budgeting process has been con-tinuing and the official 1980 budget is expected to be approved by the Board of Directors in late December 197) or early January 1980. | Q. I show you an exhibit which has been marked for identification as Met-Ed/Penelec Exhibit C-1 and ask you has this been prepared by you or under your supe rv ision ? | ||
A. Yes, Exhibit C-1 has basically been prepared under my supervision. There are , however , other witnesses who have furnished to me various data used in preparing Exhibit C-1 and they will support that data with their testimony. | |||
Q. Would you please identify those witnesses who will support such data and the general areas of their testimony? | |||
1A7A 207 | |||
. | |||
A. Yes, W. D. Garland will testif y to depreciation accrual rates and Mr. F. D. | |||
Itafer and Mr. J. G. Graham will jointly of fer testimony with respect to def erred energy. | |||
Q. Please desc ribe what is contained in Exhibit C-1. | |||
A. Exhibit C-1 is Penelec's proj ected budgeted income statement for the year ending December 31, 1980. The preliminary 1980 budgeted data which is the starting point of this exhibit was prepared in July of 1979 and reflects the austere , expense-curtailed financial planning of the immediate post-TMI accident situation. Penelec's 1980 budgeting process has been con-tinuing and the official 1980 budget is expected to be approved by the Board of Directors in late December 197) or early January 1980. | |||
The incone statement is a key document in the quantification o f a ut ility's base revenue requirement f or a g iven pe riod . | The incone statement is a key document in the quantification o f a ut ility's base revenue requirement f or a g iven pe riod . | ||
Q.Would you please describe Page 1 of 15 of Exhibit C-1. | Q. Would you please describe Page 1 of 15 of Exhibit C-1. | ||
A.Column 1 reflects the Company's 1980 net income, as taken from its prelim-inary 'audget. | A. Column 1 reflects the Company's 1980 net income, as taken from its prelim-inary 'audget. Column 2 shows a minimum number of adj ustments to normalize revenues and expenses with the identif ying adj ustment nunbers appearing adj ac ent to the respected items in Column 2. The normalizing adjtstments in this presentation have been held to a minimum in order (a) to save time in preparation of this presentation for the present hurried proceedings and (b) to avoid areas of controversy (i.e., to f orege additional normaliza-tion adj ustments which Penelec considers to be proper and appropriate for rate making purposes but which the staff and others have opposed in the past). Column 3 shows the situation af ter giving ef fect to such normalizing adj ust ments . Columns 4 and 6 show the budgeted expenses 1A74 208 | ||
Column 2 shows a minimum number of adj ustments to normalize revenues and expenses with the identif ying adj ustment nunbers appearing adj ac ent to the respected items in Column 2. | |||
The normalizing adjtstments in this presentation have been held to a minimum in order (a) to save time in preparation of this presentation for the present hurried proceedings and (b) to avoid areas of controversy (i.e., to f orege additional normaliza-tion adj ustments which Penelec considers to be proper and appropriate for rate making purposes but which the staff and others have opposed in the past). Column 3 shows the situation af ter giving ef fect to such normalizing adj ust ments . Columns 4 and 6 show the budgeted expenses 1A74 208 | . | ||
. | and related tax adj ustments which would be necessary if one were to exclude O | ||
Columns 8 and 9 are included in this schedule to provide a mechanism for adj usting base revenues to reflect the required rates of return under the applicable circumstances. | Tt11-2 and TMI-1 expenses respectively. T he situation illustrating the exclusion of TMI-2 expenses (to which Penelec does not agree) is reflected in Column 5 and the situation illustrating the possible exclusion of both Tnt-1 and 2 expenses (with which Penelec likewise does not agree) is re-flected in Column 7. Columns 8 and 9 are included in this schedule to provide a mechanism for adj usting base revenues to reflect the required rates of return under the applicable circumstances. | ||
Q.Please explain Normalization Adj ustment No. 1 of Exhibit C-1. | Q. Please explain Normalization Adj ustment No. 1 of Exhibit C-1. | ||
A.This adj ustment reflects currently projected level of sales as well as proposed settlement level of resale rates. | A. This adj ustment reflects currently projected level of sales as well as proposed settlement level of resale rates. | ||
Q.What is Normalization Adj ustment No. 2? | Q. What is Normalization Adj ustment No. 2? | ||
A.This adj ustment eliminates the tax surcharge revenues including the tax portion of energy clause revenues to reduce revenues to the base rate level (Exhibit C-1, Page 3 of 15). | A. This adj ustment eliminates the tax surcharge revenues including the tax portion of energy clause revenues to reduce revenues to the base rate level (Exhibit C-1, Page 3 of 15). | ||
Q.What is Normalization Adj ustment No. 3? | Q. What is Normalization Adj ustment No. 3? | ||
A.This adj ustment eliminaces energy clause revenues excluding the tax portion to reduce revesues to the base rate level .(Exhibit C-1, Page 5 of 15)Q.Please explain Normalization Adj ustment No. 4. | A. This adj ustment eliminaces energy clause revenues excluding the tax portion to reduce revesues to the base rate level . (Exhibit C-1, Page 5 of 15) | ||
A.This adj ustment was included to normalize forfeited c.iscounts to reflect recent customer payment patterns.(Exhib it C-1, Page 5 of 15.) | Q. Please explain Normalization Adj ustment No. 4. | ||
A. This adj ustment was included to normalize forfeited c.iscounts to reflect recent customer payment patterns. (Exhib it C-1, Page 5 of 15.) | |||
A.This adj ustment reflects a reduction of 23 Mw wheeled to the Allegheny Rural Electric Cooperative , Inc . f rom the Power Authority of the State of New | Q. What is Normalization Adj ustment No. 5? \ | ||
Q.What is Normalization Adj ustnent No. 6? | A. This adj ustment reflects a reduction of 23 Mw wheeled to the Allegheny Rural Electric Cooperative , Inc . f rom the Power Authority of the State of New | ||
A.In this adj ustment, energy related costs are normalized to the levels recoverable through base rates af ter giving ef f ect to the normalized Mwh sales .(Exhibit C-1, Page 7 of 15.) | |||
Q.What is Normalization Adj ustment No. 77 A.This is to reflect the amortization of the "old clause" balance consistent with currently projected Pa. retail sales. | York. This power has been reallocated to the Association of Municipal Power Compa nies-Ohio , Inc. | ||
Q.Please explain Narmalization Adj ustment No. 8. | Q. What is Normalization Adj ustnent No. 6? | ||
A.This adj ustment ic to reflect a calculated depreciation accrual . In addition, adj ustments were made to eliminate depreciation accruals associated with the TMI-l ring girder repair c ;ts (to avoid area of controversy) the Front Street Station allecation to steam heating and the allocation of generci plant to other utility services.(Exhibit C-1, Page 9 of 15.) | A. In this adj ustment, energy related costs are normalized to the levels recoverable through base rates af ter giving ef f ect to the normalized Mwh sales . (Exhibit C-1, Page 7 of 15.) | ||
Q.What is Normalization Adj ustment No. 97 A.To avoid an area of controversy, this adj ustment eliminates the amortization of book depreciation reserve deficiency.(Exhib it C-1, Page 10 of 15.) | Q. What is Normalization Adj ustment No. 77 A. This is to reflect the amortization of the "old clause" balance consistent with currently projected Pa. retail sales. | ||
Q.Please explain Normalization Adj ustment No. 10. | Q. Please explain Narmalization Adj ustment No. 8. | ||
A.This adj ustment to Taxes Other Than Inc'me Taxes reflects the elimination from the budget of the Pa. Public Utility Realty Tax and 40% of the capital stock tax which is recovered through the Tax Adj ustment Surcharge. T he Pennsylvania and New York State Cross Receipts Taxes have been adj usted f or normalized sales and to a level recoverable through base rates. (Exhibit C-1, Page 11 of 15.) | A. This adj ustment ic to reflect a calculated depreciation accrual . In addition, adj ustments were made to eliminate depreciation accruals associated with the TMI-l ring girder repair c ;ts (to avoid area of controversy) the Front Street Station allecation to steam heating and the allocation of generci plant to other utility services. (Exhibit C-1, Page 9 of 15.) | ||
3474 210 | Q. What is Normalization Adj ustment No. 97 A. To avoid an area of controversy, this adj ustment eliminates the amortization of book depreciation reserve deficiency. (Exhib it C-1, Page 10 of 15.) | ||
A.This adjimtment and corresponding calculations, which are showri on Page 11 of 15 of Ex hib i t C-1, reflect Federal and State Income Taxes after y ving effect to the aforementioned normalizat ion adj ustments. | Q. Please explain Normalization Adj ustment No. 10. | ||
A. This adj ustment to Taxes Other Than Inc'me Taxes reflects the elimination from the budget of the Pa. Public Utility Realty Tax and 40% of the capital stock tax which is recovered through the Tax Adj ustment Surcharge. T he Pennsylvania and New York State Cross Receipts Taxes have been adj usted f or normalized sales and to a level recoverable through base rates. (Exhibit C-1, Page 11 of 15.) | |||
3474 210 | |||
: y. W ha t is Normalization Adjtstment No. 11? | |||
O A. This adjimtment and corresponding calculations, which are showri on Page 11 of 15 of Ex hib i t C-1, reflect Federal and State Income Taxes after y ving effect to the aforementioned normalizat ion adj ustments. | |||
r, Please desc ribe Normalization Adj tstment No. 12. | r, Please desc ribe Normalization Adj tstment No. 12. | ||
A.Page 13 of 15 of Exhibit C-1 shows a computation of the Federal and State Income Taxes reflected in Column 4 of the Income S ta t e me n t presentation. | A. Page 13 of 15 of Exhibit C-1 shows a computation of the Federal and State Income Taxes reflected in Column 4 of the Income S ta t e me n t presentation. | ||
Q.Please desc ribe Adj ust ment No. 13. | Q. Please desc ribe Adj ust ment No. 13. | ||
A.This is tne computat ion of the Federal and State Income Taxes reflected in Col umn 6 of the Income Sta tement presentation.(Exhibit C-1, Page 14 of 15.) | A. This is tne computat ion of the Federal and State Income Taxes reflected in Col umn 6 of the Income Sta tement presentation. (Exhibit C-1, Page 14 of 15.) | ||
Q.What does the last adj tst ment , No. 14, on Page 15 of Exhibit C-1 represent? | Q. What does the last adj tst ment , No. 14, on Page 15 of Exhibit C-1 represent? | ||
A.This adjtstment to the Provision for Deferred Taxes was made to remove the deferred taxes associated with the PURTA adj us 6 ment s . In addition, the deterred taxes associated with deferred energy were adj usted concurrent with the adjtstment to deferred energy. | A. This adjtstment to the Provision for Deferred Taxes was made to remove the deferred taxes associated with the PURTA adj us 6 ment s . In addition, the deterred taxes associated with deferred energy were adj usted concurrent with the adjtstment to deferred energy. | ||
Q.Mr. Donofrio, are you f amiliar with Penelec 's budgeted level of Administration and General-operation and maintenance ex penses as utilized in Exhibit C-l? | Q. Mr. Donofrio, are you f amiliar with Penelec 's budgeted level of Administration and General-operation and maintenance ex penses as utilized in Exhibit C-l? | ||
A.Yes I am.Q.Wha t opin io n , if any, do you have as to the budgeted level of such expenses? | A. Yes I am. | ||
A.In my opinion, such level of expense is a conservative statement of what | Q. Wha t opin io n , if any, do you have as to the budgeted level of such expenses? | ||
A. In my opinion, such level of expense is a conservative statement of what Penelec would be expec ted to inc ur during 1980. | |||
Q.Mr. Donofrio 1 show you an exhibit which has been marked for identification | }k]k Q. Mr. Donofrio 1 show you an exhibit which has been marked for identification as Meted /Penelec Exhib i t C-2 and ask you what parts thereof have been pre- 9 pared by you or under your supervision. | ||
. | |||
Q.Please identify the witnesses. | . | ||
A.M r. W. D. Garland will tee'.ify as to the adj ustments necessary to reflect the calculated depreciation reserves, and Mr. F. D. Hafer and Mr. J. G. | A. T ha t exhibit has basically been prepared under my supervision. There are however other witnesses who have furnished to me various data used in pre-paring Exhibit C-2 and they will support that data with their testimony. | ||
Q. Please identify the witnesses. | |||
A. M r. W. D. Garland will tee'.ify as to the adj ustments necessary to reflect the calculated depreciation reserves, and Mr. F. D. Hafer and Mr. J. G. | |||
Graham will j ointly sponsor testimony relative to deferred energy balances. | Graham will j ointly sponsor testimony relative to deferred energy balances. | ||
Mr . R . W. Conrad will offer testimony with respect to the desired coal and oil inventory level . | Mr . R . W. Conrad will offer testimony with respect to the desired coal and oil inventory level . | ||
Q.Please describe what is contained in Met-Ed/Penelec Exhibi t C-27 A.Exhibit C-2 contains Penelec's budgeted 13 period average original cost measures of value for the year ending December 31, 1980, as was the case with Penelec's income statement (Exhibit C-1), the data used as a start-ing point for Exhibit C-2 was derived f rom Penelec's preliminary 1980 budg et . Page 1 of Exhibit C-2 summarizes (in Column 1) Penelec's 13 period average measures of value per budget for the year 1980 with a minimum numr ber of normalization adj ustments (Column 2) to adj ust several items for rate making consideration. Further ad.t ust nents (in Columns 4 and 6) reflect the elimination from measures of value of Penelec's 25% interest in TMI-2 (with which Penelec doe s not agree) and the possible elimination of Pene-1ec's 25% interest in TMI-1 (with which Penelee likewise does not agree) . | Q. Please describe what is contained in Met-Ed/Penelec Exhibi t C-27 A. Exhibit C-2 contains Penelec's budgeted 13 period average original cost measures of value for the year ending December 31, 1980, as was the case with Penelec's income statement (Exhibit C-1), the data used as a start-ing point for Exhibit C-2 was derived f rom Penelec's preliminary 1980 budg et . Page 1 of Exhibit C-2 summarizes (in Column 1) Penelec's 13 period average measures of value per budget for the year 1980 with a minimum numr ber of normalization adj ustments (Column 2) to adj ust several items for rate making consideration. Further ad.t ust nents (in Columns 4 and 6) reflect the elimination from measures of value of Penelec's 25% interest in TMI-2 (with which Penelec doe s not agree) and the possible elimination of Pene-1ec's 25% interest in TMI-1 (with which Penelee likewise does not agree) . | ||
Column 5 shows the ef fect of the exclusion of TMI-2 and Column 7 represents 1980 average conaitions excluding TMI-1 and 2. | Column 5 shows the ef fect of the exclusion of TMI-2 and Column 7 represents 1980 average conaitions excluding TMI-1 and 2. As was the case with Penelec's income statement, normalizing adj ustmenta have been held to a minimum to save time and to avoid areas of co stroversy. | ||
As was the case with Penelec's income statement, normalizing adj ustmenta have been held to a minimum to save time and to avoid areas of co stroversy.)a74 212 | )a74 212 | ||
. | |||
A.This adj usts the budgeted electric plant ir. service to reflect (a) the removal of the TMI-l ring girder repair costs (in order to avoid an area of controvers t), (b) the allocation of Front Street Generating Station to steam heating and (c) the general plant allocated to other utility services. | . | ||
Q.Expla f n Normalization Adj ustment ho. 2. | Q. Please desc ribe Normalization Adj ustment No. 1. O A. This adj usts the budgeted electric plant ir. service to reflect (a) the removal of the TMI-l ring girder repair costs (in order to avoid an area of controvers t), (b) the allocation of Front Street Generating Station to steam heating and (c) the general plant allocated to other utility services. | ||
A.This adj ustment to Electric Plant Held for Future Use (1) removes the cost of all items with a projected in-service date beyond ten years (to avoid another area of controversy), (2) removes the cost of a portion of jointly-owned project items to be transferred to af filiated utilities and (3) re-flects the acquisition of the Robindale Site for the Seward No. 7 Generating Station.O Q.What is Normalization Adj ustment No. 3? | Q. Expla f n Normalization Adj ustment ho. 2. | ||
A.This is to adj ust the average depreciation reserve to the average calculated reserve level and to remove the average calculated reserve associated with (1) the TMI-l ring girder (to avoid an area of controversy), (2) the alloca-tion of a portion of the Front Street Generating Station to steam heating and (3) the general plant allocation to other utility services. | A. This adj ustment to Electric Plant Held for Future Use (1) removes the cost of all items with a projected in-service date beyond ten years (to avoid another area of controversy), (2) removes the cost of a portion of jointly-owned project items to be transferred to af filiated utilities and (3) re-flects the acquisition of the Robindale Site for the Seward No. 7 Generating Station. | ||
Q.What are Normalization Adj ustment Nos. 4 and 5? | O Q. What is Normalization Adj ustment No. 3? | ||
A.Adj us t ment No. 4 is to adj ust coal inventories to a desired level. Adj ust-ment No. 5 reflects the oil inventories at a desired level. | A. This is to adj ust the average depreciation reserve to the average calculated reserve level and to remove the average calculated reserve associated with (1) the TMI-l ring girder (to avoid an area of controversy), (2) the alloca-tion of a portion of the Front Street Generating Station to steam heating and (3) the general plant allocation to other utility services. | ||
Mr. R. W.Conrad will testify as to the levels o f the coal and oil inventories. | Q. What are Normalization Adj ustment Nos. 4 and 5? | ||
Q.Please desc ribe Normalization Adj ustment No. 6 for Deferred Energy Costs . | A. Adj us t ment No. 4 is to adj ust coal inventories to a desired level. Adj ust-ment No. 5 reflects the oil inventories at a desired level. Mr. R. W. | ||
A.Adj ust ment No. 6 is to adj ust def erred energy costs to reflect the currently projected level of sales and to normalize the Levelized Energy Adj ustment | Conrad will testify as to the levels o f the coal and oil inventories. | ||
Q. Please desc ribe Normalization Adj ustment No. 6 for Deferred Energy Costs . | |||
. | A. Adj ust ment No. 6 is to adj ust def erred energy costs to reflect the currently projected level of sales and to normalize the Levelized Energy Adj ustment Clause rate to 6.5 mills per Kwh as allowed at I-79040308. | ||
Q.What is Normalization Adj ustment s'o . 8 7 A.Likewise to eliminate an area of controversy, this adj ustment , eliminates the average balance of unamortized rate case and flood expenses, in accor-dance with the Commission's Order of RID 599. | }4/4 2)3 | ||
Q.Please describe Normalization Adj ustment No. 9. | |||
A.This adj ustm ant eliminates accumulated deferred income taxes associated with Johnstown flood expenses, and the PURTA adj ustments; reflects the de-ferred incone taxes associated with the revised deferred energy balance; and reflects the maximum rate base reduction allowable with respect to de-ferred income taxes associated with liberalized depreciation, according to IRS regulations under Section 1.lb7(1)-(l)(h)(6) of the Internal Revenue Code.(Exhibit C-2, Page 10 of 10.) | . | ||
Q.Does this complete your direct tes t imony ? | Q. Wh.i t is Normalization Adj ustment No. 77 A. In order to avoid an area of controversy this adj ustment reflects a Cash Working Capital required of only the amount allowed at RID 599. | ||
A.Yes, it does. | Q. What is Normalization Adj ustment s'o . 8 7 A. Likewise to eliminate an area of controversy, this adj ustment , eliminates the average balance of unamortized rate case and flood expenses, in accor-dance with the Commission's Order of RID 599. | ||
3A74 214 | Q. Please describe Normalization Adj ustment No. 9. | ||
.APPENDIX A PROFESSION AL QUALIFICATIONS OF F. ALLEN DON 0FRIO B. S. Degree - Fairleigh Dickinson University - Major in Accounting. | A. This adj ustm ant eliminates accumulated deferred income taxes associated with Johnstown flood expenses, and the PURTA adj ustments; reflects the de-ferred incone taxes associated with the revised deferred energy balance; and reflects the maximum rate base reduction allowable with respect to de-ferred income taxes associated with liberalized depreciation, according to IRS regulations under Section 1.lb7(1)-(l)(h)(6) of the Internal Revenue Code. (Exhibit C-2, Page 10 of 10.) | ||
Q. Does this complete your direct tes t imony ? | |||
A. Yes, it does. | |||
3A74 214 | |||
. | |||
APPENDIX A PROFESSION AL QUALIFICATIONS OF F. ALLEN DON 0FRIO B. S. Degree - Fairleigh Dickinson University - Major in Accounting. | |||
Graduate courses in Business Administration leading to Masters Degree. | Graduate courses in Business Administration leading to Masters Degree. | ||
Present member of the Accounting Division Executive Committee of Edison Electric Institute. Former member of the Taxation Committee and the Budgeting and Financial Forecasting Committee. | Present member of the Accounting Division Executive Committee of Edison Electric Institute. Former member of the Taxation Committee and the Budgeting and Financial Forecasting Committee. | ||
Line 1,650: | Line 3,041: | ||
January, 1972 to July, 1973: Staf f Accountant of Jersey Central Power & | January, 1972 to July, 1973: Staf f Accountant of Jersey Central Power & | ||
Light Company, Morristown, New Jersey - Preparation of rate case schedules and testimonies, and all required filings with SEC, etc., required for financings. | Light Company, Morristown, New Jersey - Preparation of rate case schedules and testimonies, and all required filings with SEC, etc., required for financings. | ||
June, 1969 to January, 1972: | June, 1969 to January, 1972: Supervisor, General Accounting of Jersey Central Power & Light Company, Morristown, New Jerse 7 - Responsible for supervision of all General Accounting functions provided by the General Books, the Accounts Payable , and the Statistical Typing Sections . | ||
Supervisor, General Accounting of Jersey Central Power & Light Company, Morristown, New Jerse 7 - Responsible for supervision of all General Accounting functions provided by the General Books, the Accounts Payable , and the Statistical Typing Sections . | |||
August, 1964 to June, 1969: Various positions within Accounting Department of Jersey Central Power & Light Company, Morristown, New Jersey leading up to being made Senior Accountant responsible for the General Books Sec tion in June , 1967. | August, 1964 to June, 1969: Various positions within Accounting Department of Jersey Central Power & Light Company, Morristown, New Jersey leading up to being made Senior Accountant responsible for the General Books Sec tion in June , 1967. | ||
1474 215 O FEENSTLsentA ELECTRIC COMPANY S tat e ment of Operet tog lacose and Net l oc ome , Year 1980 Normalis ed and Adj ust ed to Reflect Fosetble Esclusion of T41-1 and 2 Coe t s, and to Reflect R eve s ue | 1474 215 O | ||
1 Base rates | FEENSTLsentA ELECTRIC COMPANY S tat e ment of Operet tog lacose and Net l oc ome , Year 1980 | ||
$436 092$ (2 529 ) | ' | ||
(1)5433 563$-$433 563$-$433 563$*$*2 Tas su rc har ge 28 921 (28 921)(2)---....3 Energy clause 83 091[91_02})( 3)---....4 S ub-tot al 548 018 (114 455)433 563-433 563-433 563**5 Forfetted disc oun t s 54 9 262 (4)811-811.31g.ggg 6 Other operet tes revenue 10 311 (722)(5)9 540-9 590.9 390.9 3eg'Total operating re venue 5%8 879 (114 91))4*)9**- | Normalis ed and Adj ust ed to Reflect Fosetble Esclusion of T41-1 and 2 Coe t s, and to Reflect R eve s ue M e cis s a t Y to Achieve Required Return | ||
8 F umi 172 834 9 Interchange 6 purchased po we r 53 537 10 Def erred energy costs 119_16J )11 Tot al energy costs 234 408 ( E4 8.9 ) | ( $000 ) | ||
(6)117 559-117 559.117 559.gg7 339 12 Beeerve capacit y (4 507)-(4 507)(2 196)(d 311)(2 730)419.e 13 Fuel 4 ash hand 1 Lag, coal clesotag 9 542 | Cc1. 5 Wo rmalised Normalised Adj ust ment s or Col . 7 Lees: Escluding L,ss: E sc l udi ng to Achieve i nc l udi ng time As Nor mal l a t ng Adj. Mor aal ised T41-2 Adj. TMI-2 Ty g .g 3 aj . 74 g 1 & Tq t -2 R eq ui r ed R eq ui r ed p_ o_._ Desc r ipt ion buon1*( .Aihe t een t e No. (cci i + Col 23 Costs up,2 (Col 3-Col 4) (osts 2_S (Cel 5-Col 63 R el y.rn _Relvr_L (is (2) (3) (4) (5) (6) (7) (8) (9) | ||
-9 542-9 542-9 542-9 542 14 Core management | Operating revenues : | ||
-------..15 Fayroll - oper . 4 maint . | 1 Base rates $436 092 $ (2 529 ) (1) 5433 563 $ - | ||
49 315-49 315-49 315-49 315.49 3gs 16 Othe r oper . 4 estat . | $433 563 $ - | ||
73 197-73 197 1 310 71 887 3 379 68 508-a s1 Amortisation of deferred ,'oerg y coste (old clause) 5 777 (11[)( 7)5 599-5 549-5 599-5 999 18 Tot al oper . 4 maint . e sp. | $433 563 $ * $ | ||
339 682 (88 977)250 705 (886)251 591 649 250 942-e 19 Depreciation - accrual 45 F68 ( 263 )(8)45 605 5 66.39 941 3 174 36 767-*20- net esivage 1 238-1 238-1 238-1 238-1 238 21 Amorti r.ation of ba9h reserve def ic ienc y 333 (333)(9)---....22 Deco mm iss ioning lll-111 65 46 46--e 23 Tames other than incosa taaes | * 2 Tas su rc har ge 28 921 (28 921) (2) - - - | ||
_4t_010 (23 118) (10) 17 910-17 910-_17_110**24 Total operat ing empenses 426 260 (112 691)315 569 4 843 310 ??6 3 F69 Jp6 $5i**25 O pe r a t i ng income bef ore income t e ses 130 61}(7 224)128 395 14_84})1}) 73R 11_8611 137 107**I nc ome taxes: | . . . . | ||
26 C ur rent can - f ede ral 15 359 6 414 (11)21 773 (8 704)(12)30 477 (4 858) (13) 35 335 e e 27- state 2 746 126 (11)2 872 (1 419)(12)4 291 (192) (13) 5 083**2S Def erred - f edersi 18 196 (7 088) (14) 11 108 3 239 7 869 1 646 6 223-e 29- state 1 196 (1 DOS) (14) | 3 Energy clause 83 091 [91_02}) ( 3) - - - . . . . | ||
(61 2 )-(612)-(612)-( 61 2)30 I nvest ment tan credit (6 312)-(6 312)-(6 312)-(6 312)-(6 312)31 Amorti zation of invest ment can c r edit f t 481)-(LjB])(273)__(LJJg)__J126)(1 108)-e 32 Total ineone tases 29 698 (2 356)27 34_1 (7 157)34 499 (4 110)36 e09**33 set ut ility operating inco me 1103 921$____1_}l$ _101. _011_ | 4 S ub-tot al 548 018 (114 455) 433 563 - 433 563 - 433 563 * | ||
$2_111$ 9R 739 5 241$ 94 494$** | * 5 Forfetted disc oun t s 54 9 262 (4) 811 - 811 . 31g . ggg 6 Other operet tes revenue 10 311 (722) (5) 9 540 - | ||
$ 3? 362$ 3 ' 16 2 | 9 590 . 9 390 . 9 3eg | ||
*2 N 39 Rate of return on rate base | ' 443 964 Total operating re venue 5%8 879 (114 91)) 4*)9** - | ||
]. 2g!9.44%_1_q . 3p, | - | ||
___. | 443 964 | ||
.-?__'.*3 2 ;%e*To be e otied. | * e Opera ting ex penses : | ||
8 F umi 172 834 9 Interchange 6 purchased po we r 53 537 10 Def erred energy costs 119_16J ) | |||
11 Tot al energy costs 234 408 ( E4 8.9 ) (6) 117 559 - 117 559 . 117 559 . gg7 339 12 Beeerve capacit y (4 507) - | |||
(4 507) (2 196) (d 311) (2 730) 419 . e 13 Fuel 4 ash hand 1 Lag, coal clesotag 9 542 - 9 542 - 9 542 - 9 542 - | |||
9 542 14 Core management - - - - - | |||
- - . . | |||
15 Fayroll - oper . 4 maint . 49 315 - 49 315 - 49 315 - 49 315 . 49 3gs 16 Othe r oper . 4 estat . 73 197 - 73 197 1 310 71 887 3 379 68 508 - a s1 Amortisation of deferred ,'oerg y coste (old clause) 5 777 (11[) ( 7) 5 599 - 5 549 - 5 599 - 5 999 18 Tot al oper . 4 maint . e sp. 339 682 (88 977) 250 705 (886) 251 591 649 250 942 - e 19 Depreciation - accrual 45 F68 ( 263 ) (8) 45 605 5 66. 39 941 3 174 36 767 - | |||
* 20 - net esivage 1 238 - 1 238 - | |||
1 238 - 1 238 - | |||
1 238 21 Amorti r.ation of ba9h reserve def ic ienc y 333 (333) (9) - - - . . . . | |||
22 Deco mm iss ioning lll - 111 65 46 46 - - e 23 Tames other than incosa taaes _4t_010 (23 118) (10) 17 910 - | |||
17 910 - | |||
_17_110 * | |||
* 24 Total operat ing empenses 426 260 (112 691) 315 569 4 843 310 ??6 3 F69 Jp6 $5i * | |||
* 25 O pe r a t i ng income bef ore income t e ses 130 61} (7 224) 128 395 14_84}) 1}) 73R 11_8611 137 107 * | |||
* I nc ome taxes: | |||
26 C ur rent can - f ede ral 15 359 6 414 (11) 21 773 (8 704) (12) 30 477 (4 858) (13) 35 335 e e 27 - state 2 746 126 (11) 2 872 (1 419) (12) 4 291 (192) (13) 5 083 * | |||
* 2S Def erred - f edersi 18 196 (7 088) (14) 11 108 3 239 7 869 1 646 6 223 - e 29 - state 1 196 (1 DOS) (14) (61 2 ) - | |||
(612) - | |||
(612) - | |||
( 61 2) 30 I nvest ment tan credit (6 312) - | |||
(6 312) - | |||
(6 312) - | |||
(6 312) - | |||
(6 312) 31 Amorti zation of invest ment can c r edit f t 481) - | |||
(LjB]) (273) __(LJJg) __J126) (1 108) - e 32 Total ineone tases 29 698 (2 356) 27 34_1 (7 157) 34 499 (4 110) 36 e09 * | |||
* 33 set ut ility operating inco me 1103 921 $____1_}l - $ _101. _011_ $2_111 $ 9R 739 5 241 $ 94 494 $ * | |||
* s 34 TMI eu penses including | |||
.p2m de p rec ia t i on 5 - | |||
$ 2 314 $ 2 555 $ e | |||
' '"i 35 other inc o me and ded ue t tons 3 697 3 697 3 697 3 69? 2IE 36 Less: Interest em pe nse 32 %)1 52 901 5 + 901 52 901 5SI | |||
.$23n 37 F re f e r red dividend s 14 487 la 487 | |||
_L4 4 9 7 14 se7 -** E 38 Net inc o me available f or commen 1_3I_2J0 $ 3? 362 $ 3 ' 16 2 | |||
* g h 2 | |||
N 39 Rate of return on rate base ]. 2g! 9.44% _1_q . 3p, _e_ 07; | |||
>n | |||
===* 40 R at e of return on common equit y devoted ta rate base ggI _Il- "I _ 14.42% __e 41 Rate of return on total + cm m E% | |||
quit y . _ . _8_ " _ _ " | |||
_ __9*"__ | |||
- - - - _p . 9 ;* ___. _ | |||
* Ei n, 42 In re t t uv e r age r et ta .-? __ '.*3 2 ;% e | |||
*To be e otied. | |||
Page 2 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 1 | Page 2 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 1 | ||
($000 )Adiustment To Base Rates To adj ust base revenues to reflect currently projected level of sales as well as proposed settlement level of resale rates. | ($000 ) | ||
1,i n e Base No.Rates 1 Base rates per budget for the 12 months ended 12/31/80 | Adiustment To Base Rates To adj ust base revenues to reflect currently projected level of sales as well as proposed settlement level of resale rates. | ||
$436 092 Cwh Revenues 2 Pa. Retail (234)$(1 497)3 N. Y. Retail 1 (12)4 Resale 41 (1 020)5 Total (192)$(2 529)6 Normalization adj ustment (2 529)7 Base rates per 1udget for the 12 months ended 12/31/80, as adj us ted | 1,i n e Base No. Rates 1 Base rates per budget for the 12 months ended 12/31/80 $436 092 Cwh Revenues 2 Pa. Retail (234) $(1 497) 3 N. Y. Retail 1 (12) 4 Resale 41 (1 020) 5 Total (192) $(2 529) 6 Normalization adj ustment (2 529) 7 Base rates per 1udget for the 12 months ended 12/31/80, as adj us ted $433 563 1474 217 9 | ||
$433 563 1474 217 9 | |||
..Page 3 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 2 (S000)Adjustment of Tax SurcharRe Revenues To eliminate Tax Surcharge Revenues (including tax portion of energy clause revenues). | . . | ||
Line Tax Surcharge No.Revenues 1 Tax Surcharge revenues per budget for the 12 months S 28 921 ended 12/31/80 2 Normalization adj ustment (28 921)3 Tax Surcharge revenues per budget for the 12 months ended 12/31/80, as adj usted S-)k].h | Page 3 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 2 (S000) | ||
., Page 4 of 15 PENNSYINANIA ELECTRIC COMPANY Normalization Adiustment No. 3 ( $000 )Adjus t men t o f Enc ry,y Clatise Revenues To eliminate Energy Clause Revenues (excluding tax portion) . | Adjustment of Tax SurcharRe Revenues To eliminate Tax Surcharge Revenues (including tax portion of energy clause revenues). | ||
l.Ine Energy Clause No.Revenues!Energy clause revenues per budget for the 12 months S 83 005 ended 12/31 /80 | Line Tax Surcharge No. Revenues 1 Tax Surcharge revenues per budget for the 12 months S 28 921 ended 12/31/80 2 Normalization adj ustment (28 921) 3 Tax Surcharge revenues per budget for the 12 months ended 12/31/80, as adj usted S - | ||
,83 00_5) | )k].h | ||
$_ _ _--- - - - | , | ||
O\ 47 4 L Yi e | . | ||
..Page 5 of 15 PENNSYLVANIA ELECTRIC COMPANY Nort.alization Adjustment No. 4 | . | ||
($C00)Adjustment to Forfeited Discounts To adj ust forfeited discounts to reflect most recent customer payment patterns.Line Forfeited No.Discounts 1 Forfeited Discounts per budget for the 12 months ended 12/31/80$549 2 Normalization ^ O ttstment 262 3 Forfeited Discout..s per budget for the 12 months ended 12/31/80 as adj usted | |||
$811 1474 220 | , . | ||
..Page 6 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. | Page 4 of 15 PENNSYINANIA ELECTRIC COMPANY Normalization Adiustment No. 3 | ||
( $000 ) | |||
$10,312 2 Normalization Adj ustment (722)3 Other Operating Revenue per budget for the 17 months ended 12/31/80 as adj usted S 9 590 0 1474 221 0 | Adjus t men t o f Enc ry,y Clatise Revenues To eliminate Energy Clause Revenues (excluding tax portion) . | ||
..Page 7 of 15 PENNS YLV ANIA ELECTRIC COMPANY Normalization Adiustment No. 6 | l.Ine Energy Clause No. Revenues | ||
($000 )Ad_just.ent to Total Energy Costs To adj ust energy costs to the level recoverable by base rates.Line Total Energy No.Costs 1 Total energy costs per budget for the 12 months ended 12/31/80 | ! Energy clause revenues per budget for the 12 months S 83 005 ended 12/31 /80 2 Normalization adj ustment ,83 | ||
$206 408 2 Normalized MWH sales-PaPUC 10 584 652 3 Rate ($/MWH) recoverable through base rates | ( 00_5) 3 Energy clause revenues per budget for the 12 months ended 12/31/80, as adj usted $_ _ _--- - - - | ||
$ | O | ||
$105 847 5 Normalized MWH sales - N.Y. PSC 77 669 6 Rate ($/MWH) recoverable through base rates S 2.270 7 Amount rec ove rab le 176 8 Normalized MWH sales - FERC 954 505 9 Rate ($/MWH) recoverable through base rates | \ 47 4 L Yi e | ||
$12.086 10 Amtmt recoverable 11 536 11 Total amount recoverable through base rates 117 559 12 Less Energy - related costs per books 206 408 13 Normalization adj ustment (88 849)14 Energy costs per budget for the 12 months ended 12/31/80, as adj usted | |||
$117 559 1474 222 | . . | ||
..Page 8 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 7 | Page 5 of 15 PENNSYLVANIA ELECTRIC COMPANY Nort.alization Adjustment No. 4 | ||
($000 )Adjustment to Amortization of Deferred Energy Costs To reflect amortization of "old cla.ase" balance consistent with currently p ro ject ed Pa . Retail Sales . | ($C00) | ||
Amortization of I' I "" Deferred Energy N"*Costa 1 Amortization of def erred energy costs per budget for the 12 months ended 12/31/80 | Adjustment to Forfeited Discounts To adj ust forfeited discounts to reflect most recent customer payment patterns. | ||
$5 727 2 Normalization Adj ustment (128)3 Amortization of deferred energy costs per budget for the 12 months ended 12/31/80 as adj usted | Line Forfeited No. | ||
$5 599 O 1,474 223 O | Discounts 1 Forfeited Discounts per budget for the 12 months ended 12/31/80 $549 2 Normalization ^ O ttstment 262 3 Forfeited Discout..s per budget for the 12 months ended 12/31/80 as adj usted $811 1474 220 | ||
.Page 9 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 8 ( $000 )Adjustment to Devreciation Expense To adj ust Depreciation Expense to reflect calculated accruals for rate-making purposes, to eliminate the depreciation acurual relating to the TMI #1 ring girdar repair costs (to avoid an area of controversy), and to eliminate depreciation accruals with respect to plant allocated to non-electric utility services . | |||
Line No.Depreciation 1 Depreciation per books f or the 12 months ended 12/31/80 | . . | ||
$45 868 2 A.Adj us t cent to reflect calculated dep';eciation accruals$ (16 )3 B.Adj ust ment to eliminate depreciation accrual related to TMI #1 ring girder (48)4 C.Adj us t ment to eliminate a portion of the depreciation accrual related to the boiler and associated equipment located at the F ront Street Generating Station allocated to Steam Heating Plant in Service (192)5 D.Adj ust ment to eliminate depreciation accrual on general plant allocated to Steam Heating and Nineveh Water Company (7)6 Total normalization adj ustment (263)7 Depreciation per budget, 12 months ended 12/31/80 as adj usted | Page 6 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. ; | ||
$45 605 1,474 224 | ($000) | ||
..Page 10 of 15 PENilSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 9 | A<Qustment to_0ther Operating Revenues Tri reflect reduction of 23 nr wheeled to Allegheny Rural Electric Co-cp, Inc., f rom Power Authorit y of the State of New York (PASNY). This is due to a re n llrie ntion of PASNY power to the Association of Municipal Power Companies-Ohio , | ||
($000)Adjustment to Amortization of Book Deprecie. tion Reserve Deficiency To eliminate Amortization of Book Depreciation Reserve Deficiency (to avoid an area of controversy). | I ne . | ||
Amortization of Depreciation Line Reserve No.Deficiency 1 Amortization of depreciation reserve deficiency per budget for the 12 months ended 12/31/80 | Line Other Operating No. | ||
$ 333 2 Normalization adj ustment (333)3 Amortization of book depreciation reserve deficiency for the 12 months ended 12/31/80, as acj usted S-O 10 g nb-O | Revenues 1 Other Operacing Revenue per budget for the 12 months ended 12/31/80 $10,312 2 Normalization Adj ustment (722) 3 Other Operating Revenue per budget for the 17 months ended 12/31/80 as adj usted S 9 590 0 | ||
*, Page 11 of 15 1 f24NSYLVANIA ElICTRIC COMPANY No.Talizaticn * 'ustment No. 10 | 1474 221 0 | ||
<o03)Adjustment.o Taxes Otha.,r-Taxes' o adj ust Tex a s me Taxes to the level recoverable | |||
Taxes Other Line Than Incore | . . | ||
_No, Taxes 1 Taxes Other Than Itarse ' axes per budget for the 12 Months Ended 12/31/80 | Page 7 of 15 PENNS YLV ANIA ELECTRIC COMPANY Normalization Adiustment No. 6 | ||
$ 41 028 2 A.Public Utili;y Realty Tax To eliminate Public Utility Realty Tax (electric portio, only) which is recovered through the Tax Adj ustment S urc ha r ge S (5 688)B.Pennsylvania Capital Stock Tax To eliminate 40% of the Capital Stock Tax (electric portion only) whic h is recovered through the Tax Adj ustment Surc ha rge 3 Pennsylvania Capital Stock Tax f or the 12 Months Ended 12/31/80 | ($000 ) | ||
$ 6 287 4 Portion recoverable t! rough Tax Adj ust eent Surc har ge x.4 5 Normalization Adj ustment (2 515)C.New York Cross Receipts To adjtst New York Gross Receipts Tax for normalized sales 6 Normalized New York Sales Revenues S 1 757 7 New York Forfeited Discounts 11 8 Normalized New York Tax Base 1 768 9 Tax Rate x .0375 10 66 11 Less Cross Receipts Tax budgeted 12 Months Ended 12/31/80 77 12 Normalization Adj ustnent (11)D.Pennsylvania Gross Receipts Tax To adj ust Pennsylvania Gross Receipt s Tax Expense f or normalized sales to a level recoverable through basc rates 13 Pennsylvania Normalized Sales Revenues | Ad_just.ent to Total Energy Costs To adj ust energy costs to the level recoverable by base rates. | ||
$401 250 14 Penns y lva nia Forfeited Discounts 800 15 Pennsylvania Gross Receipt s Tax Base 402 050 16 Tax Recoverable through base rates x.02 17 Normalized Pennsylvania Gross Receipts Tax 8 041 18 Less Pennsylvania Gross Receipt s Tax budgeted for the 12 Months End ed 12/31/80 22 996 E. Pennsylvania Gross Receip's Tax - Resale Custs. | Line Total Energy No. Costs 1 Total energy costs per budget for the 12 months ended 12/31/80 $206 408 2 Normalized MWH sales-PaPUC 10 584 652 3 Rate ($/MWH) recoverable through base rates $__ 10.000 4 Amount recoverable $105 847 5 Normalized MWH sales - N.Y. PSC 77 669 6 Rate ($/MWH) recoverable through base rates S 2.270 7 Amount rec ove rab le 176 8 Normalized MWH sales - FERC 954 505 9 Rate ($/MWH) recoverable through base rates $ 12.086 10 Amtmt recoverable 11 536 11 Total amount recoverable through base rates 117 559 12 Less Energy - related costs per books 206 408 13 Normalization adj ustment (88 849) 14 Energy costs per budget for the 12 months ended 12/31/80, as adj usted $117 559 1474 222 | ||
(14 955)To adj ust Pa. Gross Receipts Tax f or normalized resale sales 19 Normalized Sales Revenues | |||
$28 037 20 Tax Rate x .045 21 Associated Gross Receipts Tax 1 262 22 Less Gross Receipts Tax Per Budget 1 211 51 23 Total Normalization Adj ustment | . . | ||
$(23 118)24 Taxes Other Than Incore Taxes per budget 12 Months Ended 12/31/80 as Adj usted S 17 910) | Page 8 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 7 | ||
.Page 12 of 15 PD4NSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 11 ( $000 )Computation of Federal & State Income Taxes - Normalized LCol. 2 of Income Statement) | ($000 ) | ||
Taxes Line Before No.Calculated Taxes Adi.Adiustment (1)(2)(3)(4)! Total operating re venue | Adjustment to Amortization of Deferred Energy Costs To reflect amortization of "old cla.ase" balance consistent with currently p ro ject ed Pa . Retail Sales . | ||
$ 443,964 2 Less: Total O&M expense | Amortization of I' I "" Deferred Energy N"* Costa 1 Amortization of def erred energy costs per budget for the 12 months ended 12/31/80 $5 727 2 Normalization Adj ustment (128) 3 Amortization of deferred energy costs per budget for the 12 months ended 12/31/80 as adj usted $5 599 O | ||
$ 250,705 3 Depreciation expense 45,605 4 Ave ra ge net salvage 1,238 5 Dec o mmis s io ning 111 6 Taxes other than income t a xes 17.910 7 Total deductions 315 569 8 Net operating income before income taxes | 1,474 223 O | ||
$ 128,395 9 L es s : Interest charges (A) 52.582 10 N et income bef ore incore ta xe s | |||
$75.813 Adj ust ments to taxable inco ce : | . | ||
Add: 11 AFUDC on nuclear f uel | Page 9 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 8 | ||
$-12 Average net salvage 1.238 13 Amortization of deferred energy costs 5,599 Ded uc t : | ( $000 ) | ||
14 Adj us t ment of booked depreciation to tax basis (B) 38.548 15 Payroll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Pref erred dividead deduction 784 18 Other 250 19 Net adj ust ment | Adjustment to Devreciation Expense To adj ust Depreciation Expense to reflect calculated accruals for rate-making purposes, to eliminate the depreciation acurual relating to the TMI #1 ring girdar repair costs (to avoid an area of controversy), and to eliminate depreciation accruals with respect to plant allocated to non-electric utility services . | ||
$(34.6'l)20 Income subject to state income tax | Line No. Depreciation 1 Depreciation per books f or the 12 months ended 12/31/80 $45 868 2 A. Adj us t cent to reflect calculated dep';eciation accruals $ (16 ) | ||
$41,162 21 State income ta x @ 6.9767 % | 3 B. Adj ust ment to eliminate depreciation accrual related to TMI #1 ring girder (48) 4 C. Adj us t ment to eliminate a portion of the depreciation accrual related to the boiler and associated equipment located at the F ront Street Generating Station allocated to Steam Heating Plant in Service (192) 5 D. Adj ust ment to eliminate depreciation accrual on general plant allocated to Steam Heating and Nineveh Water Company (7) 6 Total normalization adj ustment (263) 7 Depreciation per budget, 12 months ended 12/31/80 as adj usted $45 605 1,474 224 | ||
2.872$ 2.746$ 126 22 Income subject to federal income tax | |||
$38.290 23 Federal income tax (46% less $19) | . . | ||
$17,595 28 Less JDTC (6.312)25 Total federal tax before consolidated savings | Page 10 of 15 PENilSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 9 | ||
$23.907 26 Consolidated savings (C) 2.134*27 Total federal tax | ($000) | ||
$21.773$ 15.359$ 6.414 (A) Comput ation of interest charges: | Adjustment to Amortization of Book Deprecie. tion Reserve Deficiency To eliminate Amortization of Book Depreciation Reserve Deficiency (to avoid an area of controversy). | ||
Total measure of value | Amortization of Depreciation Line Reserve No. Deficiency 1 Amortization of depreciation reserve deficiency per budget for the 12 months ended 12/31/80 $ 333 2 Normalization adj ustment (333) 3 Amortization of book depreciation reserve deficiency for the 12 months ended 12/31/80, as acj usted S | ||
$1,217,167 Interest c om ponen t of rate of retue* | - | ||
4.32%Interest ex pe n se | O 10 g nb - | ||
$52.582 (B) Adj . of booked depreciation to tax basis : | O | ||
Tax depreciation S 84,153 Book depreciation 45.605 Depreciation adj ustm at | |||
$38.548 (C) Comput ation of consolidated savings : | * , | ||
GPU interest allocated to Penelec | Page 11 of 15 1 f24NSYLVANIA ElICTRIC COMPANY No.Talizaticn * 'ustment No. 10 | ||
$4,267 Federal tax rate 46%Consolidated savings | <o03) | ||
$1.963* Includes amortization of FIT ref unds. | Adjustment .o Taxes Otha. ,r- Taxes | ||
a , Page 13 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 12 ( $000 )Computation of Federal & State income Taxes - TMI-2 Eliminated (Col. 4 of Income Statement) | ' o adj ust Tex a s a s me Taxes to the level recoverable by base ates. | ||
Taxes Line Before No.Calculated Taxes Adi.Adiustment (1)(2)( 3)(4)1 Total operating revenue | Taxes Other Line Than Incore | ||
$ 443,964 2 Less: Total 0&M expense | _No, Taxes 1 Taxes Other Than Itarse ' axes per budget for the 12 Months Ended 12/31/80 $ 41 028 2 A. Public Utili;y Realty Tax To eliminate Public Utility Realty Tax (electric portio, only) which is recovered through the Tax Adj ustment S urc ha r ge S (5 688) | ||
$ 251,591 3 Depreciation ex pense 39,941 4 Average net salvage 1,238 5 Dec o mmiss io ning 46 6 Taxes other than income taxes 17.910 7 Total deductions 310.726 8 Net operating income before income taxes | B. Pennsylvania Capital Stock Tax To eliminate 40% of the Capital Stock Tax (electric portion only) whic h is recovered through the Tax Adj ustment Surc ha rge 3 Pennsylvania Capital Stock Tax f or the 12 Months Ended 12/31/80 $ 6 287 4 Portion recoverable t! rough Tax Adj ust eent Surc har ge x .4 5 Normalization Adj ustment (2 515) | ||
$ 133,238 9 Less: Interest charges (A) 45.165 10 Net income bef ore income taxes | C. New York Cross Receipts To adjtst New York Gross Receipts Tax for normalized sales 6 Normalized New York Sales Revenues S 1 757 7 New York Forfeited Discounts 11 8 Normalized New York Tax Base 1 768 9 Tax Rate x .0375 10 66 11 Less Cross Receipts Tax budgeted 12 Months Ended 12/31/80 77 12 Normalization Adj ustnent (11) | ||
$88.073 Adj ust ment s to taxable incone: | D. Pennsylvania Gross Receipts Tax To adj ust Pennsylvania Gross Receipt s Tax Expense f or normalized sales to a level recoverable through basc rates 13 Pennsylvania Normalized Sales Revenues $401 250 14 Penns y lva nia Forfeited Discounts 800 15 Pennsylvania Gross Receipt s Tax Base 402 050 16 Tax Recoverable through base rates x .02 17 Normalized Pennsylvania Gross Receipts Tax 8 041 18 Less Pennsylvania Gross Receipt s Tax budgeted for the 12 Months End ed 12/31/80 22 996 E. Pennsylvania Gross Receip's Tax - Resale Custs. (14 955) | ||
Add: 11 AFUDC on nuclear f uel | To adj ust Pa. Gross Receipts Tax f or normalized resale sales 19 Normalized Sales Revenues $28 037 20 Tax Rate x .045 21 Associated Gross Receipts Tax 1 262 22 Less Gross Receipts Tax Per Budget 1 211 51 23 Total Normalization Adj ustment $(23 118) 24 Taxes Other Than Incore Taxes per budget 12 Months Ended 12/31/80 as Adj usted S 17 910 | ||
$-12 Average net salvage 1,238 13 Amortization of deferred energy costs 5,599 Ded uc t : | ) | ||
14 Adj ust ment of booked depreciation to tax basis (B) 30,465 15 Pa; roll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Pref erred dividend deduction 784 18 other 250 19 Net adj ust ment | |||
$ (26.568) 20 1- ome subj ect to state income tax | . | ||
$61.505 2.State inc o me tax @ 6.9767% | Page 12 of 15 PD4NSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 11 | ||
( $000 ) | |||
$57.214 23 Federal income tax (46% less $19 ) | Computation of Federal & State Income Taxes - Normalized LCol. 2 of Income Statement) | ||
$26,297 24 Less JDTC (6.312)25 Total f ederal tax bef ore consolidated savings | Taxes Line Before No. Calculated Taxes Adi. Adiustment (1) (2) (3) (4) | ||
$32,611 26 Consolidated savings (C) 2.134*27 Total federal tax | ! Total operating re venue $ 443,964 2 Less: Total O&M expense $ 250,705 3 Depreciation expense 45,605 4 Ave ra ge net salvage 1,238 5 Dec o mmis s io ning 111 6 Taxes other than income t a xes 17.910 7 Total deductions 315 569 8 Net operating income before income taxes $ 128,395 9 L es s : Interest charges (A) 52.582 10 N et income bef ore incore ta xe s $ 75.813 Adj ust ments to taxable inco ce : | ||
$30.477$ 21.773$ 8.704 (A) Comput ation of inte rest charges: | Add: | ||
Total measure of value | 11 AFUDC on nuclear f uel $ - | ||
$1,045,475 Interest c om ponen t of rate of return 4 32: Interest ex pen se | 12 Average net salvage 1.238 13 Amortization of deferred energy costs 5,599 Ded uc t : | ||
$45.165 (3) Adj . of booked depreciation to tax basis : | 14 Adj us t ment of booked depreciation to tax basis (B) 38.548 15 Payroll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Pref erred dividead deduction 784 18 Other 250 19 Net adj ust ment $ (34.6'l) 20 Income subject to state income tax $ 41,162 21 State income ta x @ 6.9767 % 2.872 $ 2.746 $ 126 22 Income subject to federal income tax $ 38.290 23 Federal income tax (46% less $19) $ 17,595 28 Less JDTC (6.312) 25 Total federal tax before consolidated savings $ 23.907 26 Consolidated savings (C) 2.134* | ||
Tax depreciation | 27 Total federal tax $ 21.773 $ 15.359 $ 6.414 (A) Comput ation of interest charges: | ||
$70,406 Book depreciation 39.941 Depreciat ion adj ust uwnt | Total measure of value $1,217,167 Interest c om ponen t of rate of retue* 4.32% | ||
}30.465 (C) Computation of consolidated savings : | Interest ex pe n se $ 52.582 (B) Adj . of booked depreciation to tax basis : | ||
GPU interest allocated tn Penelec | Tax depreciation S 84,153 Book depreciation 45.605 Depreciation adj ustm at $ 38.548 (C) Comput ation of consolidated savings : | ||
$4,267 Federal ta x rate 46%Consolidated savings | GPU interest allocated to Penelec $ 4,267 Federal tax rate 46% | ||
$1.963}~*1ncludes amortization of FIT refunds. | Consolidated savings $ 1.963 | ||
* Includes amortization of FIT ref unds. | |||
e Page la of 15 PENNSYLVANIA ELECTRIC COP PANY Normalization Adjustment No. 13 ( $000 )Computation of Federal & State Income Taxes-THI-l & 2 Eliminated (Col. 6 of Income Statement) | |||
Taxes Line Before No.Calculated Taxes | a , | ||
__Adj.Adjustment (1)(2)( 3)(4)1 Total operating revenue | Page 13 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 12 | ||
$ 443,964 2 Less: Total O&M expense | ( $000 ) | ||
$ 250,942 3 Depreciation ex pense 36,767 4 Average net nalvage 1,238 5 Dec o mm iss io ning | Computation of Federal & State income Taxes - TMI-2 Eliminated (Col. 4 of Income Statement) | ||
Taxes Line Before No. Calculated Taxes Adi. Adiustment (1) (2) ( 3) (4) 1 Total operating revenue $ 443,964 2 Less: Total 0&M expense $ 251,591 3 Depreciation ex pense 39,941 4 Average net salvage 1,238 5 Dec o mmiss io ning 46 6 Taxes other than income taxes 17.910 7 Total deductions 310.726 8 Net operating income before income taxes $ 133,238 9 Less: Interest charges (A) 45.165 10 Net income bef ore income taxes $ 88.073 Adj ust ment s to taxable incone: | |||
$ 137,107 9 Less: Interest c ha r ge s (A) 41.311 10 Net inc o me before incone ta xe s S 95,796 Adj ust ment s to taxable inc o ne : | Add: | ||
Add: 11 AFUDC on nuclear f uel | 11 AFUDC on nuclear f uel $ - | ||
$-12 Average net salvage 1,238 13 Amortization of deferred energy costs 5,599 Ded uc t : | 12 Average net salvage 1,238 13 Amortization of deferred energy costs 5,599 Ded uc t : | ||
14 Adj us t ment of booked depreciation to tax basis (B) 26,836 15 Payroll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Preferred dividend deduction 784 18 Other 250 19 Net ad j us t ment | 14 Adj ust ment of booked depreciation to tax basis (B) 30,465 15 Pa; roll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Pref erred dividend deduction 784 18 other 250 19 Net adj ust ment $ (26.568) 20 1- ome subj ect to state income tax $ 61.505 4.291 $ 2.872 $1,419 | ||
$ (22.939) 20 Income subject to state income ta x | : 2. State inc o me tax @ 6.9767% | ||
$72,857 21 State inc o me ta x @ 6.9767% | 22 Income subject to federal income tax $ 57.214 23 Federal income tax (46% less $19 ) $ 26,297 24 Less JDTC (6.312) 25 Total f ederal tax bef ore consolidated savings $ 32,611 26 Consolidated savings (C) 2.134* | ||
5.083 1__4.291$ 792 22 Income subject to federal income tax | 27 Total federal tax $ 30.477 $ 21.773 $ 8.704 (A) Comput ation of inte rest charges: | ||
$67.774 23 F ede ral income tax (46% less $19) | Total measure of value $1,045,475 Interest c om ponen t of rate of return 4 32: | ||
$31,157 24 Less JDTC (6.312)25 Total f ederal tax bef ore consolidated savings | Interest ex pen se $ 45.165 (3) Adj . of booked depreciation to tax basis : | ||
$37,469 26 Consolidated savings (C) 2.134*27 Total federal tax | Tax depreciation $ 70,406 Book depreciation 39.941 Depreciat ion adj ust uwnt } 30.465 (C) Computation of consolidated savings : | ||
} _ 352 35 L_30._4 7 7 L 4. | GPU interest allocated tn Penelec $ 4,267 Federal ta x rate 46% | ||
Total measure of value | Consolidated savings $ 1.963 | ||
$ 956,283 Interest com po nen t of rate of return 4.32%Interest expense | } ~ | ||
$41.318 (B) Adj ustment of booked depreciation to tax basis : | *1ncludes amortization of FIT refunds. g | ||
Tax depreciation | . | ||
$63,603 Book depreciation 36 | |||
$26.836 | e Page la of 15 PENNSYLVANIA ELECTRIC COP PANY Normalization Adjustment No. 13 | ||
( $000 ) | |||
$4,267[/ | Computation of Federal & State Income Taxes-THI-l & 2 Eliminated (Col. 6 of Income Statement) | ||
$1.963* Includes amortization of FIT ref inds. | Taxes Line Before No. Calculated Taxes __Adj. Adjustment (1) (2) ( 3) (4) 1 Total operating revenue $ 443,964 2 Less: Total O&M expense $ 250,942 3 Depreciation ex pense 36,767 4 Average net nalvage 1,238 5 Dec o mm iss io ning - | ||
..Page 15 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 14 | 6 Taxes other than income t a xes 17,910 7 Total deductions 306.857 M Net o pe rat ing income before income taxes $ 137,107 9 Less: Interest c ha r ge s (A) 41.311 10 Net inc o me before incone ta xe s S 95,796 Adj ust ment s to taxable inc o ne : | ||
($000)Adjustment to Provision for Deferred Income Taxes The provision for deferred income taxes was adj usted to remove taxes associated with PURTA adj ustments , and to reflect taxes associated with the revision of def erred energy costs . ' | Add: | ||
Provision for Deferred Li.te Income Taxes No.Federal State 1 Provision for Deferred Income Taxes per budget for the 12 months ended 12/31/80 | 11 AFUDC on nuclear f uel $ - | ||
$18 196$1 196 2 Adj us t ment to remove the deferred taxes associated with PURTA adj ustments 1 079 275 3 Adj ustment to reflect taxes associated with revised deferred energy (8 167)(7 083)4 Normalization Adj ustment (7 088)(1 808)5 Provision for Deferred Income Taxes per budget for the 12 months ended 12/31/80 as adj usted | 12 Average net salvage 1,238 13 Amortization of deferred energy costs 5,599 Ded uc t : | ||
$11 108$(612) | 14 Adj us t ment of booked depreciation to tax basis (B) 26,836 15 Payroll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Preferred dividend deduction 784 18 Other 250 19 Net ad j us t ment $ (22.939) 20 Income subject to state income ta x $ 72,857 21 State inc o me ta x @ 6.9767% 5.083 1__4.291 $ 792 22 Income subject to federal income tax $ 67.774 23 F ede ral income tax (46% less $19) $ 31,157 24 Less JDTC (6.312) 25 Total f ederal tax bef ore consolidated savings $ 37,469 26 Consolidated savings (C) 2.134* | ||
..PENNSYLVANIA ELFCTRIC COMPANY Average Measure of Value. Year 1980, a t Original Cost Marma11 red and Adiusted to Reflect Possible Exclusion of TM1 Units 1 & 2 (5000 )13 Month Measure of Measure of Average Normalized Less: Value Less: Value Measure Measure of TM1-2 Excluding TM1-1 Excluding Line of Value Normalizing Adj.Value Measure of TMI-2 Measure of TM1-1 & TM1-2 | 27 Total federal tax } _ 352 35 L_30._4 7 7 | ||
_N o2 Description Per Budget A_dlustments No.(Col 1 + Col 2) | _ __ ___ | ||
Value (Col 3-Col 4) value (Col 5-Col 6) | L 4.R58 (A) Comput ation of interest charges: | ||
(1)(2)(3)(4)(5)(6)(7)Electric Plant 1 Plant in se rv ic e | Total measure of value $ 956,283 Interest com po nen t of rate of return 4.32% | ||
$1 581 761 | Interest expense $ 41.318 (B) Adj ustment of booked depreciation to tax basis : | ||
$ (6107)(1)$1 575 654 | Tax depreciation $ 63,603 Book depreciation 36 t767 Depreciat ion adj ust ment $ 26.836 (C) Computation of consolidated savings: )( | ||
$180 390$1 395 264 | CPU inte rest allocated to Penelec Feieral tax rate | ||
$102 327$1 292 937 2 Plant held for future use 8 904 (2 203)(2)6 701-6 701 6 701 3 Nuclear fuel in reactor 11 179-11 179-11 179 11 179-4 Nuclear f uel-spare assemblies 6 291-6 291-6 291 6 291-5 Total electric plant 1 608 135 (8 310)1 599 825 180 390 1 419 435 119 797 1 299 638 Depreciation & Amortization Reserve: 6 Plant in se rvic e 378 893 (4 001)(3)374 892 1 420 373 472 17 602 355 870 7 Nuclear fuel in reactor 3 687-3 687-3 687 3 687-8 Total depreciation & | $ 4,267 46% | ||
amort ization reserve 382 580 (4 001)378 579 1 420 377 159 21 289 355 870 9 Net Electric Plant 1 225 555 (4 309)1 221 246 178 970 1 042 276 98 508 943 768 Add itions : | [ '_) | ||
10 Coal inventories 30 998 (7 848)(4)23 150-23 150-23 150 11 011 inventories 1 557 (67)(5)1 490-1 490-1 490 12 Other M & S inventories 14 546-14 546-14 546 4 644 9 902 13 Unauer ti zed coal mine development costs 7 662-7 66?-7 662-7 662 14 Def erred energy costs 25 861 3 663 (6)29 Si>-29 524-29 524 15 Cash working capital | / | ||
-5 448 (7)54.8 327 5 121 (809)5 930 16 Unamortized rate case and f lood expenses | Consolidated savings $ 1.963 | ||
___ 1 600 (1 600_j_(8)-----17 Total additions 82 224 (404)81 820 327 81 493 3 835 77 658 Ded uc t ion s : | * Includes amortization of FIT ref inds. | ||
18 Customer deposits 573-573-5 73-573 19 Customer advances for constr. | |||
1 473-1 473-1 473-1 473 20 Unamortized gain on reaquired debt i 190-1 190-1 190-1 190 21 Acc . def erred in ve s t - | . . | ||
ment tax credit (3%) | Page 15 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 14 | ||
16-16-16 16 98 C 2 | ($000) | ||
St 222 305 IJ5 138l S l_j i 7 167 1171 692 11 045 475 1 89 192.$956 283* | Adjustment to Provision for Deferred Income Taxes The provision for deferred income taxes was adj usted to remove taxes associated with PURTA adj ustments , and to reflect taxes associated with the revision of def erred energy costs . ' | ||
.*Page 2 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Ad_iustme.it No. 1 | Provision for Deferred Li.te Income Taxes No. Federal State 1 Provision for Deferred Income Taxes per budget for the 12 months ended 12/31/80 $18 196 $1 196 2 Adj us t ment to remove the deferred taxes associated with PURTA adj ustments 1 079 275 3 Adj ustment to reflect taxes associated with revised deferred energy (8 167) (7 083) 4 Normalization Adj ustment (7 088) (1 808) 5 Provision for Deferred Income Taxes per budget for the 12 months ended 12/31/80 as adj usted $11 108 $ (612) | ||
($000 )Ad_iustments to Electric Plant In Service These several adj ustments (a) temove from Plant In Service the cost of the TMI-l ring girder repairs (to avoid an area of controversy), (b) allocate a portion of the cost of Front Street generating station to Steam Heating , and (c) allocate a portion of the cost of General Plant to other utility services . | 'hb O | ||
Line Electric Plant No.In Service 1 Average per budget for 1980 | \414 - | ||
$1 581 761 2 TMI-1 ring girder repair costs (1 575)3 Allocation of cost of Front Street generating station (4 250)4 General Plant allocated to other utility services ( 282)5 Normalization adj ustment (6 107)6 Electric Plant In Service as adj usted | |||
$1 575 654 1474 232 9 e.Page 3 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Ad_iustment No. 2 | . | ||
($000 )Adjustment to Plant Held for Future Use To adj us t Plant Held for Future Use to incit Je only items with projected in-service dates within 10 years, the Robindale land purchase , and eliminate the portion of jointly-owned projects to be owned by affiliated utilities (Met-Ed and Jersey Central). | . | ||
Line Electric Plant Held No.For Future Use 1 Average per budget for 1980 | PENNSYLVANIA ELFCTRIC COMPANY Average Measure of Value. Year 1980, a t Original Cost Marma11 red and Adiusted to Reflect Possible Exclusion of TM1 Units 1 & 2 (5000 ) | ||
$8 904 2 Adj ust ment to eliminate items with projected in-service dates beyond ten years (380)3 Elimination of portions of jointly-owned projects to be owned by affiliated utilities (3 823)4 Land acquisition, Robindale Site 2 000 5 Normalization Adj ustment (2 203)6 Electric Plant Held for Future Use as adj usted | 13 Month Measure of Measure of Average Normalized Less: Value Less: Value Measure Measure of TM1-2 Excluding TM1-1 Excluding Line of Value Normalizing Adj. Value Measure of TMI-2 Measure of TM1-1 & TM1-2 | ||
$6 701 1474 233 | _N o2 Description Per Budget A_dlustments No. (Col 1 + Col 2) Value (Col 3-Col 4) value (Col 5-Col 6) | ||
..Page 4 of 10 PENNSYLVANIA EIECTRIC COMPANY Normalization Adjustment No. 3 | (1) (2) (3) (4) (5) (6) (7) | ||
($000 )Adjustment to Depreciation Reserve To adj ust the average book depreciation reserve to the average reserve calculated for rate-making purposes, and to eliminate the average calculated reser ies associated with (a) the TM1-1 ring girder (to avoid an area of contro-versy), (b) a portion of Front Street Generating Station allocated to steam heating, and (c) a portion of General Plant allocated to other utility services. | Electric Plant 1 Plant in se rv ic e $1 581 761 $ (6107) (1) $1 575 654 $180 390 $1 395 264 $102 327 $1 292 937 2 Plant held for future use 8 904 (2 203) (2) 6 701 - 6 701 6 701 3 Nuclear fuel in reactor 11 179 - 11 179 - | ||
Line Depreciation No.Reserve 1 Average per budget for 1980 | 11 179 11 179 - | ||
$378 893 Adj us tment to reflect calculated reserves : | 4 Nuclear f uel-spare assemblies 6 291 - | ||
2 Average calculated reserve $377 606 3 Average budgeted reserve 378 891 4 Normalization adj ustment | 6 291 - | ||
$(1 2115)Calculated reserve associated with: | 6 291 6 291 - | ||
5 TMI #1 ring girder (260)6 Front Street Generating Station allocated to Steam Heat (2 375)7 General Plant allocated to other utility services (81)8 Normalization adj ustment (4 001)9 Depreciation reserve as adj usted | 5 Total electric plant 1 608 135 (8 310) 1 599 825 180 390 1 419 435 119 797 1 299 638 Depreciation & Amortization Reserve: | ||
$374 892 1474 234 O 4 Page 5 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 4 | 6 Plant in se rvic e 378 893 (4 001) (3) 374 892 1 420 373 472 17 602 355 870 7 Nuclear fuel in reactor 3 687 - | ||
($000)Adjustment to Coal Inventories To adj ust coal inventories to desired levels. | 3 687 - | ||
Line Coal Inventories | 3 687 3 687 - | ||
$30 998 2 Normalization adj ustment (7 848)3 Coal inventories as adj usted | 8 Total depreciation & | ||
$_23 150 Computation of Cost of Normalized Coal Inventory: | amort ization reserve 382 580 (4 001) 378 579 1 420 377 159 21 289 355 870 9 Net Electric Plant 1 225 555 (4 309) 1 221 246 178 970 1 042 276 98 508 943 768 Add itions : | ||
Desired Average 1980 Normalized Level Price Cost of (Tons)Per Ton Inventory Homer City Units #1 and #2 (50% share) 189 897$33.608$ 6 382 Homer City Unit #3 (50% share) 149 208 39.530 5 898 Seward 93 773 31.903 2 992 Warren 39 294 26.166 1 026 Front Street 51 883 30.214 1 568 Williamsburg 14 785 23.333 345 S nawville 195 928 25.198 4 937 Totals 734 768$23 150)h 4 | 10 Coal inventories 30 998 (7 848) (4) 23 150 - | ||
&Page 6 of 10 PENNSYLVANIA EIECTRIC COMPANY Normalization Adjustment No. 5 (S000 )Adjustment to Oil Inventories To adj ust oil inventories to desired levels. | 23 150 - | ||
Line No.Oil Inventories 1 Average per budget for 1980 | 23 150 11 011 inventories 1 557 (67) (5) 1 490 - 1 490 - | ||
$1 557 2 Normalization adj ustment (67)3 011 inventories as adj usted | 1 490 12 Other M & S inventories 14 546 - | ||
$1 490 0 1474 236 O e.Page 7 of 10 PENNSYLVANIA ELECTRIC ( OMPANY Normalization Adjustment No. 6 | 14 546 - | ||
($000)Adjustment to Deferred Energy To adj ust the average balance of deferred energy costs to reflect the currently projected level of sales and to reflect the Levelized Energy Adj ust-ment Clause rate of 6.5 mills /Kwh (as allowed at I-79040308) instead of 7.6..mills /Kwh , as budgeted . | 14 546 4 644 9 902 13 Unauer ti zed coal mine development costs 7 662 - 7 66? - | ||
Line No.Deferred Energy 1 Average per budget for 1980 | 7 662 - | ||
$25 861 2 Normalization adj ustment 3 663 3 Deferred Energy as adj usted | 7 662 14 Def erred energy costs 25 861 3 663 (6) 29 Si> - 29 524 - | ||
$29 524 1474 237 | 29 524 15 Cash working capital - 5 448 (7) 54.8 327 5 121 (809) 5 930 16 Unamortized rate case and f lood expenses ___ 1 600 (1 600_j_ (8) - - - - - | ||
.*Page 8 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 7 | 17 Total additions 82 224 (404) 81 820 327 81 493 3 835 77 658 Ded uc t ion s : | ||
($000)Adiustment to Cash Working Capital To avoid an area of controversy, this adj ustment reflects only the level of cash working capital allowed in RID 599: | 18 Customer deposits 573 - | ||
Cash Working capital requirement | 573 - | ||
$5 448 O 1474 238.9 a.Page 9 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 8 | 5 73 - | ||
($000)Adiustment to Eliminate Unamc rtized Rate Case and Flood Expenses To avoid areas of controversy, this adj ustment eliminates the average balance of unamortized rate case and flood expenses, in accord-ance with the Commission's Order in RID 599. | 573 19 Customer advances for constr. 1 473 - 1 473 - | ||
Unamortized Rate Line Case and Flood No.Expenses 1 Average per budg:.. for 1980 | 1 473 - 1 473 20 Unamortized gain on reaquired debt i 190 - | ||
$ 1 600 2 Normalization adj ustment (1 600)3 Unamortized rate case and flood expenses as adj usted S-1474 239 | 1 190 - | ||
.*Page 10 of 10 PENNSYLVANIA ELECTRIC COMPANY k Normalization Adjustment No. 9 | 1 190 - | ||
($000 )Adjustment to Accumulated Deferred Income Taxey This adj ustment (a) eliminates accumulated deferred income taxes asso-ciated with Johnstown flood expenses , (b) eliminates the deferred income taxes associated with the PURTA adj ustments; (c) reflects the deferred income taxes associated with the revised deferred energy balance; and (d) reflects the maxi-mum rate base reduction allowable with respect to deferred income taxes associ-ated with liberalized depreciation, under Section 1.167 (1 )-1 (h) (6 ) of the Inter-nal Revenue Code. | 1 190 21 Acc . def erred in ve s t - | ||
Line Accumulated Deferred No.Income Taxes 1 Average per budget for 1980 | ment tax credit (3%) 16 - 16 - | ||
$78 770 2 Adj us tment to eliminate accumulated deferred income taxes associated with Johnstown flood expenses | 16 16 98 C 2 22 Acc. deferred income t a xe s 78 770 425 (9) 79 195 7 605 71 590 58 439 ({y 23 Inc ome tax ref unds 1 821 - | ||
$ (519)3 Adj ustment to eliminate accumulated deferred income taxes associated with PURTA ref unds (374 )4 Adj us tment to reflect the deferred income taxes associated with the revised deferred energy balance 1 843 5 Adj us t ment to reflect the maximum rate base reduction allowable with respect to deferred income taxes associated with liberalized depreciation (525)6 Normalization Adj ustment 425 7 Accumulated deferred income taxes as adj usted | 1 821 - | ||
$79 195)h k L ME/PN Exhibit F-1 Witness: H. M. Dieckamp | 1 821 1 821 *m 24 Operating reserves 1 631 - | ||
<METROPOLITAN EDISON COMPANY AND PENNSYLVANIA ELECTRIC COMPANY REVIEW BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION SEPTEMBER 2L 1979 Mat-Eti ACDH]&ff. | I 631 - | ||
1474 20I IABLE OF CONTcNTS PACc UdSCRI PT 1014 KtFERENCE tsACKGROUND lhF0knATIUra:- GPU SYSTEM flap 1- MET-ED/PENELEC STATISTICS 2 CUSTOMER ELECTRICITY COSTS: | 1 631 - | ||
A.THREE f10NTHS ENDif4G JUNE 30, 1979 AVERAGE RATE COMPARISONS - | 1 631 ~ED A 25 .St al d ed uc t ion s 85 474 425 85 899 7 605 78 294 13 151 65 143 E '' f N E? *-- | ||
pef 4NSYLVAi41 A UT ILITIES:- RESIDENTIAL CLASS 3- CortMERCI AL CLASS 4- INDUSTRI AL CLASS 5- COMPOSITE RESIDENTlaL, COMMERCIAL AND INDUSTRIAL CLASSES O D.hEPTEMBER 1, 1979 IYPICAL OILL cot 1 PARIS 0NS - | 26 Measu re of Value (Rate Base ) St 222 305 IJ5 138l S l_j i 7 167 1171 692 11 045 475 1 89 192 .$ 956 283 3 | ||
* | |||
$ | |||
N : ;; | |||
LN 5; | |||
- | |||
o7~ | |||
. | |||
* Page 2 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Ad_iustme.it No. 1 | |||
($000 ) | |||
Ad_iustments to Electric Plant In Service These several adj ustments (a) temove from Plant In Service the cost of the TMI-l ring girder repairs (to avoid an area of controversy), | |||
(b) allocate a portion of the cost of Front Street generating station to Steam Heating , and (c) allocate a portion of the cost of General Plant to other utility services . | |||
Line Electric Plant No. In Service 1 Average per budget for 1980 $1 581 761 2 TMI-1 ring girder repair costs (1 575) 3 Allocation of cost of Front Street generating station (4 250) 4 General Plant allocated to other utility services ( 282) 5 Normalization adj ustment (6 107) 6 Electric Plant In Service as adj usted $1 575 654 1474 232 9 | |||
e . | |||
Page 3 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Ad_iustment No. 2 | |||
($000 ) | |||
Adjustment to Plant Held for Future Use To adj us t Plant Held for Future Use to incit Je only items with projected in-service dates within 10 years, the Robindale land purchase , | |||
and eliminate the portion of jointly-owned projects to be owned by affiliated utilities (Met-Ed and Jersey Central). | |||
Line Electric Plant Held No. For Future Use 1 Average per budget for 1980 $8 904 2 Adj ust ment to eliminate items with projected in-service dates beyond ten years (380) 3 Elimination of portions of jointly-owned projects to be owned by affiliated utilities (3 823) 4 Land acquisition, Robindale Site 2 000 5 Normalization Adj ustment (2 203) 6 Electric Plant Held for Future Use as adj usted $6 701 1474 233 | |||
. . | |||
Page 4 of 10 PENNSYLVANIA EIECTRIC COMPANY Normalization Adjustment No. 3 | |||
($000 ) | |||
Adjustment to Depreciation Reserve To adj ust the average book depreciation reserve to the average reserve calculated for rate-making purposes, and to eliminate the average calculated reser ies associated with (a) the TM1-1 ring girder (to avoid an area of contro-versy), (b) a portion of Front Street Generating Station allocated to steam heating, and (c) a portion of General Plant allocated to other utility services. | |||
Line Depreciation No. Reserve 1 Average per budget for 1980 $378 893 Adj us tment to reflect calculated reserves : | |||
2 Average calculated reserve $377 606 3 Average budgeted reserve 378 891 4 Normalization adj ustment $(1 2115) | |||
Calculated reserve associated with: | |||
5 TMI #1 ring girder (260) 6 Front Street Generating Station allocated to Steam Heat (2 375) 7 General Plant allocated to other utility services (81) 8 Normalization adj ustment (4 001) 9 Depreciation reserve as adj usted $374 892 1474 234 O | |||
4 Page 5 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 4 | |||
($000) | |||
Adjustment to Coal Inventories To adj ust coal inventories to desired levels. | |||
Line No. Coal Inventories 1 Average per budget for 1980 $30 998 2 Normalization adj ustment (7 848) 3 Coal inventories as adj usted $_23 150 Computation of Cost of Normalized Coal Inventory: | |||
Desired Average 1980 Normalized Level Price Cost of (Tons) Per Ton Inventory Homer City Units #1 and #2 (50% share) 189 897 $33.608 $ 6 382 Homer City Unit #3 (50% share) 149 208 39.530 5 898 Seward 93 773 31.903 2 992 Warren 39 294 26.166 1 026 Front Street 51 883 30.214 1 568 Williamsburg 14 785 23.333 345 S nawville 195 928 25.198 4 937 Totals 734 768 $23 150 L | |||
)h 4 | |||
& | |||
Page 6 of 10 PENNSYLVANIA EIECTRIC COMPANY Normalization Adjustment No. 5 (S000 ) | |||
Adjustment to Oil Inventories To adj ust oil inventories to desired levels. | |||
Line No. Oil Inventories 1 Average per budget for 1980 $1 557 2 Normalization adj ustment (67) 3 011 inventories as adj usted $1 490 0 | |||
1474 236 O | |||
e . | |||
Page 7 of 10 PENNSYLVANIA ELECTRIC ( OMPANY Normalization Adjustment No. 6 | |||
($000) | |||
Adjustment to Deferred Energy To adj ust the average balance of deferred energy costs to reflect the currently projected level of sales and to reflect the Levelized Energy Adj ust-ment Clause rate of 6.5 mills /Kwh (as allowed at I-79040308) instead of 7.6.. | |||
mills /Kwh , as budgeted . | |||
Line No. Deferred Energy 1 Average per budget for 1980 $25 861 2 Normalization adj ustment 3 663 3 Deferred Energy as adj usted $29 524 1474 237 | |||
. | |||
* Page 8 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 7 | |||
($000) | |||
Adiustment to Cash Working Capital To avoid an area of controversy, this adj ustment reflects only the level of cash working capital allowed in RID 599: | |||
Cash Working capital requirement $5 448 O | |||
1474 238 | |||
. | |||
9 | |||
a . | |||
Page 9 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 8 | |||
($000) | |||
Adiustment to Eliminate Unamc rtized Rate Case and Flood Expenses To avoid areas of controversy, this adj ustment eliminates the average balance of unamortized rate case and flood expenses, in accord-ance with the Commission's Order in RID 599. | |||
Unamortized Rate Line Case and Flood No. Expenses 1 Average per budg:.. for 1980 $ 1 600 2 Normalization adj ustment (1 600) 3 Unamortized rate case and flood expenses as adj usted S - | |||
1474 239 | |||
. | |||
* Page 10 of 10 PENNSYLVANIA ELECTRIC COMPANY k Normalization Adjustment No. 9 | |||
($000 ) | |||
Adjustment to Accumulated Deferred Income Taxey This adj ustment (a) eliminates accumulated deferred income taxes asso-ciated with Johnstown flood expenses , (b) eliminates the deferred income taxes associated with the PURTA adj ustments; (c) reflects the deferred income taxes associated with the revised deferred energy balance; and (d) reflects the maxi-mum rate base reduction allowable with respect to deferred income taxes associ-ated with liberalized depreciation, under Section 1.167 (1 )-1 (h) (6 ) of the Inter-nal Revenue Code. | |||
Line Accumulated Deferred No. Income Taxes 1 Average per budget for 1980 $78 770 2 Adj us tment to eliminate accumulated deferred income taxes associated with Johnstown flood expenses $ (519) 3 Adj ustment to eliminate accumulated deferred income taxes associated with PURTA ref unds (374 ) | |||
4 Adj us tment to reflect the deferred income taxes associated with the revised deferred energy balance 1 843 5 Adj us t ment to reflect the maximum rate base reduction allowable with respect to deferred income taxes associated with liberalized depreciation (525) 6 Normalization Adj ustment 425 7 Accumulated deferred income taxes as adj usted $79 195 | |||
)h k L | |||
ME/PN Exhibit F-1 Witness: H. M. Dieckamp | |||
< | |||
METROPOLITAN EDISON COMPANY AND PENNSYLVANIA ELECTRIC COMPANY REVIEW BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION SEPTEMBER 2L 1979 Mat-Eti ACDH ]&ff.l MEMBER COMPANIES OF THE GENERAL PUBLIC UTILITIES SYSTEM. | |||
1474 20I | |||
IABLE OF CONTcNTS PACc UdSCRI PT 1014 KtFERENCE tsACKGROUND lhF0knATIUra: | |||
- GPU SYSTEM flap 1 | |||
- MET-ED/PENELEC STATISTICS 2 CUSTOMER ELECTRICITY COSTS: | |||
A. THREE f10NTHS ENDif4G JUNE 30, 1979 AVERAGE RATE COMPARISONS - | |||
pef 4NSYLVAi41 A UT ILITIES: | |||
- RESIDENTIAL CLASS 3 | |||
- CortMERCI AL CLASS 4 | |||
- INDUSTRI AL CLASS 5 | |||
- COMPOSITE RESIDENTlaL, COMMERCIAL AND INDUSTRIAL CLASSES O D. hEPTEMBER 1, 1979 IYPICAL OILL cot 1 PARIS 0NS - | |||
PENf4SYLVANIA dTILITIES: | PENf4SYLVANIA dTILITIES: | ||
tiESIDEfill AL NO ELECTRIC DATER HEATif1G 500 KWH PER MONTH 7- RcdlDElliI AL WITH ELECTRIC WATER HEATluG 1000 KWH PER MONTH 8 | tiESIDEfill AL NO ELECTRIC DATER HEATif1G 500 KWH PER MONTH 7 | ||
pef 4!4SYLVANIA UTILITIES:- RESIDEf4T I AL Wu t'.LECTRIC DATER HEATit4G 500 KWH PER M0!lTH 12- HESluEf4TIAL WITH ELECTRIC HATER HEATING 1000 KWH PER MONTH 15- LOMMERCI AL 50 KW,12 500 KWH PER MONTH 14- COMMERCIAL 500 KW, 150,000 KhH PER ' O'lTH 15- IflDUSTRI AL 10,000 Kw, 5,000,000 KWH F ER MONTH 16 d.1907-1979 AVERAGE Afil10AL ELECTRIC blLL AS A PERCEf4T OF AflNUAL INC0f1E: | - RcdlDElliI AL WITH ELECTRIC WATER HEATluG 1000 KWH PER MONTH 8 500 KWH PER M0f4T.1 9 | ||
1 FEDERAL MlfilMUM WAGES AND PRODUCTION WORKERS WAGES- MET-LD RESIDtNT I AL NO ELtCTRIC WATER HEAT IfiG 17 RtSIDEf4TIAL WITH ELECTRIC WATER HEATING 18 RESIDENTIAL ALL ELECTRIC 19- Pt!,4ELEC RESIDENTIAL h0 ELECTRIC WATER HEATit1G 20 RESIDEf4TIAL WITH ELECTRIC WATER HEATING 21 RESIDENTIAL ALL ELECTRIC 22 1A7A 242 IABLE OF LONTENTS (CONT.) | -- C0f1MtRCIAL COMMERCIAL 50 lb 500 KW, KW, 12,0,000 KWH PER M0ilTH 10 | ||
FAGE DESCRIPTI0ft REFERENCE 2 MINIMUM AND MAXIMUM SOCIAL SECURITY BENEFITS- MET-bD RESIDENTIAL NO ELECTRIC WATER HEATING 23 RESIDENTIAL WITH ELECTRIC WATER HEATING 24 RESIDENTIAL ALL ELECTRIC 23- PENELEC RESIDENTIAL NO ELECTRIC WATER HEATING 26 RESIDENTIAL WITH ELECTRIC WATER HEATING 27 RESIDENTIAL ALL ELECTRIC 28 TM1-1 RESTART PRUCEEDINGS:- PLANT AND PROCEDURE MODIFICATIONS 29- IENTATIVE NkC HEARING SCHEDULE 30 ENEkGY CUSIS: | - INDUSTRIAL 10,000 KW, 5,000,000 KWH PER M0f4TH 11 C. 1979 - StPTEMBER 1, 1979 HISTORICAL IYPICAL blLL COMPARISONS - | ||
A.COST OF ENERGY 1978 - 1981- MET-ED COST OF ENERGY BY WEIGHTED COMPONENTS 31- PENELEC COST OF ENERGY BY WEIGHTED COMPONENTS 32 B.Fuet OIL PRICES- NO. 2 OIL 1972-1980 33- NO. 6 OIL 1972-1980 34 C.1980 FORECAST SYSTEM ENERGY COSTS RELATED TO TMl-1 DELAY, FUEL PRICE INCREASES AND SHORT IERM PURCHASES- MET-ED 3S- PENELEC 36 D. | pef 4!4SYLVANIA UTILITIES: | ||
- RESIDEf4T I AL Wu t'.LECTRIC DATER HEATit4G 500 KWH PER M0!lTH 12 | |||
- HESluEf4TIAL WITH ELECTRIC HATER HEATING 1000 KWH PER MONTH 15 | |||
- LOMMERCI AL 50 KW,12 500 KWH PER MONTH 14 | |||
- COMMERCIAL 500 KW, 150,000 KhH PER ' O'lTH 15 | |||
- IflDUSTRI AL 10,000 Kw, 5,000,000 KWH F ER MONTH 16 | |||
: d. 1907-1979 AVERAGE Afil10AL ELECTRIC blLL AS A PERCEf4T OF AflNUAL INC0f1E: | |||
1 FEDERAL MlfilMUM WAGES AND PRODUCTION WORKERS WAGES | |||
- MET-LD RESIDtNT I AL NO ELtCTRIC WATER HEAT IfiG 17 RtSIDEf4TIAL WITH ELECTRIC WATER HEATING 18 RESIDENTIAL ALL ELECTRIC 19 | |||
- Pt!,4ELEC RESIDENTIAL h0 ELECTRIC WATER HEATit1G 20 RESIDEf4TIAL WITH ELECTRIC WATER HEATING 21 RESIDENTIAL ALL ELECTRIC 22 1A7A 242 | |||
IABLE OF LONTENTS (CONT.) | |||
FAGE DESCRIPTI0ft REFERENCE 2 MINIMUM AND MAXIMUM SOCIAL SECURITY BENEFITS | |||
- MET-bD RESIDENTIAL NO ELECTRIC WATER HEATING 23 RESIDENTIAL WITH ELECTRIC WATER HEATING 24 RESIDENTIAL ALL ELECTRIC 23 | |||
- PENELEC RESIDENTIAL NO ELECTRIC WATER HEATING 26 RESIDENTIAL WITH ELECTRIC WATER HEATING 27 RESIDENTIAL ALL ELECTRIC 28 TM1-1 RESTART PRUCEEDINGS: | |||
- PLANT AND PROCEDURE MODIFICATIONS 29 | |||
- IENTATIVE NkC HEARING SCHEDULE 30 ENEkGY CUSIS: | |||
A. COST OF ENERGY 1978 - 1981 | |||
- MET-ED COST OF ENERGY BY WEIGHTED COMPONENTS 31 | |||
- PENELEC COST OF ENERGY BY WEIGHTED COMPONENTS 32 B. Fuet OIL PRICES | |||
- NO. 2 OIL 1972-1980 33 | |||
- NO. 6 OIL 1972-1980 34 C. 1980 FORECAST SYSTEM ENERGY COSTS RELATED TO TMl-1 DELAY, FUEL PRICE INCREASES AND SHORT IERM PURCHASES | |||
- MET-ED 3S | |||
- PENELEC 36 D. | |||
==SUMMARY== | ==SUMMARY== | ||
OF TMI ACCIDENT RELATED SHORT IERM POWER PURCHASES- JULY 1979 37- MAY THROUGH JULY 1979 38 E.PJM/IMI- PJM/TMI PROV!SIONS 39- CURRENT ESTIMATED IMPACT OF PJM/TMI 40- CURRENT ESTIMATED 1980 PURCHASE POWER SAVINGS 41 F.DEFERRED ENERGY COST BALANCES AND ENERGY COST BILLING RATES 1979 - 1981- PENELEC ENERGY COST [lLLING RATES (EXCLUDING IAXES) 42 DEFERRED ENERGY BALANCES 43- MET-ED ENERGY COST BILLING RATES (EXCLUDING IAXES) 44 DEFERRED ENERGY BALANCES 45 3A7A 243 IABLE OF CONTENTS (CONT.) | OF TMI ACCIDENT RELATED SHORT IERM POWER PURCHASES | ||
PAGE DESCRIPTION REFERENCE UPERATION & MAltlTENAllCE BUDGET REDUCTION:- PENELEC PAYROLL AND OTHER OSM EXPENSES 46 Af1ALYSIS OF PERSONNEL CHANGES 47 CONSTRUCTION BUDGET BEFORE TMI ACCIDENT 48 CURRENT CONSTRUCTION FORECAST 49- MET-ED PAYROLL AND OTHER 0&M EXPENSES 50 AtlALYSIS OF PERSONNEL CHANGES 51 CONSTRUCT!0f4 BUDGET BEFORE TMI ACCIDENT 52 CURRENT CONSTRUCTION FORECAST 53- EFFECTS OF kEDUCED 1979 CONSTRUCTION EXPENDITURES 54 CASH !!EEDS AND SOURCES OF FUNDS: | - JULY 1979 37 | ||
A.CASH NEEDS, INTERNAL AND EXTERNAL SOURCES 1979 - 1981 55 B.EXTERNAL FINANCING REQUIREMENTS - SHORT IERM DEBT- MET-ED 56- PENELEC 57 INCUME STATEMEllTS AND TMI-2 REVENUE REQUIREMErlTS:- MET-ED CONDErlSED INCOME STATEMENTS - 12 MONTHS ENDED 12/31/80 58 kEVENUES ASSOCIATED WITH COMPONENTS OF TMI-1 & 2 59 IMPACT OF RATE INCREASES FOR COMPONENTS OF TMI-2 COSTS 60- PENELEC CONDENSED INCOME STATEMENTS - 12 MONTHS ENDED 12/31/80 61 REVENUES ASSOCIATED WITH COMPONENTS OF TMI-1 & 2 62 IMPACT OF HATE INCREASES FOR COMPONENTS OF TMI-2 COSTS 63 STUCKHOLDER IMPACT:- GPU BOOK / MARKET EQUITY VALUES - BEFORE AND AFTER IMI ACCIDENT 64- ELECTRIC UTILITY INDUSTRY 800K YIELDS JULY 31, 1979 65 PkUPOSED LOAD & CAPACITY 1979-1999:- MET-ED 66- PENELEC 67 CUllCLUSIONS 68 TA74 244 | - MAY THROUGH JULY 1979 38 E. PJM/IMI | ||
- PJM/TMI PROV!SIONS 39 | |||
/l; | - CURRENT ESTIMATED IMPACT OF PJM/TMI 40 | ||
Met-Ed Penelec Service Territory (sq. miles) 3,300 17,600//Customers (at 8/31/79): | - CURRENT ESTIMATED 1980 PURCHASE POWER SAVINGS 41 F. DEFERRED ENERGY COST BALANCES AND ENERGY COST BILLING RATES 1979 - 1981 | ||
Residential 314,400 88 447,100 88 Commercial 35,900 10 53,700 11 Industrial 2,200 1 4,700 1 Other 2,600 1 700-Total 355,100 100 506,200 100 Sales (MWH): | - PENELEC ENERGY COST [lLLING RATES (EXCLUDING IAXES) 42 DEFERRED ENERGY BALANCES 43 | ||
Residential 2,535,000 31 3,197,000 29 Commercial 1,532,000 19 2,334,000 21 Industrial 3,340,000 41 4,859,000 43 Other 717,000 9 812,000 7 Total 8,124,000 100 11,202,000 100 Net System Requirements (MWH)8,783,000 12,172,000 Installed Capacity (Summer Rating): Nuclear 828 41 414 16 Coal 915 45 1,983 74 Other 287 14 264 10 Total (Summer Rating) 2,030MW 100 2,661MW 100 Total (Winter Rating) 2,144MW 2,743MW Annual peak to Date (2-12-79)1,571 MW 2,124MW Annual Load Factor 63.8 %65.4%1474 246 3 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Residential 7 6.0.c 6 5 6-g 5.48 5.30 4.81 f5--4.54 | - MET-ED ENERGY COST BILLING RATES (EXCLUDING IAXES) 44 DEFERRED ENERGY BALANCES 45 3A7A 243 | ||
$3.0 23-$2.51 2.5--3 2.0--[c fh e 1.5 B- | IABLE OF CONTENTS (CONT.) | ||
8 Typical Bill Comparisons Pennsylvania Utilities Rates in Effect September 1,1979 Residential With Water Heating 1000 KWH/ Month 54.15 54 33 | PAGE DESCRIPTION REFERENCE UPERATION & MAltlTENAllCE BUDGET REDUCTION: | ||
-51.37 | - PENELEC PAYROLL AND OTHER OSM EXPENSES 46 Af1ALYSIS OF PERSONNEL CHANGES 47 CONSTRUCTION BUDGET BEFORE TMI ACCIDENT 48 CURRENT CONSTRUCTION FORECAST 49 | ||
* * * ''''1000- 870~820 800-69_1 | - MET-ED PAYROLL AND OTHER 0&M EXPENSES 50 AtlALYSIS OF PERSONNEL CHANGES 51 CONSTRUCT!0f4 BUDGET BEFORE TMI ACCIDENT 52 CURRENT CONSTRUCTION FORECAST 53 | ||
.11 Typical Bill Comparisons Pennsylvania Utilities Rates in Effect September 1,1979 Industrial 10000 KW 5000 MWH 240,000- | - EFFECTS OF kEDUCED 1979 CONSTRUCTION EXPENDITURES 54 CASH !!EEDS AND SOURCES OF FUNDS: | ||
--,!115, | A. CASH NEEDS, INTERNAL AND EXTERNAL SOURCES 1979 - 1981 55 B. EXTERNAL FINANCING REQUIREMENTS - SHORT IERM DEBT | ||
- MET-ED 56 | |||
- PENELEC 57 INCUME STATEMEllTS AND TMI-2 REVENUE REQUIREMErlTS: | |||
- MET-ED CONDErlSED INCOME STATEMENTS - 12 MONTHS ENDED 12/31/80 58 kEVENUES ASSOCIATED WITH COMPONENTS OF TMI-1 & 2 59 IMPACT OF RATE INCREASES FOR COMPONENTS OF TMI-2 COSTS 60 | |||
- PENELEC CONDENSED INCOME STATEMENTS - 12 MONTHS ENDED 12/31/80 61 REVENUES ASSOCIATED WITH COMPONENTS OF TMI-1 & 2 62 IMPACT OF HATE INCREASES FOR COMPONENTS OF TMI-2 COSTS 63 STUCKHOLDER IMPACT: | |||
- GPU BOOK / MARKET EQUITY VALUES - BEFORE AND AFTER IMI ACCIDENT 64 | |||
'',/'', | - ELECTRIC UTILITY INDUSTRY 800K YIELDS JULY 31, 1979 65 PkUPOSED LOAD & CAPACITY 1979-1999: | ||
.Revised 10/24/79 147A 257 14 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Commercial 50 KW 12500 KWH 900 i i i i i i i | - MET-ED 66 | ||
- PENELEC 67 CUllCLUSIONS 68 TA74 244 | |||
. | |||
,. - | |||
\,/ j | , | ||
i | |||
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y y | |||
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: | |||
. | |||
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..............,............ | /l c | ||
..)...?.... | J 1 | ||
; | |||
3 47 A 2bT 18'Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income' Residential with Electric Water Heating 9 i i i i i i i i i i i Avg Annual KWh Usage | i | ||
'* | , | ||
-Workers | . | ||
474 262 19 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income' Residential All-Electric 20......,.i i | - I' | ||
1474 263 20 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income' Residential No Electric Water Heating 5 i i i i i i i i..r ..'' i | ,a . | ||
M.z. | |||
. | |||
.' , , v, ~ | |||
* " : | |||
g 3 2 E 2 Avg Annual KWh Usage | ; | ||
l - " | |||
Production 5 W """'Workers | - | ||
-0'''''''' | '- | ||
1474 264 21 Pennsylvania Electric Company Average Annual Electric Bill as a Percent c: Annual Income' Residential with Electric Water Heating 9 i i i i i i i i i i i g,,,,''...*,..-...^~'- | % | ||
r | |||
., | |||
, / | |||
y~ | |||
............ 3. | .w. | ||
~ | |||
2 | .hg | ||
1 A7 A N 22 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income' Residential All-Electric I!I I | , i r , | ||
,,F. M. | |||
n ' | |||
10-- | - | ||
. | |||
2--'''''''''0 1968 1970 1972 1974 1976 1978 Year' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels. | *' | ||
p4 2s6 23 Metropolitan Edison Company Average Annual Electric Bill as a Percent af Annual Income,,2 Residential No Electric Water Heating 12 i i i i i i i i i i i Avg Annual KWh Usage | . | ||
'en | 'ge = | ||
'-E O 4-Avg Annual KWh Usage | , | ||
-Maximum 2 i.-social | 4 | ||
- l 7 | |||
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- | |||
Q s | |||
d | |||
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y | |||
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~' | |||
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' | |||
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C | |||
~A r J>J rE- | |||
2 Metropolitan Edison Company Pennsylvania Electric Company Key Statistics (12 Months Ended 8/31/79) | |||
Met-Ed Penelec Service Territory (sq. miles) 3,300 17,600 | |||
/ / | |||
Customers (at 8/31/79): | |||
Residential 314,400 88 447,100 88 Commercial 35,900 10 53,700 11 Industrial 2,200 1 4,700 1 Other 2,600 1 700 - | |||
Total 355,100 100 506,200 100 Sales (MWH): | |||
Residential 2,535,000 31 3,197,000 29 Commercial 1,532,000 19 2,334,000 21 Industrial 3,340,000 41 4,859,000 43 Other 717,000 9 812,000 7 Total 8,124,000 100 11,202,000 100 Net System Requirements (MWH) 8,783,000 12,172,000 Installed Capacity (Summer Rating): | |||
Nuclear 828 41 414 16 Coal 915 45 1,983 74 Other 287 14 264 10 Total (Summer Rating) 2,030MW 100 2,661MW 100 Total (Winter Rating) 2,144MW 2,743MW Annual peak to Date (2-12-79) 1,571 MW 2,124MW Annual Load Factor 63.8 % 65.4% | |||
1474 246 | |||
3 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Residential 7 | |||
6.0 | |||
.c 6 5 6 - | |||
g 5.48 5.30 4.81 f5 | |||
- - | |||
4.54 4.03 | |||
$4 _ | |||
9 3 - | |||
4 g2 - | |||
j - | |||
- - | |||
1 O A | |||
%, ho 8/o 6/eg '^&q Al '*! p 1474 247 | |||
4 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Commercial 8 | |||
h ~6.:7 | |||
- | |||
y6 - - | |||
2e 5 5.04 | |||
- | |||
4._8,4 4.66 - | |||
0 4.41 4.27 | |||
$4 | |||
- | |||
3.55 | |||
~ | |||
h 3 - - | |||
@2 - | |||
$ - | |||
> 3 4 1 | |||
- G _ | |||
O . | |||
s, "o | |||
% .%g, | |||
*%y | |||
,% e,,, % %,,%,,% | |||
,%e , | |||
4 1474 248 | |||
5 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Industrial 4.0 | |||
# | |||
5 3.5 - | |||
3.39 3.37 - | |||
3.14 3.08 3.04 | |||
$3.0 23 | |||
- | |||
$ 2.51 2.5 - - | |||
3 2.0 - - | |||
[c fh e 1.5 - | |||
B | |||
- | |||
E 5 1.0 - | |||
$g 9 | |||
0.5 - - | |||
' | |||
h | |||
" | |||
% %,,,%l% %l***l;s, a, | |||
6 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Combined Residential, Commercial & Industrial 5.0 | |||
_ 4.41 4.?9 4.26 | |||
~~ | |||
4.00 3.54 3.86 h 4.0 - | |||
- | |||
Em - | |||
E, E & 3.11 g 3.0 - | |||
g - | |||
- | |||
% - | |||
S. g C 2.0 - | |||
j! | |||
$ f3 - | |||
g - | |||
f1.0 - | |||
g | |||
- | |||
. | |||
g - | |||
O.O E | |||
''ese 9% ''%,**o, t *^er %p, 1474 250 | |||
7 Typical Bill Comparisons Pennsylvania Otilities Rates in Effect September 1,1979 Residential No Water Heating 500 KWH/ Month 35 33.47 | |||
' | |||
3 0 .- 27.73 | |||
, | |||
' | |||
- | |||
27 42 g 25 - | |||
p 23.16 22.77 - | |||
3O 20 - | |||
f | |||
& | |||
- | |||
H 15 - | |||
92 - | |||
10 - | |||
5 - | |||
9 - | |||
O en C/o A o */oo '&q d %g 1474 251 | |||
, | |||
. | |||
8 Typical Bill Comparisons Pennsylvania Utilities Rates in Effect September 1,1979 Residential With Water Heating 1000 KWH/ Month 54.15 54 33 | |||
- | |||
51.37 50.27 50 46.24 | |||
* 40 | |||
? 40.22 | |||
- | |||
, | |||
37.76 | |||
. . | |||
30 - | |||
, _ | |||
- e 20 y - | |||
a 10 h | |||
_ | |||
0 | |||
^* ^ | |||
* *^ | |||
^%,,% %,,%,% % *%, | |||
1474 252 | |||
9 Typical Bill Comparisons Pennsylvania Otilities Rates in Effect September 1,1979 | |||
* * * ' ' ' ' | |||
1000 | |||
- 870 ~ | |||
820 800 - | |||
, | |||
- | |||
69_1 659 - | |||
606 599 E | |||
aa 600 - | |||
7 | |||
_ | |||
g ,;j 480 - | |||
1 400 - | |||
l'j - | |||
- - | |||
200 - | |||
{h | |||
$ | |||
- | |||
0 k*h | |||
#4 %, % OA < ''&q *!g 1474 253 | |||
10 Typical Bill Comparisons Pennsylvania Utilities Rates in Effect September 1,1979 Commercial 500 KW 150000 KWH 10,000 9808 _ | |||
* 8,000 - | |||
7600 25 66q; ' 60598 6223 3 6,000 - | |||
' | |||
5603 | |||
; 4614 4,000 - | |||
, | |||
i 2,000 - | |||
l - | |||
! | |||
' | |||
0 | |||
/ | |||
&o %, */oo A ''&q d *! A 9 | |||
1,474 254 | |||
. | |||
11 Typical Bill Comparisons Pennsylvania Utilities Rates in Effect September 1,1979 Industrial 10000 KW 5000 MWH 240,000 | |||
. | |||
- | |||
200,000 - | |||
184,829 184,132 | |||
- | |||
168,256 | |||
~ | |||
160,000 - | |||
, | |||
148,517 146,734 | |||
- | |||
' | |||
--120,000 - | |||
! 115,435 _ | |||
E - | |||
- | |||
_ | |||
g 80,000 - | |||
_ | |||
40,000 - | |||
- - | |||
0 . | |||
8/e %, *4g OA g '&q l *4 p 3A7A 255 | |||
12 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Residential No Water Heating 500 KWH/ Month i i i i | |||
Duquesne y ,,'', | |||
, ',j 32 - | |||
'' .- | |||
e#,, , . 'l | |||
* | |||
- | |||
j ,- | |||
'/ APhil Elec 78 - | |||
TP, .p.pr# | |||
..........- l s ..... | |||
- | |||
Penelec | |||
- | |||
g y-J ''' Met -SEd - | |||
U E 24 - . ~~.. ~~,,.. ../,/' Penn Power | |||
,_- | |||
I ppg | |||
- | |||
',,. y, ' ~ | |||
N,. -West Penn l | |||
',.,. ' | |||
j ',,.' , | |||
20 ' | |||
- - '. | |||
I | |||
- | |||
,. l | |||
,, c 0 , | |||
- | |||
l l | |||
' ' ' ' ' ' | |||
16 m 1975 1976 1977 1978 1979 t c | |||
* Year 1474 2% | |||
Source: Edison Electric Institute Typical Bill Comparisons | |||
13 Major Pennsy!vania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Residential with Water Heating 1000 KWH/ Month 55 i i , i ; ; i | |||
~ | |||
D u quesne ->7',r'''il'l<' | |||
Power Pen | |||
/' f' /l\ enelec P | |||
' | |||
j' *l il f | |||
+ Met Ed l | |||
* *5 '' ...' ... Phi l Elec.h | |||
~ | |||
;:::L. * *** '' 7 " " ' " | |||
'''' | |||
~ | |||
\ | |||
.. _ ........ I CD | |||
'',/'', ,/ PP&L | |||
- | |||
~ | |||
/' ,sfy ~ | |||
- | |||
/,- ,. -; | |||
35 .-.h '' x',,,,/ ' ' | |||
,' ' - | |||
' I | |||
. | |||
N | |||
* ,.s , | |||
/ '. | |||
*s. ,/ - | |||
,,. West Penn l | |||
, | |||
_- , | |||
I I | |||
' ' ' ' ' ' | |||
25 e 1975 1976 1977 1978 1979 t | |||
:- | |||
* Year Source: Edison Electric Institute Typical P'..I Comparisons | |||
. | |||
Revised 10/24/79 147A 257 | |||
14 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Commercial 50 KW 12500 KWH 900 i i i i i i | |||
'- i Phil Elec x.d D g esne 800 - | |||
% ',.,/<4 _ | |||
l | |||
...."'....,,,/,l l | |||
* 700 - | |||
. **... -''#,/ | |||
~~'I Penelec -- | |||
) - | |||
j, x , | |||
= | |||
g _* | |||
*., ,,f ",,, f l | |||
~~~ | |||
y ' | |||
-, ,:. | |||
* _,,,/' | |||
~ | |||
.Ed 2 . PP&L l | |||
-- e'/ | |||
Y~. '- Penn Power 500 -- I - | |||
-N N- N... iWest Penn ; | |||
***,. | |||
400 s''.s. 1 I | |||
l 300 I I - I c) 1975 1976 1977 1978 1979 t . | |||
:- | |||
* Year 147A 258 Source: Edison Electric Institute Typical Bill Comparisons | |||
15 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Commercial 500 Kw 150000 Kwh/ Month 10 i i i i i | |||
:. i Phil Elec /] | |||
9 - | |||
\,/ j - | |||
: I | |||
- : | |||
O O | |||
8 - | |||
/ !- | |||
- | |||
O ... .... ...Duquesne | |||
^.....*.....,..:,, 'l, | |||
,,. Penn i | |||
* | |||
- | |||
7 | |||
.............................. | |||
v,,,',f Power I - | |||
@ ',,/'', ,/' | |||
~ O - | |||
.- '"''''P e n ele c Met Ed D ., | |||
- | |||
- | |||
-i 5 -=___. | |||
/',,' d~ /- ' ' S~ppat i | |||
_. | |||
f , | |||
C- .~.._.._. | |||
I | |||
'''' l 4 '' X West Penn l | |||
~..._._._. l 3 5 ' ' ' I cn 1975 1976 1977 1978 1979 C a | |||
Year 1474 259 Source: Edison Electric Institute Typical Bill Comparisons | |||
16 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Industrial 10000 KW 5000 MWH 200 i i i i i ii i | |||
Dugi.esne i 180 k'"'~'~.'.f | |||
-- | |||
/ i g Phil Elec /,/ ,/ ' ,, | |||
o160 Penalec # | |||
'I I | |||
O | |||
- | |||
$140 . .. . . . . . . . . . . . . . . . . . | |||
~ ~ 'f , /.7^. . . * * *fl. | |||
, | |||
_ , ,, ,/,/ | |||
Penn Power p l l | |||
PP&l. | |||
___ , ,, ', / | |||
z120 - | |||
'/ g ' | |||
' ? _[_ , ,il 100 - | |||
/, '' ' | |||
.- | |||
- | |||
,3-West Penn l i | |||
- | |||
s s' I i | |||
80 '''''I.. ' ' I ' | |||
m 1975 1976 1977 1978 1979 $ | |||
a Year 147A 260 Source: Edison Electric Institute Typical Bill Comparisons | |||
17 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income' Residential No Electric Water Heating 7 i i i i i i i i iii Avg Annual KWh Usage | |||
~ | |||
~< | |||
, 2 . | |||
, gig | |||
' -- | |||
* 5 gj;- 4 | |||
- | |||
E T Federal y | |||
8 | |||
.E 4 - # % Ng; _ #Minimum 9** | |||
g 1967 Avg KWh Usage g 3 _ | |||
_ | |||
8 Avg Annual KWh ..............,............ | |||
..)...?.... - | |||
hgk"er | |||
$ 1967 Avg KWh Usage wages | |||
_ _ | |||
3 O ' ' ''' | |||
1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels. 3 47 A 2bT | |||
18 | |||
' | |||
Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income' Residential with Electric Water Heating 9 i i i i i i i i i i i Avg Annual KWh Usage y '* | |||
'' | |||
8 - | |||
- | |||
. | |||
- | |||
Federal 7 - - | |||
Minimum y % - Wages g 6 1967 Avg KWh Usage 5 ,,, | |||
- | |||
p 4 - Avg Annual KWh Usage S . | |||
. | |||
Production 2 3 - | |||
..-; : :r ::-/ ' ~ | |||
- | |||
Workers | |||
$ g Wages 1967 Avg KWh Usage 1 - | |||
_ | |||
Q I I l l I I I l l l l 1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels. | |||
474 262 | |||
19 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income' Residential All-Electric 20 . . . . . . , . | |||
i | |||
. | |||
i 1967 Avg KWh Us g 18 - | |||
Federal e | |||
16 .WWWY$b g. | |||
- | |||
a s 14 - | |||
Avg Annual KWh Usage | |||
- | |||
c 12 ., | |||
' | |||
' | |||
o 10 - | |||
' | |||
- | |||
!8 _1967 Avg KWh Usage p k ggila,iH;}}i;2;;,a, | |||
""' | |||
2_ | |||
Production Workers W ges | |||
' | |||
6 . | |||
4 - | |||
Avg Annual KWh Usage 2 - | |||
' ' ' ' ' ' ' ' ' | |||
O 1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels. | |||
1474 263 | |||
20 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income' Residential No Electric Water Heating 5 i i i i i i i i | |||
..r ..'' i Avg AnnuaI | |||
'.... . . . . . . .. ''. | |||
... | |||
gj '' ... '.. ' | |||
,' | |||
KWh Usage 4 _ Federal | |||
* Minimum | |||
- | |||
' | |||
/ Wages B ........ - < Avg KWh Us% age g 3 | |||
% 1967 - | |||
2 E 2 Avg Annual KWh Usage - | |||
g g,,.........................""""""""""""- Production 5 W """' Workers | |||
: c. - | |||
, Wages | |||
- | |||
1 1967 Avg KWh Usage | |||
- | |||
' | |||
0 ' ' ' ' ' ' ' ' | |||
1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage. levels. | |||
1474 264 | |||
21 Pennsylvania Electric Company Average Annual Electric Bill as a Percent c: Annual Income' Residential with Electric Water Heating 9 i i i i i i i i i i i 8 - | |||
Avg Annual KWh Usage 7 - | |||
g,,,,''...*,..-...^~'- - | |||
Federal Minimum o ,.. *... ' Wages | |||
!6 o | |||
- | |||
.- | |||
, | |||
,./ - | |||
_A-c 9 - | |||
- | |||
* | |||
- | |||
Z 1967 Avg KWh Usage o | |||
~ 4 N""'""'...- - | |||
E Avg Annual KWh Usage "........ -.-.~.-~~. - Production 2 3 t Workers o .... ........ 3. ,,...................... ' Wages | |||
' | |||
2 g - | |||
1967 Avg KWh Usage 1 - - | |||
0 ' ' ' ' ' ' ' ' ' ' | |||
1968 1970 1972 1974 1976 1978 Year | |||
' income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels. 1 A7 A N | |||
22 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income' Residential All-Electric I ! | |||
I I i l i i 20 - | |||
1967 Avg KWh Usage Federal 18 - | |||
% - | |||
Minimum | |||
*""""' | |||
Wages e 16 - - | |||
g ,, _ g.......................** | |||
[c 12 Avg Annual KWh Usage _ | |||
h.............- | |||
10 - - | |||
c 1967 Avg KWh Usage / | |||
Production o 8 - | |||
- | |||
- | |||
Workers | |||
" " "" " " " """ '" " W 9'' | |||
h a %. . . . . . . _ _ , " - ~ ~ . . . . . . . . . . . . . | |||
4 Avg Annual KWh Usage - | |||
2 - - | |||
' ' ' ' ' ' ' ' ' | |||
0 1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels. | |||
p4 2s6 | |||
23 Metropolitan Edison Company Average Annual Electric Bill as a Percent af Annual Income,,2 Residential No Electric Water Heating 12 i i i i i i i i i i i Avg Annual KWh Usage | |||
' | |||
__ | |||
en s o 6 - | |||
1967 Avg KWh Usage | |||
'- | |||
E O | |||
4- Avg Annual KWh Usage | |||
- | |||
Maximum 2 - | |||
i . | |||
- | |||
social T 1967 Avg KWh Usage Security Benefits | |||
' ' ' ' ' | |||
0 ' ' ' | |||
1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration. | |||
2 Senior citizen annual usage: 68.6% of rate group average. | 2 Senior citizen annual usage: 68.6% of rate group average. | ||
1474 Zb7. | 1474 Zb7 . | ||
24 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential with Electric Water Heating 16 i i i i i i t......i i Avg AnnualKWh Usage; Minimum" 7b,w.' | |||
24 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential with Electric Water Heating 16 i i i i i i t...... i i Avg AnnualKWh Usage;" Minimum 34 . Social | |||
-$4- - ~ . . . . . . . . . . . . . , . | " 7b,w.' Security | ||
^* | |||
Benefits e 1 2 '- ' ' | |||
2 Senior citizen annual usage: | E .. 5 0 10 - | ||
'1.5 % of rate group average. | - | ||
i474 2b8 25 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential All-Electric 45 i i i i i i i i i i i 40 Minimum | 1967 Avg KWh Usage _ | ||
.5 o 8 - | |||
E y6 Avg Annual KWh Usage | |||
focjUm | - | ||
$ 4 --~.............,. _ Maximum | |||
~7 | |||
' | |||
1967 Avg KWh Usage h .._. * % 8 _ | |||
Social 2 - | |||
e s | |||
' | |||
0 ' ' ' ' - | |||
' ' | |||
1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration. | |||
2 Senior citizen annual usage: '1.5 % of rate group average. | |||
i474 2b8 | |||
25 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential All-Electric 45 i i i i i i i i i i i 40 - | |||
Minimum Avg Annual KWh Usage je , ' | |||
social 35 : security e ~' [, >y,u | |||
- | |||
g'" ' '" Benefits E ' " " ' | |||
o 30 O | |||
- | |||
s ' | |||
- | |||
5 25 - | |||
1967 Avg KWh Usage - | |||
o - | |||
E 2 15 Avg Annual KWh Usage - | |||
' | |||
3o """ % _.__..... N-=<- - | |||
focjUm 5 security 5 - | |||
1967 Avg KWh Usage - | |||
Benefits O I I I I i i i I i 1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration. | |||
2 Senior citizen annual usage: 79.6% of rate group average. | 2 Senior citizen annual usage: 79.6% of rate group average. | ||
1474 269 26 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income'< | 1474 269 | ||
Residential No Electric Water Heating 9 | |||
,.................i | 26 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income'< | ||
' , , . " , i, -Minimum-,,...., ...,,' | Residential No Electric Water Heating 9 | ||
* Security | Avg Ann ual KWh Usage ,.................i "'ts., | ||
i i i iiiiii 8 ,...,,. ' , , . " , | |||
. | |||
g g k m Security 1 1967 Avg KWh Usage Benefits | - | ||
i, - Minimum | |||
... - ,,...., ...,, ' | |||
Sociai | |||
'..- | |||
e 7 .,,,,* Security E Benefits o 6 - - | |||
+ 5 '- | |||
1967 Avg KWh Usage O | |||
y 4 - | |||
o 8 3 Avg Annual KWh Usage _ | |||
$ ..............,h..........-.......,,,,,,,_____ g g k m Security 1 1967 Avg KWh Usage Benefits | |||
' ' ' | |||
0 ' ' ' ' ' ' ' | |||
1968' 1970 1972 1974 1976 1978 Year | |||
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration. | |||
2 Senior citizen annual usage: 68.9% of rate group average. | 2 Senior citizen annual usage: 68.9% of rate group average. | ||
1474 270 27 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential with Electric Water Heating 16 i i i i , i i i i i i. Minimum | 1474 270 | ||
"""'' | |||
-C g 6-Avg Annual KWh Usage | 27 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential with Electric Water Heating 16 i i i i , i i i i i i | ||
-Q ........... | . Minimum 14 - | ||
% | Avg Annual KWh Usage ,........ """'' '- | ||
. | |||
. | |||
$c r'ity | |||
'' ,, | |||
' | |||
Benefits | |||
,,2 8... .... _ | |||
.... ...... | |||
- | |||
, . ...- | |||
" | |||
0 10 - | |||
T- | |||
.E | |||
}8 1967 Avg KWh Usage | |||
- - | |||
C g 6 - | |||
Avg Annual KWh Usage - | |||
* | |||
*- | |||
gegum a | |||
Q ........... %................................................. | |||
- | |||
" w Security 2 - | |||
g1.967 Avg KWh Usage - | |||
Benefits | |||
' ' ' ' i ' ' | |||
O I I i 1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration. | |||
2 Senior citizen annual usage: 69.7% of rate group average. | 2 Senior citizen annual usage: 69.7% of rate group average. | ||
1474 27I 28 Pennsylvania Electric Compan, Average Annual Electric Bill as a Percent of Annual Income,,2 Residential All-Electric 45 i i i i i i i i i i i | 1474 27I | ||
Nc$rity | |||
28 Pennsylvania Electric Compan, Average Annual Electric Bill as a Percent of Annual Income,,2 Residential All-Electric 45 i i i i i i i i i i i 40 - - Minimum 35 967 Avg KWh Usage [_ Nc$rity e % Benefits E | |||
o 30 o | |||
.. .. | ~..... | ||
--N........ ,...._. C...... . | - | ||
'.'.. | |||
T Security 5 Avg Annual KWh Usage-Benefits | - | ||
. | |||
. | |||
' ' ' *'.^ . | |||
............... | |||
- | |||
- | |||
.5 gg _ | |||
~...'us ' . . | |||
* | |||
. | |||
. ..Q | |||
.. | |||
. | |||
_ | |||
o Avg AnnualKWh Usage p 20 - | |||
e y 15 - | |||
1967 Avg KWh Usage | |||
- | |||
10 - N {ej"* | |||
........ ,...._. C...... .,,................. | |||
T Security 5 Avg Annual KWh Usage- Benefits | |||
' ' ' ' ' ' | |||
O 1968 1970 1972 1974 1976 1978 Year | |||
' Income is based upon rainimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benerit information was supplied by the Social Security Administration. | |||
2 Senior citizen annual usage: 74.0% of rate group average. | 2 Senior citizen annual usage: 74.0% of rate group average. | ||
1474 272 29 TMI-1 Restart i Operator Retraining & Reexamination 11 Procedure Reviews & Revisions 111 Emergency Preparedness IV Plant Modifications V isolation of TMI-1/TMI-2 V1 Waste Management Vil Management Vill Finance 1474 273 30 TMI-1 Restart Schedule Day 80 Day 365 8/13/80I | 1474 272 | ||
!V V 1% V 4}p. [ }. A | |||
.1.j g f / 9 ?.i y t | 29 TMI-1 Restart i Operator Retraining & Reexamination 11 Procedure Reviews & Revisions 111 Emergency Preparedness IV Plant Modifications V isolation of TMI-1/TMI-2 V1 Waste Management Vil Management Vill Finance 1474 273 | ||
findings)Notice filing of (This period is for testimony) | |||
Day 240 refining contentions, consolidating parties Day 140 1 & resolving procedural | 30 TMI-1 Restart Schedule Day 80 Day 365 11/2/79i 8/13/80I Publication Day 180 Decision by NRCl of Pre-hearing l 2/10/80 Conference Begin Day 335 j Order Hearings 7/14/80! j (Depositions, ASLB Certification document of Record ; | ||
(000's MWH) 1978 Interchange Delivered | production) | ||
$(16.4)(795.2)$(20.66)(9.2) %$(1.90)Interchange Received 30.0 975.3 30.72 11.4 3.50 Purchased Power | ! | ||
V V 1% V 2~ | |||
. | |||
$ 95.5 8 570.9 100.0%$11.14 1979 Interchange Delivered | 4}p. [ }. A | ||
$(9.1)(305.1)$(29.86)(3.4)$d.03)Interchange Received 58.4 1 714.6 34.05 19.4 6.60 Purchased Power 44.9 1 602.8 28.01 18.1 5.07 Hydro-138.8 1.6- | . . | ||
$171.8 8 855.8 100.0%$19.40 1980 Interchange Delivered | 1 . | ||
$ (5.2)(127.1)$(41.29)(1.4)$ (.58)Interchange Received 90.5 1 991.0 45.48 22.2 10.11 Purchased Power 43.7 1 332.6 32.76 14.9 4.87 Hydro-147.6 1.6- | j g f / 9 ?.i y t , | ||
$233.6 8 953.0 100.0%$26.09 1981 Interchange Delivered | Ak Ak 4k 4/12/80 Complete 1/1/80 Hearings Pre-hean,ng 8/15/79 (Filing of & reply Conference to proposed Publication of (Preparation & findings) | ||
$ (8.1)(281.9)$(28.86)(3.1)$ (.88)Interchange Received 90.7 1 690.1 53.66 18.3 9.83 Purchased Power | Notice filing of (This period is for testimony) Day 240 refining contentions, consolidating parties Day 140 1 matters) | ||
-----Hydro-152.0-1.7-Oil & Other 12.3 117.i 104.85 1.3 1.34 Coal 99.4 5 145.E 19.31 55.7 10.76 Nuclear 5.7 2 407.4 2.38 26.1.62 Total 1981 | & resolving procedural Day 0 347A 274 | ||
$200.0 9 231.1 100.0%$21.67.1474 275 32 Pennsylvania Electric Company Computation of Cost of Energy by Weighted Components Percent of EIIective Fuel Cost MWH$lMWH Total MWH JMWH (Million $) | |||
(000's MWH) 1978 Interchange Delivered | 31 Metropolitan Edison Company Computation of Cost of Energy by Weighted Components Percent of Effective Fuel Cost MWH $1MWH Total MWH $1MWH (Million $) (000's MWH) 1978 Interchange Delivered $(16.4) (795.2) $(20.66) (9.2) % $(1.90) | ||
$(26.1)(1 369.8)$(19.05)(1 1.51 %$(2.19)Interchange Received 25.6 853.6 29.99 7.2 2.16 Purchased Power | Interchange Received 30.0 975.3 30.72 11.4 3.50 | ||
- | |||
-163.3 1.4- | Purchased Power - - | ||
$142.1 11 806.9 100.0%$12.04 1979 Interchange Delivered | - - | ||
$(38.3)(1 633.6)$(23.15)(13.1)$(3.09)Interchange Received 15.9 435.4 36.52 3.5 1.28 Purchased Power 20.2 708.3 28.52 5.7 1.63 Hydro-77.3-0.6-Oil & Other 2.2 63.0 38.92 0.5 0.18 Coal 158.5 12 243.9 12.95 98.5 12.75 Nuclear 1.7 540.1 3.15 4.3.13 Total 1979 | Hydro - | ||
$160.2 12 434.4 100.0%$12.88 1980 Interchange Delivered | 131.2 - 1.5 - | ||
$(28.6)(942.5)$ (30.36)(7.3)$(2.19)Interchange Received 60.3 1 284.1 46.98 9.9 4.65 Purchased Power 21.8 666.3 32.75 5.1 1.67 Hydro-49.8-0.4-Oil & Other 4.0 67.4 58.89 0.5.29 Coal 168.9 11 871.9 14.22 91.4 13.00 Nuclear-----Total 1980 | Oil & Other 7.5 189.7 39.53 2.2 .87 Coal 69.5 4 897.0 14.20 57.1 8.10 Nuclear 4.9 2 846.2 1.72 33.2 .57 Nuclear (Test) - 326.7 - 3.8 - | ||
$226.4 12 997.0 100.0%$17.42 1981 Interchange Delivered | Total 1978 $ 95.5 8 570.9 100.0% $11.14 1979 Interchange Delivered $(9.1) (305.1) $(29.86) (3.4) $d.03) | ||
$(36.1)(1 323.0)$(27.27)(9.9)$(2.69)Interchange Received 52.7 971.4 54.23 7.3 3.96 Purchased Power | Interchange Received 58.4 1 714.6 34.05 19.4 6.60 Purchased Power 44.9 1 602.8 28.01 18.1 5.07 Hydro - | ||
-----Hydro 48.8-0.4- | 138.8 - 1.6 - | ||
$216.4 13 341.0 100.0%$16.22 1474 276 33 GPU System No. 2 Fuel Oil Prices Actual & Projected i i i i i i i i | Oil & Other 5.8 109.0 53.53 1.2 .65 Coal 68.4 4 520.9 15.13 51.0 7.72 Nuclear 3.4 1 074.8 3.19 12.1 .39 Total 1979 $171.8 8 855.8 100.0% $19.40 1980 Interchange Delivered $ (5.2) (127.1) $(41.29) (1.4) $ (.58) | ||
Interchange Received 90.5 1 991.0 45.48 22.2 10.11 Purchased Power 43.7 1 332.6 32.76 14.9 4.87 Hydro - | |||
FPC Form 423 Fuel Cost Data T474 277 34 GPU System NO. 6 Fuel Oil Prices Actual & Projected I I I I I I I | 147.6 - 1.6 - | ||
Oil & Other 9.6 111.9 85.99 1.3 1.08 Coal 95.0 5 497.0 17.28 61.4 10.61 Nuclear - - - - - | |||
FPC Form 423 Fuel Cost Data 1474 278 35 Metropolitan Edison Company Forecast System Energy Clause Costs Estimated Effects of TMI Accident, Fuel Price Increases and Short Term Purc'hases Calendar Year 1980 Original Estimate Docket Current I79040308 Estimate Average GPU Oil Cost. | Total 1980 $233.6 8 953.0 100.0% $26.09 1981 Interchange Delivered $ (8.1) (281.9) $(28.86) (3.1) $ (.88) | ||
$lBBL 17 31 Net System Requirements GWH 8,953 8,953 Energy Cast with | Interchange Received 90.7 1 690.1 53.66 18.3 9.83 Purchased Power - - - - - | ||
$million 91.2 106*Normal TMI Operation | Hydro - | ||
$lMWH 10.2 11.8 incremental Effect | 152.0 - 1.7 - | ||
$million 40.4 64 TM1-2 Removed incremental Effect | Oil & Other 12.3 117.i 104.85 1.3 1.34 Coal 99.4 5 145.E 19.31 55.7 10.76 Nuclear 5.7 2 407.4 2.38 26.1 .62 Total 1981 $200.0 9 231.1 100.0% $21.67 | ||
$million 0 90 TMI1 Removed incremental Effect | . | ||
$million 0 (26)Short Term Purchases Energy Cost without TMI,$million 131.6 234*with short term purchases | 1474 275 | ||
$lMWH 14.7 26.1 PUC Allowance per | |||
$million 121.5 l474 27 June 15,1979 Order | 32 Pennsylvania Electric Company Computation of Cost of Energy by Weighted Components Percent of EIIective Fuel Cost MWH $lMWH Total MWH JMWH (Million $) (000's MWH) 1978 Interchange Delivered $(26.1) (1 369.8) $(19.05) (1 1.51 % $(2.19) | ||
$lMWH | Interchange Received 25.6 853.6 29.99 7.2 2.16 | ||
36 Pennsylvania Electric Company Forecast System Energy Clause Costs Estimated Effects of TMI Accident, Fuel Price increases and Short Term Purchases Calendar Year 1980 Original Estimate Docket Current 1-79040308 Estimate | - - | ||
$lBBL 17 31 | Purchased Power - - - | ||
$million 174.7 161*Normal TMI Operation | Hydro - 58.3 - 0.5 - | ||
$lMWH 13.4 12.4 | Oil & Other 5.1 144.1 35.73 1.2 .43 Coal 135.0 10 534.3 12.82 89.2 11.43 Nuclear 2.5 1 423.1 1.76 12.0 .21 Nuclear (Test) - 163.3 - 1.4 - | ||
$million 22.7 38 TMI-2 Removed | Total 1978 $142.1 11 806.9 100.0% $12.04 1979 Interchange Delivered $(38.3) (1 633.6) $(23.15) (13.1) $(3.09) | ||
$million 0 37 TMI-1 Renioved incremental Effect | Interchange Received 15.9 435.4 36.52 3.5 1.28 Purchased Power 20.2 708.3 28.52 5.7 1.63 Hydro - | ||
$million U (10)Short Term Purchases Energy Cost without TMI,$million 197.4 226'with short term purchases | 77.3 - 0.6 - | ||
$lMWH 15.2 17.4 PUC Allowance per | Oil & Other 2.2 63.0 38.92 0.5 0.18 Coal 158.5 12 243.9 12.95 98.5 12.75 Nuclear 1.7 540.1 3.15 4.3 .13 Total 1979 $160.2 12 434.4 100.0% $12.88 1980 Interchange Delivered $(28.6) (942.5) $ (30.36) (7.3) $(2.19) | ||
$million 191.7 June 15,1979 Order | Interchange Received 60.3 1 284.1 46.98 9.9 4.65 Purchased Power 21.8 666.3 32.75 5.1 1.67 Hydro - | ||
$lMWH 14.7 14M 280' Official Budget does not include the PJMITMI special provisions. | 49.8 - | ||
37 Penelec/ Met-Ed/ Jersey Central Summary of TMI Accident Related Short Term Power Purchases July,1979 Energy Purchased (Proportional to TMI Ownershig) Estimated Estimated Energy &Alternate Energy & Op. | 0.4 - | ||
Op. Cap.Demand Total Cost Cost Cap. Savings GWH$1,000$1,000$1,000$1,000$1,000 APS (Start 5 79) | Oil & Other 4.0 67.4 58.89 0.5 .29 Coal 168.9 11 871.9 14.22 91.4 13.00 Nuclear - - - - - | ||
GPU 13.2 213 55 268 310 42 AEP and West (Start 6 79) | Total 1980 $226.4 12 997.0 100.0% $17.42 1981 Interchange Delivered $(36.1) (1 323.0) $(27.27) (9.9) $(2.69) | ||
GPU 500.8 11,025 2,817 13,842 17,791 3,949 PP&L (Start 6 79) | Interchange Received 52.7 971.4 54.23 7.3 3.96 Purchased Power - - - - - | ||
GPU 73.6 2,733 0 2,733 3,258 525 Ontario (Start 7-79) | Hydro - 48.8 - | ||
GPU 94.1 2,424 394 2,818 3,704 886 Jamestown (Start 7 79)GPU 4.3 101 0 101 184 83.Total Penelec 171.5 4,116 817 4.933 5,270 337 Met Ed 343.0 8,232 1,632 9,864 12,882 3,018 Jersay 171.5 4,148 817 4,965 7,095 2,130 GPU 686.0 16,496 3,266 19,762 25,247$5,485 1474 281 38 Penelec/ Met-Ed/ Jersey Central Summary of TMI Accident Related Short Term Power Purchases May thru July,1979 Energy Purchased (Proportional to TMI Ownership) | 0.4 - | ||
Estimated Estimated Energy &Alternate Energy & Op. | Oil & Other 6.4 82.9 77.01 0.6 .46 Coal 190.5 12 357.2 15.42 92.6 14.28 Nuclear 2.9 1 203.7 2.38 9.0 .21 Total 1981 $216.4 13 341.0 100.0% $16.22 1474 276 | ||
Op. Cap.Demand Total Cast Cast Cap. Savings GWH$1,000$1,000$1,000$1,000$1,000 APS (Start 5 79) | |||
GPU 197.0 3,421 817 4,238 6,121 1,883 AEP and West (Start 6 79)GPU 607.9 13,443 3,442 16,885 20,990 4,105 PP&l. (Start 6 79) | 33 GPU System No. 2 Fuel Oil Prices Actual & Projected i i i i i i i i 4g _ | ||
GPU 114.9 4,087 0 4,087 4,909 822 Ontario (Start 7 79) | , | ||
GPU 94.1 2,424 394 2,818 3,704 886 Jamestown (Start 7 79)GPU 4.3 101 0 101'184 83 Total Penelec 254.6 li,858 1,164 7,022 7,589 567 Met Ed 509.0 11,713 2,325 14,038 18,280 4,242 Jersey 254.6 5,905 1,164 7,069 10.039 2.970 GPU 1,018.2 23,476 4,653 28,129 35,908$7,779 1474 282 39 PJM/TMI Provision (1980D Amount 7000 GWHRSiiR at no more than 1100 MWHRS/HR Price 10% above supplier's average cost of sales Effective FERC Filing Date Duration Thru 1980 File By the end of October Contingent FERC, PaPUC and other States Commission Approval 1474 283 40 Current Estimated Impact of PJM/TMI (1980?PJM 24 Hr. Cost 38 Mills per KWH Current Split Savings / Cost 8 Mills per KWH | _ | ||
@ 10% Markup 4 Mills per KWH Savings 4 Mills per KWH X 7000 GWHRS* | "" " | ||
= $30 Million* | July 79 = 53% Actual July 78 Forecast k - | ||
* Max Take on GPU Basis 1474 284 41 Metropolitan Edison Company Pennsylvania Electric Company Current Estimated 1980 Purchase Power Savings Source Met-Ed Penelec Purchased Power * | 3 32 - | ||
$26 Million/Yr | / - | ||
$10 Million/Yr From PP&L 200 MW (2)(1)From PJM Inter-change On Cost Pius 10% Basis 8 5 Total Savings | Dec.80 t' | ||
$32 Million/Yr | = 59% Projected " | ||
$14 Million/Yr | m July 79 ' | ||
*To the extent energy is available and cheaper than PJM/TMI special provision, such energy from APS and the West could increase this savings. | Actual - | ||
1474 285 42 Pennsylvania Electric Company Energy Cost Billing Rates (Base and Clause Rates Excluding Taxes) iiiiiiiiiiiiiiiiiiii iiiiiiiisiiiisi_ | E5 24 - - | ||
: n. ' | |||
g .........g-g 16 - | |||
- | Pre TMI | ||
4- pi!!li!!s!!ils.i!!!li;liil!!!!!!! | - | ||
'** * ** " " * " *** " E~ | Q Accident 8 - - | ||
' ' ' ' ' ' ' | |||
Note: 50 Short Term Debt | 0 1972 1973 1974 1975 1976 1977 1978 1979 1980 Year Source of Historical Costs: | ||
FPC Form 423 Fuel Cost Data T474 277 | |||
1/80-*/E 30=2-20 8@ ort e rR a , p .ormal Clause Operation | |||
34 GPU System NO. 6 Fuel Oil Prices Actual & Projected I I '- | |||
40 - | |||
,. | I I I I I | ||
"' ' ""'"' | |||
To | |||
'474 288 , | - | ||
32 - | |||
ForecastY' ec. 80 | |||
= 45% Projected / | |||
5 24 n- | |||
- | |||
"'# | |||
/ - | |||
Actual + | |||
m | |||
- | |||
% ....... ; | |||
3g_ | |||
$ Pre TMI Accident 8 - | |||
' ' ' ' ' ' ' ' | |||
0 1972 1973 1974 1975 1976 1977 1978 1979 1980 Year Source of Historical Costs: | |||
FPC Form 423 Fuel Cost Data 1474 278 | |||
35 Metropolitan Edison Company Forecast System Energy Clause Costs Estimated Effects of TMI Accident, Fuel Price Increases and Short Term Purc'hases Calendar Year 1980 Original Estimate Docket Current I79040308 Estimate Average GPU Oil Cost. $lBBL 17 31 Net System Requirements GWH 8,953 8,953 Energy Cast with $million 91.2 106* | |||
Normal TMI Operation $lMWH 10.2 11.8 incremental Effect $million 40.4 64 TM1-2 Removed incremental Effect $million 0 90 TMI1 Removed incremental Effect $million 0 (26) | |||
Short Term Purchases Energy Cost without TMI, $million 131.6 234* | |||
with short term purchases $lMWH 14.7 26.1 PUC Allowance per $million 121.5 13,6 l474 27 June 15,1979 Order $lMWH | |||
*0fficial Budget does not include the PJMITMI special provisions. | |||
36 Pennsylvania Electric Company Forecast System Energy Clause Costs Estimated Effects of TMI Accident, Fuel Price increases and Short Term Purchases Calendar Year 1980 Original Estimate Docket Current 1-79040308 Estimate | |||
$lBBL 17 31 Average GPU Oil Cast GWH 12,997 12,997 Net System Requirements Energy Cost with $million 174.7 161* | |||
Normal TMI Operation $lMWH 13.4 12.4 | |||
$million 22.7 38 Incremental Effect TMI-2 Removed | |||
$million 0 37 incremental Effect TMI-1 Renioved incremental Effect $million U (10) | |||
Short Term Purchases Energy Cost without TMI, $million 197.4 226' with short term purchases $lMWH 15.2 17.4 PUC Allowance per $million 191.7 June 15,1979 Order $lMWH 14.7 14M 280 | |||
' Official Budget does not include the PJMITMI special provisions. | |||
37 Penelec/ Met-Ed/ Jersey Central Summary of TMI Accident Related Short Term Power Purchases July,1979 Energy Purchased (Proportional to TMI Ownershig) Estimated Estimated Energy & Alternate Energy & Op. | |||
Op. Cap. Demand Total Cost Cost Cap. Savings GWH $1,000 $1,000 $1,000 $1,000 $1,000 APS (Start 5 79) | |||
GPU 13.2 213 55 268 310 42 AEP and West (Start 6 79) | |||
GPU 500.8 11,025 2,817 13,842 17,791 3,949 PP&L (Start 6 79) | |||
GPU 73.6 2,733 0 2,733 3,258 525 Ontario (Start 7-79) | |||
GPU 94.1 2,424 394 2,818 3,704 886 Jamestown (Start 7 79) | |||
GPU 4.3 101 0 101 184 83 | |||
. | |||
Total Penelec 171.5 4,116 817 4.933 5,270 337 Met Ed 343.0 8,232 1,632 9,864 12,882 3,018 Jersay 171.5 4,148 817 4,965 7,095 2,130 GPU 686.0 16,496 3,266 19,762 25,247 $5,485 1474 281 | |||
38 Penelec/ Met-Ed/ Jersey Central Summary of TMI Accident Related Short Term Power Purchases May thru July,1979 Energy Purchased (Proportional to TMI Ownership) Estimated Estimated Energy & Alternate Energy & Op. | |||
Op. Cap. Demand Total Cast Cast Cap. Savings GWH $1,000 $1,000 $1,000 $1,000 $1,000 APS (Start 5 79) | |||
GPU 197.0 3,421 817 4,238 6,121 1,883 AEP and West (Start 6 79) | |||
GPU 607.9 13,443 3,442 16,885 20,990 4,105 PP&l. (Start 6 79) | |||
GPU 114.9 4,087 0 4,087 4,909 822 Ontario (Start 7 79) | |||
GPU 94.1 2,424 394 2,818 3,704 886 Jamestown (Start 7 79) | |||
GPU 4.3 101 0 101' 184 83 Total Penelec 254.6 li,858 1,164 7,022 7,589 567 Met Ed 509.0 11,713 2,325 14,038 18,280 4,242 Jersey 254.6 5,905 1,164 7,069 10.039 2.970 GPU 1,018.2 23,476 4,653 28,129 35,908 $7,779 1474 282 | |||
39 PJM/TMI Provision (1980D Amount 7000 GWHRSiiR at no more than 1100 MWHRS/HR Price 10% above supplier's average cost of sales Effective FERC Filing Date Duration Thru 1980 File By the end of October Contingent FERC, PaPUC and other States Commission Approval 1474 283 | |||
40 Current Estimated Impact of PJM/TMI (1980? | |||
PJM 24 Hr. Cost 38 Mills per KWH Current Split Savings / Cost 8 Mills per KWH | |||
@ 10% Markup 4 Mills per KWH Savings 4 Mills per KWH X 7000 GWHRS* = $30 Million* | |||
* Max Take on GPU Basis 1474 284 | |||
41 Metropolitan Edison Company Pennsylvania Electric Company Current Estimated 1980 Purchase Power Savings Source Met-Ed Penelec Purchased Power * $26 Million/Yr $10 Million/Yr From PP&L 200 MW (2) (1) | |||
From PJM Inter-change On Cost Pius 10% Basis 8 5 Total Savings $32 Million/Yr $14 Million/Yr | |||
*To the extent energy is available and cheaper than PJM/TMI special provision, such energy from APS and the West could increase this savings. | |||
1474 285 | |||
42 Pennsylvania Electric Company Energy Cost Billing Rates (Base and Clause Rates Excluding Taxes) | |||
_ | |||
iiiiiiiiiiiiiiiiiiii iiiiiiiisiiiisi_ | |||
_ | |||
22 - - | |||
Normal Clause 20 ,r 18 - | |||
_ _____ | |||
g_il,Is . - | |||
C - I | |||
\ .2 6 Mills 2 3 | |||
g 14 - | |||
- 1 | |||
- | |||
5 12 :y, j | |||
' 10 FA | |||
. 4 - | |||
. :: | |||
I:!! | |||
! | |||
:::'.:: | |||
5S 4:'::: | |||
:: | |||
!!!!! | |||
8 _is I | |||
- | |||
2 !!!i!! lill s gii! s:Is :::Is 6 j!!j!! jj!Il10 Mills included in Base Rates! | |||
_i!!! | |||
4 - pi!! li!!s !!ils . | |||
- | |||
i!!! li;liil !!!!!!! | |||
2 [!!! jj!!j! lll1lii 0 | |||
~ | |||
**~'*"Nl *** '** * ** " " * " *** " E~ | |||
JM J S D M J S D M J S D 1979 1980 1981 Assumes TMI-1 Returns to Service 1/1/81 1474 286 | |||
43 Pennsylvania Electric Company Deferred Energy Balances (10.0 Mills included in Base Rates) 60 iiiii iiiiiiiiiiiiiiii iiiiiiiiiiiii 6.2 Mill EAC 7/1/79 - | |||
Note: | |||
50 Short Term Debt - | |||
Limit $118 Million - | |||
40 - | |||
7.2 Mill EAC f/ 1/80- | |||
* | |||
/ | |||
E 30 | |||
= | |||
2 - | |||
20 N /80 10 8@ ort e rR a , p .ormal Clause Operation - | |||
O * ******' ' ' 's ''''' | |||
JM J S D M J S D M J S D 1979 1980 1981 Assumes TMI-1 Returns to Service 1/1/81 1A7A 287 | |||
44 Metropolitan Edison Company Energy Cost Billing Rates (Base and Clause Rates Excluding Taxes) 36 iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii | |||
_ _ | |||
_ | |||
30 - | |||
_ | |||
, ._ _ _ | |||
20 Mills,_ | |||
- I 17 Mills - | |||
_c 24 - | |||
3 - Normal l ,1 2. Mills - | |||
M - | |||
Clause 1 | |||
- | |||
p 18 - | |||
I | |||
,8.4 Mills - | |||
.= / i | |||
= 1 1 2 12 - | |||
1 I | |||
- | |||
1 1 - | |||
- | |||
l . . . - z.m. ...e., - | |||
.. . . . . | |||
6 llll lllllll ll - | |||
l!l[ | |||
M ii 1l | |||
.!ll;ll !!!Allll8 Mills included in | |||
. | |||
)lt!!! | |||
;- | |||
0 5!!ii 1 i s i1!i*iiil5i4:i:stii!E!!!' | |||
i 'si i!Yiiif i li ii!!i i 1 i:s:i:ssi!!!*i!!i:!!!'5' i si!!i i f i l: i tsi i:ii:iis!!!s:!:lisi JM J S D M J S D M J S D 1979 1980 1981 Assumes TMI-1 Returns to Service 1/1/81 | |||
'474 288 | |||
, | |||
45 Metropolitan Edison Company Deferred Energy Balances (8.0 Mills included in Base Rates) | 45 Metropolitan Edison Company Deferred Energy Balances (8.0 Mills included in Base Rates) | ||
'''''''''''''''''''''''''''''''''''' | '''''''''''''''''''''''''''''''''''' | ||
220- | 220 _ | ||
-180-r- | - | ||
_ | |||
g- | 200 - | ||
8.4 Mills EAC | |||
- | |||
($ Millions;l 1979 Original Budget | 180 - | ||
$ 123.8 Reductions: | _ | ||
Eliminate Budgeted Personnel Additions | g r | ||
$.9 Reduce Overtime | - | ||
.4 Reduce Outside Services 1.9 GPUSC Cost Reduction Programs 1.9 Defer Fossil Generation Maintenance 4.8 Tree Trimming 1.6 Employee Reduction Program 1.3 Total Reductions 12.8 1979 Current Forecast | - | ||
$ 111.0 3474 290 47 Pennsylvania Electric Company Analysis of Personnsi Changes 3/31/79 - 12/31/79 Employees at 3/31/79 4,202 Changes: Laid off 7/1/79 (150)Early Retirements (60)Total Change (210)Estimated Employees at 12/31/79 3,992 1474 29I 48 Pennsylvania Electric Company Construction Budget Before TMI Accident | 160 - - | ||
($ Millions) 1979 1980 1981 1982 1983 1984 1985 New Generation Seward$11$ 16$ 17$ 50$ 94$113$120 Coho 1 1 1 3 5 21 39 Combustion Turbines 1 2 22 13 2 18 10 Other J 2 10 4 2 7 9 Total$14$ 21$ 50$ 70$103$159$178 Existing Generation 25 26 31 24 18 17 13 Nuclear Fuel 11 12 19 20 21 14 25 Transmission 8 12 23 31 28 27 26 Distribution 27 42 43 47 49 54 54 Other 6 5 2 2 2 2 2 Total Construction $g | 12.9 Mills EAC _ | ||
$118$168$194$221$273$208 1474 292 49 Pennsylvania tilectric Company Current Construction Forecast | * 140 -Short Term Debt Limit my /_ | ||
($ Millions) 1979 1980 1981 1982 1983 1984 1985 | ~ | ||
& Retentions (3)1 6----TMI-2 Restoration *" 24 27 17 12 2--Total Construction | g120 - _ | ||
$g$117$138$184$220$240$255 aConstruction Budget Pre TMI Accident | $ 100 _ 17 Mills EAC _ | ||
$91$118$168$194$221$273$298' Replacement Nuclear Fuel Core included in Nuclear Fuel g4 7g3 50 Metropolitan Edison Company Comparison of Pre-TM] Budget with Current Forecast Payroll & Other O&M Expenses C$MillionsD 1979 Original Budget | g - r _ | ||
$ 90.8 Reductions: | 80 - | ||
Eliminate Budgeted Personnel Additions | 4 - | ||
$1.6 Reduce Overtime | 60 - | ||
.1 Reduce Outside Services 1.7 GPUSC Cost Reduction Programs 1.7 Defer Fossil Generation Maintenance 2.1 Tree Trimming 1.7 Diversion of Employees to TMl 1.5 Total Reductions 10.4 1979 Current Forecast | - | ||
$ 80.4 1474 294 51 Metropolitan Edison Company Analysis of Personnel Changes 3/31/79 - 12/31/79 Non TMI TM1 Total Employees at 3/31/79 2,284 508 2,792 Changes: | ^% '' _ | ||
_ | |||
($ Millions) 1979 1980 1981 1982 1983 1984 | - | ||
$65$70$86$100$107$126$146 1474 296. | 20 Mills EAC ' | ||
40 - | |||
~ | |||
'N - | |||
- | |||
20 # Unamortized - Prior 7/1/78 'N | |||
..,,';; | |||
- | |||
u.:. | |||
f | |||
[:fffp?$fff}}fe/f3fffe?(fp?yt:{:p%.te:Z 'y:.gf:.j:f3t;y:gyte:<.p,:.p,;3.c,3., | |||
. _ | |||
JM J S D M J S D M J S D 1979 1980 1981 Assumes TMI-1 Returns to Service 1/1/81 1474 28 | |||
48 Pennsylvania Electric Company Comparison of Pre-TMI Budget with Current Forecast Payroll & Other O&M Expenses | |||
($ Millions;l 1979 Original Budget $ 123.8 Reductions: | |||
Eliminate Budgeted Personnel Additions $ .9 Reduce Overtime .4 Reduce Outside Services 1.9 GPUSC Cost Reduction Programs 1.9 Defer Fossil Generation Maintenance 4.8 Tree Trimming 1.6 Employee Reduction Program 1.3 Total Reductions 12.8 1979 Current Forecast $ 111.0 3474 290 | |||
47 Pennsylvania Electric Company Analysis of Personnsi Changes 3/31/79 - 12/31/79 Employees at 3/31/79 4,202 Changes: | |||
Laid off 7/1/79 (150) | |||
Early Retirements (60) | |||
Total Change (210) | |||
Estimated Employees at 12/31/79 3,992 1474 29I | |||
48 Pennsylvania Electric Company Construction Budget Before TMI Accident | |||
($ Millions) 1979 1980 1981 1982 1983 1984 1985 New Generation Seward $11 $ 16 $ 17 $ 50 $ 94 $113 $120 Coho 1 1 1 3 5 21 39 Combustion Turbines 1 2 22 13 2 18 10 Other J 2 10 4 2 7 9 Total $14 $ 21 $ 50 $ 70 $103 $159 $178 Existing Generation 25 26 31 24 18 17 13 Nuclear Fuel 11 12 19 20 21 14 25 Transmission 8 12 23 31 28 27 26 Distribution 27 42 43 47 49 54 54 Other 6 5 2 2 2 2 2 Total Construction $g $118 $168 $194 $221 $273 $208 1474 292 | |||
49 Pennsylvania tilectric Company Current Construction Forecast | |||
($ Millions) 1979 1980 1981 1982 , | |||
1983 1984 1985 New Generation Seward $3 $ 8 $ 21 $ 62 $119 $135 $140 Other 3 1 10 5 - - - | |||
Total $6 $ 9 $ 31 $ 67 $119 $135 $140 Existing Generation 21 23 24 27 23 20 15 Nuclear Fuel 10 8 4 21 14 19 27 Transmissica 5 7 12 14 14 21 21 Distribution 24 38 32 41 45 43 50 Other 5 4 6 2 3 2 2 Total * $71 $ 89 $115 $172 $218 $240 $255 Nuclear Fuel Deferral | |||
& Retentions (3) 1 6 - - - - | |||
TMI-2 Restoration *" 24 27 17 12 2 - - | |||
Total Construction $g $117 $138 $184 $220 $240 $255 aConstruction Budget Pre TMI Accident $91 $118 $168 $194 $221 $273 $298 | |||
' Replacement Nuclear Fuel Core included in Nuclear Fuel g4 7g3 | |||
50 Metropolitan Edison Company Comparison of Pre-TM] Budget with Current Forecast Payroll & Other O&M Expenses C$MillionsD 1979 Original Budget $ 90.8 Reductions: | |||
Eliminate Budgeted Personnel Additions $1.6 Reduce Overtime .1 Reduce Outside Services 1.7 GPUSC Cost Reduction Programs 1.7 Defer Fossil Generation Maintenance 2.1 Tree Trimming 1.7 Diversion of Employees to TMl 1.5 Total Reductions 10.4 1979 Current Forecast $ 80.4 1474 294 | |||
51 Metropolitan Edison Company Analysis of Personnel Changes 3/31/79 - 12/31/79 Non TMI TM1 Total Employees at 3/31/79 2,284 508 2,792 Changes: | |||
Attritions (29) - | |||
(29) | |||
Regular Retirements (27) - | |||
(27) | |||
Early Retirement Program (53) - | |||
(53) | |||
Additions & Replacements 38 - | |||
38 Temporary Assigned to TMI (215) 215 - | |||
Additional Requirements at TMl - | |||
164 164 Total Change (286) 379 93 Estimated Employees at 12/31/79 1,998 887 2,885 1474 295 | |||
52 Metropolitan Edison Company Construction Budget Before TMI Accident | |||
($ Millions) 1979 1980 1981 1982 | |||
_ | |||
1983 1984 1985 New Generation Seward $1 $2 $2 $ 6 $ 12 $ 14 $ 16 Coho - - - | |||
1 3 10 20 Combustion Turbines - - | |||
1 9 7 18 10 Other 4 5 4 6 4 9 11 Total $5 $7 $7 $ 22 $ 26 $ 51 $ 57 Existing Generation 14 10 9 6 6 6 6 Nuclear Fuel 23 24 38 39 41 27 49 Transmission 2 6 7 9 7 13 5 Distribution 19 22 24 24 26 26 27 Other 2 1 1 - | |||
1 3 2 Total Construction $65 $70 $86 $100 $107 $126 $146 1474 296 | |||
. | |||
53 Metropolitan Edison Company Current Construction Forecast | 53 Metropolitan Edison Company Current Construction Forecast | ||
($ Millions) 1979 1980 1981 1982 1983 1984 1985 New Generation Seward$1$1$3$8$15$17$17 Other 2 1 3 3 2--Total$3$2$6$11$17$17$17 E::::; ting Generation 14 5 9 7 6 6 6 Nuclear Fuel 19 15 8 41 27 37 54 ansmission 1 4 5 14 10 7 7 Distribution 17 20 24 26 27 29 31 Other 1 2 1 1 1 2 3 Total *$55$48$53$100$88$98$118 Nuclear Fuel Deferral | ($ Millions) 1979 1980 1981 1982 1983 1984 1985 New Generation Seward $1 $1 $3 $8 $15 $17 $17 Other 2 1 3 3 2 - - | ||
$98$102$g$124$g$98$ | Total $3 $2 $6 $11 $17 $17 $17 E::::; ting Generation 14 5 9 7 6 6 6 Nuclear Fuel 19 15 8 41 27 37 54 ansmission 1 4 5 14 10 7 7 Distribution 17 20 24 26 27 29 31 Other 1 2 1 1 1 2 3 Total * $55 $48 $53 $100 $88 $98 $118 Nuclear Fuel Deferral | ||
$65$ 70$86$1G0$107$126$146** Replacement Nuclear Fuel Core included in Nuclear Fuel i474 297 54 Possible Effects of Reduced 1-979 Construction Expenditures | & Retentions (5) - | ||
10 - - - - | |||
TMI 2 Restoration" 48 54 34 24 4 - - | |||
Total Construction $98 $102 $g $124 $g $98 $118 | |||
_ | |||
= Construction Budget Pre TMl Accident $65 $ 70 $86 $1G0 $107 $126 $146 | |||
** Replacement Nuclear Fuel Core included in Nuclear Fuel i474 297 | |||
54 Possible Effects of Reduced 1-979 Construction Expenditures | |||
($ Millions) | ($ Millions) | ||
Reductions Project Met Ed Penelec Impact of Cutbacks New Generation | Reductions Project Met Ed Penelec Impact of Cutbacks New Generation $1.7 $7.4 Higher Expenditures in Future Years Nuclear Fuel 3.4 1.6 None Existing Generation 0.9 4.1 Up to One Year Delay in Achieving Performance improvements | ||
$1.7$7.4 Higher Expenditures in Future Years Nuclear Fuel 3.4 1.6 None Existing Generation 0.9 4.1 Up to One Year Delay in Achieving Performance improvements- Loss of Generation Output through Higher Unavailability- Higher Energy Costs- Higher Maintenance Costs T&D Transmission 0.8 2.4 { | - Loss of Generation Output through Higher Unavailability | ||
- Higher Energy Costs | |||
- Higher Maintenance Costs T&D Transmission 0.8 Reduced System Design Criteria 2.4 { | |||
Distribution 1.9 Resulting in: | |||
2.5 ) | |||
- Premature Equipment Failure Due to Overloading | |||
- Reduced System Back Up Capability in Time of Emergency | |||
-Increased Frequency & Duration of Outages | |||
- Higher Maintenance Costs | |||
- Higher Future Capital Costs Due to Short Term Solutions Other 1.3 1.9 Delay in Office Additions Total $ 10.0 $19.9 1474 298 | |||
55 GPU Operating Companies Statement of Cash Needs, Internal Sources | |||
& External Sources - 1979,1980, & 1981 | & External Sources - 1979,1980, & 1981 | ||
[$ Millions) | [$ Millions) | ||
Year 1979 Year 1980 Year 1981 ME PN ME PN ME | Year 1979 Year 1980 Year 1981 ME PN ME PN ME -- | ||
$ 50$ 68$ 48$ 90$ 63$121 TMI 2 Restoration | PN Needs for Cash Construction $ 50 $ 68 $ 48 $ 90 $ 63 $121 TMI 2 Restoration | ||
* 48 24 54 27 34 17 Refinancings 2 14 14 5 2 10 Deferral of Energy Costs 52 (8)53 14 (26)4 Total$152$ 98$169$136$ 73$ | * 48 24 54 27 34 17 Refinancings 2 14 14 5 2 10 Deferral of Energy Costs 52 (8) 53 14 (26) 4 Total $152 $ 98 $169 $136 $ 73 $152 | ||
30 54 22 54 23 53 Depreciation & Amortization 41 48 39 47 45 52 Deferred Taxes & ITC (net) 37 10 30 13 17 29 Changes in Working Capital 3 9 2 (8)3 (6)TMI 2 insurance Proceeds 18 9 60 30 36 18 Dividends on Pmferred & Common (17)(49)(10)(49)(20)(50)Total$112$g$143$g$104$ 96 Cash Deficiency | _ _ | ||
$ 40$ 17$ 2_6$ 49$(31)$ 56 External Sources of Cash Long Term Financings --50 Capital Contributions | internal Sources of Cash Net income Before Preferred Div. 30 54 22 54 23 53 Depreciation & Amortization 41 48 39 47 45 52 Deferred Taxes & ITC (net) 37 10 30 13 17 29 Changes in Working Capital 3 9 2 (8) 3 (6) | ||
------Bank Borrowings 40-26 16 (31)6 Temporary investments | TMI 2 insurance Proceeds 18 9 60 30 36 18 Dividends on Pmferred & Common (17) (49) (10) (49) (20) (50) | ||
Total $112 $g $143 $g $104 $ 96 Cash Deficiency $ 40 $ 17 $ 2_6 $ 49 $(31) $ 56 External Sources of Cash Long Term Financings - | |||
$ 75-$101$ 16$ 70$ 22 Temporary investments | 50 - - - | ||
50 Capital Contributions - - - - - - | |||
........................................... ..................................... | Bank Borrowings 40 - | ||
120-100<>m 80-C.9 y60-40-20'''''''''''I I | 26 16 (31) 6 Temporary investments - | ||
*1979 at 8.4 mills | (33) 33 | ||
*1980 at 12.9 mills | __ | ||
*1981 at 17.8 mills | _ _- | ||
]474'00-TMI-1 Returns to Service 1/1/81 | Total $ 40 $ 17 $ 26 $ 49 $ (31) $ 56 | ||
-8.0 Mills Energy Cost included in Base Rates 57 Pennsylvania Electric Company Cumulative External Financing Requirements 140 i i i , , i i i i i i i i i i 120....................................................................................... | _ _ _ _ _ _ | ||
Short-term Debt Limit 8 | Short Term Debt Balance $ 75 - | ||
$101 $ 16 $ 70 $ 22 Temporary investments - | |||
$ 33 - - - - | |||
* Nuclear Fuel included in Construction | |||
56 Metropolitan Edison Company Cumulative External Financing Requirements 140 ii i i i i i i i i i i i i i i Short-term Debt Limit g | |||
........................................... ..................................... | |||
120 - | |||
100 | |||
<> | |||
m 80 - | |||
C | |||
.9 y60 - | |||
40 - | |||
20 0 ' ' ' ' ' ' ' ' ' ' ' I I AS N J M M J SNJMMJ SND 1979 1980 1981 Assumptions: | |||
-No Permanent financings | |||
- No GPU Contributions | |||
-Energy Cost Adjustment (excl. taxes) | |||
*1979 at 8.4 mills | |||
*1980 at 12.9 mills | |||
*1981 at 17.8 mills ]474 '00 | |||
-TMI-1 Returns to Service 1/1/81 | |||
-8.0 Mills Energy Cost included in Base Rates | |||
57 Pennsylvania Electric Company Cumulative External Financing Requirements 140 i i i , , i i i i i i i i i i 120 ....................................................................................... | |||
100 Short-term Debt Limit 8 80 - - | |||
60 - | |||
- | |||
u> | |||
m 40 - | |||
C | |||
$ 20 - - | |||
5 o _ $ 50 million Bond | |||
- 20 - | |||
-40 - - | |||
-60 - - | |||
-80 ' '' ' ' ' ' ' ' ' ' ' ' | |||
AS NJMMJ SNJMMJ SND 1979 1980 1981 Assumptions: | |||
No GPU Contributions Energy Cost Adjustment (excl. taxes) | No GPU Contributions Energy Cost Adjustment (excl. taxes) | ||
*1979 at 6.2 mills 1474 01* 1980,1981 at 7.2 mills TMI-1 Returns to Service 1/1/81 | *1979 at 6.2 mills 1474 01 | ||
~10.0 Mills Energy Cost included in Base Rates 58 Metropolitan Edison Company Condensed Income Statements 12 Months Ended 12/31/80 | * 1980,1981 at 7.2 mills TMI-1 Returns to Service 1/1/81 | ||
~10.0 Mills Energy Cost included in Base Rates | |||
58 Metropolitan Edison Company Condensed Income Statements 12 Months Ended 12/31/80 | |||
($ Millions) | ($ Millions) | ||
Total Rate Making Line Company Treatment (A) | Total Rate Making Line Company No. Treatment (A) | ||
(1) (2) 1 Revenue $411.9 $ 411.9 Expenses: | |||
$337.4$338.6 9 Return on Rate Base | 2 Energy $ 180.8 $ 180.8 3 Payroll 37.9 36.7 4 Other O&M 41.7 40.3 5 Depreciation 39.0 27.7 6 Taxes, Other 34.9 34.9 7 income Taxes 3.1 18.2 8 Total Expense $337.4 $338.6 9 Return on Rate Base $ 74.5 $ 73.3 10 Int. & Pref. Div. 62.1 35.2 11 Equity Return $ 12.4 $ 38.1 Rates of Return 12 On Rate Base - | ||
$ 74.5$ 73.3 10 Int. & Pref. Div. | 9.80 % | ||
62.1 35.2 11 Equity Return | 13 On Total Capital 6.54 % - | ||
$ 12.4$ 38.1 Rates of Return 12 On Rate Base | 14 On Common Equity Devoted to Rate Base - | ||
13.39% | |||
On Total Common Equity 3.19% - | |||
(%)(%)Current Forecast Excluding TMI 1 | Coverage Ratios 16 Interest Coverage 1.76 17 Preferred Stock 1.19 147A 02 (A) Excludes TMI-2 | ||
$377.8 (9.3)%1.04 (.85)%TMI1: Interest 7.3 2.0.15.88 Preferred Dividends 3.7 1.0.08.44 Depreciation 3.9 1.1.08.47 Return on Common Equity 17.0 4.7.36 2.00 Operating Expenses 2.2.5.05.25 Total TMl 1 | |||
$34.1 9.3%.72 4.04%Current Forecast: | 59 Metropolitan Edison Company Revenues Associated with Components of TMl-1 & 2 Costs and Impact on Costs to Customers, Interest Coverage Ratios and Return on Common Equity (1980) | ||
$411.9-1.76 3.19%TMI 2: Interest 13.7 3.8.29 1.62 Preferred Dividends 6.7 1.8.14.80 Depreciation 9.0 2.5.19 1.08 Return on Common Equity 31.8 8.6.66 3.80 Operating Expenses 2.8.7.06 J Total TMI 2 64.0 17.4%1.34 7.63 %Forecast, AAsted to include TMI-2$475.9 17.4%3.10 10 ;2%' Compared to Current Rates 3474'03 60 Metropolitan Edison Company Impact of Rate increase for Components of TMI-2 Costs Upon Charges to Customers, Interest Coverage Ratios & Return on Common Equity (1980D 3.1 | Impact on impact on Change in Interest ROR on Avg Customer Coverage Total Common Revenues Costs 1 Ratio Equity | ||
$2.5 g $, O O e,7 3p | ($ Millions) (%) (%) | ||
Current Forecast Excluding TMI 1 $377.8 (9.3)% 1.04 (.85)% | |||
TMI1: | |||
Interest 7.3 2.0 .15 .88 Preferred Dividends 3.7 1.0 .08 .44 Depreciation 3.9 1.1 .08 .47 Return on Common Equity 17.0 4.7 .36 2.00 Operating Expenses 2.2 .5 .05 .25 Total TMl 1 $34.1 9.3% .72 4.04% | |||
b | Current Forecast: $411.9 - | ||
1.76 3.19% | |||
TMI 2: | |||
Interest 13.7 3.8 .29 1.62 Preferred Dividends 6.7 1.8 .14 .80 Depreciation 9.0 2.5 .19 1.08 Return on Common Equity 31.8 8.6 .66 3.80 Operating Expenses 2.8 .7 .06 J Total TMI 2 64.0 17.4% 1.34 7.63 % | |||
Forecast, AAsted to include TMI-2 $475.9 17.4% 3.10 10 ;2% | |||
' Compared to Current Rates 3474 '03 | |||
60 Metropolitan Edison Company Impact of Rate increase for Components of TMI-2 Costs Upon Charges to Customers, Interest Coverage Ratios & Return on Common Equity (1980D 3.1 , , , , , , , , , , , 10.8 | |||
_ | |||
,0 9 Exp | |||
- | |||
10.5 2.9 2:, | |||
K Common < | |||
" | |||
e 2.7 - | |||
-- -- | |||
8.6 H z | |||
$ - | |||
si.$ | |||
% Common Equity | |||
$ 2.5 g $, | |||
O O o - | |||
___________ e,7 3p | |||
~ | |||
2.3 B g | |||
s a~E Depreciation O m | |||
o - | |||
- - - - - - - - - - - - - - - - | |||
5.6 m | |||
.E 2.1 - Preferred Dividends s 4'8 @ O 2.0 - | |||
- | |||
------------------ | |||
Interest (b | |||
1.7 ' ' ' ' ' i i ' i i i i ,3. 2 0 4 8 12 1617.4 | |||
% increase to Customers (Rev 9/26/791 1A7A :04 | |||
61 Pennsylvania Electric Company Condensed Income Statements 12 Months Ended 12/31/80 | |||
($ Millions ? | ($ Millions ? | ||
Tntal Rate Niaking | Line Tntal Rate Niaking No. Compc'iy _ | ||
Treatment (A) | |||
$458.8$456.6 9 Return on Rate Base | (1) (2) 1 Revenues $ 558.9 $ 558.9 Expenses: | ||
$ 100.1$ 102.3 10 Int. & Pref. Div. | 2 Energy $ 212.1 $ 212.1 3 Payroll 49.3 49.3 4 Other O&M 78.3 72.3 5 Depreciation 47.3 41.6 6 Taxes, Other 41.0 40.9 7 income Taxes 30.8 40.4 8 Total Expenses $458.8 $456.6 9 Return on Rate Base $ 100.1 $ 102.3 10 Int. & Pref. Div. 64.2 57.1 11 Equity r.eturn $ 35.9 $ 45.2 Rates of Return 12 On Rate Base - | ||
64.2 57.1 11 Equity r.eturn | 9.72% | ||
$ 35.9$ 45.2 Rates of Return 12 On Rate Base | 13 On Total Capital 7.94% - | ||
14 On Common Equity Devoted to Rate Base - | |||
13.24% | |||
(%)(%)Current Forecast Excluding TMI.1 | 15 On Total Common Equity 8.60 % - | ||
$542.6 (3.1)%2.42 6.80%TMI 1: Interest 3.9.7.07.42 Preferred Dividends 2.1.4.04.23 Depreciation | Coverage Ratios Interest Coverage 2.68 Preferred Stock 1.50 (A) Excludes TMI-2 g474 .05 | ||
.9.2.02.10 deturn on Common Equity 7.6 1.4.12.85 Operating Expenses 1.8.4.03.20 Total TMI.1 | |||
$ 16.3 3.1 %.28 1.80%Current Forecast: | 62 Pennsylvania Electric Company Revenues Associated with Components of TMI-1 & 2 Costs and impact on Costs to Customers, Interest Coverage Ratios and Return on Common Equity (1980) | ||
$558.9-2.70 8.60%TMI 2: Interest 7.3 1.3.13.81 Preferred Dividends 4.0.6.07.44 Depreciation 3.0.6.05.33 Return on Common Equity 14.4 2.6.25 1.60 Operating Expenses 3.1.6.05.33 Total TMI 2 31.8 5.7%.55 3.51 %Forecast, Adjusted to include TMI2 6590. | Impact on impact on Cha'ge in Interest ROR on Avg Customer Coverage Total Common Revenues Costs 1 Ratio Equity | ||
($ Millions) (%) (%) | |||
Current Forecast Excluding TMI.1 $542.6 (3.1)% 2.42 6.80% | |||
_- - - - - - - - - - - - - - - - | TMI 1: | ||
Interest 3.9 .7 .07 .42 Preferred Dividends 2.1 .4 .04 .23 Depreciation .9 .2 .02 .10 deturn on Common Equity 7.6 1.4 .12 .85 Operating Expenses 1.8 .4 .03 .20 Total TMI.1 $ 16.3 3.1 % .28 1.80% | |||
Book Value @ 12/31178 | Current Forecast: $558.9 - | ||
($22.41)GPU Post Accident and Utility Sample: Per Salomon Brothers Stock Research Report - | 2.70 8.60% | ||
TMI 2: | |||
Interest 7.3 1.3 .13 .81 Preferred Dividends 4.0 .6 .07 .44 Depreciation 3.0 .6 .05 .33 Return on Common Equity 14.4 2.6 .25 1.60 Operating Expenses 3.1 .6 .05 .33 Total TMI 2 31.8 5.7% .55 3.51 % | |||
Forecast, Adjusted to include TMI2 6590.7 _5.7 % 3.25 12.11% | |||
' Compared to Current Rates | |||
;06 3A7A | |||
63 Pennsylvania Electric Company impact of Rate increase for Components of TMI-2 Costs Upon Charges to Customers, Interest Coverage Ratios & Return on Common Equity (1980) 3.25 i i i i i i i i i i , 12.1 | |||
"*" | |||
3.20 - | |||
11.8 | |||
- | |||
> | |||
< | |||
% Common c Equity -{ | |||
3'10 - | |||
$ ------ | |||
11.0 2 x ER E | |||
o* | |||
- | |||
8 % Common Equity o$ | |||
o 3.00 o B g | |||
0 | |||
- | |||
------------ | |||
Depreciation 10.2 3l C2 2 | |||
y 2.90 - | |||
_ _ _ _ . _ _ _ _ . _ _ _ _ _ . _ . | |||
9.8 m3 3 Preferred Dividends $ | |||
y$ | |||
_ | |||
, | |||
- - - - - - - - - - - - - - - - | |||
9.4 2.80 Interest 2.70 ' ' ' ' ' ' ' ' | |||
, | |||
,8.6 0 1 2 3 4 5 5.7 | |||
% increase to Customers 1474 07 (Rev 9/26/791 | |||
64 Impact of TMI-2 Accidunt on GPU Common Stockholder Common Stockholder Investment vs Market Worth 1400 ._ | |||
a ^ ^ | |||
a 1200 299 ! 328 | |||
,r 384 y | |||
-- | |||
y 1010 - - | |||
!g- ; | |||
,3 g- 77ti | |||
* 800 - | |||
, | |||
- | |||
i A | |||
9 e | |||
ki i'y | |||
- | |||
i k gj O E h | |||
' | |||
$! d | |||
.9 e a s ,, | |||
j 600 - | |||
' | |||
[j g-s R 400 41 d@ 5 k: | |||
if ft g y B 3 s a a g% a 200 | |||
' | |||
- | |||
% % | |||
- | |||
$ | |||
. | |||
4th Qt Jan-Feb Mar'79 July'79 | |||
'78 '79 Book Value 147a DB E Closing Market Price at end of Period Multiplied by Shares Outstanding at end of Period | |||
65 Imp..et of TMI-2 Accident on GPU Common Stockholder Dividend Yield on Book Value 10.0 | |||
. | |||
- | |||
Pre Accident _ | |||
# | |||
g 6.0 | |||
.9 Post | |||
( Accident 4.0 - | |||
5 h 3 | |||
2.0 - | |||
ij , | |||
- | |||
s | |||
! ff vg;.;g;,, 'ly P,ook Value Og GPU Pre Accident Annual Dividend Rate @ 12/31/78 l$1.80) Book Value @ 12/31178 | |||
($22.41) | |||
GPU Post Accident and Utility Sample: Per Salomon Brothers Stock Research Report - | |||
8/1/79 (Annual Dividend Rate @ 7131179 | 8/1/79 (Annual Dividend Rate @ 7131179 | ||
+ Book Value @ 3/31179) 1474 M 66.Metropolitan Edison Company Installed Capacity & Obligation Proposed Capacity Plan 6000 5000-~- | + Book Value @ 3/31179) 1474 M | ||
, , , | 66 | ||
. | |||
Metropolitan Edison Company Installed Capacity & Obligation Proposed Capacity Plan 6000 5000 - | |||
" | |||
~ | |||
- | |||
o 2 -Ei 4000 - | |||
get.Ed Total installed E $m e | |||
- | |||
Capacity Obligation - | |||
1-m E. - i f3000 Met Ed installed Peaking Capacity V f N m | |||
2000 y rms# # - | |||
, , | |||
, , A _, Base + Intermediate Capacity Goal 1000 ~; ..l Installed Base + . | |||
> | |||
Intermediate Capacity / | |||
, ,, --- | |||
, , | |||
~ | |||
0 ' | |||
> | |||
79 80 81 82 83 84 85 86 8788 89 90 91 92 93 94 95 96 97 98 99 Year TMI Capacity | |||
\414 >\U | |||
67 O | |||
. | |||
Pennsylvania Electric Company Installed Capacity & Obligation Proposed Capacity Plan 6000 - | |||
" | |||
* e 5000 - | |||
s 1 1 | |||
* _ | |||
Penelec Total Installed g - ; 7m_ | |||
= .a =3 8 Capacity Obligation | |||
! 3 E. " " | |||
EWW Edu 4000 - | |||
Penelec Installed * | |||
" E50 Peaking Capacity % 5- = | |||
_ | |||
3 3000 - | |||
V | |||
'~ ' | |||
~ | |||
2 y~ an | |||
- | |||
' | |||
Base + lntermeauate | |||
~~ - | |||
. | |||
- | |||
Capacity Goal | Capacity Goal | ||
. | , . . , | ||
2000 3 | |||
, _. Q Installed Base + | |||
_ | |||
1000 .' l"lermediate Capacity | |||
,. | |||
; . | |||
, | |||
i . . | |||
0 79 88 81 82 83 84 85 86 87 88 89 98 91 92 93 94 95 96 97 98 99 Year TMI Capacity 1474 all | |||
68 Conclusions e Currently and Historically, Met Ed and Penelec Rates Compare Favorably with Other Pennsylvania Utilities. | |||
* The Percent of income Required for Payment of Electricity Measured Against Wages, and Social Security Benefits Has Been Relatively Stable Over the Last Several Years e TMI1 Restart Schedule Hinges Upon NRC Proceedings. | * The Percent of income Required for Payment of Electricity Measured Against Wages, and Social Security Benefits Has Been Relatively Stable Over the Last Several Years e TMI1 Restart Schedule Hinges Upon NRC Proceedings. | ||
* Energy Costs Are Extremely Sensitive to Oil Prices and Nuclear Generation Availability, e TMI Short Term Power Purchases and PJMlTMI Emergency Provisions Will Substantially Reduce Replacement Power Costs. | * Energy Costs Are Extremely Sensitive to Oil Prices and Nuclear Generation Availability, e TMI Short Term Power Purchases and PJMlTMI Emergency Provisions Will Substantially Reduce Replacement Power Costs. | ||
e Met Ed Deferred Energy Balance Requires Modification of Levelized Cost Rate.Penelec Could Revert to Standard ECR. | e Met Ed Deferred Energy Balance Requires Modification of Levelized Cost Rate.Penelec Could Revert to Standard ECR. | ||
* Reductions in Construction, O&M Expenses, and Personnel Will Provide Short Term Savings But May Affect Service Reliability and Long Term Costs. | * Reductions in Construction, O&M Expenses, and Personnel Will Provide Short Term Savings But May Affect Service Reliability and Long Term Costs. | ||
* External Financial Requirements Continue to Pose Formidable Barriers (Short Term Limits and Coverage Tests). New Equity issues Unlikely.* Modest TMI Related Revenues Can Restore Credit Worthiness. | * External Financial Requirements Continue to Pose Formidable Barriers (Short Term Limits and Coverage Tests). New Equity issues Unlikely. | ||
* Modest TMI Related Revenues Can Restore Credit Worthiness. | |||
* Future Construction of Generation Required to Meet Load Growth Needs to Be Addressed. | * Future Construction of Generation Required to Meet Load Growth Needs to Be Addressed. | ||
1474;12}} | 1474 ;12}} |
Revision as of 13:26, 19 October 2019
ML19210E233 | |
Person / Time | |
---|---|
Site: | Three Mile Island ![]() |
Issue date: | 11/29/1979 |
From: | Hafer F GENERAL PUBLIC UTILITIES CORP. |
To: | Vollmer R NRC - TMI-2 OPERATIONS/SUPPORT TASK FORCE |
References | |
NUDOCS 7912040087 | |
Download: ML19210E233 (148) | |
Text
'
GPU Service Corporation e
.
'
- ON 100 interpace Parkway Parsippany, New Jersey 07054 201 263-6500 TELEX 136-482
. Wnter's Direct Dial Nurnber (201) 263-6013
-
November 29, 1979 Mr. Richard H. Vollmer Director, Three Mile Island-2 Support Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission 7920 Norfolk Avenue Bethesda, Maryland 20014 RE: NRC Docket No. 50-289 - "MI-l Restart Proceeding
Dear Mr. Vollmer:
In respense to the NRC's supplementary requests for financial information telecopied to C. W. Smyth on November 9, 1979, enclosed are eight copies of the following:
- 1. Additional response to Supplementary Financial Request No. 9 (PA PUC's Order requring Met-Ed to "show cause why its certificate of public convenience should not be revoked").
Please acknowledge receipt of this material by signing, dating and returning the enclosed copy of this letter. A stamped, pre-addressed envelope is enclosed for that purpose.
Very truly yours, i
v 1 k
F. D. Hafer Vice President, Rate Case Management FDH:jb
[y cc: J. C. Petersen - No enclosures; to be distributed by ARC b b H. Silver - No enclosures; to be distributed by NRC '
, I
(,M g
1474 001 7912040 OF7 4 GPU Ser rice Corporation is a subsdary of General Pubhc Ut Corporation
l'e rson Hosponu lble for Prepa rat ioe:
F. D. Itafer, Vice President - Rate Case Management, CPU Service Corp.
Telephone: (201) 203-S013 Date: November 29, 19/9 GENERAL PUBLIC UTILITIES CORPORATION Me t ropoli tan Ed i son Company, Pennsylvania Elec t r ic Company and Je rse y Cen t ral Powe r f. Light Com pa n y NitC Docke t No. 50-289 Three Mile Island Unit No. I Restart Proceedinc, Supplementary response to NRC Staff's Supplemental Financial Information Request No. 9, telecopied 11/9/79 (item numbers refer to initial requests dated 9/21/79):
"(10.5 and 10.c) Subsequent to our September 21, 1979 request, it was reported (Wall Street Journal, November 2, 1979, p. 12) that the Pennsylvania Public Utility Commission (PPUC) issued a show cause order to Met-Ed regarding the company's ability to provide utility service in Pennsylvania. Provide copies of the PPUC order and cop 'es of Met-Ed's response to the order, when available. Continue to keep the NRC Stt.f f informed of all developments in the uhow cause proceeding. Provide copies of all subsequent PPUC orders and other directives and Met-Ed rest anses relat ed to this proceeding."
Response.
As a further response to this request, attached are copies of the following exhibits and testimony submitted at the continued prehearing conference in the PA PUC's Docket No. I-79040308 held on 11/27/79 in llarrisburg:
- 1. ME/PN Exhibit A-1 (revolving credit agreement; wi t n es ses: J. G. Graham, F. D. !!a f e r) .
- 2. ME/PN Exhibit A-2 (petition to increase Met-Ed's levelized energy cost adjustment charge; witnesses: J. G. Graham, F. D. lla f e r) .
- 3. ME/PN Statement B, Exhibits n-1, B-2 (preliminary statements of 1980 rate base, operating and net income, with and without TMI-l and TMI-2, and related accounting testimony - Met-Ed; witness: D. L. Iluf f) .
- 4. ME/PN Scatement C, Exhibits C-1, C-2 (preliminary statements of 1980 rate base, operating and net income. with and without IMI-l and fMI-2, and related accounting testimony - Penelec, witness: F. A. Donofrio).
- 5. ME/PN Exhibit F-1 (ME/PN presentatton before the PA PUC, 9/21/79; witness: 11. M. Dieckamp) .
1474 302
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LMu .n.% ~ , s ..
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Il ME/?N E::hibit A-1 Witnesses. J.G. Graham; F.D.Hafer (Final Execution Copy]
REVOL7ING CREDIT AGREEMENT Dated as of June 15, 1979 GENERAL PUBLIC UTILITIES CORPOBATION, a Pennsylvania corporation ("GPU"), JERSEY CENTRAL PCWER & LIGHT COMPANY, a New Jersey corporation ("JC"), METROPOLITAN EDISON CO 1P ANY, a Pennsylvania corporation ("ME"), and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation ("PE") (GPU, JC, ME and PE being , collectively, the " Borrowers" and each individually a " Borrower"), each Bank (as defined below) and CITIBANK, N.A.
("Citibank"), as agent (the " Agent"), and CHEMICAL BANK
(" Chemical Bank"), as co-agent ( the "Co-Agent" ) for the Banks, agree as follows:
ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms snall nave the follcwing meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
" Additional JC Amount" means, at any time, an amount equal to the principal amcunt of JC Eonds pledged to the Co-Agent pursuant to the JC Bond Pledge Agreement less the principal amount of any JC Bonds released frcm such pledge; provided, however, that, upon the making of such pledge, tne co-Agent snall have received the applic-able JC Eonds, together witn an opinion of Messrs.
Berlack, Israels & Libe rman , counsel for JC, in substan-tially the form of Exhibit I hereto and such other approvals, opinions and other documents as any Bank through the Agent may recsonably request.
" Advances" means advances pursuant to Article II.
" Aggregate Octal Commitment' means the sum of the Total Commitments of tne Bar.ns frcn time to time.
" Bank" means, prior to the Closing Date, each cank which has, together with the Sorrowers, the Agent and Co-Agent, executed a counterpcr" hereof en or prior to the 300RORMWAL e e
'
fl 2
9 date hereof and, as at and subsequent to the Closing Date, each Confirming Bank; collectively, the " Banks".
" Base Amount" has the meaning assigned to that term in Section 2.01 (c)(ii) .
" Basic Documents" means the Loan Documents, the GPU Loan Agreement, the GPU Loan Agreement Restatement and the New GPU Notes.
" Bond Pledce Acreements" means the ME Bond Pledge Agreement and, it executed and delivered, the JC Bond Pledge Agreement.
" Bonds" means the ME Bonds and the JC Bonds.
"Borrowinc" means a borrowing consisting of simul-taneous Advances from the Banks to any one Borrower.
" Business Dav" means any day other than a Saturday, Sunday or day on which commercial banks in the State of New York are authorized by law *c close.
"Closinc Date" means June 20, 1979, the date upon O which the initial Advances to the Borrowers shall, subject to the terms and conditions hereof, be made.
" Collateral Acreements" means the Stock Pledge Agreement, the Bond Pledge Agreements and the Security Agreements.
" Commitment Increase Recuest" means a certificate of the principal financial officer of GPU substantially in the form of Exhibit J hereto.
"Confirminc Bank" means each Bank which, prior to the Closing Date, has confirmed, orally or in writing (including by telex, cable or telegram), to the Agent or the Co-Agent that the Rate Orders are satisfacrory to it; collectively, the "Confirminc Banks".
" Event of Default" has the meaning assigned to that term in Section 6.01.
" External Line" means a Line to a Borrower from a commercial bank wnich is not a Confirming Bank.
O
.
1474 004
$ .
3
" Final Aggrecate Total Commitment" means the sum of the Tc tal Commitments of tne Confirming Banks.
"GPU Loan Agreement" means the Loan Agreement, dated as of November 15, 1976, as amended by an Agree-ment, made as of March 20, 1979, among GPU, Citibank, Chemical Bank, Irving Trust Company, Manufacturers Hanover Trust Company and Marine Midland Bank and, upon the effectiveness of the GPU Loan Agreement Restatement, such Loan Agreement as amended and restated pursuant thereto.
"GPU Loan Agreement Restatement" means an Amendment to the Loan Agreement, dated as of November 15, 1976, as amended by an Agreement, made as of March 20, 1979, among GPU, Citibank, Chemical Bank, Irving Trust Company, Manufacturers Hanover Trust Company and Marine Midland Bank in substantially the form or Exhibit E hereto.
" Guaranties" means the JC Guaranty, the ME Guaranty, the PE Guaranty and the ServCo Guaranty.
" Indebtedness" of any Person means (i) indebtedness for borrowed money or for the deferred purchase price of property or services in respect of which such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which such Person other-wise assures a creditor against loss, (ii) obligations under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases in respect of which obliga-tions such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise assures a cred-itor against loss, and (iii) unfunded vested benefits under each plan maintained for employees of such Person and covered by Title IV of the Employee Retirement Income Security Act of 1974.
"JC Bonds" means First Mortgage Bonds of JC issued pursuant to one or more indentures supplemental to that certain Indenture (the "JC Indenture"), dated March 1, 1946, from JC to Citibank ( formerly, City Bank Farmers Trust Company), Trustee, which bonds, in the case of any such bonds pledged to the Co-Agent in accordance with
. Section 6.01(i), shall have a stated maturity of October 1, 1981, and a stated interest rate of 11% per annum.
3A74 005
~ r 4
"JC Bond Pledge Agreement" means a Pledge Agreement, g executed by JC, in suostantially the form of Exhibit D W hereto.
' '
Guaranty" has the meaning assigned to that term in Sui on 3.01(vi)(b).
s "JC Security Agreement" has the meaning assigned to that term in Section 3.01(vi)(i).
"JC Term Loan Acreement" means that certain Term Loan Agreement, dated as of May 21, 1979, as amended and restated to the date hereof, among JC, certain of the Banks and Citibank, as Agent.
"Line" means any arrangement (other than pursuant to this Agreement, the GPU Loan Agreement or the Senior Debt Documents) with any commercial bank pursuant to which such commercial bank has agreed (whether or not such agreement shall be legally enforceable) to make unsecured loans or extend credit on an unsecured basis to one or more Borrowers up to r. specified amount either on a demand basis or for periods of not in excess of 270 days or any similar financing arrangement commonly known as a "line of c,redit" . The principal amount of Indebtedness outstanding under Lines as at May 31, 1979, specified by Borrower and by lending bank g
is set forth on Schedule II hereto.
" Loan Documents" means this Agreement, the Notes, the Guaranties and the Collateral Agreements.
" Loan Limit" means at any time in the case of:
(a) GPU, S75,000,000 as at the date hereof and, subsequent to the date hereof, such increased amount not in excess of $150,000,000 as shall be from time to time consented to in writing by the Super Majority Banks subsequent.to the receipt by the Agent of a Commitment Increase Request in respect thereof; (b) JC, $139,000,000 plus the Additional JC Amount;
(c) ME, S125,000,000 or such other amount (presently S90,000,000) not in excess of $125,000,000 as he SEC may from time to time authorize by ap-propriate order, a copy of which order or orders, certified by the. Secretary of ME, together with a favorable opinion with respect thereto of Messrs.
Berlack, Israels & Liberman, counsel to ME, shall lll 1474 006
__
, .
5 be delivered to the Agent, in sufficient copies for the Banks, prior to any Borrowing by ME which would cause the outstanding Indebtedness of ME hereunder to exceed the theretofore authorized amount; pro-vided, however, that the ME Loan Limit in effect from time co time shall be reduced by an amount equal to the amount, if any, by which the principal maount of ME Bonds pledged to the Co-Agent pursuant to the ME Bond Pl~dge e Agreement from time to time shall be less than S40,000,000; and (d) PE, $116,000,000.
" Majority Banks" means at any time Banks holding at least 66 2/3% of the then aggregate unpaid principal amount of the Notes held by Banks, or, if no such principal amount is then outstanding, having at least 66 2/3% of the Aggregate Total Commitment; provided, however, that with respect to the Co-Agent acting under or in respect of any Collateral Agreement, " Majority Banks" means at any time Banks holding at least 66 2/3% of the then aggregate unpaid principal amount of Secured Debt.
"ME Bonds" means First Mortgage Bonds of ME issued pursuant to one or more indentures supplemental to that certain Indenture (the "ME Indenture"), dated November 1, 1944, from ME to Morgan Guaranty Trust Company of New York (formerly Guaranty Trust Company of New York),
Trustee, which bonds, in the case of any such bonde pledged to the Co-Agent in accordance with Section 3.01(vi)(g), shall have a stated maturity of October 1, 1981, and a stated interest rate of 11% per annum.
"ME Bond Pledge Agreement" has the meaning assigned to that term in Section 3.01(vi)(g).
"ME Guaranty" has the meaning assigned to that term in Section 3.01(vi) (c) .
"ME Security Agreement" has the meaning assigned to that term in Section 2.01(vi)(h).
"NJBPU" means the Board of Public Utilities of the State of New Jersey.
"New GPU Notes" means the promissory notes of GPU in substantially the form of Exhibit A-1 to the GPU Lo an Agreement Restatement issued to Citibank, Chemical Bank,
,
Irving Trust Company, Manuf acturers Hanover Trust Com-pany and Marine Midland Bank in connection with the ef fectiveness of the GPU Doan Agreement Restatemer74 14 007
__
. ,
'
@
"New Note Issue Date" has the meaning assigned that term in Section 2.02.
" Note" means each promissory note of any Borrower to the order of a Bank evidencing the Indebtedness af such Borrower hereunder to such Bank in substantially the form of Exhibit A-1, Exhibit A-2, Exhibit A-3 or Exhibit A-4 hereto, respectively, and issued pursuant to Section 2.02 and Article III.
"PaPUC" means the Pennsylvania Public Utility Commission.
"PE Guarartv" has the meaning assigned to that terr. in Section 3.01(vi)(d).
" Percentage" means, for each Bank, a percentage equal to a fraction of which the numerator is such Bank's Total Commitment and the denominator is the Final Aggregate Total Commitment.
" Person _" means any individual, corporation, partner- g ship, i~o' int venture, trust, unincorporated organizaticn W or other juridical entity, or a government or any agency or political sucdivision thereof.
" Rate Orders" has the ~ meaning acsigned to that term in Section 3.01(vii).
"SEC" means the Sece-ities and Exchange Commission.
" Secured Debt" means, as to any Collateral Agree-ment, the Indeotedness purported to be secured thereby.
" Security Agreements" means the ME Security Agreement and the JC Security Agreement.
" Senior Debt" means Indebtedness of a Borrower under a Senior Deot Document.
" Senior Debt Document" means any of those agree-ments and other documents listed on Schedule I hereto, as such agreements and other documents may be supple-mented from time to time.
'
"ServCo Guaranty" has the meaning assigned to that term in Section 3.01(vi)(e). ggg 1474 008
,
7
" Stock Pledge Aareement" has the meaning assigned to that term in section 3.01(vi)(f).
" Super Maiority Banks" means at eny time Banks holding at least 85% of the then aggregate unpaid principal amount of the Notes held by Banks, or, if no such principal amount is then outstanding, having at least 85% of the Final Aggregate Total Commitment.
" Termination Date" means the earlier of October 1, 19F1, or the date on which the Total Commitments are te rminated in whole pursuant to Section 2.05 or Section 6.01.
" Trustee Bank" has the meaning assigned to that term in Section 2.01(c).
" Total Commitment" means for each Bank, the amount set opposite suen Bank's name on the signature pages of the counterparts hereof executed by such Bank.
"Utilitv Act" means the Public Utility Holding Company Act of 1935.
SECTION 1.02. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles con-sistently applied.
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES; REFUNDINGS; AVAILABILITY SECTION 2.01. (a) The Advances. Subject to the provisions of subsections (b) and (c), below, each Bank severally agrees, on the terms and conditions provided here-in, to make Advances (the " Advances") to any Borrower from time to time during the period from and including the Closing Date to the Termination Date, provided that immediately af ter giving effect to each Advance the aggregate outstanding amount of Advances by such Bank to all Borrowers shall not exceed such Bank's Total Commitment. Each Borrowing under this Section 2.01 shall be in an aggregate amount of $1,000,000 or an integral multiple thereof ( prov ided , however, that, in 1474 009
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8
.
O respect of each Borrower, the initial Borrowing shall be in an aggregate amount which is not less than the aggregate principt amount of the Indebtedness of such borrower to the Banks ou standing on the date thereof under the Lines from the Banks to such Borrower and, in the case of JC, shall be in an additional amount eqmal to the aggregate principal amount of the Indebtedness of JC then outstanding under the JC Term Loan Agreement). Except as provided in Section 2.01(c), each Borrowing shall consist of Advances made on the same day by the Banks, each in the amount of their respective Percentages of the aggregate amount of such Borrouing. With-in the limits of this Section 2.01, each Borrower may borrow, prepay pursuant to Sections 2.06 or 2.07 and reborrow under this Section 2.01.
(b) Incremental Availability of the Final Agore-gate Total Commitment. Subject ~ to the otner terms and condi-tions hereof, the Final Aggregate Total Commitment shall be available to the Borrowers as follows:
(i) as at the Closing Date, there shall be available to the Borrowers the Final Aggregate Total Commitment less $120,000,000; and (ii) upon the written consent of the Super Majority O Banks, subsequent to the receipt by the Agent of a Com-mitment Increase Request in respect thereof, there shall be available to the Borrowers such additional amount not in excess of $120,000,000 as shall be specified in such consent.
(c) Certain Advances to JC and ME. With respect to Advances to JC by Citibank or to ME by Morgan Guaranty Trust Company of New York (each such Bank in respect of the applicable such Borrower being the " Trustee Bank"), the ini-tial Borrowing by each such Borrower shall incl'de an Advance by the Trustee Bank in an amount which is the greater of (i) the aggregate principal amount of the Indebtedness of such Borrower to the Trustee Bank to be paid pursuant to Section 2.11 (the " Base Amount") and (ii) the Trustee Bank's Percen-tage of the aggregate amount of such Borrowing. In the event that clause (i) of the preceding sentence shall be applicable in respect of a Borrowing: (x) the Banks other than the Trus-tee Bank shall make ratable (in proportion to their respective Percentages) Advances to the appropriate Borrower on the same day in an aggregate amount equal to the aggregate amount of
-
such Borrowing less the applicable Base Amount; (y) subsequent Borrowings by such Borrower shall consist of ratable (in pro-portion to their respective Percentages) Advances on the same lll 1474 010
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9 day by such other Banks to such Borrower until the Trustee Bank's Percentage of the aggregate principal amount of the Indebtedness of such Borrower outstanding hereunder is equal to the applicable Base Amount; and (z) thereafter, Borrowings by such Borrower shall consist of Advances made on the same day by the Banks (including the Trustee Bank), ecch in the amount of their respective Percentages of such Borrowing or remaining (giving effect to clause (y), above) portion thereof.
SECTION 2.02.- The Notes and Refundinos. TPe Advances will be evidenced by, and each Borrower shall repay the principal of each Advance and interest thereon in accord-ance with, the Notes received by the Banks pursuan'. to Arti-cle III, initially pursuant to Section 3.01(vi)(a). The Bor-rowers may, on the dates specified below (each a "New Note Issue Date"), issue, and the Banks hereby agree, subject to the terms and conditions provided for herein, to accept new Notes payable to the Banks on the dates specified below:
New Note Payable Issue Date On October 1, 1979 April 1, 1980 April ~, 1980 October 1, 1980 October 1, 1980 April 1, 1981 April 1, 1981 October 1, 1981.
New Notes issued and accepted hereunder shall, as at each New Note Issue Date, be deemed to constitute satisfaction in full of the obligation of the respective Borrowers to repay on such New Note Issue Date the Indebtedness evidenced by the Notes theretcfore outstanding, and such Indebtedness will thereupon be evidenced by the new Notes issued and accepted on such New Note Issue Date (and upon such issuance and acceptance, the former Notes shall no longer be deemed outstanding).
SECTION 2.03. Making the Advances. Each Advance (except the initial Advances, wnicn snall, subject to the terms and conditions hereof, be made on June 20, 1979) shall be made on at least five Business Days' written notice to the Agent (which shall give prompt notice thereof, and of each other notice received from any Borrower hereunder, to j klk O
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each Bank) signed by a duly authorized officer of such Bor-rower stating the identity of the Borrower to wnich the Advances are to be made and the requested amount and date of such Advances. Not later than 11:00 A.M. (New York City time) on the date of such Borrowing, each Bank shall make available to the Agent at its address referred to in Section 8.02, in immediately available funds, an amount equal to such Bank's Advance in respect of such Borrowing. After the
^qent's receipt of such funds and upon fulfillment of the m, plicable conditions set forth in Article III, the Agent will make such funds available to the Borrower designated in such notice to receive such Advances in immediately available funds at the Agent's aforesaid address.
SECTION 2.04. Fees. (a) Commitment' Fee. The Borrowers agree to pay to each Confirming Bank a commitment fee on such Bank's Total Commitment (whether used or unused and whether or not availaole) from the Closing Date until the Termination Date at the rate of 1/2 of 1% per annum, payable in arrears on the first day of each calendar month commencing August 1, 1979, and on the Termination Date.
(b) Administrat ion Fee. tne Borrowers agree to pay to the Co-Agent for 1rs own account and the account lh of the Agent, as they shall agree, an administration fee of $100,000 per annum from the Closing Date until the Termination Date payable in advance in consecurive quarter-annual installments of S25,000 each on the Closing Date, and thereafter on the firr' aay of October, January, April and July in each year, commencing October 1, 1979.
(c) Fee Allocation Amonc Borrowers. The Borrowers' respective obligations in respect of fees pursuant to this Section 2.04 and costs, expenses and taxes pursuant to Sec-tion 9.04 shall be determined by agreement among themselves and specified in a certificate signed by the principal finan-cial officer of each Borrower delivered to the Agent and the Co-Agent on or prior to the Closing Date. Such certificate shall be conclusively binding _ upon each Borrower; provided, however, that, if no Event of Default, or event which, with the giving of notice or the lapse of time or both, would con-stitute an Event of Default shall have occurred and be con-t i.au ing , a substitute certificate may be delivered from time to time by the Borrowers which shall, upon its delivery, be conclusively binding upon each Borrower until a further sub-stitute certificate is delivered as aforesaid; provided, further, however, that GPU shall be liable in respect of all lll 1474 012
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11 such fees and costs, expenses and taxes to the extent that any obligation of any other Borrower in respect thereof is unenforceabla or unpaid for any reason or in the event that no such certificate is furnished.
SECTION 2.05. Reduction of Total Commitments and Loan Limits. The Total Commitment of each Bank shall be reducec, upon at least five Business Days' written notice to the Agent, signed by a duly authorized officer of each Bor-rower, by such Bank's Percentage of the amount specified in such notice by which such Borrower's Loan Limit is to be reduced and, at the same time, such Borrower's Loan Limit shall be reduced by such amount; provided, however, that each partial reduction shall be in the aggregate amount of
$5,000,000 or an integral multiple thereof.
SECTION 2.06. Optional Precavments. Any Borrower may, upon at least five Business Days' written notice to the Agent signed by a duly authorized officer of such Forrower, prepay the outstanding Notes issued '~ such Borrower in whole or ratably in part with accrued intetust to the date of such prepayment on the amount prepaid, provided that each partial prepayment shall be in an aggregate principal amount not less than 55,000,000. Each such prepayment shall, <c on the giving of such notice, be and become due and payable upon the date specified in such notice.
SECTION 2.07. Mandatory Precavments. (a) In the event that any Borrower shall sell any of its property or assets (other than in the ordinary course of its business as conducted on the date hereof) or any of its debt securities or shall otherwise after the date hereof create or incur any Indebtedness (other than hereunder or as permitted hereby or under External Lines), such Borrower shall.give the Agent written notice thereof not less than five Business Days prior to such Borrower's first receipt of the proceeds therefrom (the " Proceeds") and shall, immediately upon its receipt of the Proceeds for its account (unless, in the case of JC, ME and PE, such Proceeds are required to be deposited with the Trustee under such Borrower's First Mortgage Bond Indenture and are not released) prepay the Notes of such Borrower in an amount equal to the lesser of the Proceeds or the then unpaid principal amount of the outstanding Notes issued by such Borrower, together with interest accrued thereon to the date of such crepayment; provided, hcwever, that Proceeds shall not include (i) capital contributions and/or loans made by GPU to JC, ME or PE, (ii) proceeds of the sale or assignment of nuclear material or of contracts
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in respec of nuclear material if such nuclear material or contract have not been pledged or assigned to secure Indebt-edness hereunder or under the Notes or (iii) proceeds of sales of debt securiO 1s so long as such debt securities are expressly and effect.vely subordinated to the Indebtedness hereunder on terms acceptable to the Majority Banks. Each such prepayment shall, upon the giving of such notice, be and become due and payable upon the date specified in such notice.
(b) In the event that at any time the aggregate unpaid p::incipal amount of the Advances to a Borrower snall be or become in excess of its Loan Limit, such Borrower shall immeciately make a prepayment of the Notes in an amount equal to at least the amount of such excess, plus interest accrued on the amount prepaid to the date of such prepayment.
SECTION 2.08. Pa' ,ents and Comcutations. Each Borrower shall give to thT ant not less tnan 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> notice (which notice may be oral) of each payment under any Loan Cocument (other than regularly scheduled payments of in-terest, principal and fees) and shall make each such payment not later than 10:00 A.M. (New York City time) on the day when due in lawful money of the United States of America to {gg the Agent (bute in the case of fees pursuant to Section 2.04, to the Co-Agent) at its address referred to in Section 8.02 in immediately available funds. The Agent or the Co-Agent, as the case may be, will promptly thereafter distribute to each Bank its ratable share of each such paym2nt received by it for the account of the Banks. Each Borrower hereby author-izes each Bank, if and to the extent payment owed to sr.ch Bank is not made when due under any Loan Document, "o charge
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from time to time against any account of such Borrower with such Bank any amount so due. All computations of interest under the Notes and commitment fee hereunder shall be made on the basis of a year of 365 or 366 u,vs, as the case may be, for the actual number of days (incluctng the first day but excluding the last day) elapsed.
SECTION 2.09. Payment on Non-Business Days,. When-ever any payment to be made hereunder or uncer tne Notes shall be stated to be due on a day which is not a Business 7ay, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be in-cluded in the computation of payment of interest or commit-mene fee, as the case may be.
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SECTION 2.10. Sharina of Pavments, Etc. If any~
Bank shall obtain any payment or any collateral (whether lll 1474 014
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13 voluntary, involuntary, through the exercise of any richt of set-off, through operation of the Bankruptcy Act or otherwise) on account of the Notes held by it in excess of its ratable share of payments and collateral on account of the Notes ob-tained by all tne Banks, such Bank shall purchase from ti e other Banks such participations in the Notes held by them or shall provide such Banks with shares of the benefits of any collateral (including cash collateral, as defined in the Bank-ruptcy Act) or any proceeds resulting from such collateral, as the case may be, as shall be necessary to cause such par-chasing or benefited Bank to share the excess payment or the benefits of such collateral or such proceeds ratably with each of them, provided, however, that if all or a.y portion of any such excess payment is thereafter recovered from such purchasing Bank, the purchase shall be rescinded and the pur-chase price restored to the extent of such recovery, but with-out interest. Each Bank agrees to apply any amount received by it through the exercise of any righ* of set-off which such Bank may have first to amounts outstanding hereunder and under the Notes, after giving continuing effect to the foregoing senter 's. Each Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.10 may exercise all its rights of payment (including the right of set-off) with respect to such participation ac fully as if such Bank were the direct creditor of such Borrower in the amount of such participation.
SECTION 2.11. Use of Proceeds. The proceeds of the initial Borrowings shall be applied, forthwith upon their availability, to the extent necessary to pay in full the then outstanding principal amount under all Lines to tne Borrowers from the Banks and, in the case of JC, to pay in full the aggregate principal amount of the Indebtedness of JC then outstanding under the JC Term Loan Agreement (upon the making of which payment, the obligations of the banks parties to the JC Term Loan Agreement to make advances thereunder shall terminate).
ARTICLE III CONDITIONS PRECEDENT TO ADVANCES SECTION 3.01. Condition Precedent to Initial Advsnces. The initial Borrowing by each Borrower shall occur coincidentally with the initi-1 Borrowings by the other Bor-rowers, and the obligation of each Bank to make its initial Advance to each of the Borrowers is subject to the conditions
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precedent that: (i) all interest and other amounts accrued to the date of such Borrowings in respect of all Lines to the Borrowers from the Banks shall have beun paid; (ii) all interest and commitment fees accrued to the dat' of such Bor-rowings in respect of the Indebtedness of JC under the JC Term Loan Agreement shall have been paid; (iii) the fee pro-vided for in Section 2.04(b) shall have been paid; (iv) the certificate provided for in Section 2.04(c) shall have been delivered; (v) all interest accrued to the date of such Borrowings under the GPU Loan Agreement and the promissory notes issued thereunder shall have been paid; (vi) the Agent shall have received on or before the day of such Advances the following, each dated such day, in form and substance satisfactory to the Agent and the Co-Agent and (except for the Notes, the GPU Loan Agreement Restatement and the New GPU Notes ar.d the items furnished pursuant to clauses f(i-ii),
g(1-ii), h(1-iii) and i(i-lii), below) in sufficient copies for each Bank:
(a) A Note of each Borrower payable to the order of each Bank; (b) A guaranty of the Indebtedness of JC hereunder, duly executed by GPU, in substantially the form of Exhib- g it B hereto (the "JC Guaranty");
(r ) A guaranty of the Indebtedness of ME hereunder, duly executed by GPU, in substantially the form of Exhib-it B hereto (the "ME Guaranty");
(d) A guaranty of the Indebtedness of PE hereunder, duly executed by GPU, in substantially the form of Exhibit B hereto (the "PE Guaranty");
(e) A guaranty of certain Indebtedners of GPU Service Corporation, duly executed by GPU. in substan-tially the form of Exhibit B hereto (the "3ervCo Guaranty");
(f) A Pledge Agreement, duly executed by GPU, in substantially the form of Exhibit C hereto (the " Stock Pledge Agreement"), together with:
(i) certificates representing the Pledged Shares referred to in the Stock Pledge Agreement and undated stock powers for such certificates executed in blank; and
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15 (ii) evidence that all other actions neces-sary or, in the opinion of the Agent, desirable to perfect and protect the security interests created by the Stock Pledge Agreement have been taken.
(g) A Pledge Agreement, duly executed by ME, in substantially the form of Exhibit D hereto (the "ME Bond Pledge Agreement"), together with:
(i) not less than S40,000,000 principal amount of ME Bonds in bearer form or registered in the name of the Co-Agent or its nominee; (ii) evidence that all other actions neces-sary or, in the opinion of the Agent, desirable to perfect ari protect the security interests created by the ME Bond Pledge Agreement have been taken; (h) A Security Agreement, duly executed by ME, in substantially the form of Exhibit F hereto (the "ME Security Agreement"), together with:
(i) acknowledgment copies of proper Financing Statements (Form UCC-1) duly filed under the re-spective Uniform Commercial Codes of the State of Oklahoma and the Commonwealth of Pennsylvania in the Office of the County Clerk of Oklahoma County, Oklahoma, and in the Office of the Secretary of the Commonwealth of Pennsylvania, respectively; (ii) a certified copy of a Uniform Commer-cial Code Certificate of Search of the Secretary
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of the Commonwealth of Pennsylvania, listing the Pennsylvania Financing Statement referred to above in clause (i) and all other effective Finan-cing Statements which name ME (under its present name and any previous name) as debtor filed with the Secretary of the Commonwealth of Pennsylvania and a certified copy of an abstractor's report listing the Oklahoma Financing Statement referred to above in clause ( i) and all other effective Financing Statements which name ME (under its pre-sent name and any previous name) as debtor filed with the County Clerk of Oklahoma County, Oklahoma, together, in each case, with copies of such Finan-
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cing Statements (none of which shall cover the col-lateral purported to be covered by the ME Security Agreement); and
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(iii) a consent of Kerr-McGee Nuclear Corpor-ation to the hE Security Agreement and the transac-tions conteaplated thereby; (i) An Amended and Restated Security Agreement, duly executed by JC, in substantially the form of Exhib-it F hereto (the "JC Security Agreement"), together with:
(1) acknowledgment copies of proper Financing Statemerts (Form UCC-1) duly Jiled under the respec-tive Unilorm Commercial Codes of the States of New Jersey and Oklahoma in the Office of the Secretary of State of the State of New Jersey and in the Office of the County Clerk of Oklahoma County, Oklahoma, res.pectively; (ii) a certified copy of a Uniform Commercial Code Certificate of Search of the Secretary of the State of New Jersey, listing the New Jersey Finan-cing Statement referred to above in clause (i) and all other effective Financing Statements which name JC (under its present name and any previous name) at debtor filed with the Secretary of State of Naw g Jer_ay and a certified copy of an abstractor's W report listing the Oklahoma Financing Statement referred to above in clause (i) and all other effective Financing Statements which name JC (under its present name and any previous name) as debtor filed with the County Clerk of Oklahoma County, Oklahoma, together, in each case, with copies of such Financing Statements (none of which shall cover the collateral purported to be covered by the JC Security Agreement, except such as may have been filed in favor of certain of the Banks in connec-tion with the JC Security Agreement prior to its amendment and restatement); and (iii) a consent of Kerr-McGee Nuclear Corpor-ation to the JC Security Agreement and the transac-tions contemplated thereby; (j) The GPU Loan Agreement Restatement, executed by each of the parties thereto; (k) A New GPU Note payable to the order of each of Citibank, Chemical Bank, Irving Trust Company, Manufac-turers Hanover Trust. Company and Marine Midland Bank, respectively; lll 1474 018
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17 (1) Federal Reserve Forms U-1 provided for in Regulation U issued by the Board of Governors of the Federal Reserve System, the statements made in which shall be such, in the opinion of the Agent, as to permit the transactions contemplated hereby in accordance with said Regulation U; (m) Copios of all necessary governmental approvals with respect to the Basic Documents, including, without limitation, appropriate orders of the SEC under the Utility Act and of the NJBPU and of the PaPUC in connection with the Basic Documents and the transactions contemplated thereby, including the borrowings under this Agreement and the GPU Loan Agreement, in each case certified by the Secretary or an Assistant Secretary of the applicable Borrower; (n) Copies of resolutions adopted by the Board of Directors of each Borrower upproving each Basic Document to which it is or is to be a party, and of all documents evidencing other necessary corporate action and govern-mental approvals, if any, with respect to each such Basic Document, certified by the Secretary cr an Assistant Secretary of each Borrower; (o) A certificate of the Secretary or an Assistant Secretary of each Borrower certifying the names and true signatures of the officers of such Borrower authorized to sign each Basic Document to which it is or is to be a party and the other documents to be delivered by it hereunder; (p) A favorable opinion of Messrs. Berlack, Isrgels & Liberman, counsel for the Borrowers, in sub-stantially the form of Exhibit G hereto and as to such other matters as any Bank through the Agent may reason-ably request; (q) A favorable opinion of Messrs. Shearman &
Sterling, special counsel for the Banks, in substantially the form of Exhibi- H hereto; and i474 019
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(vii) the Agent shall have received on or before the day of such Advances and in sufficient copies for each of the Banks
-noies, in each case certified by the Secretary or an Assis-
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Secretary of the applicable Borrower, of appropriate orders (which orders (the " Rate Orders") shall be satisfac-tory to each Bank), in the case of JC, of the NJBPU and, in the case of ME and PE, of the PaPUC with respect to the rates which such Borrowers may charge their respective customers.
SECTION 3.02. Conditions Precedent 'o All Advances
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and to the Acceotance of New Notes. The obligat " of each Bank to make an Advance on the occasion of each Borrowing (including each Borrower's initial Borrowing) or to accept a new Note on a New Note Issue Date shall be subject to the further conditions precedent that on such date:
(a) the following statements shall be true and the Agent shall have received for the account of such Bank certificates (each a " Borrowing Certificate")
signed by a duly authorized officer of each Borrower, dated such date, stating that:
(i) the representations and warranties of such Borrower contained in cach of the Basic Documents are correct on and as of the date of such Borrowing as though made on and as of such date; (ii) no event has occurred and is continuing, or would result from such Borrowing or the issu-ance of such Note, which constitutes an Event of Default or would constitute an Event of Default but for the requirement that notice be given or time elapse or both; provided, however, that no such Borrowing Cerrificate need advert to an Event of Default under Section 6.01(g) following a determination of the Majority Banks in accordance with Section 8.06 or otherwise, unless notice thereof has been received by such Borrower; and (iii) giving effect to such Borrowing and the application of its proceeds, the unpaid principal amount of such Borrower's Notes does not exceed such Borrower's Loan Limit;
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1474 020
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19 (b) there shall not have been a det'ermination by the Majority Banks in accordance with Section 8.06 or otherwise that the revenues to be available to such Borrower will be insufficient to assure its ongoing financial viability; (c) there shall not have been a determination by the Majority Banks in accordance with Section 8.06 or otherwise that there has occurred a change in the financial condition or prospects of such Borrower since May 29, 1979, which is material and adverse and substantially increases the risk that the Notes issued by such Borrower will not be repaid when due; (d) the Agent and the Co-Agent shall have received such other approvals, opinions or documents as any Bank through the Agent may reasonably request.
SECTION 3.03. Additional Conditions Precedent to Accentance of Notes on Each New Note Issue Date. The ooliga-tion of each Bank to accept a new Note on a New Note Issue Date shall be subject to the further conditions precedent that the Agent shall have received for the account of such Bank a new Note, dated such date, and payable on the first day of April or October next following drawn to the order of such Bank du./ executed by such Borrower and a favorable opinion, dated such date, of Messrs. Berlack, Israels &
L ibe rr.an , counsel to the Borrowers, confirming their opinion delivered pursuant to Section 3.01(vi)(p), with references therein to the Notes of such Borrower to mean the new Notes issued on such New Note Issue Date.
ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01. Recresentations and Warranties of the Borrowers. Each Borrower represents and warrants as at the Closing Date and as of the date of each Borrowing and on each New Note Issue Date with respect to itself as follows:
(a) Such Borrower is a corporation duly incorpo-rated, validly existing and in good standing under the laws of its jurisdiction of incorporation.
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(b) The execution, delivery and performance by such Borrower of each Loan Document to which it is or is to be a party are within such Borrower's corporate powers, have been duly authorized by all necessary cor-porate action, do not contravene (i) such Borrower's charter or by-laws or (ii) law or any contractual re-striction binding on or affecting such Borrower, and do not result in or require the creation of any lien, secur-ity interest or other charge or encumbrance (other than pursuant to the Collateral Agreements to which it is or is to be a party) upon or with respect to any of its properties.
(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by such Borrower of any Loan Document to which it is or is to be a party except for (i) in the case of each Borrower, appropriate orders of the SEC under the Utility Act, (ii) in the case of JC, an appropriate order or orders of the NJBPU and (iii) in the case of each of ME and PE, an appropri-ate order or orders of the PaPUC, each of which orders has been obtained, is in full force and effect and is klh sufficient for its purpose.
(d) This Agreement is, and each other Loan Docu-ment to which such Borrower is to be a party when deliv-ered hereunder will be, legal, valid and binding obliga-tions of such Borrower enforceable against such Borrower in accordance with their respective terms.
(e) The balance sheets of such Borrower and its subsidiaries as at December 31, 1973, and the related statements of income and retained earning of such Bor-rower and its subsidiaries for the fiscal year then ended, copies of which have been furnished to each Bank, fairly present the financial condition of such Borrower and its subsidiaries as at such date and the results of the operations of such Borrower and its subs id iaries for the period ended on such date, all in accordance with generally accepted accounting principles consistently applied, and since December 31, 1978, there has been no material adverse change in such condition or operations except such as shall have occurred in connection with
'
or a result of the nuclear incident at the Three Mile Island facility which commenced on March 28, 1979, and since May 29, 1979, there has been no material adverse change in such condition or operations.
lll
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21 (f) There has not been any failure by such Borrower to file at or prior to the time recuired any reports or other filings with any regulatory authority having jurisdiction over it which would materially adversely af fect its business or financial condition.
(g) No proceeds of any Advance will be used to acquire any security in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934.
(h) Such Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.
(i) The outstanding principal amount of its Senior Debt as at the date hereof is as specified on Schedule I hereto.
(j) No " Reportable Event" (as that term is used in subsections (1) through (8) of Section 4043(b) of Title IV of the Employee Retirement Inccme Security Act of 1974 ("ERISA")) has occurred or is continuing with respect to the following: any employee benefit plan or other plan which is covered by Title IV of ERISA and (a) which is maintained for employees of such Borrower, or (b) with respect to which such Borrower has withdrawn during a plan year for which it was a substantial employer as defined under Title IV of ERISA. In addition, such Borrower has not terminated nor is it aware of any determination by the Pension Benefit Guaranty Corporation that there is a need to terminate any plan described in the preceding sentence.
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ARTICLE V COVENANTS OF THE BORROWER SECTION 5.01. Affirmative Covenants. Each Borrower covenants that it will, so long as any Note shall remain unpaid or any Bank shall have any obligation to make Advances hereunder, unless the Super Majority Banks shall otherwise consent in writing:
(a) Pavment of Taxes, Etc. Pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, might become a lien or charge upon any properties of such Borrower, prov id ed it shall not be required to pay any such tax, assessment, ch arg e ,
levy or claim which is being contested in good faith and by proper proceedings.
(b) Performance and Comoliance with Other Acree-ments. Perf orm and ccmply with each of the matericl provisions of each material indenture, credit agreement, llg contract or other agreement by which such Borrower is bound, non-performance or non-compliance with which would have a material adverse ef fect upon its business or credit or in any way af fect its ability to perform its obligations hereunder except material contracts or other agreements being contested in good faith.
(c) Preservation of Coroorate Existence, Etc.
Preserve and maintain its corporate existence in the jurisdiction of its incorporation, and qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification is necessary or desirable in view of its business and operations or the ownership of its properties and preserve its rights, franchises and privileges to conduct its business substantially as conducted on the date hereof.
(d) Comoliance with Laws, Etc. Comply with the requirements of all applicable laws, rules, regula-tions and orders of any governmenta. authority, non-
,
compliance with which would have a material adverse effect upon its business or credit or in any way affect O
1474 024
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23 its ability to perform its obligations hereunder except laws, rules, regulations and orders being contested in good faith.
(e) Maintenance of Insurance. Maintain insurance with responsible and reputable insurance companies or associations in such amounts as is available to such Borrower covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties (including, without limitation, the operation and ownership of nuclear generating facilities) in the same general areas in which it or they operate.
(f) Maintenance of Retained Earnincs. Maintain at all times retained earnings of not less than, in the case of GPU and its subsidiaries on a consolidated bas is , S300,000,000 and, in the case of each of JC, ME and PE on an unconsolidated basis, 51.00.
(g) Indebtedness Under External Lines. Will maintain at all times Indebtedness under such Borrower's External Lines in an aggregate outstanding principal amount of not less than the amount of such Indebtedness outstanding as at the Closing Date (less $1,000,000 in the case of JC, $1,000,000 in the case of ME and S2,000,000 in the case of PE); provided, however, that if and for so long as the principal amount of Indebted-ness of such Borrower outstanding under this Agreement shall be less than the amount of such Borrower's initial Borrowing then the aggregate outstanding principal amount of Indebtedness under such Borrower's External Lines which such Borrower is required by this subsection (g) to maintain shall be an amount not less than the net amount specified above for such Borrower multiplied by a fraction whose numerator shall be the principal amount of Indebtedness of such Borrower outstanding under this Agreement at the time of any such determination and whose denominator shall be the amount of such Borrower's initial Borrowing.
(h) Visitation Richts. At any reasonable time and from time to time, permit the Agent, the Co-Agent or any Bank or any agents or representatives thereof to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, such Borrower and to discuss the affairs, finances and accounts of such. Borrower with any of its officers or directors.
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~BCTION 5.02. Necative Covenants of the Borrowers.
Each Borro 'er covenants tnat it will not, so long as any Note shall Jemain unpaid or any Bank shall have any obliga-tion to make Advances hereunder, without the prior written consent of the Super Majority Banks:
(a) Liens, Etc. Create any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance, or any other type of prefer-ential arrangement, upon or with respect to any of its properties or rights, whether now owned or here-af ter acquired, or assign any right to receive income, services or property, except that the foregoing re-strictions shall not apply to mortgagec, deeds of trust, pledges, lie ns , security interests, or other charges or encumbrances or any other type of prefer-ential arrangement created by the Loan Documents or the Senior Debt Documents or:
(i) existing on the date hereof; (ii) created by the Senior Debt Documents; Drovided, however, that no mortgage, deed of trust, pledge, lien, security interest or other charge or ll encumbrance or other type of preferential arrange-ment created by or in respect of any Senior Debt Document shall extend to or cover property of any type which is excluded therefrom on the date hereof; (iii) for taxes, assessments or governmental charges or levies on property of such Borrower if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings; (iv) imposed by law, such as carriers' ,
warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business; (v) arising out of pledges or deposits under workmen's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation: or O
347A 026
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25 (vi) arising out of purchase money mort-gages or other liens on property acqu red by such Borrower in the ordinary course of business to secure the purchase price of such property or to secure Indebtedness incurred solely for the pur-pose of financing the acquisition of any such property to be subject to such mortgages or other liens, or mortgages or other liens existing on any such property at the time of acquisition, or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount, provided that no such mortgage or other lien shall extend to or cover any property other than the property being acquired, and no such extension, renewal or replacement shall extend to or cover any property not theretofore subject to the mortgage or lien being extended, renewed or replaced.
(b) Indebtedness. Create or suffer to exist any Indebtedness, except:
(i) Indebtedness of such Borrower hereunder or under the Notes; (ii) Indebtedness directly secured by liens permitted by Section 5.02(a);
(iii) Indebtedness under Senior Debt Documents; (iv) Prior to the Closing Date, Indebtedness under the JC Term Loan Agreement; (v) Prior to the Closing Date, Indebtedness of such Borrower u.. der Lines from the Banks; (vi) Indebtedness of such Borrower under External Lines; .
(vii) Indebtedness arising from the deferral of the purchase price of certain mobile transformers purchased by the Borrawers from Brown Boveri Corporation:
(viii) Indebtedness which is expressly and
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effectively subordinated to the Indebtedness here-under and under the Notes on terms acceptable to the Majority Banks;
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(ix) Indebtedness arising from the purchase in the ordinary course of its business as conducted on the date hereof of fuel, supplies and services with respect to which no assertion that such Indebtedness is delinquent in payment has been made and outstanding for more than 60 days, unless such Borrower is contesting such assertion in good faith and by appropriate proceedings; or (x) Indebtedness in respect of unfunded vested benefits under each plan maintained for employees of such Borrower and covered by Title IV of the Employee Retirement Income Security Act of 1974.
(c) Lease Oblications. Create, incur, assume or suffer to exist any ooligations as lessee (other than lease obligations included in Indebtedness) (i) for the rental or hire of prodaction, transmission or distributien property or fossil fuel in connection with any sale and leaseback transaction e>: cept transactions relating to air or water pollution control f acilities, or (ii) for the rental or hire of personal property of a any kind under leases or agreements to lease for a period of one year or more which would cause the annual W
rental payments in respect of all such obligations payab]e in any period of 12 consecutive months to exceed $10,000,000.
(d) Assumotions, Guaranties, Etc. of I.,debtedness of Other Persons. Assume, guarantee, endorse or otner-wise become directly or contingent 1v liable (including, without limitation, liable by way m f agreement, contin-gent or othe rwise, to purchase, to provide funds for payment, to sapply funds to or otherwise invest in the debtor or otherwise to assure the creditor against loss) in connection with any obligation or Indebtednesa of any other Person, except (i) guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (ii) guaranties of JC of obligations of the Florence Mining Company to General Electric Credit Corporation, (iii) obligations to pay insurance premiums, (iv) the Guaranties, (v) guaranties existing on the date hereof, (vi) guaranties by GPU of obligations of any Dorrower for the purchase price of property ( includ ing , but not limited to, fuel) or services, (vii) indernifications of any Dorrower or GPU or GPU Service Corporation ggg 3474 028
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27
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for the benefit of suppliers and contractors of property or services to any Borrower (other than GPU) with respect to nuclear material and f acilities, and (viii) guaranties by GPU of Indebtedness of ME under External Lines in amounts not exceeding those outstand-ing under such External Lines on the Closing Date.
(e) Mercers, Etc. Merge or consolidate with any Person sell, ass ign , lease or otherwise dispose of (whether in one transaction or in a series of transactions) all of its assets or properties, includ-ing its receivables (whether now owned or hereafter acquired) or any material asset or property (it being agreed that (i) the capital stock or assets of any wholly-owned (except for qualifying shares) subsidiary of such Borrower is a material asset or property and (ii) any nuclear c.aterial or any contract in respect of any nuclear material which has not been pledged er assigned to secure Indebtedness hereunder or under the Notes is not a material asset or property) to any Person, except pursuant to the Loan Documents, unless such disposition is effected for fair value in cash and such Borrower's Indebtedness hereunder is prepaid in an amount equal to the proceeds of any such dispo-sition, or agree to do any of the foregoing.
(f) Investments in Other Persons. Make any loan or advance to any Person or purchase or otherwise acquire the capital stock, assets or obligations of, or any interest in, any Person except:
(i) in the ordinary course of such Bor-rower's business as presently conducted or as may arise in the course of transactions per-mitted by Section 5.02(d),
(ii) short-term readily marketable obliga-tions of the kind in which such Borrower's Board of Directors has authorized investment on the date hereof, (iii) loans or advances to, or purchases or acquisitions of the capital stock, assets or obligations of, any wholly-owned (except for qualifying shares) subsidiary of such Borrower, and (iv) in the case of PE, loans or advances to, or purchases or acquisitions of the capital stock,
.
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assets or obligations of, The Helen Mining Company or Helvetia Coal Company, the principal amount of, or purchase price for, which shall not exceed
$5,060,000 in respect of each such company in any year.
(g) Precavment of External Lines. Use the pro-ceeds of any Advance to make any payment on or in respect of Indebtedness of such Borrower under Exter-nal Lines.
(h) Precavment of GPU Loan Aareement. In the gase of GPU, make any prepayment in any amount of the Indebtedness of GPU under the GPU Loan Agreement or the New GPU Notes, other than pursuant to an acceleration of such Indebtedness.
SECTION 5.03. Necative Covenant of GPU. GPU covenants that it will not, without the prior written con-sent of the Super Majority Banks, use the proceads of any Advance madt to it hereunder (a) for the purpose of making any capital contribution or loan to, of acquiring any equity or debt security of, or of paying directly or indirectly any obligation or liability of, any Borrower unless the aggregate amount of Advances to such Borrower outstanding hereunder on the date of any such Advance to GPU shall be equal to such Borrower's Loan Limit and (b) for any purpose other than (i) as set forth in clause (a) above, (ii), in the case of the initial Borrowing by GPU, the payment of the then ou t-standing principal amounts under all Lines to GPU from the Banks, (iii) the payment of the current operating expenses of GPU or GPU Service Corporation, or (iv) the payment of dividends on its capital stock.
SECTION 5.04. Covenants of GPU with Resnect to GPU Service Corocration. GPU covLnants tnat, so long as any Note shall remain unpaid or any Bank shall have any obligation to make Advances hereunder, unless the Super Majority Banks shall otherwise consent in writing, it will:
(a) cause GPU Service Corporation to perform, observe and comply with each of the covenants con-tained in Section 5.01 ( e xcep t the covenant contained in Section 5.01(g)) and in Section 5.02(c), (d), (e) and (f), as fully and completely as if GPU Service
,
Corporation were a Borroser other than GPU; and (b) not permit GPU Service Corporation to: gg 147A U30
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(i) Liens, Etc. Create any mortgage, deed of trust, plecge, lien, security interest or other charge or encumbrance, or any other type of pre-ferential arrangement, upon or with respect to any of its prcperties or rights, whether now owned or hereaf ter acquired, or assign any right to receive income, services or property, except that the foregoing restrictions shall not apply to mortgages, deeds of trust, pledges, liens, security interests, or other charges or encum-brances or any other type of preferential ar-rangement created by the Loan Documents or:
(A) existing on the date hereof; (B) created by a mortgage in favor of Hartford National Bank on certain property of GPU Service Corporation in Parsippany, New Jersey; (C) created by a mortgage in favor of The Fidelity Bank on certain property of GPU Service Corporation in Reading, Pennsylvania; (D) for taxes, assessments or govern-mental charges or levies on property of GPU Service Corporation if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good f aith and by appropriate proceedings; (E) imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business; (F) arising out of pledges or deposits under workmen's ccmpensation laws, unemploy-ment insurance, old age pensions, or other social security or retirement benefits, or similar legislation; or (G) arising out of purchase money mort-gages or other liens on property acquired by GPU Service Corporation in the ordinary course of business to secure the purchase 1474 031
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30 price of such property or to secure Indebted-ness incurred solely for the purpose of financ-ing the acquisition of any such property to be subject to such mortgages or other liens, or mortgages or other lians existing on any such property at the time of acquisition, or ext ens ions , renewals or replacements of any of the foregoing for the same or a lesser amount, provided that no such mortgage or other lien shall extend to or cover any property other than the property being ac-quired, and no such extension, renewal or replacement shall extend to or cover any property not theretofore subject to the mortgage or lien being extended, renewed or replaced; or (ii) Indebtedness. Create or suffer to exist any Indebtedness, except:
(A) Indebtedness of GPU Service Corpora-tion existing on the date hereof; (B) Indebtedness directly secured by liens permitted by clause (i), above; lll (C) Indebtedness to GPU; or (D) Indebtedness in respect of un-funded vested benefits under each plan maintained for employees of GPU Service Corporation and covered by Title IV of the Employee Retirement Income Security Act of 1974.
SECTION 5.05. Reportino Recuirements. Each Borrower covenants that it will, so long as any Note shall remain unpaid or any Bank shall have any obligation to make Advances hereunder, unless the Majcrity Banks shall other-wise consent in writing, furnish to each Bank:
(a) as soon as possible and in any event within three days after the occurrence of each Event of Default or each event which, with the giving of notice or lapse of time or both, would constitute an Svent of Def ault, continu ing on the date of such statement, the state-ment of the chief financial officer of such Borrower setting forth details of such Event of Def ault or event and the action which it is proposed to take with re-spect thereto; i474 032
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31 (b) (i) as soon as possible and in any event within three Business Days of the enactment or issuance of any statute, order, decree, rule or regulation having applicability to such Borrower which could or would increase or decrease the rates which such Borrower is entitled to charge its customers or could or would modify the basis thereof, the statement of the chief financial officer of such Borrower setting forth details of such statute, order, decree, rule or regulation and, if available, copies thereof; and (ii) within eight Business Days of such enactment or issuance, a detailed analysis of the anticipated effects of such statute, order, decree, rule or regulation upon the rates which such Borrower is entitled to charge to customers and upon the revenues of such Borrower, certified by the chief financial officer of such Borrower; (c) as soon as available and in any event within 30 days after the end of each calendar month, summary financial statements (including a balance sheet and statements of income and sources and applications of funds) of each Borrower for such month, together with a summary cro forma analysis of such Borrower's sources and applications (including its construction costs) of funds Jr the 12-month period commencing immediately subsequent to the end of such calendar month; (d) as soon as available and in any event within 45 days after the end of each of the first three quar-ters of each fiscal year of such Sorrower, a balance sheet of such Borrower an of the end of such quarter and statements of income ai d retained earnings and of source and application of funds of such Borrower (in the case of GPU, on a consolidated and consolidcting basis) for the 3-month and the 12-month periods ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the 3-month and the 12-month periods ending on the corresponding date of the preceding fiscal year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the chief financial officer of such Borrower as having been prepared in accordance widt generally accepted accounring principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01,
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together with a certificate of said officer stating that he has no knowledge chat an Event of Default, or r
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32 an event which, with notice or lapse of time, or both, would constitute an Event of Default, has occurred and is continuing or, if an Event of Default or such event has occurred and is continuing, a statement as to the nature thereof and the action which such Borrower proposes to take with respect thereto; (e) as soon as available and in any event within 90 days after the end of each fiscal year of such Borrower, a copy of the annual audit report for such year for such Borrower including therein a balance sheet as of the end of such fiscal year and statements of income and retained earnings and of source and application of funds of such Borrower (in the case of GPU; cn a consolidated and consolidating basis) for such fiscal year, in each case certified (except for the consolidating financial statements) by Coopers &
Lybrand or other independent public accountants of recognized standing acceptable to the Agent, as having been prepared in accordance with generally accepted accounting principles consistently applied together with a certificate of (i) such accounting firm to the Agent stating that in the course of its audit of the business of such Borrower, which audit was conducted ggg by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that an Event of Default, or an event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default, has occurred and is continuing, or if, in the opinion of such accounting firm, an Event of Default or such event has occurred and is continuing, a statement as to the nature thereof and (ii) the chief
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financial officer of such Borrower corresponding to the certificate referred to in the last clause of Section 5.05(d);
(f) as soon as available and in any event within 45 days after the end of each quarter of each fiscal year of such Borrower, detailed pro forma analyses of revenues, cash flows, expenditures and construction expenditures, each such analysis to be in form and substance satisfactory to the Agent, for the next succeeding quarter of such fiscal year and for the next succeeding 24 consecutive months, each certified by the
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chief financial officer of such Borrower; (g) promptly after the sending or filing thereof, g copies of all such proxy statements, financial state- W 1474 034
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33 ments and reports which such Borrower sends to its stockholders (other than in the case of JC, ME and PE, proxy statemerts, financial statements and reports which are sent onlr to GPU), and copies of all regular, periodic and special reports, and all registration statements which such Borrower files with the SEC or any governmenta' authority which may be substituted therefor, with any national securities exchange, with the NJBPU or the PaPUC; (h) as soon as possible and in any event within three days after (i) the occurrence of any cancella-tion or reduction of the principal amounts available to such Borrower under External Lines or (ii) such Borrower's receipt of any demand for repayment of its Indebtedness outstanding under Lines, the statement of the chief financial officer of such Borrower setting forth the details of such occurrence or demand and the action which it is proposed to take with respect thereto; (i) as soon as possible and in any event within
- hree days of the occurrence of a material adverse change in the financial condition or procpects of auch Borrower, the statement of the chief financial cfficer of such Borrower setting forth the details of such change, the anticipated effects thereof and the action which it is proposed to take with respect thereto; (j) prcmptly after the furnishing thereof, copies cf any statement, certificate or report furnished to any other holder of the securities of such Borrower pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Banks pursuant to any other clause of this Section 5.05; (k) promptly af ter the filing or receiving thereof, copies of all reports and notices which such Borrower files under the Employee Retirement Income Security Act of 1974 with the Pension Benefit Guaranty Corporation, the Internal Revenue Service or the U.S. Department of Labor or which such Borrower receives from such Corpora-tion; and (1) such other information respecting the busi-ness, properties or the condition or operations, finan-cial or otherwise, of such Borrower as any Bank may through the Agent from time to time reasonably request.
1474 035
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ARTICLE VI EVENTS OF DEFAULT SECTION 6.01. Events of Default. As to a Borrower, if any of the following events (" Events of Def ault") shall occur and be continuing:
(a) Such Borrower shall fail to make any payment of principal of, or interest on, any Note when due; or (b) Any representation or warranty or statement made by such Borrower (or any of its officers) in or in connection with any Loan Document or in any schedule, certificate or other document delivered pursuant to or in connection with any Loan Document shall prove to have been incorrect in any material respect when made; or (c) Such Borrower shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed and, except in respect of any such failure under Section 5.02, any such f ailure shall remain unremedied lll for 10 days af ter written notice thereof shall have been given to such Borrswer by the Agent or any Bank (and, if such notice was given by a Bank, such Bank shall promptly give notice thereof to the Agent); or (d) Such Borrower shall (i) fail to pay any Indebtedness (other than Indebtedness evidenced by the Notes) of such Borrower, or any interest or premium thereon, when due (whether by scheduled maturity, re-guired prepayment, acceleration, demand or otherwise) and such f ailure shall continue af ter the applicable grace period, if any, specified in the agreement or ins trument relating to such Indebtedness, or (ii) fail to perform or observe any term, covenant or condition on its part to be performed or cbserved under any agreement or instrument relating to any such Indebted-ness, when recuired to be performed or observed, and such failure shall continue after the applicable grace period, if any, specified in such acreement or ins t rume n t, if the ef fect of such f ailure to perform or observe is to accelerate, or to permit the accelera-tion of, the maturity of such Indebtedness; or any such Indebtedness (other than Indebtedness in an aggregate O
1474 036
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35 principal amount of not in excess of S1,000,000 in the case of JC, of not in excess of $1,000,000 in the case of ME and of not in excess of $2,000,000 in the case of PE of such Borrcwer under one or more External Lines) shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or (e) Such Borrower shall generally not pay its debts as they beccme due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors or shall institute any proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent or seeking reorganization, arrangement, adjustment, pro-tection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief or protection of debtors or seeking the entry or an order for relief or the ap-pointment of a receiver, tru s te e , custodian or other similar of ficial for it or for any substantial part of its property or such Borrower or any of its sub-sidiaries shall take any corpor=te action to autho-rize any of the actions described in this subsection (e); or (f) Any proceeding shall be instituted against such Borrewer seeking to adjudicate it a bankrupt or insolvent or seeking reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insol-vency or reorganization or relief or protection of debtors or seeking the entry or an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property; or (g) There shall have occurred a change in the financial condition or prospects of such Borrower since May 29, 1979, which, in the determination of the Majority Banks in accordance with Section 8.06 or othe rw ise, is material cod adverse and substantially increases the risk that the Notes issued by such Borrower will not be repaid when due; or
'
(h) A final judgment or order for the payment of monry in excess of S1,000,000 shall be rendared against suci Borrower and such judgment or order shall continue
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36 e
unsatisfied and in effect for a period of 30 consecu-
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tive da (excluding therefrem any period during which enfor an' of such judgment or order shall be stayed, w^ 9ther by endency of appeal or otherwise); or (i) Such Borrcwer, if it is JC, shall fail, on prior to June 30, 1979, to have issued, to have caused to be authenticated and to have sold to Persons other than the Banks not less than S50,000,000 in aggregate principal amount of JC Sonds or, if less than such aggregate principal amount of JC Bonds are so sold, JC shall fail, on or prior to June 30, 1979, to have pledged to the Banks JC Bonds in an aggregate principal amount of $ 50,0 00,0 00, minus the amount of JC Bonds so sold; provided, however, that, in respect of any JC Bonds plecgea ro the Banks, such pledge shall be pursuant to a Pledge Agreement in form substantially similar to Exhibit D hereto (the "JC Bond Pledge Agreement"), dulv executed and delivered to the Co-Agent, together with sunn JC Bonds in bearer form or registered in the name of the Co-Agent or its nominee and an opinion of Messrs. Berlack, Isreels & Libe rman, counsel for JC, in substantially the form of Exhibit I hereto; or g
(j) Any provision of any of the Guarantien or the Stock Pledge Agreement af ter delivery thereof under Section 3.01 shall for any reason cease to be valid and binding on GPU, or GPU shall so state in writing; or (k) If such Borrower is ME, any provision of the ME Bond Pledge Agreement or the ME Security Agreement af ter delivery thereof under Section 3.01 shall for any reason cease to be binding on ME or ME or GPU shall so state in writing; or (1) If such Borrower is JC, any provision of the JC Bond Pledge Agreement or the JC Security Agreement af ter delivery thereof under this Section 6.01 or Section 3.01, respecti ely, shall for any reason cease to be binding on JC or JC or GPU shall so state in writing; or (m) If the Indebtedness of such Borrower (as guarantor or otherwise) purports to be secured thereby, any of the Collateral Agreements af ter its delivery O
!474 038
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37 shall for any reason, except to the extent permitted by the terms thereof, ceare to create a valid and perfected first priority security interest in any of the collateral purported to be covered thereby; or (n) If such Borrower is JC, there shall be enacted by the State of New Jersey, a statute which by its terms is principally applicable to JC or to a group of which JC is a member and which could cause the revenues to be available to JC to be insufficient to assure its ongoing financial viability; or (o) If such Borrower is ME or PE, there shall be enacted by the Commonwealth of Pennsylvania, a statute (including, without limitation, Pennsylvania Senate Bill Number 632, Session of 1979, as amended on Third Consideration, May 22, 1979) which by its terms is principally applicable to such Borrower or to a group of which such Borrower is a member and which could cause the revenues to be available to such Borrower to be insufficient to assure its ongoing financial viability; then, and in any such event described in subsections (a)-(d) and (f)-(c), above, the Agent shall at the request, or may with the consent, of the Majority Banks: (i) by notice to such Borrower and any one or more of the other Borrowers, declare the obligation of each Bank to make Advances to such Borrower and any one or more of the other Borrowers to be terminated, whereupon the same shall immediately terminate; and/or (ii) by notice to such Borrower, declare the Notes issued by such Borrower, all interest thereon and all ot;'er amounts payable under this Agreement by such Borrower to be forthwith due and payable, whereupon such Notes, all such interest and all such amounts shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Borrower and in any such event described in
_
subsection (e), abeve, the obligations of each Bank to make Advances to the Borrowers shall immediately terminate and the Notes issued by such Borrower, all interest thereon and all other amounts payable under this Agreement by such Borrower shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Borrower.
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1474 039
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38 ARTICLE VII THE AGENT AND THE CO-AGENT SECTION 7.01. Authorizati n and Action. Each Bank hereby appoints and autnorizes the Agent and the Co-Agent to take such a: tion as agent on :s behalf and to exercise such powers under the Loan Documents as are dele-gated to the Agent and the Co-Agent, respectively, by the terms thereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly pro-vided for by the Loan Documents (including, without limita-tion, enforcement or collection of the Notes, the Guaranties or the Collateral Agreements), the Agent and the Co-Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from act-ing (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Banks, and such instructions shall be binding upon all Banks and all holders of Notes; provided, however, that neither the Agent nor the Co-Agent shall be requireo to take any action which exposes the Agent or the Co-Agent to personal liability or which is contrary to any Loan Document or applicable law.
SECTION 7.02. The Acent and the Cc-Acent.
no circumstances whatsoever shall (a) the Agent, by reason Under g of its being Agent, be responsible for or liable because of any action taken or omitted to be taken by the Co-Agent, its directors, officers, employees or agents, whether or not resulting from the gross negligence or wilful misconduct of the Co-Agent, and (b) the Co-Agent, by reason of its being Co-Agent, be responsible for or liable because of any action taken or omitted to be takan by the Agent, its directors, officers, employees or agents, whether or not resulting from the gross negligence or wilful misconduct of the Agent. In the event that either the Agent or the Co-Agent is held liable for the actions or omissions of the other, the Co-Agent or the Agent (as the case may be) agrees to indemnify the other from and agains t any and all liabilities, obliga-tions, los se s , d amages, penalties, actions, judgments, suits, costs, expenses or disbur: 3ments of any kind or nature what-soever which may be imposed on, incurred by or asserted against the other as a result of such action or omission by it.
SECTION 7.03. Reliance of Acent and Cc-Acent, Etc. Neither the Agent, the Co-Agent nor any of their respective directora, officers, agents or employees shall O
1A7A U40
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39 be liable for any acrion taken or emitted to be taken by any of them under or in connection with any Loan Document, except for their own gross negligence or wilful misconduct.
Without limitation of the generality of the foregoing, the Agent and the Co-Agent: (i) may treat the payee of any Note as the holder thereof until the Agent and the Co-Agent receive written notice of the assignment or transfer thereof signed by such payee and in form satisf actory to the Agent; (ii) may consult with legal counsel (including counsel for the Borrowerr) , independent public accountants (including the Borrowers' independent public accountants) and other experts selected by the Agent or the Co-Agent and shall not be liable for any action taken or omitted to be taken in good f aith by either of them in accordance with the advice of such counsel, accountants or experts; (iii) make no warranty or represen' a-tion to any Bank ano shall not be responsible to any Bank tor any statements, warranties or representations made in or in connection with any Loan Document; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Loan Document or to inspect the property (including the bocks and records) of any Borrower; (v) shall not be respon-sible to any Bank for the due execution, legality , validity ,
enforceability, genuineness, sufficiency or value of any Loan Document er collateral covered thereby or any other instrument or document furnished pursuant thereto; and (vi) shall incur no liability under or in respect of any Loan Document by act-ing upon any notice, consent, certificate or other instrument or writing (which may be by telegram, cable or telex) believed by the recipient to be genuine and signed or sent by the prop-er party or parties.
SCCTION 7.04. Citibank, Chemical Bank and Their Affi]iates. With respect to their respective obligations to make Aavances, the Advances made by them and the Notes issued to them, Citibank and Chemical Bank shall have the same rights and powers under the Loan Documents as any other Bank and may exercise the same as though they were not, respectively, the Agent and the Co-Agent; and the term "B - " or " Banks" shall, unless otherwise expressly indicated tu ;1ude Citibank and Chemical Bank in their individual capacities. Ci t iba nk ,
Chemical Bank and their affiliates may accept deposits frem, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, any Borrower, any of its subsidiaries and any person or entity who may do business with or own securities of any Borrower or any of its subs id iar ies , all as if Citibank were not the Agent and Chemical Bank were not the Co-Agent and without any duty to account therefor to the Banks.
1474 04I
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40 SECTION 7.05. Bank Credit Decision. Each Bank 0
acknowledges that it has, independently and without reliance upon the Agent, the Co-Agent or any other Bank and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appro-priate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agent, the Co-Agent or any other Bank and based on such documents and informatian as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.
SECTION 7.06. Indemnification. The Banks agree to indemnify the Agent and/or the Co-Agent (to the extent not reimbursed by any Borrower) , ratably according to the respective principal amounts of the Notes then held by each of them, from and against any and all liabilities, obliga-tions, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent and/or the Co-Agent in any way relating to or arising out of the Loen Documents, or any of them, or any action taken or omitted by the Agent and/or the Co-Agent under the Loan Documents, or any of them, provided that no Bank shall be liable for any portion of such lia-bilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements result-ing from the gross negligence or wilful misconduct of the indemnitee or from its status as a Trustee Bank. Without limitation of the foregoing, each Bank agrees to reimburse the Agent and/or the Co-Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Agent and/or the Co-Agent in connection with the preparation, execution, administration, or enforcement of, or legal advice in respect of rights or responsibilities under, the Loan Documents, or any of them, to the extent that the Agent and/or the Co-Agent is not reimbursed for such expenses by any Borrower.
SECTION 7.07. Successor Acent. The Agent or Co-Agent may resign at any time as Agent or Cn-Agent (as the case may be) under the Loan Documents by g.ving written no-tice thereof to the Banks and each Borrower and may be re-moved as Agent or Co-Agent (as the case may be) under the
.
O 1474 042
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41 Loan Documents at any time with or without cause by the Majority Banks. Upon any such resignatic. or removal, the Majority Banks shall have the right to appoint a successor Agent or Co-Agent thereunder. If no successor Agent or Co-Agent shall have been so appointed by the Majority Banks, and shall have accepted such appointment, within 30 days after the giving of notice of resignation or the Majority Banks' removal of the retiring Agent or Co-Agent, then the retiring Agent or Co-Agent (as the case may be) may, on behalf of the Banks, appoint a successor Agent or Co-Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least S100,000,000. Upon the acceptance of any appointment as Agent or Co-Agent under the Loan Documents by a successor Agent or Co-Agent, such successor Agent or Co-Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent or Co-Agent, and the retiring Agent or Co-Agent shall be discharged from its duties and obligations as Agent or Co-Agent, respectively, under the Lcan Documents. After any retiring Agent's or Co-Agent's resignation or removal as Agent or Co-Agent under the Loan Documents, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent or Co-Agent under the Loan Documents.
ARTICLE VIII MISCELLANEOUS SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of any Loan Document, nor consent to any departure by any Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Super Majority Banks, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; crovided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Banks, do any of the follow-ing: (a) waive any of the conditions specified in Article III, (b) increase any Bank's Percentage or subject any Bank to any additional obligations, (c) reduce the principal of, or interest on, the Notes or any fees hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees hereunder, (e) release any collateral except as shall be otherwise provided in any Loan Document, y $]h 0
.
42 O
(f) take any action which requires the consent of all the Banks pursuant to the terms of any Loan Document, (g) change any Bank's Percentage or of the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under any Loan Document, cxcept to the extent, if any, caused by banks becoming a party hereto after the Closing Date, or (h) amend the provisions of this Section 8.01.
SECTION 8.02. Notices, Etc. All notices and other communications provided for hereunder shall be in writing (including telex, cable and telegram) and, unless otherwise provided, mailed or transmitted or delivered, if to GPU, at its address at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention: Vice President and Chief Financial Officer; if to JC, at its address at Madison Avenue at Punch Bowl Road, Morristown, New Jersey 07960, Attention: Vice Presidenr, Finance; if to !!E, at its address at 2800 Pottsville Pike, Muhlenberg Township, Berks County, Pennsylvania (P.O. Box 542, Reading, Pennsylvania 19640), Attention: Vice President, Finance; if to PE, at its address at 1001 Broad Street, Johnstown, Pennsylvania 15907, Attention: Vice President -
Fincncial (in case of :'otices or othee communications to JC, gg ME or PE, with a copy thereof to GPU at its address given above); if to any Bank, at its a: dress set forth under its name on the signature pages of the counterpart hereof executed by such Bank; if to the Agent, at its address at 399 Park Ave-nue, New York, New York 10043 (Telex No. 125 507), Attention:
Energy-East Department, National Banking Group; and, if to the Co-Agent, at its address at 277 Park Avenue, New Yor.,
New York 10017 (Telex No. 129 100), Attention: Public Utility District; or as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and communications shall, when mailed or transmitted, be effective when deposited in the mails or delivered to the transmission facility, respectively, except that notices and communications to the Agent or the Co-Agent pursuant to Article II or VII or Section 8.06 shall not be effective until received by the Agent or the Co-Agent as the case may be.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Bank or the Agent or the Co-Agent to exercise, and no delay in exercising, any right under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document pre-clude any other or further exercise thereof or the exercise g
1474 044
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43
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of any other right. The remedies provided in the Loan Documants are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Excenses and Taxes. The Bor-rowers agree to pay on demand all costs and expenses in con-nection with the preparation, exe cu tion , delivery, filing, recording and administration of the Loan Documents and the other documents to be delivered under the Loan Documents, including, without limitation, the reasonable fees and out-of-pocket expenses of Messrs. Shearman & Sterling and Messrs. Cravath, Swaine & Moore, special counsel for the Banks, and local counsel who may be retained by said counsel, with respect thereto and with respect to advising the Agent and the Co-Agent as to their respective rights and responsi-bilities under the Loan Documents, and all costs and expenses, if any, in connection with the enforcement of the Loan Docu-ments and the other documents to be delivered under the Loan Documents. The Borrowers also agree to indemnify the Agent, the Co-Agent and each Bank from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asrarted against the Agent, the Co-Agent or any Bank in any way relating to or arising out of the Loan Documents, or any of them, or any action taken or omitted by the Agent, the Co-Agent or any Bank under the Loan Documents or any of them. In addition, the Borrowers shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery of this Agreement, the other Loan Documents and the other documents to be delivered hereunder, and agree to save the Agent, the Co-Agent and each Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the continuance of any Event of Default as to a Borrower, and (ii) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Agent to declare the Notes due and payable pursuant to the provicions of Section 6.01, each Bank is hereby authorized at any time and f rom time to time, without notice to such Borrower (any such notice being expressly waived by each Borrower), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time
) h] h
. .
44 O
owing by such Bank to or for the credit or the account of such Borrower against any and all of the obligations of such Borrower now or hereafter existing under this Agreement or the Note of such Borrower held by such Bank, irrespective of whether or not such Bank shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Bank agrees promptly to notify such Borrower after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-off and application.
The rights of each Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Bank may has3.
SECTION 8.06. Certain Determinations: Suscension of Availability. (a) A determination by cne Majority Ban.ss for purposes of Section 3.02(b), Section 3.02(c) or Section 6.01(g) shall be evidenced by notices in writing (including by hand delivery, telex, cable or telegram, but not by mail) to the Agent from the Majority Banks. The Agent may (but under no circumstances, except pursuant to the next sentence, shall have any obligation to) poll the Banks at any time to afford the Majority Banks an opportunity to make such a ggg determination. The Agent shall, reasonably promptly upon receipt of written notice (including by hand delivery, telex, cable or telegram, but not by mail), which notice must be received by the Agent prior to the giving of any notice of Borrowing, from Banks holding at least 15% of the then aggregate outstanding principal amount of the Notes or, if no such principal amount is outstanding, 15% of the Final Total Aggregate Commitment or 25% or more in number of the Banks (which notice shall state why it is believed that such a determination would be appropriate), give telex notice thereof to the Banks requesting their decision as to such a determination. A Bank which does not respond to such notice within two Business Days of its transmission shall be daemed not to have made such a determination.
(b) Each Bank shall, within the earlier of three Business Days of the forwarding by the Agent of the report of any Borrower delivered to the Agent pursuant to Section 5.05(b)(ii) and eleven Business Days of any enactment or issuance of which notice is given by a Borrower to the Agent pursuant to Section 5.05(b)(i), give written notice (includ-ing by hand delivery, telex, cable or telegram, but not by mail) as to whether such Bank has determined that the reve-nues to be available to such Borrower will be insufficient to assure its ongoing financial viability for purposes of lll 1474 046
.
.
45 Section 3.02(b) or that there has been a change in such Borrower's financial condition or prospects since May 29, 1979, which is material and adverse and substantially in-creases the risk that the Notes issued by such Borrower will not be repaid when due for purposes of Section 3.01;c) or Section 6.01(g). A Bank which does not so respond within the allotted three Business Days shall be deemed not to have made such a determination.
(c) In the event of the enactment or issuance by the government of the Commonwealth of Pennsylvania or the State of New Jersey or any political subdivision or agency or commission of either thereof of any statute, order, decree, rule or regulation having applicability to JC, ME or PE, or the revocation, modification or termination of any of the foregoing, which could or would, directly or indirectly: re-duce the revenues and/or the cash flow of JC, ME or PE, and notwithstanding any other provision hereof, the obligations of th? Banks to make Advances to: (i) GPU and to such of the other Borrowers as are located in the state in which such action is taken shall be suspended upon receipt by the Agent of requests from Banks: (A) located in Pennsylvania and having not less than 66 2/3% of the Total Commitments of all the Banks located in Pennsylvania; (B) located in New Jersey and having not less than 66 2/3% of the Total Commit-ments of all the Banks located in New Jersey; or (C) having 66 2/3% of the Final Aggregate Total Commitment; and (ii) all the Borrowers shall be suspended upon receipt by the Agent of requests from Banks having 66 2/3 % of the Final Aggregate Total Commitment. Such suspension requests shall be in writ-ing (including telex, cable and telegram) and shall be to the effect that an availability suspension is requested because of adverse regulatory action. Any such suspension shall be effective from the time of the Agent's receipt of the requisite requests; the Agent shall promptly notify the Borrowers and the Banks of any such suspension. Such a suspension shall not itself relieve the Banks of any obli-gation which they would otnerwise have hereunder to accept Notes on a New Note Issue Date pursuant to Section 2.02.
Such a suspension shall continue until the Agent shall have received requests for its revocation from the Super Majority Banks. Such revocation requests shall be in writing (includ-ing telex, cable and telegram) and a revocation resulting therefrom shall be effective in respect of the first Borrow-ing noticed subsequen'_ to the receipt by the Agent of the requisite requests.
147A 047
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46 O
SECTION 8.07. The Trustee Banks. Despite any provision contained herein or, in any other Loan Document:
(a) obligations hereunder of a Borrower to its Trustee Bank shall not be, or be deemed to be, secured by such Borrower's Bond Pledge Agreement and shall not be, or be deemed to be, entitled to any benefit therefrom, whether in respect of any realization upon the Pledged Collateral (as defined therein) or otherwise; (b) the Indebtedness cutstanding under the Note issued by a Borrcwer to its Trustee Bank shall rot be reduced to less than the applicable Base Amount by virtue of any prepayment pursuant to Section 2.07 or otherwise if, at the time such prepayment would otherwise be made and giving ef fect thereto, there is any Indebtedness of such Borrower outstanding and secured by such Borrower's Bond Pledge Agreement, and any amount which would otherwise be applied to such a prepayment shall be applied to the ratable (in proportion to their respective Percentages) prepayment of such Borrcwer's Notes issued to the other Banks; and (c) a Trustee Bank shall not, by virtue of the operation of Section 2.10, obtain indirectly any benefit which it is prohibited from obtaining directly by clause (a) of this Section 8.07.
SECTION 8.08. Bindina Effect; Governina Law.
This Agreement is effective among the Borrcwers, the Agent, tue Co-Agent and the Banks which shall, on or prior to the Closing Date, have executed counterparts hereof and shall be binding upon and inure to the benefit of each Borrower, the Agent, the Co-Agent and each such Bank and their respec-tive successors and es sig ns, except that no Borrower shall have the right to assign its rights hereunder or any inter-est herein without the prior written consent of the Banks; provided, however, that in no event shall any Bank which is not a Confirming Bank have any obligation to make any Advance hereunder or otherwise, as at and subsecuent to the Closing Date, be deemed to be a party hereto; crovided, further, however, that no Bank shall be obligated to make its initial Advance hereunder if the Final Aggregate Total Commitment is less than $400,000,000. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.
SECTION 8.09. Execution in Counterparts. This Agreement shall be execu ted in counterparts each of which shall be executed by the Borrowers, the Agent and the Co-Agent and one or more Banks and each of which shall be O
347A DAB
.
47 substantially identical except for the identities, Total Com-mitments and other information specifically relating to such Bank or Banks. All such counterparts, when so executed, shall be deemed to be an original and all such counterparts, taken together, shall constitute one and the same agreement.
IN WITNESS EHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
GENERAL PUBLIC UTILITIES CORPORATION By /
- '*'
% s, -
ViCE Pnu t 1 s a c JERSEY CENTRAL POWER &
LIGHT COMPANY
[A By /' .%4%
Title:
VICE F;' 6
. Np METROPOLITAN EDISON COMPANY By / h< e, Title:
VICE PP'! 7 NT PENNSYLVANIA ELECTRIC COMPANY N
By f , . , , . - -
.
Title:
'/ ICE Pr ? I' :'T 1474 049
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48
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Total Commitment
$65,000,000 CITIBANK, N.A., Individually and as Agent ,/
/ -
? y
- - '.
,
By
/j ' - f. W ~- -
'
Vice P,res id ant 399 Park Avenue New York, New York 10043 Attention: Energy-East Department, National Banking Group
$50,000,000 CIIEMICAL BANK, Individually and as,.Co-Acent
- * '
- /.;, Ls:7 A < !/ if,f
/ /!,
. s1 ! o/
/
p,, [. ,q/ /, D'/i;y,9'
- ' / (- 7
'
Vice Presicent g 277 Park Avenue New York, New York 10017 Attention: Public Utili-ties District S
(Name of Bank)
'
By Title:
Address:
Telex No.:
.
1474 050 e
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SCHEDULE I SENIOR DEST SENIOR DEBT DOCUMENT AMOUNT CURRENTLY OUTSTANDING GPU Loan Agreement dated as of November 15, 1976, as amended by amendment thereto, dated March 30, 1979 S 39,000,000 3C First Mortcace Bonds Indenture, dated as of March 1, 1946, to Citibank, N.A. (formerly Citibank Farmers Trust Company) as Trustee $690,560,000 Mortgage and Deed of Trust, dated as of March 1, 1944 from New Jersey Power & Light Company to Morgan Guaranty Trust Company of New York (formerly Guaranty Trust Company of New York) as Trustee S 39,200,000 Debentures Indenture, dated as of October 1, 1963, to Irving Trust Company, as Trustee S 74,203,000 Indenture, dated as of July 1, 1964 f rom New J e rsey Powe r '& Light Company to The Chase Manhattan Bank, N.A., as Trustee S 7,800,000 Term Loan Agreement, dated as of May 21, 1979, as amended and restated by amendment dated May 25, 1979 $ 24,000,000
} kl k
-
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2 O
SENIOR DEBT DOCUMENT AMOUNT CURRENTLY OUTSTANDING Other Lona Term Debt Amendment No. 3, dated as of May 20, 1977 to Agreement, dated as of February 16, 1970 with Brown Boveri Corporation $ 18,362,170 Mg First Mortcage Bonds Indenture, dated November 1, 1944 to Morgan Guaranty Trust Company of New York ( formerly Guaranty Trust Company of New York) as Trustee $463,098,377 Debentures Indenture, dated as of June 1, 1965, to the Marine Midland Bank e
(formerly The Marine Midland Trust Company of New York) as Trustee $ 84,560,000 EE First Mortcage Bonds Mortgage and Deed of Trust dated as of January 1, 1942 to Bankers Trust Company of New York as Trustee $579,397,895 Indenture, dated as of January 1, 1945 of Northern Pennsylvania Power Co. S 500,000 Indenture dated as of November 1, 1919 of Erie County Electric Company S 74,000
-
3474 052
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3 SENIOR DEBT DOCUllENT AMOUNT CURRENTLY OUTSTANDING Debentures Indenture, dated as of June 1, 1961 to Chemical Bank (formerly Chemical Bank New York Trust Company) as Trustee S 72,680,000 1, ki k O
.
. .
SCHEDLT E II Outstarding Indebtedness Under 2,ines As At May 31, 1979 (Amounts in Thcusands) g Total Name of Bank GPU JCP&L Met-Ed Penelec System New York Citibark, N.A. $11,400 S 9,120 $ 5,000 - $ 25,520 The Chese Manhattan Bark, N.A. - 17,788 - -
17,788 Chanical Bark 2,500 4,704 5,000 - 12,204 Marine Midlan$ BarA - N.Y. 4,000 5,152 2,000 -
11,152 Barkers Trust Co. -
1,416 1,000 - 2,416 Manufacturers Hancver Trust Co. 4,500 4,352 2,000 -
10,852 Morgan Guaranty Tn:st Co. of N.Y. -- 1,416 4,000 - 5,416 Irving Trust Co. 4,000 9,352 3,000 -
16,352 Frcedem National Bank - - - - -
Tot.01 Nea York $26,400 S53,300 S22,000 - $101,700 New Jersey Fidelity Unicn Trust slo. - S 3,000 - - S 3,000 Midlantic National Bark -
3,000 - - 3,000 Nea Jersey Bark, N.A. -
3,000 - -
3,000 $
Naticnal Cc:= unity Bark -
3,000 - - 3,000 United Jersey Bark - 4,000 - - 4,000 The Central Jersey Bark & Trust -
3,000 - -
3,000 The First Jersey National Bark -
1,500 - - 1,500 Heritage Bark North, N.A. -
2,500 - - 2,500 The Nat. Stata Bark of Eli::abeth -
2,500 - - 2,500 Colonial First Naticnal Bark - 2,000 - -
2,000 New Jersey Naticnal Bmk - 2,000 - -
2,000 The Bank of Nea Jersey -
1,000 - -
1,000 United Counties Trust Co. -
1,500 - - 1,500 First Nat. State Bark of West Jersey - 2,000 - -
2,000
- - -
First Nat. State Bark of New Jersey - -
First Merchants Naticnal Bank - 500 - -
500 Frarklin State Bark - 2,000 - -
2,000 Summit and Elizabeth Trust Co. - 1,000 - - 1,000 American Naticnal Bark & Trust - 2,000 - - 2,000 First Naticnal Bank of Solth Jersey -
,1,000 - - 1,000 The Hunterden Ccunty National Bark of Flemin; ten - 700 - -
700 First National State Bark of Northwest Jersey -
500 - -
500' Ocean Ccunty Nat .onal Bank of i
Point Pleasant - 400 - -
__
400
'1btal New Jersey S - _$42,100 S - S - S J2,100 974 09
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Page 2 of 3 S3EDU:E II Outstanding Indabtedness Under Lines As At May 31, 1979 (Amounts in Thcusands)
Total Name of Bank GPU JCP&L Met-Ed Penelec System Pennsylvania Mellon National Bank, N.A. S 2,000 $ -
S
-
S 2,000 S 4,000 Pittsburgh National BarA (Penna.) - - -
4,000 4,000 First Penrsylvania Bark, N.A. 2,000 -
4,000 -
6,000 Arerican Bark atd Trust Cc.
of Pennsylvania - -
5,000 -
5,000 The Fidelity Bark 2,000 -
3,000 -
5,000 National Cent .al Bank - -
2,500 -
2,500 Provident Ma*icnal Bank - -
2,000 -
2,000 Bark of Pernsylvania - -
1,000 -
1,000 Industrial Valley Bark &
Trust Co. - -
2,000 -
2,000 Equibark, N. A. - - -
2,000 2,000 United States Natienal (Perna.) - - -
1,000 1,000 The York Bark ard Trust Co. - -
1,000 -
1,000 F g Naticnal of Pa. - Eria - - -
2,000 2,000 FlYft Valley Bark - - - - -
Northeastern Bark of Penrsylvania - -
500 -
500 Mid -State Bark & Trust (Perna. ) - - - - -
Northsest Pa. Bark & Trust (Penna.) - - - - -
Pennsylvania Bark & Trust (Perna.) - - -
500 500 First Seneca Bank & Trust (Penna. ) - - - - -
Johnstcwn Bark & Trust Co.
(Penna.) - - -
1,000 1,000 The National Bank of Bcyertcwn - - - - -
Security - Pecples Trust Co. -
Erie (Perna. ) - - -
1,000 1,000 The W5cnirg Naticnal Bark of Wilkes Barre - - - - -
CCiB Bark , N. A. - -
250 -
250 Lebarrn Valley Naticnal Bank - -
250 -
250 Laurel National Bank - - -
500 500 National Bark of the Ccr=creeealth - - -
400 400 Nazareth National Bank & Trust Co. - - - - -
Central Ccunties Bark of Altocna - - - - -
Clearfield Bark & Trust Co. - - - - -
Unicn Bank & Trust (Perna.) - - - - -
E. :n Naticnal Bank & Trust Co. - - - - -
Fact.ers Bark & Trust Co.
of Hanover - - - - -
1474 055
Page 3 of 3 SCHEDCLE II Outstanding Indebtedness Under Lines As At May 31, 1979 h
(Amounts in Thcurands)
Short-Term Debt Outstandina 9 5/31/79 Total Name of Bank GPU JCP&L Met-Ed Penelec System Pennsvivania (cent'd)
Lafayette Trust Bark $ -
S -
S
-
S -
S
-
Ccresanwealth Bank & Trust Co. - - - - -
Mansfield (Penra.) - - - - -
The Moxhcm Naticnal BarA, - - - - -
Johnstcwn (Penna.) - - -
300 300 Warren National BarA (Penna.; - - - - -
Lebanon Ccunty Trust Co. - - - - -
Penn Central Naticnal Bark - - - - - -
Huntimdon - - - - -
The Merchants Naticnal Bank - - - - -
of Bangor - -
200 -
200 Cu.eunwealth National Bank - - - - -
Keystone National BarA - - - - -
Dale Naticnal Bank - - - - -
The Savings and Trust Co. - - - - - -
Indiara (Penna.) - - - - -
Unicn Naticnal Bark & - - - - -
Trust Co. Huntingten (Penna. ) - - - - -
The Valley Trust Co. of Palmyra - - - - -
Unibank Bark & Trust Co. - - - - -
Deposit Naticnal Bank - - - - -
Hollidaysburg Trust Co. - - - - -
Smerset Trust Co. - - - - -
Union Barking & Trust Co. - - - - -
Dubois (Perna.) - - - - -
Hmer City State Ban'c - - - - -
National Bark of Western - - - - -
Pernsylvania - BAerlin - - - - -
Hartley National BarA - - - - - -
Bedford - - - - -
Total Fernsylvania S 6,000 S- $21,700 $14,700 S 42,4t'0 Other Hartford Nation Bark
& Trust Co. S - S 1,000 S -
S - S 1,000 Total othar S - S 1,000 S -
S - S 1,C00
@
Total Short-Term Debt $32,400 S96,400 S43,7g $14,700 J187,200 1474 0 %
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EXHIBIT A-1 PROMISSORY NOTE
- Dated , 1 9__,
FOR VALUE RECEIVED, GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the " Borrower"),
HEREBY PROMISES TO PAY to the order of [NAME OF BANK] (the
" Bank") the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** ,
19__, together with interest on the principal amount from ti,me to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to (a) 105G of the Alternate Base Rate on that portion of such principal amount which is not in excess of the Bank's Percentage (as defined in the Credit Agreement) of $30,000,000, (b) 108% of the Alternate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $30,000,000 but not in excess of the Bank's Percentage of $60,000,000 and (c) 111% of the Alter-nate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $60,000,000.
The " Alternate Base Rate" means the higher of:
(a) The base rate of Citibank, N.A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent,
- The date or the initial Borrowing or the appropriate New Note Issue Date.
- October 1, 1979, April 1, 1980, October 1, 1980, 474 057 April 1, 1981, or October 1, 1981, as appropriate.
,
. .
2 but in no event higher than the maximum rate permitted by O
law.
Both principal and interest are payable in lawful money of the United States of America to Citibank, N. A. , as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds.
This Promissory Note is one.of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borrcwer, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A.,
as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. The Credit Agreement, among other th ings , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.
GENERAL PUBLIC UTILITIES CORPORATION g
By Title:
1474 058 O
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EXHIBIT A-2 PROMISSORY NOTE
- Duted ,
19__
FOR VALUE RECEIVED, JERSEY CENTRnL POWER & LIGHT COMPANY, a New Jersey corporation (the " Borrower"), HEREBY PROMISES TO PAY to the order of [NAME OF BANK] (the " Bank")
the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** ,
19__, tegether with interest on the principal amount from time to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to (a) 105% of the Alternate Base Rate on that portion of such principal amount which is not in excess of the Bank's Percentage (as defined in the Credit Agreement) of $35,000,000, (b) 108% of the Alternate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $35,000,000 but not in excess of the Bank's Percentage of $70,000,000 and (c) 111% of the Alter-nate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of S70,000,000. The
" Alternate Base Rate" means the higher of:
(a) The base rate of Citibank, N. A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-
~ week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New Srk or, if such publication shall be suspen?.ed or terL nated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next
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higher 1/4 of one percent, 1474 059
- The date of the initial Borrowing or the appropriate New Note Issue Date.
- October 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981, or October 1, 1981, as appropriate.
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2 but in no event higher than the maximum rate permitted by O
law.
Both principal and interest are payable in lawful money of the United States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds.
This Promissory Note is onc of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borr,wer, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A.,
as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. The Credit Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.
JERSEY CENTRAL POWER & LIGHT g COMPANY W By Title:
!474 080 0
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EXHIBIT A-3 PROMISSORY NOTE
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- Dated ,
19__
FOR VALUE RECEIVED, METROPOLITAN EDISON COMPANY, a Pennsylvania corporation (the " Borrower"), HEREBY PROMISES TO PAY to the order of [NAME OF BANK] (the " Bank") the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** , 19__,
together with interest on the principal amount from time to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to (a) 105% of the Alternate Base Rate on that portion of such principal amount which is not in excess of the Bank's Percentage (as defined in the Credit Agreement) of $25,000,000, (b) 108% of the Alternate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $25,000,000 but not in excess of the Bank's Percentage of S50,000,000 and (c) 111% of the Alter-nate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of $50,000,000. The
" Alternate Base Rate" means the higher of:
(a) The base rate of Citibank, N.A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, 74 061
- The date of the initial Borrowing or the appropriate
,
New Note Issue Date.
- October 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981, or October 1, 1981, as appropriate.
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2 but in no event higher than the maximum rate permitted by O
law.
Both principal and interest are payable in lawful money of the United States of America to Citibank, N. A. , as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds.
This Promissory Note is one of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among the Borrower, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A.,
as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Loan Documents referred to therein. The Credit Agreement, among other things , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.
METROPOLITAN EDISON COMPANY By Title:
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!474 062
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EXHIBIT A-4 PROMISSORY NOTE
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- Dated ,
19 _
FOR VALUE RECEIVED , PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation (the " Borrower"), HEREBY PROMISES TO PAY to the order of [NAME OF BANK] (the " Bank") the aggregate unpaid principal amount of all Advances made by the Bank to the Borrower pursuant to the Credit Agreement (as hereinafter defined), on** , 19__,
together with interest on the principal amount from time to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to (a) 105% of the Alternate Base Rate on that portion of such principal amount which is not in excess of the Bank's Percentage (as defined in the Credit Agreement) of $10,000,000, (b) 108% of the Alternate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of S10,000,000 but not in excess of the Bank's Percentage of $20,000,000 and (c) 111% of the Alter-nate Base Rate on that portion of such principal amount which is greater than the Bank's Percentage of S20,000,000. The
" Alternate Base Rate" means the higher of:
(a) The base rate of Citibank, N.A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-week moving average of secondary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of Jew York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent,
- The date of the initial Borrowing or the appropriate New Note Issue Date.
}
- October 1, 1979, April 1, 1980, October 1, 1980, April 1, 1981, or October 1, 1981, as appropriate.
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but in no event higher than the maximum race permitted by law.
Both principal and interest are payable in lawful money of the United States of America to Citibank, N. A. , as Agent, at 399 Park Avenue, New York, New York 10043, in immediately available funds.
This Promissory Nc'e is one of the Notes referred to in and is entitled to the benefits of, the Revolving Credit Agreement, dated as of June 15, 1979 ( the " Credit Agreement"), among the Borrower, the other borrowers, the Bank, certain other banks parties thereto, Citibank, N.A.,
as Agent for the Bank and such other banks, and Chemical Bank, as co-agent for the Bank and such other banks, and the Locn Documents referred to therein. The Credit Agreement, among other things , contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments en account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.
PENNSYLVANIA ELECTRIC COMPANY h By Title:
1,474 064 O
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. EXHIBIT B GUARANTY GUARANTY, dated as of June 20, 1979, made by GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the
" Guarantor"), in favor of [the Banks (the " Banks") parties to the Credit Agreement (as defined below), CITIBANK, N.A., as agent (the " Agent") for the Banks and CHEMICAL BANK, as co-agent (the "Co-Agent") for the Banks] [ Hartford National Bank and The Fidelity Bank (the " Banks").]
PRELI:1INARY STATEMENT. [The Banks, the Agent and the Co-Agent have entered into a Revolving Credit Agreement, dated as of J' ne 15, 1979 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the
" Credit Agreement", the terms defined therein and not other-wise defined herein being used herein as therein defined),
with the Guarantor, JERSEY CENTRAL PCNER & LIGHT COMPANY, a New Jersey corporation, METROPOLITAN EDISON COMPANY, a Pennsylvania corporation, and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation. It is a condition precedent to the obligation of the Banks to make Advances under the Credit Agreement that the Guarantor, as the beneficial owner of 100 percent of the outstanding shares of common stock of JC, ME and PE, shall have executed and delivered this Guaranty.]
[ Hartford National Bank and Citibank, N.A., have agreed, in anticipation of this Guaranty, to modify the terms of the indebtedness of GPU Service Corporation ("ServCo") to them pursuant to that certain Letter of Intent, dated April 4, 1978, from ServCo to Hartford National Bank and Citibank, N.A., with respect to the acquisition and improvement of certain property in Parsippany, New Jersey (the "Parsippany Agreement"). Pursuant to that certain Loan Agreement, dated December 31, 1973, as amended by an Amendment, dated November 30, 1977, between ServCo and The Fidelity Bank with respect to the acquisition and improvement of certain property in Reading, Pennsylvania, ServCo is indebted to The Fidelity Bank (the " Read ing Agreement"; together with the Parsippany Agreement, the " Credit Agreement", the promissory notes isued under the Credit Agreement being the " Notes").]
NOW, THEREFORE, in consideration of the premises (and in order to induce the Banks to make Advances under the Credit Agreement] , the Guarantor hereby agrees as follows:
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SECTION 1. Guarantv. The Guarantor hereby uncon-ditionally guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of (JC] (ME] [PE] [GPU Service Corporation] (the "Obligor") now or hereafter existing under the Credit Agree-ment and the Notes, whether for principal, interest, fees, expenses or otherwise (such obligations being the "Obliga-tions"), and any and all expenses incurred by (the Agent, the Co-Agent or] the Banks in enforcing any rights under this Guaranty][; provided, however, that the Guarantor shall make no payment witn respect to tne Obligations under this Guar-anty, so long as the Guarantor shall have any obligations with respect to the JC Guaranty, the MC Guaranty or the PE Guaranty (as each such term is defined in that certain Revolving Credit Agreement, dated as of June 15, 1979, among the Guarantor, Jersey Central Power & Light Company, Metro-politan Edisen Company and Pennsylvania Electric Company, the banks parties thereto and Citibank, as Agent and Chemical Bank, as Co-Agent for such Banks) as the same may from time to time be amended, modified or supplemented).
SECTION 2. Guarantv Absolnte. The Guarantor cuar-antees that the Obligations will oe paid strictly in accord-ance with the terms of the Credit Agreement and the Notes. lll The liability of the Guarantor under this Guaranty shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Credit Agreement, the Notes or any other agreement or instrument relating thereto; (ii) any change ir. the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from the Credit Agreement or the Notes; (iii) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations; or (iv) any other circumstance which might otherwise constitute a defense available to, or a discharge of,
'
the Obligor in respect of the Obligations or the Guaran-tor in respect of this Guaranty, O
1474 Ob6
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3 except to the extent tha this Guaranty may finally be deter-mined to be unenforceable as contrary to public policy. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by
[the Agent, the Co-Agent or) any Bank upon the insolvency, bankruptcy or reorganization of the Obligor or otherwise, all as though such paydent had not been made.
SECTION 3. Waiver. The Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guar-anty and any requirement that [the Agent, the Co-Agent or]
any Bank exhaust any right or take any action against the obligor or any other Person or any collateral.
SECTION 4. Subrocation. The Guarantor will not exercise any rights whien it may acquire by way of subroga-tion under this Guaranty, by any payment made hereunder or otherwise, until all the Obligations shall have been paid in full. If any amount shall be paid to ".he Guarantor on ac-count of such subrogation rights at any time when all the Ob-ligations shall not have been paid in full, such amount shall be held in trust for the benefit of [the Agent, the Co-Agent and] the Banks and shall forthwith be paid to the [ Agen t]
[ Banks] to be credited and applied upon the Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement. If (i) the Guarantor shall make payment to [the Agent, the Co-Agent or] the Banks of all or any part of the Obligations and (ii) all the obligations shall be paid in full, [the Agent, the Co-Agent and] the Banks will, at the Guarantor's request, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting from such payment by ;he Guarantor.
SECTION 5. Amendments, Etc. No amendment or waiv~er of any provision of this Guaranty nor consent to any departure by the Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by
[the Agent, the Co-Agent and] the Banks.
!474 067
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SECTION 6. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Guarantor, mailed or telegraphed or delivered to it, addressed to it at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention of Vice President and Chief Financial Officer, if to [the Agent, the Co-Agent or] any Bank, mailed or delivered to it, addressed to it at the address of [the Agent, the Co-Agent or] such Bank (as the case may be) specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Sectien. All such notices and other communications shall, when mailed or telegraphed, respectively, be effective when deposited in the mails or delivered to the telegraph company, respectively, addressed as aforesaid.
SECTION 7. No Waiver; Remedies. No f ailure on the part of [the Agent, the Co-Agent or) any Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any reme-dies provided by law.
SECTION 8. Richt_of Set-off. Upon [(i)] the occur-rence and during the continuance of any Event of Default [and (ii) the making of the request or the granting of the consent specified by Section 6.01 of the Credit Agreement to author-ize the Agent to declare the Notes due and payable pursuant to the provisions of said Section 6.01], each Bank is hereby authorized at any time and from time to time, without notice to the Guarantor (any such notico being expressly waived by the Guarantor), to set off and apply any ar.a all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Guaran-tor against any and all of the obligations of the Guarantor now or hereafter existing under this Guaranty, irrespective of whether or not such Bank shall have made any demand under this Guaranty and although such obligations may be contingent and unmatured. Each Bank agrees promptly to notify the Guar-antor after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-of f and application. The rights of each Bank under this Section are in addition to other rights and remedies ( intiud ing , without limitat ion ,
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other rights of set-off) which such Bank may have.
llh TA7A Ob8
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5 SECTION 9. Continuino Guaranty- Transfer of Notes.
This Guaranty is a continuing guaranty and shall (i) remain in full force and ef fect until payment in full [(after the Termination Date)] of the Obligations and all other amounts payable under this Guaranty, (ii) be binding upon the Guaran-tor, its successors and assigns, and (iii) inure to the bene-fit of and be enf orceable by the Banks [, the Agent, the Co-Agent] and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note held by it to any other Person, and such other Person shall thereupon become vested with all the rights in respect thereof granted to sucn Bank herein or otherwise[, subject, however, to the provisions of Article VII (concerning the Agent) of the Credit Agreement] .
SECTION 10. Governinc Law. This Guaranty shall be governed my, and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its of ficer thereunto duly authorized as of the date first above written.
GENERAL PUBLIC UTILITIES CORPORATION By Title:
1474 069
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EXHIBIT C PLEDGE AGREEMENT dated as of June 20, 1979, made by GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corpora-tion (the "Pledgor"), to CHEMICAL BANK as agent (the " Agent")
for the banks parties to the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement (each as hereinafter defined);
PRELIMINARY STATEMENTS:
(1) The Pledgar is the owner of the shares (the
" Pledged Shares") of stock described in Schedule I hereto and issued by the corporations named therein.
(2) Certain banks, CITIBANK, N.A., as agent (the
" Credit Agreement Agent") and CHEMICAL BANK, as co-agent, have entered into a Revolving Credit Agreement, dated as of June 15, 1979 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the " Credit Agreement", the terms defined therein and not otherwise de-fined herein being used herein as therein defined), with the Pledgor, JERSEY CENTRAL PCWER & LIGHT COMPANY, a New Jersey corporation, METROPOLITAN EDISON CCMPANY, a Pennsylvania cor-poration, and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation; certain banks and Citibank, N. A. , as agent, (the "GPU Loan Agreement Agent") are parties to the GPU Loan Agree-ment. Hartford National Bank is a party to that certain Letter of Intent, dated April 4, 1978, as amended, from GPU Service Corporation ("ServCo) with respect to the acquis i-tion and improvement of certain property located in Parsippany, New Jersey (the "Parsippiny Agreement"); and The Fidelity Bank is a party to that certain Loan Agreement, dated Decem-ber'31, 1973, as amended bi an Amendment, dated November 30, 1977, with ServCo with respect to the acquisition and improve-ment of certain property located in Reading, Pennsylvania (the
" Reading Agreement") (the banks parties to one or more of the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement being the " Banks"). It is a condition precedent to the obligations of the Banks to make Advances to the Borrowers under the Credit Agreement and to the effectiveness of the GPU Loan Agreement Restatement that the Pledgor shall have made the pledge contemplated by this Agreement. The Parsippany Agreement has been modified in anticipation of the pledge contemplated by this Agreement.
Pursuant to the Reading Agreement, Se rvCo , a wholly-owned subsidiary of the Pledgor, is indebted to The Fidelity Bank.
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NOW, THEREFORE, in consideration of the premises, the Pledgor hereby agrees with the Agent for its benefit, the benefit of the Co-Agent and the ratable benefit of the Banks as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Agent for its benefit, the benefit of the Credit Agree-ment Agent, the GPU Loan Agreement Agent and the ratable (in accordance with the Indebtedness of the Borrowers to the Banks outstanding under the Credit Agreement, the GPU Loan Agreement the Parsippany Agreement and the Reading Agreement) benefit of the Banks, and grants to the Agent for its benefit, the benefit of the Credit Agreement Agent, the GPU Loan Agree-ment Agent and the ratable benefit of the Banks a security interest in, the following (the " Pledged Collateral"):
(i) the Pledged Shares and the certificates repre-senting the Pledged Shares, and all dividends, cash, in-struments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; (ii) all additional shares of stock of any issuer of the Pledged Shares from time to time acquired by the Pledgor in any manner, and the certif icates representing such additional shares, and all dividends, cash, instru-ments and other property from time to time received, re-ceivable or otherwise distributed in respect of or in exchange for any or all of such shares; and (iii) any and all proceeds of the foregoing.
SECTION 2. Security for Oblications. This Agree-ment secures the payment of all obligations of the Borrowers now or hereafter existing under the Credit Agreement, the notes issued thereunder, the GPU Loan Agreement, the promis-sory notes issued thereunder, the Parsippany Agreement, the promissory note issued thereunder, the Reading Agreement and the premissory note issued thereunder (all such premissory notes being referred to herein, collectiv ely , as the " Notes"),
whether for principal, interest, fees, expenses or otherwise, and all obligations of the Pledgor now or hereaf ter existing under the Guaranties or this Agreement (all such obligations of the Borrower and the Pledgor being the " Obligations").
SECTION 3. Deliverv of Pledced Collateral. All certificates or instruments representing or evicencing the Pledged Collateral shall be delivered to and held by or on behalf of the Agent pursuant hereto and shall be in suitable j kl k
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form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form ano substance satisfactory to the Agent. The Agent shall have the right, at any time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Agent or any of its nc.ninees any or all of the Pledged Collateral, subject only to the receipt of the appropriare orders referred to in Section 4.02(c), below, and to the revocable rights specified in Section 6(a). In addi-tion, the Agent shall '. ave the right at any time to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations.
SECTION 4. Recresentations and Warranties. The Pledgor represents and warrants as follows:
(a) All of the outstanding common stock of JC, ME, PE, and GPU Service Corporation has been validly issued, is fully paid and non-assessable and is owned by the Pledgor free and clear of all mortgages, deeds of trust, pledges, liens, security interests and other charges or encumbra: 's, other than those created by this Agreement and the Pledged g Shares constitute 100% of the outstanding common stock of JC, W ME, PE and GPU Service Corporation. GPU is the record and beneficial owner of all of the Pledged Shares, except for twelve shares of the common stock of ME which are nominally registered in the names of certain employees of ME for convenience in the conduct of meetings of shareholders, but which are beneficially owned by GPU.
(b) The pledge of the Pledged Shares pursuant to this Agreement creates a valid and perfected first priority security interest in the Pledged Shares, securing the payment of the Obligations.
(c) Except for any appropriate order of .ae SEC under the Utility Act, of the NJSPU as to the shares of JC constituting Pledged Shares and of the PaPUC as to the shares of ME and PE constituting Pledged Shares (all of which orders are in full force and effect), no authorization, approval, or other action by, and no notice to or filing with, any govern-mental authority or regulatory body is required for the pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of the Agreement by the Pledgor.
O
!474 072
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4 SECTION 5. Further Assurances. The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Agent may re-quest, in order to perfect and protect any security interest grar.ted or purported to be granted hereby or to enable tne Agent to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral.
SECTION 6. Votinc Richts; Dividends: Etc. (a) So long as no Event of Dcfault or event wnien, with the giving of notice or the lapse of time, or both, would become an Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to enercise any and all voting and other consensual rights pertaining to the Pledged Collateral or any part thereof for any pur-pose not inconsistent with the terms of this Agreement or the Credit Agreement; orovided, however, that the Pledgor shall not exercise or refrain from e::ercising any such right if, in the Agent's judgment, such action would have a material adverse effect on the value of the Pledged Collateral or any part thereof, and, provided, further, that the Pledgor shall give the Agent at least five days' written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right.
(ii) The Pledgor shall be entitled to receive and retain any and all dividends and interest paid in re-spect of the Pledged Collateral, provided, however, that any and all (A) dividends and interest paid or payable other than in cash in respect of, and instruments and other property received, receivable or other-wise distributed in respect of, or in ex.:hange for, any Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Pledged Collat-eral in connection with a partial or total liquida-tion or dissolution or in connection with a reduc-tion of capital, capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise dis-tributed in exchange for, any Pledged Collateral,
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5 shall be, and shall forthwith delivered to the Agent to O
hold as, Pledged Collateral and shall, if received by the Pledgor, be received in trust for the benefit of the Agent, be segregated frca the other property or funds of the Pledgor, and be forthwith delivered to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement).
(iii) The Agent shall execute and deliver (or cause to be executed and delivered) to the Pledgor all such proxies and other instruments as the Pledgor may reasonably request for the purpose of enabling the Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments which it is authorized to receive and retain pursuant to para-graph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of Default or an event which, with the giving of notice or the lapse of time, or both, would become an Event of Default:
(i) Subject to any required approval or consent of the SEC under the Utility Act, of the NJBPU and of the lll PaPUC, all rights of the Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) may, at the election of the Majority Banks, and all rights of the Pledgor to receive the dividends and payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall, cease, and all such rights shall thereupon become vested in the Agent who shall thereupon have the sole right to exercise such voting and other ccnsensual rights and to receive and hold as Pledged Collateral such dividends and payments.
(ii) All dividends and payments which are re-ceived by the Pledgor contrary to the provisions of paragraph (i) of this Section 6(b) shall be received in trust for the benefit of the Agent, shall be segregated from other funds of the Pledgor and shall be forthwith paid over to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement).
- SECTION 7. Transfers and Other Liens; Add it ional Shares. (a) The Pledgor agrees that it will not (i) sell or otherwise dispose of, or grant any option with respect to, ggg 3 47 A 074
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6 any of the Pledged Collateral, or (ii) create or permit to exist any lien, security interest, or other charge or encum-brance upon or with respect to any of the Pledged Collateral, except for the security interest under this Agreement.
(b) The Pledgor agrees that it will (i) cause each issuer of the Pledged Shares not to issue any common stock in addition to, or issue any stock or other securities in sub-stitution for, the Pledged Shares issued by such issuer, except to the Pledgor and (ii) pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all additional shares of common stock and any and all such stock or other securities of each issuer of the Pledged Shares.
SECTION 8. Acent Apuointed Attornev-in-Fact. The Pledgor hereby appoints the Agent the Pledgor's attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, from time to time in the Agent's discretion to take any action and to execute any instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, indorse and col-lect all instruments made payable to the Pledgor representing any dividend, payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full dis-charce for the same.
SECTION 9. Acent Mav Perform. If the Pledgor fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Pledgor under Section 13.
SECTION 10. Reasonable Care. The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collareral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which Chemical Bank accords its own property, it being understood that neither the Agent, the Credit Agree-ment Agent, the GPU Loan Agreement Agent nor any Bank shall have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenaecs or other matters relative to any Pledged Collateral, whether or not the Agent, the Credit Agreement Agent, the GPU Loan Agreement Agent or any Bank has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral.
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SECTION 11. Remedies uoan Default. If any Event of Default shall have occurred and ce continuing and subject to any required approval or consent of the SEC under the Utility Act, of the NJBPU and of the PaPUC:
(a) The Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for hcrein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Cc:cmercial Code (the " Code")
in effec: in the State of New York at that time, and the Agent may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Agent's offices or elsewhere, for cash, on credit or tor future delivery, and at such price or prices and upon such other terms as the Agent may deem commercially reasonable. The Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notifi-cation. The Agent shall not be obligated to make any ll) sale of Pledged Collateral regardless of notice of sale having been given. The Agent may adjourn any public or private sale from time to time by announce-ment at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.
(b) Any cash held by the Agent as Pledged Col-lateral and all cash proceeds received by the Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Col-lateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 13) in whole or in part by the Agent first for the ratable (in accordance with the Indebtedness of the Borrowers to the Banks outstanding under the Credit Agreement and the GPU Loan Agreement) benefit of the Banks against all or any part of the Obligations existing in respect of the Credit Agreement and the GPU Loan Agreement until all such Obligations shall have been paid in full and, thereafter, for the ratable benefit of the Banks party to the Parsippany Agreement and the Reading Agreement againsu all or any part of the Obligations existing in lh 1A74 076
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8 respect of the Parsippany Agreement and the Reading Agreement until all such Obligations shall have been paid in full. Any surplus of such cash or cash proceeds held by the Agent and remaining af ter payment in full of all the Obligations shall be paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus.
SECTION 12. Recistration Richts. If the Agent shall determine to exercise its rignt to sell all or any of the Pledged Collateral pursuant to Section 11, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its own expense:
(a) execute and deliver, and cause each issuer of the Pledged Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such ins truments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of the Agent, advisable to register such Pledged Collateral under the provisions of the Securities Act of 1933, as from time to time amended (the " Securities Act"), and to cause the registration statement relating thereto to become ef fective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of the Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto; (b) use its best efforts to qualify the Pledged Collateral under the state securities cr " Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Pledged Collateral, as recuested by the Agent; (c) cause each such issuer to make available to its security holders , as soon as practicable, an earn-ing statement which will satisfy the provisions of Section ll(a) of the Securities Act; and (d) do or cause to be done all such other acts and things as may be necessary (including, without limitation, obtaining any necessary or desirable approval of the SEC under the Utility Act and of the 1474 077
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9 NJBPU and the PaPUC) to make such sale of the Pledged Collateral or any part thereof valid and binding and in compliance with applicable law.
The Pledgor further ackncwledges the impossibility of ascer-ta ining the amount of damages which would be suf fered by the Agent, the Credit Agreement Agent, the GPU Loan Agreement perform any of the covenants contained in this Section and, consequently, agrees that, if the Plegdor shall f ail to per-form any of such covenants, it shall pay, as liquidated dam-ages and not as a penalty, an amount equal to the value of the Pledged Collateral on the date the Agent shall demand compliance with this Section.
SECTION 13. Excenses. The Pledgor will upon de-mand pay to the Agent the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, or the sale of, collection frem, or other realization upon, any of the Pledged Collateral, (iii) the exercise or enforcamen' of any of the rights of .he Agent, the Credit Agreement Agent, the GPU Loan Aareemenc Acent or the Banks hereunder or (iv) the
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f ailure by the Pledgor to perform or observe any of the pro- llh visions hereof.
SECTION 14. Security Interest Absolute. All rights of the Agent and security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any Principal Agreement (meaning the Credit Agreement, the GPU Loan Agreement, the Parsippany Agreement and the Reading Agreement) , the Notes or any other agree-ment or instrument relating thereto; (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from any Principal Agreement or the Notes; (iii) any exchange, release or non-perfection of any other collateral, or any release or amendment or
- waiver of or consent to departure f rom any guaranty, for all or any of the Obligations; or 9
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10 (iv) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Borrower in respect of the Obligations or the Pledgor in respect of this Agreement, except to the extent that this Agreement may finally be deter-mined to be unenforceabla as contrary to public policy.
SECTION 15. Amendments, Etc. No amendnent or waiver of any provision of this Agreement nor consent to any departure by the Pledgor herefrom, shall in any event be effective unless the same snall be in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given.
SECTION 16. Addresses for Motices. All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Pledgor, mailed or telegraphed or delivered to it, addressed to it at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention of Vice President ar.d Chief Finan-cial Officer, if to the Agent, mailed or delivered to it, addressed to it at the address of the Agent specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. All such notices and other communications shall, when mailed or telegraphed, respec-tively, be effective when deposited in the mails or de-livered to the telegraph company, respectively, addressed as aforesaid.
SECTION 17. Continuing Securitv Interest: Transfer of Notes. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until payment in full (in respect of the Credit Agreement, after the Termination Date) of the Goligations, (ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure, together with the rights and remed_es of the Agent hereunder, to the benefit of the Agent, the Credit Agreement Agent, the GPU Loan Agreement Agent, the Ba nk s , and their respective successors, transferees and a s s ig.'s . Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note head by it to any other person or entity, and such other person oc entity shall thereupon become vested with all the benefits i.n respect thereof granted to such Bank herein or othe rw ise , subject, however, to the provisions of Article VII TA74 079
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(concerning the Agent and the Co-Agent thereunder) of the Credit Agreement and of Article VI (concerning the Agent thereunder) of the GPU Loan Agreement with respect to the Notes issued thereunder. Upon the payment in full (in re-spect of the Credit Agreemont, after the Termination Date) of the Obligations, the Pledgor shall be entitled to the return, upon its request and at its expense, of such of the Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof.
SECTION 18. Governinc Law: Te r:ns . This Agreement shall be governed by and construed in accordance with the laws of the Stace of New York, except as required by mandatory provision of law and except to the extent that the validity or perfection of the security interest hereunder, or remedies hereunder, in respect of any particular Fledgca Collateral are governed by the laws of a jurisdiction other than the State of New York. Unless otherwise defined herein or in the Credit Agreement, terms defined in Article 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined.
IN WITNESS WHEREOF, the Pledgor has caused thi.'
Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
GENERAL PUBLIC UTILITIES CORPORATION By Title:
. CHEMICAL BANK, as Agent By Vice President O
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SCllEDULE I .
Attached to and forming a part of that certain Pledge Agreement dated as of June 20, 1979, by General Public Utilities Corporation, as Pledgor, to Chemical Bank, as Agent Stock Certificate Number Stock Issuer Class of Stock No(s). Par Value of Shares Jersey Central Power Nos. C-30 6,978,770
& Li9ht Company Common C-31 $10 8,392,500 lietropolitan Edison Company Common Nos. 291 none 859,488 294 2 297 2 300 2 301 2 303 2 304 2 Pennsylvania Electric Nos. A-30 $20 5,290,591 Company Common A-34 5 GPU Service Corporation Common No. 1 $10 5,000
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EXHIBIT D g
PLEDGE AGREEMENT dated as of June 20, 1979, between [ JERSEY CENTRAL PONER & LIGHT COMPANY] [ METROPOLITAN EDISON COMPANY] a [New Jersey] [ Pennsylvania] corporation (the "Pledgor"), and CHEMICAL BANK as agent (the " Agent")
for the banks (the " Banks") parties to the Credit Agreement (as hereinafter defined);
PRELIMINARY STATEMENT:
The Banks, CITIBANK, N.A., as agent (the " Credit Agreement Agent") and CHEMICAL BANK- as co-agent, have entered into a Revolving Credir Agreement, dated as of June 15, 1979 (said Agreement, as it may hereafter be amended or otherwise modified from time to time, being the "Credir Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined), with GENERAL PUBLIC UTILITIES CORPORATION, the Pledgor, [ JERSEY CENTRAL PCUER & LIGHT COMPANY, a New Jersey corporation,) [ METROPOLITAN EDISON COMPANY, a Pennsylvania corporation,] and PENNSYLVANIA ELECTRIC COMPANY, a Pennsyl-vania corporation. It is a condition precedent to the obligations of the Banks to make and maintain Advances to the Pledgor under the Credit Agreement that the Pledgor shall have made the pledge contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce the Banks to make Advances to the Pledgor under the Credit Agreement, the Pledgor hereby agrees with the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks, and grants to the Agent for its benefit, the benefit of the Credit Agreement Agent and the ratable benefit of the Banks a security interest in, the following (the " Pledged Collateral"):
(i) the Bonds 'the " Pledged Bonds") described in Schedule I hereto and the certificates representing the Pledged Bonds, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of vr in exchange for any or all of the Pledged Bonds; lll 347A 082
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2 (ii) all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Bonds; and (iii) any and all proceeds of the foregoing.
SECTION 2. Security for Oblicaticns. This Agree-ment secures the payment of all obligations of the Pledgor now or hereafter enisting under the Credit Agreement and the Notes, whether for principal, interest, fees, expenses or otherwise (except such obligations of the Pledgor to
[Citibank) [ Morgan Guaranty Trust Company of New York] ), and all obligations of the Pledgor now or hereafter existing under this Agreement (all such obligations of the Pledgor being the " Obligations") .
SECTION 3. Delivery of Pledaed Collateral. All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to and held by or on
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behalf of the Agent pursuant hereto and shall be, in the case of the Pledged Bonds, registered in the name of the Agent or in the name of such nominee as the Agent shall select and, in the case of Pledged Collateral other than mhe Pledged Bonds, shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instru-ments of transfer or assignment in blank, all in form and substance satisfactory to the Agent. The Agent shall have the right, at any time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Agent or any cf its nominees any or all of the Pledged Collateral, subject only to the revocable rights specified in Section 6(a) and to the requirements of the [JC] [ME]
Indenture. In addition, the Agent shall have the right at any time to exchange certificates or instruments represent-ing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations.
SECTION 4. Reoresentations and Warranties. The Pledgor represents and warrants as follows:
(a) The pledge of the Pledged Bcads pursuant to this Agreement creates a valid and perfected first priority security interest in the Pledged Bonds, securing the payment o,f the Obligations.
(b) Except for any appropriate order of the SEC under the Utility Act and of the [NJBPU) [PaPUC]
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(all of which orders are in full force and effect), no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by the Pledgor.
SECTION 5. Further Assurances. The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver all further inctruments and documents, and take all further action, that may be necessary or desirable, or that the Agent may request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Agent to exercise and enforce its rights and remedies hereunder with respect to any Pledged Ccilateral.
SECTION 6. Votinc Rights: Etc. (a) So long as no Event of Default (meaning, for purposes of this Agreement, J
an Event of Default as to the Pledgor under Section 6.01 of the Credit Acreement) or event which, with the giving of notice or the lapse of time, or both, would become an Event lll of Default shall have occurred add be continuing:
(i) The Pledger shall be entitled to exercise any and all voting and other consensual rights which it may have, if any, pertaining to the Pledged Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Credit Agreement; provided, however, that the Pledgor shall not exercise or refrain from axercising any such right if: in the Agent's j udgment, such action would have a material adverse effect on the value of the Pledged Collateral or any part thereof, and, provided, further, that the Pledgor shall give the Agent at least five days' written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right.
(ii) The Pledgor shall be entitled to receive and retain any and all dividends and interest paid in respect of the Piedged Collateral, provided, however, that any and all (A) dividends and interest paid or payable other than in cash in respect of, and instruments llh 3A7A GBA
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and other property received , receivable or other-wise distributed in respect of, or in exchange for, any Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (C) cash paid, payable or othewise dis-tributed in exchange for, any Pledge Collateral, shall be, and shall forthwith be delivered to the Agent to hold as, Pledged Collateral and shall, if received by the Pledgor, be received in trust for the benefit of the Agent, be segregated from the other property or funds of the Pledgor, and be forthwith delivered to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement).
'iii) The Agent shall execute and deliver (cr cause to be executed and delivered) to the Pledgor all such proxies and other instruments as the Pledgor may reasonably request for the purpose of enabling the-Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or interest payments which it is authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of Default or an event which, with the giving of notice or the lapse of time, or both, would become an Event of Defau?.t:
(i) Subj ect to any required approval tr consent of the SEC under the Utility Act, of the NJbPU and of the PaPUC, all rights of the Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a)(i) may, at the election of the Majority Banks, and all rights of the Pledgor to receive the dividends and payments which it would otherwise be authorized to receive and retain pursuant to Section 6(a)(ii) shall, cease, and all such rights shall thereupon become 1A7A 085
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5 vested in the Agent who shall thereupon have the sole O
right to exercise such voting and other consensual rights and to receive and hold as Pledged Collateral such dividends and payments.
(ii) All dividends and payments which are received by the Pledgor contrary to the provisions c,f paragraph (1) of this Section 6(b) shall be received in trust for the benefit of the Agent, shall be segregated from other funds of the Pledgor and shall be forthwith paid over to the Agent as Pledged Collateral in the same form as so received (with any necessary indorsement).
SECTION 7. Transfers and Other Liens- Additional Shares. The Pledgor agrees tnat it will not (i) sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collcteral, or (ii) create or permit to exist any lien, security interest, or other charge or encun.brance upon or with respect to any of the Pledged Collateral, except for the security interest under this Agreement.
SECTION 8. Agent Appointed Attornev-in-Fact.
The Pledgor hereby appoints the Agent the Pledgor's attorney- g in-fact, witn full authority in the place and stead of the W Pledcor and in the name of the Pledgor or otherwise, from ri.ne to time in the Agent's discretion to take any action and to execute any instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, in-dorse and collect all instruments made payable to the Pledgor representing any dividend, payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same.
SECTION 9. Agent May Perform. If the Pledgor fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Pledgor under Section 13.
SECTION 10. Reasonable Care. The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possescion if the Pledged Collateral is accorded treatment substantially equal to that which Chemical Bank accords its own property, it being understood that neither the Agent, the Credit Agree-ment Agent nor any Bank shall have responsibility for (1) ascertaining or taking action with respect to calls, conver-sions, exchanges, maturities, tenders or other matters rela-llg tive to any Pledged Collateral, whether or not the Agent,
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6 the Credit Agreement Agent or any Bank has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral.
SECTION 11. Remedies upon Default. If any Event of Default shall have occurred and be continuing and subject to any required approval or consent of the SEC under the Utility Act or of the [NJBPU) [PaPUC]:
(a) The Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code (the " Code")
in effect in the State of New York at that time, and the Agent may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Agent's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Agent may deem commercially reasonable. The Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to the Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notifi-cation. The Agent shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The Agent may adjourn any public or private sale from time to time by announce-ment at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.
(b) Any cash held by the Agent as Pledged Col-lateral and all cash proceeds received by the Agent in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Col-lateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 13) in whole or in part by the Agent for the ratable benefit of obligees of the Obligations against, all or any part of the obligations in such order as the Agent shall elect.
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Any surplus of such cash or cash proceeds held by the Agent and remaining after payment in full of all the Obligations shall be paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus.
SECTION 12. Reaistration Richts. If the Agent shall determine to exercise its right to sell all or any of the Pledged Collateral pursuant to Section 11, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its cwn expens e:
(a) execu te and deliver, and cause each issuer of the Pledged Collateral contemplated to be sold and the directors and of ficers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessa ry or, in the opinion of the Agent, advisable to register such Pledged Collateral under the provisions of the Securities Act of 1933, as from time to time amended (the " Securities Act"), and to cause the registration statement relating thereto to become effective and to remain ef fective for such ceriod as prospectuses are required by law to be furn'ished, and to make all amendments and supplements thereto and to lll the related prospectus which, in the opinion of the Agent, are necessary or advisable, all in conformity with the recuirements of the Securities Act and the rules and regulations of the SEC applicable thereto; (b) use its best ef forts to qualify the Pledged Collateral under the state securities or " Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Pledged Collateral, as requested by the Agent; (c) cause each such issuer to make available to its security holders , as soon as practicable, an earn-ing statement which will satisfy the provisions of Section ll(a) of _ the Securities Act; and (d) do or cause to be done all such other acts and things as may be necessary (including, without limitation, obtaining any necessary or desirable approval of the SEC under the Utility Act or of the
[NJBPU] [PaPUC]) to make such sale of the Pledged Collateral or any part thereof valid and binding and in compliance with applicable law.
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8 The Pledgor further acknowledges the impossibility of ascer-taining the amount of damages which would be suf fered by the Agent, the Credit Agreement Agent or the Banks by reason of the failure by the Pledgor to perform any of the covenants contained in this Section and, consequently, agrees that, if the Pledgor shall fail to perform any of such covenants, it shall pay, as liquidated damages and not as a penalty, an amount equal to the value of the Pledged Collateral on the date the Agent shall demand compliance with this Section.
SECTION 13. Expenses. The Pledgor will upin de-mand pay to the Agent the amount of any and all reat mable expenses, including the reasonable fees and e::penses of its counsel and of any experts and agents, which the Agent may incur in connection with (i) the administration of this Agree-ment, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Pledged Collateral, (iii) the exercise or enforcement of any of the rights of the Agent, the Credit Agreement Agent or the Banks hereunder or (iv) the failure by the Pledgor to perform or observe any of the provisions hereof.
SECTICN 14. Security Interest Absolute. All rights of the Agent and security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Credit Agreement, tne Notes or any other agreement or instrument relating thereto; (ii) any change in the time, manner or ace of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement or the Notes; (iii) any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations; or (iv) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Borre'er in respect of the Obligations or the Pledgor in respect of this E.greement, except to the extent tha t this Agreement may finally be determined to be unenforceable as contrary to public policy.
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SECTION 15. Amendments, Etc. No amendment or waiver of any provision of this Agreement nor consent to any departure by the Pledgor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given.
SECTION 16. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic communication) and, if to the Pledgor, mailed or telegraphed or delivered to it, addressed to it at its address specified in the Credit Agreement, if to the Agent, mailed or delivered to it, addressed to it at the address of the Agent specified in the Credit Agreement, or as to each party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. All such notices and other communications shall, when mailed or telegraphed, respectively, be effective
, when deposited in the mails or delivered to the telegraph company, respectively, addressed as aforesaid.
I SECTION 17. Continuing Security Interest; Transfer of Notes. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until payment in full (after the Ter-mination Date) of the Obligations, (ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Agent, the Credit Agreement Agent, the Banks, and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (iii),
any Bank may assign or otherwise transfer any Note held by it to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Bank herein or otherwise, subject, however, to the provisions of Article VII (concerning the Cre-dit Agreement Agent) of the Credit Agreement. Upon the pay-ment in full (after the Termination Date) of the Obligations, the Pledgor shall be entitled to the return, upon its reauest and at its expense, of such of the Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof.
- SECTION 18. Payment of Obligations. So long as the Pledcor shall make due and punctual cavment of all of the Obligations, the Agent or any holder'of, or any other
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10 Person who has acquired any interest in, the Pledged Bonds shall have no right to and shall not demand, collect or receive any principal of or interest on any of the Pledged Bonds.
SECTION 19. Release of Pledged Bonds. In the event that the Pledgor snall sell any or its First Mortgage Bonds to Persons other than the Banks, the Agent will release a like principal amount of the Pledged Bonds from the pledge and security interest granted hereby against receipt by it from the purchaser of the purchase price of such First Mortgage Bonds.
SECTION 20. Governing Law: Terms. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as required by mandatory provision of law and except to the extent that the validity or perfection of the security interest hereunder, or remedies hereunder, in respect of any particular Pledged Collateral are governed by the laws of a j urisdiction other than the State of New York. Unless otherwise defined herein or in the Credit Agreement, terms defined in Article 9 of the Uniform Commcrcial Code in the State of New York are used herein as therein defined.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
(JERSEY CENTRAL POWER & LIGHT COMPANY]
[ METROPOLITAN EDISON COMPANY]
By Title:
CHEMICAL BANK, as Agent By Vice President 1A7A 09I
SCilEDULE I
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Attached to and forming a part of that certain Pltdge Agreement dated as of June 20, 1979, by [Jersev Central Power & Light Company]
[ Metropolitan Edison] , as Pledgor 9 Chemical Bank, as Agent Bonds Principal Amount Certificate No's)
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EXHIBIT E AMENDMENT Dated as of June 20, 1979 GENERAL PUBLIC UTILITIES CORPORATION, a Pennsyl-vania corporation (the " Borrower"), and certain Banks are parties to the Loan Agreemcat, dated as of November 15, 1976, as amended by an Agreement made as of March 20, 1979 (the "GPU Loan Agreement"), pursuant to which such Banks lent an aggregate of S50,000,000 principal amount to the Borrower, of which S39,000,000 principal amount remains out-standing. It is proposed that the GPU Loan Agreement be amended and restated to modify the repayment schedule thereunder, to change the applicable interest rate and to effect certain other changes.
Accordingly, it is hereby agreed that the GPU Loan Agreement is, subject to the satisfaction of the conditions specified in Section 3.01 and Section 3.02 of the Revolving Credit Agreement, dated as of June 15, 1979, among the Borrower, Jersey Central Power & Light Company, Metropolitan Edison Company, Pennsylvania Electric Company, certain Banks and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, hereby amended and restated to read in its entirety as set forth in Exhibit A hereto; such amendment and restatement shall be effective as of the date of the satisfaction of such conditions.
This Amendment shall be governed by and construed in accordance with the laws of the State of New York and shall be effective when a counterpart hereof has been executed and delivered by each of the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written.
GENERAL PUBLIC UTILITIES CORPORATION By CITIBANK, N.A., CHEMICAL BANK Individually and as Agent 1A74 093 By By Title: Tit 1c:
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2 IRVING TRUST COMPANY MARINE 111DLAND BANK By By Tit.e:
1 Title-MANUFACTURERS HANOVER TRUST COMPANY By Title:
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EXHIBIT A TO GPU LOAM AGREEMENT RESTATEMENT
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LOAN AGREEMENT Dated as of November 15, 1976, As Amended and Restated Pursuant to The Amendment, Dated as of June 20, 1979 GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the " Borrower"), CITIBANK, N.A., CHEMICAL BANK, IRVING TRUST COMPANY, MANUFACTURERS HANOVER TRUST COMPANY AND MARINE MIDLAND BANK (the " Banks"), and CITIBA"K, N.A.
("Citibank") as agent (the " Agent") for the Banks hereunder, agree as follows:
ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms snall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
" Amendment" means the Amendment, dated as of June 20, 1979, hereto.
" Business Dav" means any day other than a Saturday, Sunday or day on which commercial banks in the State of New York are authorized by law to close.
" Event of Default" shall have the meaning assigned to that term in Section 5.01.
" Indebtedness" of any Person means (i) indebted-ness for borrowed money or for the deferred purchase price of property or services in respect of which such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which such Person otherwise assures a creditor against loss, (ii) obligations under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases in respect of which obligations such Person is
, liable, contingently or otherwise, as obligor, guaran-3474 095
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2 tor or otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss, and (iii) unfunded vested benefits under each plan maintained for employees of such Person and covered by Title IV of the Employee Retirement Income Security Act of 1974.
" Loan" means, as to any Bank, the principal amount of the Indebtedness of the Borrower to such Bank outstanding from time to time hereunder.
" Loan Documents" means this Agreement, the Notes, and the Stock Pledge Agreement.
" Majority Banks" means at any time Banks holding at least 66 2/3% of the then aggregate unpaid princi-pal amount of the Notes held by Banks.
" Note" means each promissory note of the Borrower to the orcer of a Bank evidencing the Indebtedness of the Borrower hereunder to such Bank in substantially the form of Exhibit A-1 to the Amendment.
" Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or other judicial entity, or a govern-ment or any agency or political subdivision thereof.
" Revolving Credit Acreement" means the Revolving Credit Agreement among tne Borrower, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, the banks parties thereto and Citibank, as Agent, and Chemical Bank, as Co-Agent for such Banks, as the same may from time to time be amended, modified or supplemented.
"SEC" means the Securities and Exchange Commission.
" Stock Pledce Aareement" shall have the meaning assigned to tnat term in the Revolving Credit Agreement.
" Utility Act" means the Public Utility Holding Company Act of 1935.
SECTION 1.02. Accounting Terms. All accounting terms not specifically defined herein snall be construed in accordance with generally accepted accounting principles con-sistently applied.
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3 ARTICLE II THE LOANS SECTION 2.01. The Notes and Recavmen,1 The Loans are evidenced by, and the Borrcwer shall repay the principal of each Loan and interest thereon in accordance with, the Notes received by the Banks.
SECfION 2.02. Ootional Precayments. Tne Bor-rower may, upon at least five Business Days' written notice to the Agent signed by a duly authorized officer of such Borrcwer, prepay the Notes in whole or ratably in part with accrued interest to the date of such prepayment on the amount prepaid, provided that each partial prepayment shall be in an aggregate principal amount not less than S5,000,000.
SECTION 2.03. Payments and Comoutations. The Borrower shall make each payment unoer any Loan Document not later than 12:00 ncon (New York City time) on the day when due in lawful money of the United States of America to the Agent at its address referre' to in Section 7.02 in immediately available funds. The Agent will promptly thereaf ter distribute to each Bank its ratable share of each such payment received by it for the account of the Banks.
The Borrower hereby authorizes each Bank, if and to the extent payment owed to such Bank is not made when due under any Loan Document, to charge from time to time against any account of the Borrower with such Bank any amount so due.
All computations of interest under the Notes hereunder shall be made on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days (including the first day but excluding the last day) elapsed.
SECTION 2.04. Payment on Non-Business Davs. When-ever any payment to be made hereunder or under the Notes shall be stated to be due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be in-cluded in the computation of payment of interest.
SECTION 2.05. Sharina of Payments, Etc. If any Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Notes held by it in excess of its ratable share of p'.yments on account of the Notes obtained by all
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the Banks, such Bank shall purchase from the other Banks such participations in the Notes held by them as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them, crovided, however, that if all or any portion of such excess payment is thereafter recovered from sucn purchasing Bank, the purchase shall be rescinded and the purchase price restored to the extent of such recovery , bu t wi thout interest. The Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.05 may exercise all its righ ts of payment (including the right of set-off) with respect to such participation as fully as if such Bank were the direct creditor of the Borrower in the amount of such pa rt icipa tion.
ARTICLE III REPRESENTATIONS AND WARR/WTIES SECTION 3.01. Reoresentations and Warranties of the Borrower. The Borrower represents and warrants that:
(a) It is a corporation duly incorporated, validly existing and in good standing under the lll laws of the Commonwealth of Pennsylvania.
(b) The execution, delivery and performance by the Borrewer of each Loan Document to wh.ch it is a par *.y are within the Borrcwer's corporate powers, have been duly authorized by all necessary corporate action, do not contravene (i) the Borrower's charter or by-laws or (ii) law or any contractual restriction binding on or affecting the Borrower, and do not re-sult in or require the creation of any lien, security interest or other charge or encumbrance (other than pursuant to the Stock Pledge Agreement) upon or with respect to any of its properties.
(c) No authorization or approval or other action by, and no notice to or filing with, any goverraental authority or regulatory body is required for the due execu tion, delivery and performance by the Borrower of any Loan Document to which it is or is to be a party except for appropriate orders of the SEC under the Utility Act, each of which orders has been obtained, is in full force and effect and is sufficient for its purpose.
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5 (d) This Agreement is, and each other Loan Document to which the Borrower is to be a party when delivered will be, legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms.
ARTICLE IV COVENANT OF THE BORROWER SECTION 4.01. Covenant of the Borrower. The Borrower covenants that it will, so long as any Note shall remain unpaid, unless the Majority Banks shall otherwise consent in writing, pe rf o rm , observe and adhere to each and every covenant of the Borrower contained in Article V of the Revolving Credit Agreement (provided, however, that references in respect of such covenants to " Notes" shall mean the Notes as defined herein and to " Majority Banks" shall mean the Majority Banks as defined herein) just as if each and every such covenant were set out herein and, by this reference, such covenants (together with the definitions of the defined terms used therein) are hereby incorporated herein. In the event that the Revolving Credit Agreement shall for any reason (including by reason of the final payment in full of all obligations of the Borrowers thereunder), terminate or cease to be binding upon the Borrcwer, then the covenants contained in Article V of the Revolving Credit Agreement (together with the definitions of the defined terms used therein) as in effect on the date of such termination or cessation, shall be deemed to be set out herein and, by this reference, such covenants are hereby incorporated herein.
ARTICLE V EVENTS OF DEFAULT SECTION 5.01. Events of Default. If any of the following events (" Events of Def ault") shall occur and be continuing:
(a) The Borrower shall f ail to make any payment of principal of, or interest on, any Note when due; or
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(b) Any representation or warranty or statement made by the Borrower (or any of its officers) in or .n 1474 099
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connection with any Loan Document or the Revolving Credit Agreement or in any schedule, certificate or other document delivered pursuant to or in connection with any Loan Document (as defined herein and in the Revolving Credit Agreement) shall prove to have been incorrect in any material respect when made; or (c) The Borrower shall f ail to perform or observe any other term, covenant or agreement contained or incorporated by reference in any Loan Document on its part to be performed or observed and any such failure shall remain unremedied for 10 days af ter written notice thereof shall have been given to the Borrower by the Agent or any Bank; or (d) The Borrower shall (i) fail to pay any Indebtedness (other than Indebtedness evidenced by the Notes) of such Borrower, or any interest or premium thereon, when due (whether by scheduled maturity, re-quired prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, or (ii) fail to perf orm or observe any term, covenant or condition on its part to be performed or observed under any agreement or instrument relating to any such Indebted-ness, when required to be performed or observed, and such failure shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such failure to perform or observe is to accelerate, or to permit the accelera-tion of, the maturity of such Int -bt ed nes s ; or any such Indebtedness shall be declarud to be due and pay-able, or required to be prepaid (other than by a regu-larly scheduled required prepayment) , prior to the stated maturity thereof; or (e) The Borrower shall generally fail to pay its debts as they become due or shall admit in writing its inabilitf to pay its debts or shall make a general assignme nt for the benefit of creditors or shall institute any proceeding or voluntary case s eek ing to ad j ud icate it a bankrupt or insolvent or seek ing reorganiz a tio n , arrangement, ad j u stment , protection, relief, or composition of it or its debts under any law O
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7 relating to bankruptcy, insolvency or reorganization or relief or protection of debtors or seeking the entry of an order for relief or the appointment of a receiver, trusteo, custodian or e her similar official for it or for any substantial part of its property or such Borrower or any of its subsidiaries shall take any corporate action to authorize any of the actions described in this subsection (e); or (f) Any proceeding shall be instituted against such Borrower seeking to adjudicate it a bankrupt or insolvent or seeking reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insol-vency or reorganization or relief or protection of debtors or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property; or (g) There shall have occurred change in the fi-nancial condition or prospects of the Borrower since May 29, 1979, which, in the opinion of the Majority Banks, is material and adverse and substantially in-creases the risk that the Notes will not be repaid when due; or (h) A final juagment or order for the payment of money in excess of S1,000,000 shall be rendered against the Borrower and such judgment or order shall continue unsatisfied and in effect for a period of 30 consecu-tive days (excluding therefrom any period during which enforcement of such jcdgment or order shall be stayed, whether by pendency of appeal or otherwise); or (i) If any provision of the Stock Pledge Agreement after delivery thereof shall for any reason cease to be valid and binding on the Borrower, or, except to the extent permitted by the terms thereof, cease to create a valid and perfected first priority security interest in any of the collateral purported to be covered thereby, or the Borrower shall so state in writing; then, and in any such event described in subsections (a)-(d) and ( f)- { i) , abere, the Agent shall at the request, or may with the consent, of the Majority Banks, by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement by the Borrower to be immediately due and payable, whereupon the
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Notes, all such interest and all such amounts shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower (orovided however, that no such declaration shall or may be made unless prior thereto or concurrently therewith the promissory notes of the Borrower issued under the Revolving Credit Agreement shall have been or shall be declared to be due and payable pursuant to Section 6.01 of the Revolving Credit Agreement, and in any such event deceribed in subsection (e), above, the Hotes, all interest thereon and all other amounts payable under this Agreement by the Borrower shall become and be immedictely due and payable, without presentment, demand, protest or nocice of any kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VI THE AGENT SECTION 6.01. Authorization and Action. Each g Bank hereby 6ppoints and authorizes tne Agent to take such W action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly pro-vided for by the Loan Documents (including, without limita-tion, enforcement or collection of the Notes or the Stock Pledge Agreement) , the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining frcm acting) upon the instructions of the Majority Banks, and such instructions shall be binding upon all Banks and all holders of Notes; crovided, however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to any Loan Document or applicable law.
SECTION 6.02. Reliance of Acent. Neither the Agent nor any of its directors, otficers, agents or employees shall be liable for any action taken or emitted to be taken by any of them under or in connection with any Loan Docu-ment, except for its or their own gross negligence or wilful misconduct. Without limitation of the generality of the foregoing, the Agent: (i)"may treat the payee of any Note as the holder thereof until the Agent receives written g
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9 notice of the assignment or transfer thereof signed by such payee and in form satisf actory to the Agent; (ii) may con-sult with legal counsel (including counsel for the Borrower),
independent public accountants (including the Borrower's independent public accountants) and other experts selected by the Agent and shall not be liable for any action taken or omitted to be taken in good f aith by either of them in accordance with the advice of such counsel, accountants or experts; (iii) make no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties or representations made in or in connection with any Loan Document; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the t e rms , covenants or conditions of any Loan Document or to inspect the property (including the books and records) of the Borrower; (v) shall not be re-spons ible to any Bank for the due execution, legality, valid i ty , enforceability, genuineness, sufficiency or value of any Loan Document or collateral covered thereby or any other instrument or document furnished pursuant thereto; and (vi) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consant, cer-tificate or other instrument or writir.g (which may be by telegram, canle or telex) believed by the recipient to be genuine and signed or sent by the proper party or parties.
SECTION 6.03. Citibank and Its Affiliates. With respect to its Loan and the Note issued to it, C i t ibank shall have the same rights and powers under the Loan Documents as any other Bank and may exercise the same as though it were not the Agent; and the term " Bank" or " Banks" shall, unless otherwise expressly indicated, include Citibank in its individual capacity. Citibank and its affiliates may accept deposits frem, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrcwer, any of its subsidiaries and any person or entity who may do business with or own securities of any Borrower or any of its subsidiaries, all as if Citibank were not the Agent and without any duty to account there for to the Banks.
SECTION 6.04. Bank Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the Amendment. Each Bank also acknowledges that it will, independently and without reliance upon the Agent
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10 or any other Bank and based on such documents and informa tion as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.
SECTION 6.05. Indemnification. The Banks agree to indemnify the Agent (to the extent not reimbursed by the Borrcwer), ratably according to the respective principal amount of the Note then held by each of them, frcm and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of the Loan Documents, or any of them, or any action taken or omitted by the Agent under the Loan Documents, or any of them, provided that no Bank shall be liable for any portion of such lia-bilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements result-ing from the gross negligence or wilful misconduct of the indemnitee. Without limitation of the foregoing, each Bank agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Acent in connection with the preparation, execu tion , administration, or enforcement of, h or legal advice in respect of rights or responsibilities under, the Loan Documents, or any of them, to the extent that the Agent is not reimbursed for such expenses by the Borrower.
SECTION 6.06. Successor Acent. The Agent may resign at any time as Agent under the Loan Documents by giving written notice thereof to the Banks and the Borrcwer and may be removed as Agent under the Loan Documents at any time with or without cause by the Majority Banks. Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Agent thereunder. If no successor Agent shall have been so appointed by the Majority Banks, and shall have accepted such appointment, within 30 days af ter the giving of notice of resignation or the Majority Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least SS,000,000. Upon the acceptanco of any appointment as Agent under the Loan Documents by a successor Agent, such 9
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11 successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under the Loan Documents.
Af ter any retiring Agent's resignation or removal as Agent under the Loan Documents, the provisions of this Article VI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under the Loan Documents.
ARTICLE VII MISCELLANECUS SECTION 7.01. Amendments, Etc. No amendment or waiver of any provision of any Loan Document, nor consent to any departure by the Borrower therefrom, shall in any event be ef fective unless the same shall be in writing and signed by the Majority Banks, and then such waiver or con-sent shall be effective only in the specific instance and for the specific purpose for which given; orovided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Banks, do any of the follow-ing: (a) subject the Banks to any additional obligations, (b) reduce the principal of, or interest on, the Notes, (c) postpone any date fixed for any payment of principal of, or interest on, the Notes, (d) release any collateral except as shall be otherwise provided in any Loan Document or (e) change the aggregate unpaid principal amount of the Notes, or the number of Banks, which shall be required for the Banks or any of them to take any action under any Loan Docume nt.
SECTION 7.02. Notices, Etc. All notices and other communications provided for hereunder shall be in writing (including telegraphic ccmmunication) and mailed or telegraphed or delivered, if to the Borrower, at its address at 260 Cherry Hill Road, Parsippany, New Jersey 07054, Attention:
Vice President and Chief Financial Of ficer; if to any Bank, at its address set forth under its name on the signa-ture pages of the Revolving Credit Agreement; and if to the Agent, at its address at 399 Park Avenue, New York, New York 10043, Attention: Energy-East Department, National Banking Group; or as to each party, at such other address as shall be designated by such party in a written notice to the other p'a rt i e s . All such notices and communications stall, when mailed or telegraphed, be ef fective when deposited in the
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except th at notices and communications to the Agent pursuant to Article VI shall not be effective until received by the Agent as the case may be.
SECTION 7.03. No Waiver- Remedies. No f ailure on the part of any Bank ar the Agent to exercise, and no delay in exercising, any right under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in the Loan Documents are cumul ative and not exclusive of any remedies provided by law.
SECTION 7.04. Costs, Excences and Taxes. The Borrower agrees to pay on cemand all costs and expenses in connection with the preparation, execu tion, delive ry ,
filing, recording, and administration of the Loan Documents and the other documents to be delivered under the Loan Do cumen ts , including, without limitation, the reasonable rees and out-of-pocket expenses of counsel for the Agent and special counsel for the Banks, and local counsel who may be retained by said counsel, with respect thereto and with respect to advising the Agent as to its righ ts and respons i-lll bilities under the Loan Documents, and all costs and expenses, if any, in connection with the enforcement of the Loan Documents and the other documents to be delivered under the Loan Documents. In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, d elive ry ,
of this Agreement, the Amendment, the Notes and the other documents delivered hereunder, and agrees to save the Agent and each Bank harmless frcm and against any and all liabili-ties with respect to or resulting from any delay in paying or omission to pay such taxes.
SECTION 7.05. Richt of Set-off. Upon (i) the occurrence and during the continuance of any Event of Default and (ii) the making of the reauest or the granting of the consent specified by Section 5.01 to authorize the Agen.t to declare the Notes due and payable pursuant to the provisions of Section 5.01, each Bank is hereby authorized at any time and f rcm time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower), to set of f and apply any and all deposits (general or special, time or demand, provisional or f. al) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of the Borrower
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13 against any and all of the obligations of the Borrower now or hereafter existing under this Agreement and the Note held by such Bank, irrespective of whether or not such Bank shall have made any demand under this Agreement or such Note and although such obligations may be unmatured. Each Bank agrees promptly to notify the Borrower after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Bank may have.
SECTION 7.06. Binding Effect; Governing Law.
This Agreement shall be binding upon and inure to the benefit of the Borrower, the Agent and each Bank and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Banks. This Agreement and the Notes shall be governed by, and construed in accordance with, t .ie laws of the State of New York.
IN WITNESS WHEREOF, the parties 1.9reto have caused this Agreerent to be executed by their respective officers thereunto duly authorized, as of the date first above written.
GENERAL PUBLIC UTILITIES CORPORATION By
- CITIBANK, N.A., Individually and as Agent By
- CHEMICAL BANK By *
) h] $
- Executed through execution of the Amendment.
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IRVING TRUST COMPAN' By
- MANUFACTURERS HANOV-COMPANY By
- MARINE MIDLAND BANK By
- O un \@
- ~ Execu ted through execution of the Amendment.
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EXHIBIT A-1 TO GPU LOAN AGREEMENT RESTATEMENT PROMISSORY NOTE
$ Dated ,
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FOR VALUE RECEIVED, GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the " Borrower"),
HEREBY PRO:tISES TO PAY to the order of [NAME OF BANK] (the
" Bank") the amount of S ( Dollars) on October 1, 1981, , together with interest on the principal amount from time to time outstanding hereunder from the date hereof until payment in full, payable monthly on the first day of each calendar month during the term hereof and on the date of payment in full, at a fluctuating rate per annum equal at all times to 108% of the Alternate Base "=#.e.
The " Alternate Base Rate" means the higher of:
(a) The base rate of Citibank, N.A. on 90-day loans to responsible and substantial commercial borrowers in effect from time to time, or (b) 1/2 of one percent above the latest three-week moving average of secordary market morning offer-ing rates in the United States for three-month certi-ficates of deposit of major United States money market banks, such three-week moving average being determined weekly by the Agent (as hereinafter defined) on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspeaded or terminated, on the basis of quotations for such rates received by the Agent from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent, but in no event higher than the maximum rate permitted by law.
Both principal and interest are payable in lawful money of the United States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, Nes York 10043, in immediately tvailable funds. All payments made on account of principal hereof shall, prior to any transfer hereof, be endorsed on the grid attached hereto which is part of this Promissory Note.
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This Promissory Note is one of the Notes referred to in and is entitled to the benefits of, the Loan Agree-ment, dated as of November 15, 1976, as amended and restated pursuant to an Amendment, dated as of June 20, 1979 (the
" Credit Agreement") amond the Borrower, the Bank, certain other banks parties thereto and Citibank, N. A. , as Agent for the Bank and such other banks, and the Loan Documents re-ferred to therein. The Credit Agreement, amont other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of prit.cipal hereof prior to the maturity hereof upon the terms and conditions therein specified.
GENERAL PUBLIC UTILITIES CORPORATION By Title:
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- ADvac s mo PAROs*U OF P2.mceA1.
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EXHIBIT F
[ AMENDED AND RESTATED] SECURITY AGREEMENT, dated
[as of May 21, 1979, as amended and restated) as of June 20, 1979, made by [ JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey corporation] [ METROPOLITAN EDISON CORPOPATIONc a Pennsylvania corporation] (the "Oorrower"), to CHEMICAL BANK, as agent (the " Agent") for the Banks (as defined below);
PRELIMINARY STATEMENT. The Banks have agreed to make, subject to certain terms and conditions, certain Advancas (the " Advances") to the Borrower pursuant to the Revolving Credit Agreement, dated as of June 15, 1979, among tha Borrower, General Public Utilities Corporation,
[ Jersey Central Power & Light Company] [ Metropolitan Edison Company), Pennsylvania Electric Company, the Banks parties thereto (the " Banks"), Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent (the " Credit Agreement"). [The proceeds of such Advances will be applied in part to pay the indebted-ness of the Borrower to certain of the Banks under the Term Loan Agreement, dated as of May 21, 1979, as amended and restated as of May 25, 1979, among the Borrower, certain of such Banks and Citibank, N.A., as Agent (the " Term Loan lll Agreement").] It in a condition precedent to the making of such Advances by the Banks that the Borrower shall have
[ confirmed and] granted the security interest contemplated by this Agreement.
NOW, THE RE FORE , in consideration of the premises and in order to induce the Banks to make such Advances, the Borrower hereby agrees with the Agent for its benefit and the ratable benefit of the Banks as follows:
SECTION 1. Grant of Securitv. The Borrower hereby assigns and pledges to the Agent for its benefit and the ratable benefit of the Banks, and hereby (confirms and]
grants to the Agent for its benefit and the ratable benefit of the Banks a security interest in all of the Borrower's
-i-ht, title and interest in and to the fo. '.owing (the
" Collateral"):
(a) All right, title and interest of the Bor-rower in, to and under the Contract for Conversion Services, dated January 30, 1975, among the Borrower,
[ Jersey Central Power & 'fqht Company] [ Metropolitan Edison Company] and Pennsylvania Electric Company, each acting through GPU Service Corporation, and Kerr-McGee jg Nuclear Corporation (the " Contract");
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2 (b) All right, title and interest of the Borrower in " concentrates" and "UF " (each as defined in the Contract) under the Contr$ct (the Borrower's interest in concentrates and UF6 pursuant to the Contract being the " Uranium"); and (c) All proceeds of the Collateral and, to the extent not otherwise included, all payments under insur-ance (whether or not the Agent is the loss payee thereof),
or any indemnity, warranty or guaranty, payable by rea-son of loss or damage to or otherwise with resrect to the Collateral or any other property covered thereby.
SECTION 2. Zecurier for Cbligations. This Agreement secures the payment of all obligations of the Borrower to the Banks now or hereafter existing under (i) the [ Term Loan Agreement and the promissory notes of the Borrower evidencing the '7debtedness of the borrower to the respective Banks under the Term Loan Agreement and (ii) the]
Credit Agreement and the Notes, whether for principal, interest, expenses or otherwise, and [(iii)] [(ii)] all obligations of the Borrower now or hereaf ter enisting ander this Agreement (all such oblif . ions of the Bo: rower being the " Obligations").
SECTION 3. Borrower Remains Liable. Anything herein to the contrary notwithstanding, (a) the Borrower shall remain liable under the Contract to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Agent of any of the rights hereunder shall not release the Borrower from any of its duties or obligations under the Contract and (c) neither the Agent nor any Bank shall have any obligation or liability under the Contract by reason of this Agre'3-ment, nor shall the Agent or any Bank be obligated to per-form any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
SECTION 4. Representations and Warranties. The Borrower represents and warrants as follows:
(a) The chief place of business and chief execu-tive office of the Borrower and the office where the Borrower keeps its records concerning accounts and con-
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tract rights is located at [ Madison Avenue at Punch 1474 1iT
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3 Bowl Road, Morristown, New Jersey 07960] [2800 Pottsville Pike, Muhlenberg Township, Berks County, Pennsylvania];
all Uranium which is owned by the Borrower or in which the Borrower has an interest pursuant to the Contract is located at Gore, Oklahoma.
(b) The Borrower has not assigned or otherwise transferred or encumbered the Contract or any interest in or related to the Contract or the Uranium, except for the security interest created by this Agreement; no ef fective financing statement or other instrument similar in effect covering the Contract or any interest in or related to the Contract or the Uranium or any account or contract righ t is on file in any office [,
excep t such as may have been filed in favor of the Agent relating to this Agreement] .
(c) This Agreement creates a valid and a perf ected first priority security interest in the Collateral, securing the payment of the Obligations.
SECTION 5. Further Assurances. (a) The Borrower agrees that f rcm time to t im e , at the expense of the Borrower, the Borrower will promp' ly execute and deliver all further instruments and documentc, and take all further action, that may be necessary or desirable, or that the Agent may request, ll) in order to perf ect and protect any security interest granted or purported to be granted hereby or to enable the Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, the Borrower will execute and file such financing or continuation staements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Agent may request, in order to per-fect and preserve the security interests granted or pur-ported to be granted hereby.
(b) The Borrower hereby authorizes the Agent to file one or more notices and financing or continuatic.
statements, and amendments thereto, relative to all or any pa rt of the Collateral without the signature of the Borrower where permitted g law.
(c) The Borrower will furnish to the Agent fccm time to time statements and schedules and such other reports in connection with the Collateral as the Agent may reason-ably request, all in reasonable detail.
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4 (d) The Borrower will take no action under or in respect of the Contract or the Uranium (other than a sale permitted by the Credit Agreement) which might aaversely affect the rights of the Banks or the protections intended to be afforded hereby without the prior consent of the Agent; the Borrower will not cause or permit any Uranium to be delivered by Kerr-McGee Nuclear Corporation to any person without the prior written consent of the Agent.
SECTION 6. Transfers and Other Liens. The Borrower shall not:
(a) Sell, assign (by operation of law or other-wise) or otherwise dispose of any of the Collateral or any interest in or related to the Contract; or (b) Create or suffer to exist any lien, security interest or other charge or encumbrance upon or with respect to any of the Collateral except for the secur-ity interest created by this Agreement.
SECTION 7. Agent Appointed Attorney-in-Fact.
The Borrower hereby irrevocaoly appoints the Agent the Borrower's attorney-in-fact, with full authority in the place and stead of the Bocrower and in the name of the Borrower or otherwise, from time to time in the Agent's discretion, to take any action and to execute any instru-ment which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement.
SECTION 8. Agent May Perform. If the Borrcwer fails to perform any agreement contained herein, the Agent may itself perform, or cause performance of, such agreement, and the expenses of the Agent incurred in connection there-with shall be payable by the Borrower under Section 15.
SECTION 9. The Acent's Duties. The powers con-ferred on the Agent hereunder are solely to protect its in-terest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its pos. session and the accounting for moneys actually received by it hereunder, the Agent shall have no duty as to the Contract or any Collateral.
SECTION 10. Remedies. If any Event of Default (meaning, for purposes of this Agreement, an Event of De-fault as to the Borrower under 6.01 of the Credit Agree-c
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5 ment) shall have occurred and be continuing, the Agent may, subject to obtaining any recuired approvals and licenses of and from the United States Government, exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code (whether or not the Code applies to the affected Collateral) and all cash proceeds received oy the Agent in respect of any sale of,* collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Agent, be held by the Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Agent pursuant to Section 11 or 15) in whole or in part by the Agent for the ratable benefit of the Banks against, all or any part of the Obligations in such order as the Agent shall elect. Any surplus of such cash or cash proceeds held by the Agent and remaining after payment in full of all the Obligations shall be paid over to the Borrower or to whom-soever may be lawfully entitled to receive such surplus.
SECTION 11. Indemnitv by Borrower. The Borrower agrees to indemnify the Agent and eacn Bank from and against any and all claims, losses and liabilities growing out of or resulting from this Agreement (including, without limitation, ggg enforcement of this Agreement), except claims, losses or liabilities resulting from the Agent 's gross negligence or wilful misconduct.
SECTION 12. Amendments; Etc. No amendment or waiver of any provision of tnia Agreement nor consent to any departure by the Borrower herefrom, shall in any event be effective unless the same shall ce in writing and signed by the Agent, and then such waiver or consent shall be effec-tive only in the specific instance and for the specific pur-pose for which given.
SECTION 13. Addresses for Notices. All notices and other communications provided for nereunder shall be in writing (including telegraphic communication) and, if to the Borrower or the Agent, mailed or delivered to it, addressed to it at its address specified in the Credit Agreement, or as to either party at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this Section. All such notices and other communications shall, when mailed or telegraphed, respectively, be effec-tive when deposited in the mails or delivered to the tele-graph company, respectively, addressed as aforesaid.
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6 SECTION 14. Continuing Security Interest: Trans-fer of Notes. This Agreement shall create a continuing se-curity interest in the Collateral and shall (i) remain in full force and effect until the final payment in full of the Obligations after the Termination Date (as defined in the Credit Agreement), (ii) be binding upon the Borrower, its successors and assigns and (iii) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Agent, the Banks and their respective successors, trans-ferees and assigns; crovided, however, that the security interest created and confirmed hereoy shall terminate in the event and to the extent that the Borrower shall sell or assign all or part of the Collateral for fair market value and shall apply the net cash proceeds from the sale or sales of such Collateral in accordance with Section 2.07 of the Credit Agreement. Without limiting the generality of the foregoing clause (iii), any Bank may assign or otherwise transfer any Note held by it to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Bank herein or otherwise. Upon the payment in full of the Obligations, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the Borrower. Upon any such termination, the Agent will, at the Borrower's expense, execute and de-liver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination.
SECTION 15. Costs, Excenses and Taxes. The Borrower agrees to pay on comand all costs and expenses in connection with the preparation, execution, delivery, filing, recording, and administration of this Agreement and the other documents to be delivered hereunder, in-cluding, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent, and local counsel who may be retained by said counsel, with respect thereto and with respect to advising the Agent as to its rights and responsibilities hereunder, and all costs and expenses, if any, in connection with the enforcement of the Loan Docu-ments and the other documents to be delivered under this Agreement.
SECTION 16. Governinc Law: Terms. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as required by manda-tory provisions of law and except to the extent that the validity or perfection of the security interest hereunder,
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7 or remedies hereunder, in respect of any particular Collat- llh eral are governed by the laws of a jurisdiction other than the State of New York. Unless otherwise defined herein or in the Credit Agreement, terms used in Article 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined.
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
[ JERSEY CENTRAL POWER & LIGHT COMPANY]
[ METROPOLITAN EDISON COMPANY]
By Vice President ACKNCWLEDGED:
GPU SERVICE CORPORATION PENNSYLVANIA ELECTRIC COMPANY By _
By Executive Vice President Vice President
[ METROPOLITAN EDISON COMPANY) [ JERSEY CENTRAr POWER &
LIGHT CCP ' .]
By By ___
Vice President Vice President
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EXHIBIT G
[ Letterhead of Messrs. Berlack, Israels & Libe rman]
[Date of initial Borrowings]
To each of the Banks parties to: (a) the Revolving Credit Agreement dated as of June 15, 1979, among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company ,
said Banks and Citibank, N. A. ,
as Agent, and Chemical Bank, as Co-Agent, for said Banks; and (b) the Loan Agreement, dated as of November 15, 1976, as amended and restated effective as of the date hereof, among General Public Utilities Corpo-ration, said Banks and Citibank, N.A., as Agent, and to Citibank, N.A., as Agent, and to Chemical Bank, as Co-Agent General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Comoany and Pennsylvania Electric Company Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(vi)(p) of the Revolving Credit Agreement, d ated as of June 15, 1979 (the " Credit Agreement") among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, the Banks parties thereto and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, for said Banks. Terms defined in the Credit Agreement are used herein as therein defined unless otherwise defined here-in; the Loan Documents, together with the GPU Loan Agree-ment, the GPU Loan Agreement Restatement, the New GPU Notes and the Supplemental Indenture (as 49 fined below), are from time to time referred to hereinaf tt a9 the " Bas ic Documents" .
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We have acted as counsel for the Borrowers in con-nection wi.th tha preparation, execution and delivery of, and the init.al Borrowings made under, the Credit Agreement.
In that connection we have examined:
(1) The Credit Agreement.
(1) The documents furnished by the Borrowers pursuant to Article III of the Credit Agreement.
(3) The Indenture, dated November 1, 1944, by ME to Morgan Guaranty Trust Company of New York and all Supplemental Indentures thereto (the " Indenture"), in-cluding the Supplemental Indenture, dated as of June 1, 1979, pursuant to which the ME Bonds have been issued (the " Supplemental Indenture '), and the ME Bonds.
(4) The Articles or the Certificate of Incorpora-tion of each Borrower and all amendments thereto (such Borrower's " Charter").
(5) The by-laws of eaca Borrower and all amend-ments thereto (such Borrower's "Jy-laws").
lll (6) A certificate of the Secretary of the Common-wealth of Pennsylvania, dated , 1979, at-testing to the continued corporate existence and good standing of each Borrower (other than Jersey Central Power & Light Company) in that Commo nwealth .
(7) A certificate of the Secretary of State of New Jersey, dated , 1979, attesting to the continued corporate existence and good standing of Jersey Central Power & Light Company in that State.
We have also made such further investigation as we have deemed necessary as a basis for this opinion. We have relied, as to all matters covered hereby which are governed by the laws of New Jersey, Pennsylvania or Oklahoma, on the attached opinions of Robert O. Brokaw, Esq., Messrs. Ryan, Russell & McConaghy and Messrs. Ballard, Spahr, Andrews & Ingersoll and Messrs.
Lawrence, Scott & Lamb, respectively, upon which opinions we believe you and we are justified in relying. he have assumed the due execution and delivery, pursuant to due authorisation, of the Amendment and the Credit Agreement by the Banks and the Agent.
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3 Based upon the foregoing and upon such investiga-tion as we have deemed necessary, we are of the opinion that:
- 1. Each Borrower is a corporation duly incorpor-ated validly existing and in good standing under the laws of its jurisdiction of incorp ora t ion.
- 2. The execution, delivery and performance by each Borrower of each Basic Document to which it is a party are within such Borrcwer's corporate powers, have been duly authorized by all necessary corporate action, do not contravene (i) such Borrower's Charter or By-laws or (ii) law or any contractual restriction binding on or affecting such Dorrower, and do not, except as created thereunder, result in or recuire the creation of any lien, se curity interest or other charge or encumbrance upon or with respect to any of its properties.
- 3. No authorization or approval or other action by, and no notice to or filing with, any goverr; mental authority or regulatory body is required for the due execution, delivery and performance by each Borrower of any Basic Document to which it is a party except for (i) in the case of each Borrower, appropriate orders of the SEC unoer the Utility Act, ( i i) in the case of JC an appropriate order of the NJBPU and (iii) in the case of each of ME and PE, an appropriate order of the PaPUC, all of which orders have been obtained, are in full force and effect and are sufficient for their purpose.
- 4. The Credit Agreement and each other Basic Document is the legal, valid and binding obligation of each Borrower which is a party thereto, enforceable against such Borrower in accordance with its respe ct ive terms.
- 5. The Pledged Shares (as defined in the Stock Pledge Agreement) constitute 100% of the outstanding common stock of each of JC, ME, PE and GPU Service Corporation and 100% of the capital stock having ordinary voting rights of each of JC, ME, PE and GPU Service Corporation and the Pledged Shares have been duly and validly issued and are fully paid and non-assessable. GPU is the record and beneficial owner of all of the Pledged Shares, except for twelve shares of the common stock of ME which are nominally registered
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4 in the names of certain employees of ME for convenience e
in the conduct of meetings of shareholders, but which are beneficially owned by GPU.
- 6. The pledge of the Pledged Shares pursuant to the Stock Pledge Agreement creates a valid and perfected first priority security interest in the collateral in existence on the date hereof subject to, or purported to be subject to, the Stock Pledge Agreement securing the payment of the Obligations (as defined in the Stock Pledge Agreement).
- 7. The ME Bonds have been duly and validly issued, and the Indenture effectively creates a valid first lien on all property owned by ME purported to be covered thereby for the benefit of the holders of all bonds issued thereunder, including the ME Bonds, subject to restrictions, easements, leases, covenants, reservations, the lien of current taxes and minor encumbrances and defects which are common to properties of the character and size of that of ME, none of which in our opinion is material.
- 8. The pledge of the ME Bonds pursuant to the ME 4h Bond Pledge Agreement creates a valid and perfected first pricrity security interest in the collateral in existence on the date hereof subject to, or purported to be subject to, the ME Bond Pledge Agreement securing the payment of the Obligations (as defined in the ME Bond Pledge Agreement), and to the extent of the principal amount of the ME Bonds, the Banks are entitled to the benefits of the Indenture in respect of the obligations of ME under the Credit Agreement and its Notes.
- 9. The JC Security Agreement and the ME Security Agreement and the filing of the Financing Statements (copies of which were delivered to the Agent pursuant to Sections 3.01(vi)(i)(i) and 3.01 (vi)(h)( i), respec-tively, of the Credit Agreement) create valid and per-fected fire priority security interests (subject, in the case of the JC Security Agreement and as to priority only, to the filing of termination statements with respect to the financing statement filed with the Secretary of State of the State of New Jersey on May 22, 1979 (File No. 545939) and the financing statement filed with the County Clerk of Oklahoma County, Okla-homa on May 22, 1979 (File No. 146216)) in and to the Collateral (as defined in the JC Security Agreement and llh 347A
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the MB Security Agreement, respectively) securing the payment of the obligations purported to be secured thereby, and all actions necessary to perfect and protect such security interests have been taken and completed.
The opinions set forth above are subject to the following qualifications:
(a) The enforceability of each Borrower's obligations under the Credit Agreement and the other Basic Documents to which it is a party is subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and the remedies of the Banks under the Security Agreements and the ME Bond Pledge Agreement are subject to the effect of the Atomic Energy Act of 1954, as amended, and the regulations thereunder.
(b) The anforceability of each Borrower's obligations under the Credit Agreement and the other Basic Documents to which it is a party may be sub]ect to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(c) We express no opinion as to (.) Section 2.10 of the Credit Agreement or Section 2.05 of the GPU Loan Agreement insofar as they provide that any Bank purchasing a participation from another Bank pursuant thereto may exercise set-of f or similar rights with respect to such participation, (ii) Section 8.05 of the Credit Agreement or Section 7.05 of the GPU Loan Agreement insof ar as they authorize each Bank to set off and apply any deposits at any time held, and any other indebtedness at any time owing, by such Bank to or for the account of the Borrower and (iii) the effect of the law of any jurisdiction other than the State of New York wherein any Bank may be located or wherein enforcement of the Credit Agreement, the Notes, the GPU Loan Agreement or the New GPU Notes may be sought which limits the rates of interest legally chargeable or collectible.
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(d) The Borrowers' indemnification obligations under the third sentence of Section 8.04 of the Credit Agreement may be unenforceable as contrary to public policy.
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We also wish to call to your attention that remedies available to the Agent and the Banks under the Stock Pledge Agreement and the JC Security Agreement and the ME Security Agreement may be limited in that: (a) the consent of the SEC may be required prior to the transfer of the shares of JC, ME or PE or to the exercise of rights in respect of such shares; (b) the consent of the NJBPU is required prior to the transfer of the shares of JC or to the exercise of rights in respect of such shares; (c) the consent of Kerr-McGee Nuclear Corpora-tion may be required prior to the assignment of any rights in respect of the Contract (as defined in the JC Security Agree-ment and the ME Secur4.ty Agreement); and (d) the consent of the Department of Energy may be required in respect of any action purporting to af fect the Uranium (as defined in the Contract).
Very truly yours, O
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EXHIBIT H
[ Letterhead of Shearman & Sterling]
[ Closing Date]
To the Confirming Banks (as defined in the Revolving Credit Agreement referred to below) to Citibank, N.A., as Agent thereunder, and Chemical Bank, as Co-Agent thereunder.
General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsvlvania Electric Company Gentlemen:
We have acted as your special counsel in connection with the preparation, execution and delivery of, and the ini-tial Borrowings made under, the Revolving Credit Agreement, dated as of June 15, 1979 ( the " Credit Agreement") , among Gen-eral Public Utilities Corporation, Jersey Central Power &
Light Company, Metropolitan Edison Company and Pennsylvania Electric Company , each of you , Citibank , N. A. , as Agent, and Chemical Bank, as Co-Agent. Unless otherwise indicated, terms defined in the Credit Agreement are used herein and in Schedule I hereto as therein defined.
In this connection we have examined the documents listed on Schedule I hereto [being the Loan Documents and the other documents delivered pursuant to Article III of the Credit Agreement] .
In our examination of the documents listed on such Schedule I, we have assumed the authen*i. city of all such documents submitted to us as originals, the genuineness of all signatures, the due authority of the parties execut-ing such documents and the conf ormity to the originals of
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2 all such documents submitted to us as copies. We have llh relied, as to factual matters, on the documents we have examined and, as to the matters of law covered by the opinion of counsel listed in Item __ of such Schedule I, on such opinion. We are qualified to practice law in the State o' New York and we do not purport to be experts on, or to express any opinions herein concerning, the law of any other jurisdiction.
Based upon and subject to the foregoing and while we have not independently considered the matters covered by the opinion listed in Item __ of such ScheduJ e I to the extent necessary to enable us to express the conclusions stated therein, we are of the opinion that (i) such opinion, the Credit Agreenent and other documents listed in such Schedule I appear to be in substantially acceptable legal form, and (ii) the documents listed in such Schedule I furnished pursuant to Article II of the Credit Agreement (except the orders of the SEC, the NJBPU and the PaPUC listed in Items , , and , respectively, of such Schedule I, as to wh.ch we express no opinion) are substantially responsive to the requirements of the Credit Agreement.
Very truly yourc, SHEARMAN & STERLING 1474 126 O
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EXHIBIT I
[ Letterhead of Messrs. Berlack, Israels & Liberman]
[Date of the JC Pledge Agreement]
To each of the Banks parties to the Revolving Credit Agreement dated as of June 15, 1979, ancng General Public Utiliries Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company, said Banks and Citibank, N.A., as Agent, and Chemical Bank, as Co-Agent, for said Banks, and to Citibank, N.A., as Agent, and to Chemical Bank, as Co-Agent Jersey Central Pcuer
& Light Comcany Gentlemen:
This opinion is furnished to you it. connection with the execution and delivery of that certain Pledge Agreement, dated as of June 20, 1979 (' he "JC Bond Pledge Agreement") ,
made by Jersey Central Power & Light Company ("JC") to Citi-bank, G.A., as your Agent (the " Agent"), in connection with the Revolving Credit Agreement, dated as of Junc 15, 1979 (the " Credit Agreement") among General Public Utilities Corporation, JC, Metropolitan Edison Company and Pennsylvania Electric Company, each of you and Citibank, N.A., as your Agent, and Chemical Bawnk, as your Co-Agent. Terms defined in the Credit Agreement are used herein as therein defined unless otherwise defined herein.
We have acted as counsel for JC in connection with the preparation, execution and delivery of the JC Bond Pledge Agreement.
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In that connection we have examined (1) The JC Bond Pledge Agreement.
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(2) The Indenture, dated March 1, 1946, from JC to Citibank, N.A., as Trustee, and all Supplemental Inden-tures thereto (the "JC Indenture"), including the Supple-mental Indenture, dated as of June __, 1979, pursuant to which the JC Bonds have been irsued (the "JC Supplemental Indenture"), and the JC Bonds-(3) Orders of the SEC and the NJBPU, authorizing the JC Bond Pledge Agreement and the JC Supplemental Indenture and the transactions contemplated thereby.
(4) The Articles or the Certificate of Incorpora-tion of JC and all amendments thereto (JC's " Charter").
(5) The by-laws of JC and all amendments thereto (JC's "By-laws").
(6) A certificate of the Secretary of State of New Jersey, dated , 1979, attesting to the continued corporate existence and good standing of JC in that State.
We have also nade such further investigation as we have deemed necessary as a basis for tnis opinion. We have relied, as to all matters covered hereby which are governed by the laws of New Jersey, on the attached opinion of Robert O. Brokaw, Esq., upon which opinion we believe you and we are justified in relying.
Based upon the foregoing and upon such investiga-tion as we have deemed necessary, we are of the opinion that:
- 1. JC is a corporaticn duly incorporated, validly existing and in good standing under the laws of New Jersey.
- 2. The execution, delivery and performance by JC of the JC Bond Pledge Agreement and the JC Supplemental Indenture are within JC's corporate powers, have been duly authorized by all necessary corporate action, do not contravene ( i) JC 's Charter or By-laws or ( ii) law or any contractual restriction binding on or af fecting JC, and do not, except as created thereunder, result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties.
- 2. .Jo authorization or approval or other action by, and no no-ice to or filing with, any governmental author-llh ity or regulatory body is required for the due execution, 1474 128
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3 delivery and performance by JC of the JC Bond Pledge Agreement or the JC Supplemental Indenture except for (i) appropriate orders of the SEC under the Utility Act and (ii) an appropriate order of the NJSPU, each of which orders has been obtained, is in full force and effect and is suf ficient for their purpose.
- 4. The JC Bond Pledge Agreement is the legal, valid and binding obligation of JC, enforceable against JC in accordance with its terms.
- 5. The JC Bonds nave been duly and validly issued, and the JC Indenture effectively creates a valid first lien on all property owned by JC purported to bc owned thereby for the benefit of the holders of all bonds issued thereunder, including the JC Bonds, subject to restrictions, easements, leases, covenants, reserva-tions, the lien of current taxes and minor encumbrances and defects which are common to properties of the character and size of that of JC, none of which in our opinion is material.
- 6. The pledge of the JC Bonds pursuant to the JC Bond Pledge Agreement creates a valid and perfected first priority security interest in the collateral in existence on the date hereof subject to, or purported to be subject to, the JC Bond Pledge Agreement securing the payment of the Obligations (as defined in the JC Bond Pledge Agreement), and to the extent of the principal amount of the JC Bonds, the Banks are entitled to the benefits of the JC Indenture in respect of the obliga-tions of JC under the Credit Agreement and its Notes.
The opinions set forth above are subject to the following qualif ications :
(a) The enforceability of JC's obligations under the JC Bond Pledge Agreement is subject to the effect of any applicable bankruptcy, insolvency, reorg a n iza t ion ,
moratorium or other similar laws affecting creditors' rights generally and the remedies of the Banks under the JC Bond Pledge Agreement are subject to the effect of the Atomic Energy Act of 1954, as amended, and the regu-lations thereunder.
(b) The enforceability of JC's obligations under the JC Bond Pledge Agreement may be subject to general principles of equity (regardless of whether such enforce-ability is considered in a proceeding in equity or at law).
Very truly yours, 147A 129
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EXHIBIT J COMMITMENT INCREASE REQUEST
[date]
Citibank, N.A., as Agent 399 Park Avenue New York, New York, 10043 Attention: Energy-East Department National Banking Group Gentlemen:
Reference made to that certain Revolving Credit Agreement, dated as of June 15, 1979, among the undersigned, Jersey Central Power & Light Company, Metropolitan Edison Company and Pennsylvania Electric Company (the " Borrowers"),
the Banks parties thereto, yourselves as Agent and Chemical Bank, as Co-Agent (the " Credit Agreemant"; terms defined therein being used herein as therein defined). lll
[The undersigned hereby requests that, in accordance with the definition of Loan Limit contained in Section 1.01 of the Credit Agreement, that the Loan Limit of the under-signed be increased from S75,000,000 to S , or such lesser amount as the Majority Banks shall consent to in writing, effective on [date].]
[The undersigned hereby requests on behalf of each of the Borrowers that, in accordance with the provisions of Section 2.01(b)(ii) of the Credit Agreement, the Final Aggregate Total Commitment be increased f rom the amount thereof available on the date hereof to S or such lesser amount as the Super Majority Banks shall consent to in writing, effective [date].]
Very truly yours, GENERAL PUBLIC UTILITIES CO RPO RATION
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i474 130 By Chief Financial Of ficer
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[ Execution Copy)
LETTER At1ENDMENT As of October 10, 1979 To the Banks parties to the Revolving Credit Agreement dated as of June 15, 1979, among General Public Utilities Corporation, Jersey Central Power & Light Company, Metropolitan Edison Company, Pennsylvania Electric Company, said Banks, Citibank, N.A., as agent for said Banks, and Chemical Bank, as co-agent for said Banks We refer to the Revolving Credit Agreement, dated as of June 15, 1979 (the " Credit Agreement"), among as youreach agentof(the the undersigned, each of you, Citibank, N.A.,
" Agent") and Chemical Bank, as your the co-agent (the "Co-Agent").
terms defined in the Unless otherwise defined herein,shall be used herein as therein defined.
Credit Agreement is hereby agreed by you and us as follows:
It The Credit Agreement is, effective the date first above written, hereby amended so that:
(a) Section 5.01(g) shall read as follows:
"(g) (Section 5.01(g) deleted inten-tionally.)"
(b) Section 5.02(b)(vi) shall read as follo. .s :
"(vi) Indebtedness of such Borrower under External Lines; provided, however, that the aggregate principal amount of such Indebtedness shall not exceed at any time
\
}k7k
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2 outstanding $7,500,000 in the case of JC,
$5,000,000 in the case of GPU, $5,000,000 g
in the case of ME and $5,000,000 in the case of PE, and provided, further, that the aggregate principal amount of such Indeoted-ness of all Borrowers shall not exceed at any time outstanding S15,000,000;"
(c) The words "the Florence Mining Company" appearing in clause (ii) of Section 5.02(d) shall be deleted and the words "The Rochester & Pittsburgh Coal Company" substituted therefor.
On and after the effective date of this letter amend-ment, each reference in the Credit Agreement to "this Agree-ment", " hereunder", " hereof", or vords of like import referring to the Credit Agreement, and each reference in the other Basic Documents to' " the Credi t Ag reemen t" , " thereunder", "thereof",
or words of like import referring to the Credit Agreement, shall mean the Credit Agreement as amended by this letter amendment. The Credit Agreement, as amended by this letter amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.
This letter amendment may be executed in any nuraber 3 of counterparts and by any combination of the parties hereto W in separate counterparts, each of which counterparts shall be an original and all of which taken together shall concti-tute one and the same letter amendment.
If you agree to the terms and provisions hereof, please evidence your agreement by executing and returning at least two counterparts of this letter amendment to Citibank, N.A., 399 Park hvenue, New York, New York 10043, Attention:
Energy-East Department, National Banking Group. This letter amendment shall become effective as of the date first above written when and if counterparts of this letter amendment shall have been executed by us and the Majority Banks and the consent attached hereto shall have been executed by GPU, as guarantor.
Very truly yours, GENE RAL PUBLIC UTILITIES CORPORATION
/ 6f By
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/t ga b Vice President h
t474 i32
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3 JEr1SEf CENTitAL P0dE rs &
LIGilT COMPai1Y By A:w
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Vice President METROPOLITAN EDISON COMPANY By / es(m _
Vice Presioent
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PUtJNSYLVANIA ELECTRIC COMPANY By ,W ^'
/ Vice'Presicent Agreed as of the date first above written:
CITIBANi:, N.A., Indivi.-
ually and as Agent By Vice President Ci!EiiI C AL BANK, Individ-ually and as Co-Agent By Vice President
[t:AMC OF 3ANK]
BY__
[TITLEJ
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CONSENT The undersigned, as Guarantor under those certain Guaranties, dated as of June 20, 1979 (the " Guaranties"), in favor of the Banks parties to the Credit Agreement referrea to in the foregoing letter amendment, hereby consents to said letter amendment and hereby confirms and agrees that the Guaranties are, and shall continue to be, in full force and effect and are hereby confirmed and ratified in all respects except that, upon the effectiveness of, and on and after the date of, said letter amendment, all references in the Guaranties to the Credit Agreement, " thereunder", "there-of", or words of like import referring to the Credit Agree-ment shall mean the Credit Agreement as amended by raid letter amendment.
GEN E RAL PUBLIC UTILITIES CORPORATION
//
By //k p,w g _
Vice President h
!474 134
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[ EXECUTION COPY)
AMENDMENT NO. 2 Dated as of November 1, 1979 This AMENDMENT among GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation ("GPU"), JERSEY C ENTRAL POWER & LIGHT COMPANY, a New Jersey corporation
("JC"), METROPOLITAN EDISON COMPANY, a Pennsylvania cor-poration ("ME"), and PENNSYLVANIls ELECTRIC COMPANY, a Pennsylvania corporation ("PE") (GPU, JC, ME and PE being, collectively, the " Borrowers" and each, individually, a
" Borrower"), the banks. parties to the Credit Agreement referred to below (the " Banks"), CITIBANK, N.A., as agent (the " Agent") for the Banks, and CHEMICAL DANK as co-agent (the "Co-Agent").
F RELIMIli ARY STATEMENT. The Borrowers, the Banks.
the Agent and the Co-Agent have entered into a Revolving Credit Agreement, dated as of June 15, 1979, and a Letter Amendment thereto, dated as of October 10, 1979 (said Credit Agreement as so amended being the " Credit Agreement", the terms defined therein being used herein as therein defined unless otherwise defined herein). It has been proposed that the Credit Agreement be further amended upon tne conditions hereinafter set forth in order to permit the First National State Bank of New Jersey and the Farmers Bank and Trust Company of Hanover (each a "New Bank" and collec-tively the "New Banks") to become parties thereto.
NOW THEREFORE, the parties agree as follows SECTION 1. Amendments to Credit Agreement. The Credit Agreennent is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, hereby amended so that:
(a) The term " dank" in Section 1.01 thereof shall be defined as follows:
" Bank" means, (i) prior to the Closing Date, each bank which has, together with tne Borrowers, the Agent and Co-Agent, executed a counterpart nereof on or prior to the date hereaf, (ii) as at i474 135
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2 the Closing Date, each Confirming Bank and, (iii) lh suosequent to the Closing Date, each Confirming Bank and each New Bank; collectively, the " Banks".
(b) The term " Confirming Bank" in Section 1.01 thereof shall be defined as follows:
" Confirming Bank" means (i) each Bank which, prior to the closing Date, has confirmed, orally or in writing (including by telex, cable or telegram), to the Agent or the Co-Agent that the Rate Orders are satisfactory to it and (ii) each New Bank; collectively, the " Con f i rm in_c Banks".
(c) The following defined term shall be udded to Section 1.01 thereof:
"Second Amendment" means the Amendment, dateo as of November 1, 1979, hereto.
"New Banks" means, upon the offectiveness of the Second Amendment with respect to such bank, the First National State Bank of New Jersey and the Farmers Bank and Trust Company of Hanover, g each individually a "New Bank" . W (d) The following shall be inserted at the end of the definition of the term " Note" in Section 1.01 thereof:
"or pursuant to the Secona Amendment" (e) The third sentence of Section 2.01 (a) thereof shall read in full as follows:
"Except as provided in bection 2.01(c) and Section 2.03(b), each Eorrowing shall consist of Advances made on the same day by the Banks, each in the amount of their respective Percentages of the aggregate amount of such Borrowing."
(f) Scotion 2.03 thereof is hereby amended by in-serting after the heading thereof the designation "(a)"
and inserting at the end of such section, the tollowing:
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"(b) Notwithstanding the proviciens of Section 2.03(a), with respect to each Borrower, the first Advance by a tiew Bank shall be in an amount equal to such New Bank's Percentage (giving effeet g
to the Second Amendment) of the agg reg a te pr inci pal 1474 156
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3 amount of the Advances outstanding, if any, to such Borrower immediately prior to such effective-ness. Such Borrower shall, notwithstanding the provisions of Section 2.00 of this Agreement, apply the proceeds of eacn such Advance forthwith to the ratable prepayment of the Advances, if any, of the Banks (other than *he Neu Bank) to such Borrower (the Agent nereby being authorizea to effect such applications).
(g) The following shall be inserted imnediately after the phrase "the obligation of each Bank to make its initial Advance" occurring in the third line of Section 3.01 thereof:
"(other than a first Advance by a New Bank)"
SECTION 2. Conditions of Effectiveness. This Amendment snall become effective as of the date first above written with respect to a New Bank when, and only when,' the Agent shall have received: (i) counterparts of this Amend-ment duly executed by the Borrowers, the Agent, the Co-Agent, and the Super Majority Banks; (ii) counterparts of the ereoit Agreement, the Letter Amendment, dated as of October 10, 1979, thereto and this Amendment, duly executed by such New Bank (cy such execution, each New Bank agreeing , sub]ect to the terms and conditions nereof, to be bound by all the provisions of the Credit Agreement as so amended as if it were an original Bank party thereto); (iii) all of the following documents, each document (unless otherwise indi-cated) being dated the date first written above and otherwise in form and substance satisfactory to the Agent and in sufficient copies for each Bank (including the New Bank):
(a) Certified copies of the resolutions of the Board of Directors (or an authorized Executive Committee thereof) of each Borrower approving this Amendment and the New Bank Notes (as definec below);
(b) Certificates of the Secretary or Assistant Secretary of each Borrower, certifying the names and true signatures of the officers of such Borrower authorized to sign this Amendment, the New Dank Notes and the other accuments contemplated hereby; (c) Certified copies of all necessary governmental authorizations and approvals, if any, with respect to 1474 137
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4 this Amendment and the Bank Notes, other than the order of the Securities ud Exchange Commission re-ferred to in Section 5 hereof; (d) A favorable opinion of Messrs. Berlack, Israels & Liberman, counsel for the Borrowers, to the effect that this laaendment and the New Bank Notes have been duly authorized, executed and delivered by the Borrowers and confirming the opinion of sucn counsel dated June 20, 1979, furnished pursuant to Section 3.01(vi)(p) of the Credit Agreement with references therein to each of the Loan Documents to mean the Loan Documents as amended by the Letter Amendment, dated as of October 10, 1979, thereto and this Amendment and with references therein to the Notes to include the New Bank Notes; (iv) the Agent shall have received for the account of the New Bank on or prior to the date first above written all of the following documents, c'ch (unless otherwise indicated) dated the date first writ .i above and otherwise in form and substance satisfactory to the Agent and the Co-Agent:
(a) A Note of each Borrower payable to the order (gg of such New Bank (a "New Bank Note");
(b) Counterparts of the JC Guaranty, the ME Guaranty, the PE Guaranty and the Stock Pledge Agree-ment, each dated as of June 20, 1979, duly executed by GPU; (c) Counterparts of tne ME Bond Pledge Agreenent, and the ME Security Agreement, each dated as of June 2 0., 1979, duly executed by ME; (d) Counterparts of the JC Security Agreement, dated as of May 21, 1979, as amended and restated as of June 20, 1979, duly executed by JC; (c) Federal Reserve Forms U-1 provided for in Regulation U issued by the Board of Governors of the Federal Reserve System, the statements made in which shall be such, in the opinion of the Agent, as to permit tne transactions contemplated hereby in accordance with said Regulation U; and (v) the New Bank shall.have made its first Advance to be applied as provided in Section 2.03(b) of the Credit Agree- lll ment, as amended nereby, which such first Advance shall 1474 }38
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S be made on the date first written aoove unless all other conditions of effectiveness with respect to s2ch New Bank have not been met on or before such cate in which event such first Advance snall be made on the first day of tne next succeeding calendar mont a .
SUCTION 3. Representations and Warranties of the Borrowers.
Each Borrower represents and warrants as follows:
(a) Each Dorrower is a corporation duly incor-porated, validly existing and in good standing under the laws of its jurisdiction of incorporation; (b) The execution, delivery and performance by such Borrower of this Amendment, the New Bank Notes and the Loan Documents as amended by the Letter Amend-ment dated as of October 10, 1979, thereto an 3 by this Amendment to which it is or is to be a party are within such Borrower's corporate powers, have been duly author-ized by all necessary corporate action and do not contravene (i) sucn Borrower's enarter or by-laws, or (ii) law or any contractual restriction oinding on or affecting such corrow-r, and da not result in, or require the creation of any lien, security interest or other charge or encumbrance (other than pursuant to the Collateral Agreements to which it is a party) upon or with respect to any of its properties; (c) No authorization, approval or other action by any governmental authority or regulatory body is required for the due execution, deliverythe and New performance Bank Notes by sucn Borrower of this Amendment, or any of the Loan Documents, as amc.Med by the Letter Amendment, dated as of October 10, 1979, thereto and by this Amendment except for (i) such authorizations on andor approvals which have been delivered to t! e Agent prior to the date first written above, and (ii) an appropriate order of the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935 authorizing payment by the Borrowers of certain costs, expenses and other fees as provided in Section 5 hereof; and (d) This Amendment, the New Bank Notes and each of the other Loan Documents, as amended by the Letter Amendment, dated October 10, 1979, thereto and by this-Amendment, to whien each Borrower is a party constitute legal, valid and binding obligations of each Borrower enforceable against each Dorrower in cccordance with their respective tarms.
i474 139
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SECTION 4. Reference to and Effect on the Loan Documents. (a) Upon tne effectiveness of Section i here-of, eacn reference in the Credit Agreement to "this Agree-ment", " hereunder", " hereof", "herein" or words of like import, and each reference in the other Loan Documents to tne Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in the Loan Documents to the Notes, shall mean and be a refer-ence to the Notes including the New Bank Notes.
(b) Except as specifically amended above the Credit agreement and the Notes, and all other Loan Docu-ments, shall remain in full force and effect and are nereby ratified and confirmed.
(c) The execution, devery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Bank, the Agent or the Co-Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
SECTION 5. Costs, Expences and Taxes. The O
Borrowers agrce to pay on demand all costs ano expenses of the Agent in connection with the preparation, reproduction, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder or thereunder, including the reasonable fees and out-of-pocket expenses of Messrs. Shearman & Sterling, special counsel for the Banks, with respect thereto and of local counsel, if any, who may be retained by said special counsel with respect thereto. In addition, the Borrower snall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery, filing or recording of this Amendment and the other instru-ments and documents to be delivered hereunder or thereunder, and agree to save the Agent and each Bank harmless from and against any and all liabilities with respect to ot resulting from any delay in paying or omission to pay suen taxes or fees. Tne Borrowers agree promptly to take all action necessary and appropriate to obtain an appropriate order of the Securities and Exchange Commission under the Public 0,tility Holding Company Act of 1935 authorizing and approving the payment by them of such costs, expenses and other fees provided for in this Section 5.
!474 140
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7 SECTIO:1 6. Execution in Counterparts. This Amend-ment may be executed in cny number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which tal:en together shall constitute but one and the same instrument.
SECTION 7. Governing Lau. This Amendment shall be governed by and construed in accordance with the laws of tne State of New Yor1:.
SECTION 8. I!eadings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of tnis Amendment for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.
GENEllAL PUBLIC UTILITlES CORPORATION *..
By
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! \, h, , < ,A V i c'e'f r e s id e n t JEllSEY CENTRAL POWER &
LIGliT COMPANY
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/
By '
) )bbm Vice President liETRCTO:.7AN EDISON COc1 pat 1Y f /
Ry
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/\Vice President i
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M&d. /%
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- As Borrower and as the Guarantor under the JC Guaranties, Tne ME Guaranties and the PE Guaranties.
14 p
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PEN:JSYLVANIA ELECTRIC Cor1PAIPI
/
By '
// $7s 8l6 % '
Vice Precident Agreed as of the date first above written:
CITIDAtli;, N.A., Individ-ually and as Agent By_ _ . _ _
Vice President g CHEMICAL BANK, Individ-ually and as Co-Agent By -
Vice President 1474 142 (tJAME OF 3 Ai4 K)
BY
[ TITLE]
O
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ME/PN Exhibit A-2 Witnesses: J. G. Grahan; u . F. D. Hafer
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Law orriccs
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, RYAN, RusscLL & McCor:AoHY
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530 PCNN SCUARC CCNTCM SAMurL t. ausstLL 8"O'##
P. C. B O X 6 9 9 "'"O'OJ
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., ratognica ' ntsots
- f , W. towsN CoctN
. .LRicL.S.armAMN 215-372 476 JCMN S.McCCNAGMT
?, ALAN MICMark SELTttR CQWNSCL
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November 1, 1979
'.'.".
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E[h$} v Mr. William P. Thierfelder, Secretary NOV1 1979 Pennsylvania Public Utility Commission P. O. Box 3265 SECRETARY'S OmCE Harrisburg, PA 17120 EMb!!c Utility Commissicn Re: Pennsylvania Public Utility Cc.r.ission at al.
- v. Metropolitan Edison Company and Pennsylvania Electric Company, Respondents Docket No. I-79040308
.. , .
Dear Sir:
.
Enclosed herewith for fi'.ing are an original and three copies of the petition of Metrcpolitan Edison Comcany for a modification of the Order entered by the Ccamissiian on June 19, 1979 in the above proceeding.
Very truly yours, RYAN, RUSSELL 5 McC0"AGHY SBR:ph
_ _ .
cc: Chairman W. Wilson Goode Commissioner Michael Johnson
,*
1474 \43
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P001ORIBikAL
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BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
- O Pennsylvania Public Utility Commission, :
et al. :
- v. : Docket No .
- I-79040308 Metropolitan Edison Company and :
Pennsylvania Electric Company, :
Respondents :
PETITION OF METROPOLITAN EDISON COMPANY FOR MODIFICATION OF C OM:!IS S I O N ORDER ENTERED JUNE 19, 1979 Metropolitan Edison Company (" Met-Ed" or " Petitioner"),
pursuant to 52 Pa. Code 53.291, hereby petitions the Commission for modification of the Order entered in the above proceeding on June 19, 1973, and in support thereof respectfully represente lh that:
- 1. Petitioner is Metropolitan Edison Company, 2800 Pottsville Pike, Reading, Pennsylvania.
- 2. By Order entered June 19, 1979 at I-79040308, the Commission permitted Met-Ed to put into effect a levelized energy cost adj us tment charge of 8.8 mills /KWH to recover 8.4 mills of energy costs and certain demand costs and .4 mills of the associated Pennslyvania gross receipts tax under its net energy adj ustment clause, for a period of 18 months comnencing July 1, 1979. )474 }44
- 3. On June 22, 1979, Met-Ed filed an Addendum to Rider B of its Tariff Electric Pa.P.U.C. No . 42 (a copy of Rider B, Energy Cost Adj us t=en t Clause, and t :ic Addendum thereto is included in the attached Appendix A) in compliance
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with th e above Order authorizing the 8.8 mills /KWH levelized net energy clause charge.
- 4. The Addendum to Rider B permits interim reviews of the operation of the levelized charge to be made if " requested by the company or directed by the Pa.P.U.C."
- 5. There is attached as part of Appendix Aa statement of the infor=ation with respect to the operation of the levelized charge for the three-month period ended September 30, 1979, as required by items (a) through (c) of the third paragraph of that Addendum.
- 6. The unrecovered balanc e of energy costs which Me t-Ed has incurred and deferred for subsequent c o lle c t io n under the 8.8 mill levelized charge nas increased rapidly since July 1, 1979 and is continuing to increase rapidly.
Unless the 8.8 mill charge prescribed by the above Order is modified to permit Met-Ed to recover currently from its customers a greater amount of the energy costs which it is incurring currently to serve those customers, Met-Ed expec ts that by mid-1980 the unrecovered balanc e of such costs will exceed its capability to borrow funds to finance such costs, as shown by Figure 1 and Table 1 contained it the attached Appendix B.
- 7. Included among the assumptions upon which the aforesaid 8.8 mills levelized charge pr esc rib ed by the above Order was predicated were the following:
474 145
, (a) Met-Ed (and the other TMI owners) would be able to find alternatives to normal purchases of
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interchange from the Pennsylvania-New Jersey-Maryland Interconnection ("PJM") on a split-savings basis.to h reduce, by about 25%, Met-Ed's then estimated share
($10 million per month for the April 1 - December 31, 1979 period) of the cost of replacing the energy from the Three Mile Island nuclear generating station
("TMI");
(b) Three Mile Island Unit No . 1 ("TMI-1")
would resume power operation on January 1, 1980; and (c) For a period of six months (July 1, 1979 until January 1, 1980), as an in c e n t iv e to enter into such alternate purchase arrangements for TMI replace-ment energy, Met-Ed would be permitted to include as part of the recoverable costs under its levelized adj us tmen t charge the demand or reserve c ap ac ity charges associated with such purchases.
- 8. Me t- Ed and its affiliates have ag g r e s s iv e ly pursued alternative sources of purchased power and have effected substantial alternative power purchases both before and since the aforesaid Order entered June 19, 1979
- 9. The petition for a declaratory order, which was filed by Met-Ed and its affiliate, Pennsylvania Electric 1474 146 9
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Company ("Penelec"), with your Commission on October 10, 1979 in the above proceeding, sets forth in detail various efforts made by them and their New Jersey affiliate, Jersey Central Power and Light Company (" Jersey Central"), to achieve net energy cost savings by means of purchase power agreements and to minimize the net cost of energy purchased from PJM. That petition is incorporated herein by reference, pursuant to 1 Pa. Code 233 3.
- 10. A detailed statement of the efforts made by Met-Ed and its affiliates to obtain authorization to return TMI-1 to power operation at the earliest date consistent with public health and safety is set forth in the answer to the Commissions's Order to Show Cause entered in the above proceeding on September 21, 1979 filed by Met-Ed and Penelee with your Commission on October 11, 1979. That answer is incorporated herein by reference, pursuant to 1 Pa. Code 333.3.
- 11. In view of the fact that TMI-1 will not resume power operation by January 1, 1980, despite the many e f f o rt s by Me t-Ed to obtain authorization for such operation, and in view of fuel and energy cost increases that have occurred since the Commission's determination of the 8.8 mill level charge in I-79040308, such charge
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has not been and will not be sufficient to recover the energy costs Met-Ed is incurring to serve its customers.
(Summaries of Met-Ed's actual and p roj ec ted fuel and energy costs are attached as Figures 3, 4 and 5, and Tables 3, 4 and 5 of Appendix B) .
12 Met-Ed is therefore petitioning the Commission to increase th e 8.8 mill level charge, but by only the minimum amount necessary to keep Met-Ed's short-term debt within manageable limits, as shown by Figure 2 of Appendix B.
The requested increase is 6.9 mills (6.854 mills, when calculated to the nearest thousandth of a mill, pursuant to Met-Ed's Tariff), to become effective with bills rendered on and after January 1, 1980. llh
- 13. This increase, if granted, would increase Me t- Ed 's overall charges to retail customers by 15.7%,
and increase charges to the typical residential customer using 500 Kwh per month by 12.5%, as shown by Tables 10 and 9 of Appendix B, respectively. With the 6 9 mill increase, Me t-Ed 's charges to this same residential customer would still be below those experienced by a substantial number of other Pennsylvania utility customers, as shown by Figure 6 of Appendix B. The increase would provide Met-Ed with approximately $55 million of additional retail revenue, of which $52 million would be for energy costs and $3 million for additional revenue taxes.
1474 i48 O
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- 14. The 69 mill requested increase is reasonable based on the level of energy costs experienced by Met-Ed since July 1, 1979 Me t-Ed 's energy costs are expected to continue at this level well into 1980 d t.e to the unavaila-bility of TMI-1, as shown by Table 3 of Appendix B. If Met-Ed's request were based on its July through September 1979 energy cost experience, an increase of 8.2 mills would be indicated, as shown by Table 6 of Appendix B. Alterna-tively, a surcharge to recover Met-Ed's balance of energy costs proj ec ted to be unrecovered as (. f January 1, 1980, the proposed effective date of the clause increase, would require an increase in the 8.8 mill factor of 7.7 mills, as shown by Table 7 of Appendix B. A " full cost recovery" increase, essentially replicating the Commission's I-79040308 determination of the 8.8 mill level charge, would be 10.4 mills, as shown by Table 8 of Appendix B.
WHEREFORE, Petitioner Metropolitan Ed iso n Company, prays that the Commission modify the aforesaid Order entered in the above proceeding on June 19, 1979 so as to authorize a levelized net energy cost adj us tmen t charge increase of at least 6 9 mills /KWH, effective January 1, 1980 or at the earliest possible date, and extending the time within which Pe tit ione r will be permitted to include (as part of the recoverable costs under its net energy clause) the demand or reserve capacity costs associat ed wi tn al terna tive sources of purchased power.
METROPOLITAN EDISON COMPANY (S r J ~~4 s
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1474 149 By F.J. Smith
/Senio r Vic e President
O Commonwealth of Pennsylvania County of Berks F. J. Smith, being duly sworn according to law, deposes and says that he is a Senior Vice President of Metropolitan Edison Company; that he is authorized to and does make this affidavit on its behalft and that the facts set forth in the foregoing petition are true and correct to the best of his knowledge, information and belief.
- O F J. SMITH Sworn to and subscribed before me this 1st day of No v em b e r , 1979.
WN /
Notary Public 1474 i50 RITA M. POWERS No'ary Put!.c. MW:nvrg Tap. Berks Co My Comrnission Ex., ires sep.emter 30, / y'f1 0
CERTIFICATE CF SERVICE I hereby certify that I have this day served the foregoing document upon all parties of record in this pro-ceeding in accordance with the requirements of 1 Pa. Code 833.32 (relating to service by a participant).
Dated this 1st day of November, 1979.
Aa ~
k) Y
- f. ~s .. - ,,: -~.sr-
.a 9.
..,f4 >
m .4-1
/ Kyan ,'.hussell 5 dcConaghy
-
Attorneys for Metropolitan Edison Company 1474 151
.
.
APPENDIX A O
METROPOLITAN EDISON CO:!PA!,"I Petition for Increase in Levelized Enernv Cost Adjustment Charge
- Rider B, Energy Cost Adjustment Clause, and Addendum to Rider B.
- State =ent of Energy Clause Revenues, Expenses and Deferrals for the 3 Months Ended September 30, 1979 1474 iS2 O
.
O
..
.
Electric Pa. P.U.C. No. 42 (Supp. L i METRCPOLITAN EDISON CCMPANY First Revisad Page 39 Superseding Original Page 89 RIDER 3 ENERGY COST ADJUSTMENT CLAUSE An energy clause shall be applied to each kilowatthour supplied under this tariff. This energy clause factor determined to the nearest one-thousandth of 1 mill per kilevatthour in accordance with the for=ula set forth below, shall be applied to all kilowatthours billed during the billing month:
? =
h- - Ec x 1 f T Where A = Adjustment factor in mills per kilowatthour to be applied to each kilowatthour supplied under this tarif f.
F = The energy-related cost of net energy generated in the Company's fossil and nuclear generating stations, excluding tne cost of energy generated and sold to other utilities on a firm basis, plus the Company's energy-related cost of energy purchased anc' net energy interchanged in the current (c) and base (b) periods, defined as follows:
Fossil Generation - the costs charged to fuel Accounts 501 and 547 which are computed on the basis of the cos t of fuel delivered to the generating site at which it is consumed, plus the cost of disposing of solid waste from sulfur oxide re= oval devices.
Nuclear Generation - the costs charged to fuel Accounts 518 and 521 which are co=puted on the basis of the cost of such fuel delivered at the generating site at which it is to be consu=ed af ter deducting therefrom the present . salvage or reuse value of such fuel.
Net Energy Purchases - the a=ounts charged or credited to Account 555, excluding demand charges.
Net Energy Interchanged - the amounts charged or credited to Account 555, excluding charges or credits for reserve capacity
- transactions.
Ec = A factor expressed in mills per kwh to adjust for any over and under collection of energy cost that resulted frco the operation of this clause in the prior six months, ending with the second month preceding the billing month.
.
14 t i53
.
Issued October 17, 1978 Ef fective September 13, 1978
.
Electric Pa. P.U.C. No. 42 (Supp. 9)
Second Revised Page 90 Superseding METF.0POLITAN EDISON CG:GANY First Revised Page 90 The Ec factor, expressed in mills per kwh, shall be determined by dividing (a) the revenues (excluding revenues for gross receipt taxas) produced by the energy cir.use less the related energy costs recoverable by the clause, both determined as of the end of the second conth creceding the billing =onth, by (b) the six conth retail sales.
S = The Ccepany's total k',;h sales to Custc=ers, excluding firm (C) sales to other utilities and energy pecduced from facilities undergoing operational tests prior to being placed into com-cercial operation, in the current (c) and base (b) periods.
Fb g - Base energy cost of 8.000 mills per kilowatthour T = The Pennsylvania gross receipts tax race in effect during the billing =onth, expressed in d. .asal form.
The "Fe" and "Sc" factors shall be deter =ined as the six conth totals for the period ending with the second =onth preceding the Lilling conth.
This clause shall be applied to all kilowatthours supplied and such charge shall be an addition to any minimu=s applicable.
At least ten days prior to the beginning of each billing =cnth, the Company will fila with the Pennsylvania Public Utility Cocnission in such form as tne Commission shall have prescribed, (a) a copy of the computation of the energy clause to be applied during such =onth, and (b) such other information per-taining thereto as the Cc= mission cay require.
The application of this clause shall be subject to continuous review and to audit by the Cc==ission at such intervals as the Cc= mission shall determine. The Cc= mission shall continuously review the reasonableness and lawfulness of the a=ounts of the surcharges produced by the energy cost adjust =ent clause and the charges included therein.
If frc= such audit it shall be determined, by final order entered after notice and hearing, that this clause has been erroneously or improperly utilized, the Ccepany will rectify such error or impropriety, and in accordance with the te us of this order apply credits against future energy clauses for such revenuas as shall have been errcneously or i= properly collected. The Commission's order shall be subject to the ri;ht of appeal.
1474 %
O (C) Change Issued Augu n 16, 1979 Effective September 15, 1979
Electric Pa. P.U.C..No. 42 (Supp. 8)
METROPO!.ITAN EDISON CCMPANY Original Page 90.1 ADDENOUM TO RIDPR B (C)
In lieu of the cdjustment factor otherwise chargeable via the operation of this Rider B during the eighteen month period commencing July 1, 1979 and ending Decc=ber 31, 1930, a levelized adjusteent factor of 8.8 mills per kilowatt-hour shall be applied during such period to each kilowatthour supplied under this tariff, on account of costs (as hereinafter identified) incurred by the Company and not reccvered through its base rates. Such costs shall consist of (a) the unrecovered balance at June 30, 1979 of er rgy costs incurred and deferred by the Company for collection via the operation of this Rider 3, (b) the energy costs incurred and deferred during such eighteen -onth period for recovery via the
.
operation of this Rider B, (c) the de=ana or capacity costs incurred by the Company during the period of July 1,1979 through January 1, 1980 in connection with purchased power agreements entered into by it to provide energy needed to serve the Cc=pany's customers during the continuing outage of Units 1 and 2 (or of Unit 2 alone) of the Three Mile Island nuclear generating station and (d) applicable gross receipts taxes. All such costs (exclusive of gross receipts tax) shall be reflected in the appropriate deferred debit (or credit) account of the Company.
Unless otherwise directed by the Pa.P.U.C., this Addendum to this Rider B shall cease and determine ef fective December 31, 1980, and this Rider B shall resu=e operation effective January 1, 1981 in accordance with its terms, subject, however, to such modification as may be directed by the Pa.P.U.C. as a result of any hereinaf ter mentioned accounting.
On or before February 1, 1981 (and on or before the first day of the second month following a shorter accounting period, if an earlier accounting is requested by the company or directed by the Pa. P.U.C.), the Company shall file with the Pa.P.U.C.,
in such form as the latter may prescribe, a statement showing as of December 31, 1980 (or as of the end of such other accounting p=riod) (a) the respective amounts and the aggregate total of the aforesaid r>sts incurred as of the end of such accounting period, (b) the revenues derived - a result of the aforesaid levelized adjustment factor during such accounting per. 4, (c) the balance of such deferred debit (or credit) account as of the end of such accounting period (less the portion of such costs to be collected via the normal o rration of this Rider B subsequent to December 31, 1980), (d) the ef forts made by the Compar.y during s'uch pericd to achieve net savings by means of purchased power agreements and (e) such other information as to the Company's efforts to minimize the net ,:ost of obtaining the energy needed to serve its customers during such period as the Pa.P.U.C. may require. After notice and hearing, if the Pa.P.U.C. shall determine that the Company has utilized diligence and reasonable ef forts to minimize the. net cost of obtaining such energy during such period, the Company shall, be permitted to recover from (or credit to) its customers, such undercollection (or overcollection) of the costs, including said demand or capacity costs , incurred and deferred as aforesaid and not recovered (or overrecovered) during the above eighteen month period (or other applicable accounting period) via the levelized adjustment factor, as are found to be reasonable.
(C) Change Issued June 22, 1979 Effective with bills rendered during the billing conth of July 1979.
}k)k
METRCPOLITA.N EDISCN COMPANY Statement of Retail Energy Clause Reve:*ues. Txpenses and DeferralsIl) .
3 Months Ended Sepre ser 30 1979 3 Months September Jule Autust Se:tember 1979 ,
Sales and Revenues Pennsylvania Retail Sales (Cwn) 582 613 625 1820 Level Energy Cost Adjustment Charge 8.8 8.8 8.8 8.8 (mills /Kwn) [
Clause Revenues Before Billing Adjustments
($ millions) $ 5.1 $ 5.4 $ 5.5 $16.0 Billing Adjustments (0.0) 0.0 0.0 (0.0)
Clause Revenues as Adjusted $5.1 $5.4 $5.5 $16.0 (Less): Pa. Cross Receipts Tax G 4.52 (0.2) (0.2) (0.3) (0.7)
Retail Clause Revenues for Energy Costs S 4.9 S 5.2 S 5.2 S15.3 Expenses Total System Energy Costs ($ millions)(2) $15.5 $16.6 $14.7 $46.8 Total System Sales (Cwh) 619 654 662 1935 Energy Costs per K:.*i 'old (mills) 25.1 25.4 22 2 24.2 (1,e ss) : Energy Costs per Kwh Included in Retail Base Rates (8.0) (8.0) (8.0) (8.0)
Energy Costs per Kwh above Base 17 1 17.4 14.2 16.2 Energy Costs (above Level Recovered by Base Rates) Applicable to Retail Sales (Costs per Kwh Times Retail Sales) $10.0 $10.7 S 8.3 $29.5 Deferrals Balance of Retail Energy Costs Deferred at Beginning of Month ($ millions) $28.1 $33 2 $38.7 $28.1 Plus Current moth's Deferra1(3) 10.0 10.7 8.8 29.5 (Lese): (.usrent Month's Ratail Clause Revenues for Energy Costs (4.9) (5.2) (5.2) (15 3)
Balance of Retail Energy Costs Deferred at End of natch S33.2 S39.7 $42.3 $42.3 (1) as reported monthly to the Commission (2) includes de::and component of cost of TMI-related short-term power purchases ($ 5.5 million for 3 months ended Septecber 30, 1979).
(3) includes dessand component of cost of TMI-related short-term power purchases ($5.2 million
' for 3 months ended September 30, 1979).
O 1474 156
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APPE!! DIX 3 METROPOLITAN EDISON COMPANY Petition for Increase in Levelized Ener2v Cost Adj us tment Charge Supporting Material:
'
FIGURE 1 - Proj ected Short-Term Debt Balances, No Revision in 8.8 Mill Level Charge
'
TABLE 1 - Data for Figure 1
'
FIGURE 2 - Proj ected Short-Ters Debt Balances, 8.8 Mill Level Charge Increased by 6.9 Mills Ef fective 1/1/80
'
TABLE 2 - Data for Figure 2
'
TABLE 3 - System Energy Costs and Saler, July 1979 -
December 1980
'
FIGURE 3 - Actual and Proj ected Cost of Coal, 1970-1980
'
TABLE 4 - Data for Figure 3
'
EIGURE 4 - Actual and Proj ected Cost of 011, 1970-1980
'
TABLE 5 - Data for Figure 4
'
FIGURE 5 - Average Annual PJM Running Rate , 1970-1979
'
TABLE 6 - Indicated Increase in Level Charge Based on Energy Costs Experienced in July, August and September, 1979
'
TABLE 7 - Increase in Level Charge That would be Required to Recover during 1980 the Energy Costs Proj ected to be Unrecovered as of December 31, 1979
'
TABLE 8 -
" Full Cost Recovery" Increase in Level Charge
'
TABLE 9 - Residential Rate Comparison, Current Level Charge vs. Proposed Increase
'
FIGURE 6 - Residential Rate Ccaparisons, Met-Ed (Including Clause Increase) vs. Other Pennsylvania Utilities
'
TABLE 10 - Overall Increase to All Retail Customers c
3}
3 47 A
.
.
METROPOLITAN EDISON COMPANY Projected Short-Term Debt Ita l anc es ,
No Revision in 8.8 Mill I.evel Charge i I I I I I I I I I I I l l l 160 - _
~
_ Total Short- _
Debt Limit Term Debt 140 -
Under Revolving _
Credit Agreement
_
o ........................ ..........................
=120 -
_
d.
- _..............._.... . . . . . . . . . . . ................... . _
vs. ,
' 100 -
Margin of r, rety -
5
,%
o
_ ($15 Million) -
@
o $
g 80 -
_ ~
o 7
-
Deferred _
nergy Costs
$ 60
.c
-
_
m _
_
40 -
_
-
_
_
{
0 -
_
( 311 Other
_
_
O I I I I I I I l l I l l I
0 N D J F M A M J J A S 0 N D
-
1979 1980 o'
OD e O O
TABLE 1 METROPOLITA EDISO:; COMPA.W Projected Short-Ters Debt Balances, No Revision in 8.8 Mill Level Charge (S Millions)
Requirements Total Other Than Deferred Projected De fe rred Energy Short-Tern Ener,, Costs Costs (1) Debt Oct. 1979 $28.8 $ 62.4 S 91.2 Nov. 30.4 66.3 96.7 Dec. 12.4 71.5 83.9 Jan. 1980 $ 7.8 $ 81.4 $ 89.2 Feb. 4.6 88.8 93.4 Mar. 9.0 94.2 103.2 Apr. 22.5 99.1 121.6 May 20.7 105.1 125.8(2)
June 27.9 108.9 136.2 "
July 23.8 112.9 136.7 "
Aug. 20.8 119.7 140.5 "
Sept. 31.3 116.8 148,1 "
Oct. 25.8 115.6 141.4 "
Nov. 30.9 112.5 143.4 "
Dec. 18.3 112.2 130.5 "
(1) includes unamortized "old clause" balance recoverable by base rates.
(2) exceeds $123 million limit under revolving credit agreement.
.
METROPOLITAN EDISON COMPANY Projected Short-Term Debt Balances, 8.8 Hill Level Charge Increa,ed by 6.9 Mills (Total Charge of 15.7 !!!11s) l I I I I l l 1 1 I I I i l iso -
Debt Limit 140 - Under Revolving -
g Credit Agreement O - -
[ ....................................................
O120
- -
m -................... ....... .................. -
a Margin of Safety y 100 -
(sjs niijinn) p7 --
g g _ Total Short- __
Q Term Debt M fi 80 - - "
S 3 - -
.5
- so - 3 2
-
,g Deferred -
>m Energy Costs 40 -
22 UN
-
0-3v
-
_
__
w 20 D%
~
-
r All-
-
-
3
-
\( Other -
" I I I I I I I I I I I I I
- " O O N D J F M A M J J A S O N D
-
1979 1980 7
CD 9 9 e
.
METROPOLITAN EDISON COMPANY Projected Short-Term Debt 11alances 8.8 Mill Level Charge Increased by 6.9 Mills (Total Charge of 15.7 Mills), Ef fective 1/1/80
($ Millions)
Requirements Deferred Energy Costs
- Total Other Than No Revision Iteduction Balance Projected Deferred Energy in 8.8 Mill Due to 6.9 Reflecting Short-Term Costs Level Charge Mill Increase 6.9 Mill Increase Debt Oct. 1979 $28.8 $ 62.4 S
-
$62.4 S 91.2 Nov. 30.4 66.3 -
66.3 96.7 Dec. 12.4 71.5 -
71.5 83.9 Jan. 1980 $ 7.8 $ 81.4 $ (4.8) $76.6 S 84.4 Feb. 4.6 88.8 (9.6) 79.2 83.8 Mar. 9.0 94.2 (14.3) 79.9 88.9 g Apr. 22.5 99.1 (18.7) 80.4 102.9 g; May 20.7 105.1 (22.8) 82.3 103.0 p; June 27.9 108.9 (26.8) 82.1 110.0 ,,
July 23.8 112.9 (30.8) 82.1 105.9 Aug. 20.8 119.7 (35.0) 84.7 105.5 Sept. 31.3 116.8 (39.3) 7/.5 108.8 Oct. 25.8 115.6 (43.4) 72.2 98.0 Nov. 30.9 112.5 (47.6) 64.9 95.8 Dec. 18.3 112.2 (52.1) 60.1 78.4
- includes unamortized "old clause" balance recoverable by base rates.
.-
4
.P-
/
$
-
TABLE 3 MEIROPOLITAN EDISO:; COMPA:nf System Enerev Cests and Sales, July 1979 - December 1986 Energy Total Retail Sales Costs Sales
- of
($ millions) (Gwh) mills /Kwh Gwh Total Sales July 1979 (actual) S 15.5 619 25.1 582 94.0%
"
Aug. 16.6 654 25.4 613 93. 7
"
Sept. 14.7 662 22.2 625 94.4 Oct. (forecast)
"
17.0 642 26.5 607 94.5 Nov. 15.6 664 23.5 625 94.1
"
Dec. 17.8 712 25.0 666 93.5 6 Months Dec. 1979 $ 97.2 3 953 24.6 3 718 94.1*
Average Month $ 16.2 659 24.6 620 9 4.1 *.
Jan. 1980 (forecast) $ 24.0 785 30.6 733 93 4%
"
Feb. 21.4 789 27.1 738 93 5
"
Mar. 18.2 738 24.7 717 97 2
"
Apr. 16.7 683 24.5 666 97.5
"
May 17.0 635 26.8 621 97.8
"
June 14.7 633 23.2 618 97.6
"
July 14 9 629 23.7 614 97.6
"
Aug. 18.3 662 27.6 646 97.6 g
"
Sept. 8.5 670 12.7 655 97 8 w
"
Oct. 9.8 645 15.2 631 97.8
"
Nov. 8.3 666 12.5 648 97.3
"
Dec. 11.8 709 16.6 685 96.6 12 Months Dec. 1980 $183.6 8 244 22.3 7 972 96.7%
Average Month $ 15.3 687 22.3 664 96.7%
18 Months Dec. 1980 $280.8 12 197 23.0 11 690 95.8*
Average 1buch $ 15.6 678 23.0 649 95.8%
Assueptions
'
'
TMI-1 returns to service 9/1/80.
" Cost plus 10%" pricing of. GPU's TMI-related purchases f rom PJM ef fective 11/1/79.
'
Other economic TMI-related purchases (Ontario, Jamestown, APS) continue for forecast period.
'
Demand component of cost of TMI-related purchases included for full forecast period.
'
15% oil price escalation, Dec. 1980 over Dec. 1979.
O 1474 162
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METROPOLITAN EDISON COMPANY Actual and Forecast Cost of Coal, 1970-1980 50 ~; g i ; i i l : i 45 - -
40 - -
$34/
(1979)Ton l lk ,
35 -
3/ 'd -
/
, $36/ Ton 30 -
(1980) --
8
"
-
?
8 t
n.
25 - -
A to 44 a 20 - -
T C
15 - -
10 -
Actual -
Forecast
.
g _ _
->
x=-
" O I I I I I I I I I I I 3" 1970 1971 1972 1973 1974 1975 197G 1977 1978 1979 1980
-
&
TABLE 4 ,
METROPOLITA: EDISO:; CO"PA:;Y Actual and Projected Cost of Coal, 1970 - 1980 Tons Purchased Cos t Year (000's) (S millions) S/ ton 1970 2 454 S25.6 S10.44 1971 2 108 24.0 11.40 1972 2 271 28.4 12.50 1973 2 356 32.6 13.86 1974 2 341 61.1 26.09 1975 2 000 60.4 30.22 1976 2 046 57.0 27.88 1977 2 212 63.1 28.51 1978 1 884- 63.0 33.43 1979 Jan. 130 $ 4.3 $32.96 Feb. 81 2.8 34.49 Mar. 197 6.9 35.30 Apr. 189 6.3 33.50 g May 147 5.1 34.76 W June 138 4.5 32.84 July 168 6.0 35.56 Aug. 159 5.4 33.91 Sept. 138 4.9 35.32 Oct. (forecast)
"
130 4.5 34.33 Nov.
"
133 4.6 34.34 Dec. 197 6.8 34.68 Year 1 807 $62.1 S34,37 1980 Jan. (forecast)
"
205 $ 7.1 S34.84 Feb. 182 6.4 35.08
"
Mar.
"
200 7.1 35.35 Apr.
"
180 6.4 35.57 May 172 6.1 35.72
"
June
"
199 7.2 36.13 July 207 7.5 36.40
"
Aug. 192 7.1 36.81
"
Sept. 168 6.2 36.96
"
Oct. 164 6.1 36.97
"
Nov. 199 7.4 37.43
"
Dec. 204 7.7 37.68 Year 2 272 $82.3 S36.24 O
!474 i64
.
METROPOLITAN EDISON COMPANY Actual and Projected Cost of oil, 1970-1980 45 g g j g i i i g g g 40 - -
~
35 - -
'
30 -
.
-
T U 3 E! 25 -
Projected for Year 1979 ,
" '_ @
Based on 9 Months Actual g
p.
(S24. 65 /bb1) "h#/
p f 4
M y
e 20 -
~
-
O July Eudget Y Revision A
15 - -
f (S26.65/bb1) -
10 - -
-
_ps Actual N
.p>
5 -
~
- - - - - Forecast -
o I I I I I I I I I I I O
en 1970 1971 1972 1973 1974 1975 197G 1977 1978 1979 1980
.
TABLE 5
$
METROPOLITAN EDISON CO:!PANY Actual and Pro jected Cost of oil, 1970 - 1980 Barrels Purchased Cost Year (000's) (S millions) S/ bbl 1970 323 S 1.4 S 4.41 1971 961 4.9 5.06 1972 1 332 6.8 5.09 1973 1 341 8.7 6.52 1974 1 457 19.0 13.01 1975 636 8.5 13.37 1976 403 5.8 14.34 1977 683 11.0 16.04 1978 668 10.9 16.26 1979 Jan. 57 $ 1.0 $17.94 Feb. 48 0.9 18.87 Fu r . 28 0.5 19.80 Apr. 20 0.4 20.32 May June 24 16 0.5 0.4 21.91 23.49 g
July 53 1.4 25.92 Aug. 37 1.0 26.13 Sept. 19 0.5 27.88 Oct. (forecast)
"
40 1.0 24.12 Nov. 41 1.0 24.52
"
Dec. 55 1.4 25.46 Year 436 $10.0 $22.82 1980 Jan. (forecast)
"
39 $ 1.0 $25.56 Feb.
"
31 0.8 25.33 Mar.
"
29 0.7 25.21 Apr.
"
30 0.8 25.65 May
"
27 0.7 25.72 June 29 0.8 26.37
"
July
"
30 0.8 26.57 Aug. 30 0.8 26.84
"
Sept. 27 0.7 27.06
"
Oct. 30 0.8 27.55
"
Nov. 28 G.8 27.94
"
Dec. 42 1.2 29.26 Year 372 S 9.9 S26.65
.
O 1474 166
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METROPOLITAN EDISON COMPANY Average Annual PJM Running Rate, 1970-1979 50 g ; ; ; i l l l l
,
45 - -
40 -
,
-
35 -
31.7 -
(Ent.) %,
'
a 30 - -
3 G 's u m
- a. 2 5 - - =
'
0 E 20 - -
'
15 - -
n w
"
10 - -
- 7_ -
a-
% 5 - -
I I I I I I I I I I 0
1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Mills er IG,*ll-P 7. 8 9.3 8.5 10.5 24.5 20.0 19.8 24.6 25.2
TABLE 6 METF.0POLITA!! EDISO CC:!PA :Y Indicated Increase in 8.8 Mill Level Charge Based on Ener7v Costs Experience.d to Date 1979 Actual 3 Months Julv Aug Sept Sept Total System Energy Costs *
($ millions) $15.5 $16.6 $14.7 $46.8 Total System Sales (G*iH) 619 654 662 1,935 Mills /lciH of Sales 25.1 25.4 22.2 24.2 (Less): Total Re tail Charges for Energy Costs (8 mills base, 8.4 mills claus 2, excl. taxes) _(16.4)
Increase in Energy Costs Over Level Provided for by Currently Ef f ective Re tail Es tes 7.6 Indicared Increase in Level Charge (above X 1.047 .
revenue tax fac tor) 8.2
- includes demand component of cost of TMI-related short-term power purchases.
1474 168
..
O
.. w.
FICL'RE 6 METROPOLITXi EJISO:' COMPM.'Y
.
ilyr,",.ow aa] C ,m ;_ u ., ~. o, . u u n o
.
ra.,
Lv .. . u,.,m,1:,, a e w . _ Q ,L, -. .a2 m e. .m.
- ,on Rataa in Effect Scptember 1,1979 Recidentic! No V!ctor Hecting 500 lOf1HR.lonth 35 - 33.47 p30.85 With -
i ~~ 31.24 31.21 V 6.9 Mill Increase 30 -
,'
~~-
27.73 -
<a i 2 ;-A2 s 25 -
l, 23J6 22.77 ro
,
,
- . i . .
p-3 20
'
-
-
- I O '
l-15 - -
'
'
10 . -
5 - -
0
%, #4 %o *4o &q d *!p
. . s
'
1474 109
.
TABLE 7 METROPOLITAN EDISON COMPA!.T Increase in 3.8 ".ill Level Charge That Would be Required to Recover During 1980 the Energy Costs Proj ected to be Unrecovered (Deferred)
As of December 31, 1979 h
Deferred Enargy Costs as of 9/30/79*
(actual; $ =illions) $42.3 Estimated Additional Unrecovered Energy Costs through 12/31/79 16.3 Proj ected Balance as of Propos ad 1/1/80 Ef fective Date of Clause Revision $58.6 Retail Sales Proj ected for the Period January 1980 - December 1980 (Gwh) 7,972 Amortization Rate per Kwh, Excluding Revenue Taxes 7.4 Increase in Currently Effective 8.8 Mill Level Charge (a*vove x 1.047 revenue tax f actc,c) 7 .7 O
- excludes unamortized "old clause" balance recoverable by base rates ($14 4 million).
1474 170
.
O
.
TABLE 8 METROPOLITA:. EDISON COMPA'iY
" Full Cost Recovery" Increase in 8.8 Mill Level Charge, Assuming Return to 6-Month Historical Clause Effective 1/1/81 S Millions Total energy costs projected for the 18-month period July 1979 - December 1980 (July -
September 1979 actual, TM1-1 back 9/1/80,
" cost plus 10%" PJM pricing effective 11/1/79, APS, Ontario and Jamestown purchases, 15% oil price escalation) $281 Amount applicable to retail sales (above X 0.958, ratio of retail to total sales, July 1979 -
December 1980) $269 Plus. Energy costs deferred under retail clause in effect prior to shift to level clause on July 1, 1979 (actual balance of costs deferred under 6-month historical clause as of June 30, 1979) 28 (Less): Energy costs incurred in 1980 that would be recovered in 1981 by 6-month historical clause if that clause were reinstated effective January 1, 1981 (26)
Retail energy costs recoverable during 18-month period July 1979 - December 1980, assuming re-turn to 6-month historical clause effective January 1, 1981 $271 (Less): Retail revenues for. energy costs, July 1979 -
December 1980, at current rates (8 mills base, 8.4 mills clause (excl. taxes); 16.4 mills X 11,690 G'!H retail sales projected for the period) (192)
Unrecovered costs, no revision in current level charge $ 79 Increase in level charge required for complete re-covery, assuning increase is effective January 1, }k} 1980 (above : 7,972 GWH retail sales projected for the period January 1980 - December 1980, X 1.047 revenue tax factor) 10.4 Mills /KWH
.
TABLE 9 tiETROPOLITAN EDISON CC:!PANY Monthly Bills Under Residential Ra te RS, Level Char 2e Currentiv in Effect vs. P ronosed Increase Monthly Present Rates Proposed Ra tes Usage (8.8 Mill Level (15. 7 Mill Level Increase ONh) Charge) Charge) Amount %_ 200 $13.45 $14.82 $1.37 10.2% 300 18.11 20.17 2.06 11.4 400 22.77 25.51 2.74 12.0 460 (average) 25.60 28.75 3.15 12.3 500 27.42 30.85 3.43 12.5 600 32.08 36.19 4.11 12.8 700 36.74 41.54 4.80 13.1 800 41.40 46.88 5.48 13.2 900 46.05 52.22 6.17 13.4 1 000 50.71 57.56 6.85 13.5 Note: Both present and proposed rates include 0.72 base rate tax surcharge currently in ef fect (surcharge may be revised pur-suant to Ac t No. 1979-27, as described in PaPUC's Secretarial letter dated 10/3/79.) 1474 172 O ."
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. TABLE 10 METROPOLITAN EDISCN CCIPANY Total Charges to Custouers Reflecting Proposed Increase in 8.8 Mill Level Charce Normalized retail base revenues allowed in R.I.D. 434, including 5.42 mill " roll-in" of energy costs into base rates $237.7 Million. Normalized test year retail sales 6 872 Gwh Average retail revenue per Kwh ($ 237.7 million t 6 872 Gwh) 34.590 mills /Kwh Plus: Tax adjustment surcharge currently in effect (34.590 mills /Kwh x .0072) 0.249 Plus: 8.8 Mill leveltzed energy cost adjustment charge allowed in I-79040308 8.800 Total average annual charges to retail customers 43.639 mills /Kwh Prope:cd increase in 8.8 mill level charge 6.854 mills /Kwh
% Increase in total charges to retail customers 15.7%
Annualized increase in retail revenues, 12 months ended December 31, 1980, based upon proj ected retail sales of 7,972 Gwh: Mills /Kuh $ Fullions For energy costs 6.546 $52.2 For revenue taxes (6.546 x .047) .308 2.4 Total 6.854 $54.6
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Met-Ed/Penelec Statement B Witness: D. L. Huff Q. Would you please state your name and address? A. David L. Huf f, my business address is 2800 Pot t sville Pike Muhlenburg Twp. , Pennsylvania. Q. By whom are you employed and in what capacity? A. I am employed as an Assistant Comptroller by Metropolitan Edison Company, to which I shall trom time to time refer to as the " Company" or as " Met-Ed." Q. What is your educational and professional background? A. I was graduated from Husson College with a Bachelor of Science degree in Accounting and Rutgers University with an MBA degree in Economics and have over 14 years of accounting experience with the Company and its sister company, Jersey Central Power & Light Company. This is more fully described in the attached Appendix A. Q. miat are your duties and responsibilities with the Company? A. I am responsible to the Comptroller for the administration of the book-keeping, property records, accounts payable, special projects and tax sections of the Accounting Department, including rate case preparation. Q. Does the Company adhere to a system of accounts prescribed by the Pennsyl-vania Public Ut ility Commission ("PUC")? A. Yes. The Company's accouncing records are maintained in accordance with the Pennsylvania Public Ut ility Regulations at 52 Pa. Code, Sec. 57.41 et seq. and in conformity with the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission ("FERC"), fomerly the Federal Power Commission ("FPC"), and adopted by the PUC. _ _
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. .i Q. Are the Company's accounts audited?
A. Yes. They are audited at least annually by an independent certified public accounting firm; and, in addition, the FERC conducted compliance audits in 1964, 1971 and 1977 to ascertain that the Company is keeping its accounts in conformity with the Uniform System of Accounts. The PUC Staf f partici-pated in the review of the findings of the FERC Staff Audits. Q. Has an original cost determinatien been made of the Company's utility plant? A. Yes. An original cost determination was made as of December 31, 1944, for which approval orders were issued by the PUC for Met-Ed on December 11, 1945 under EOC Docket No. 27 and for Edison Light and Power Company (which was subsequently merged witn Met-Ed) on November 12, 1946 under EOC Docket No. 11. In 1948, the Company filed with this Commission a basic plan for maintenance of its continuing property records. The PUC accepted and approved this plan on April 19, 1948. The Company has since that date maintained its continuing property records in accordance with the basic plan. Q. Mr. Huf f, I show you an exhibit which has been marked for identification as Met-Ed/Penelec Exhibit B-1 and ask you what parts thereof have been prepared by you or under your supervision? A. Met-Ed/Penelec Exhibit B-1 has basically been prepared under my supervision.
'Ihere are, however, other witnesses who have furnished various data to me and they will support that data with their testimony.
Q. Would you please identify those witnesses who will support such data and the general areas of their testimony? -
i . A. Yes. Mr. W. D. Garland will testify to calculated depreciation accrual rates and Mr. F. D. Hafer and Mr. J. G. Graham will jointly of fer testimony with respect to energy costs and related matters. Q. What is contained in Met-Ed/Peaelec Exhibit B-l? A. Exhibit B-1 represents the projected budgeted and normalized statement of Met-Ed net utility operating income (the equivalent of utility " return" for racemaking purposes) for the test year ending December 31, 1980. The budgeted data which is the starting point of this exhibit was prepared in July of 1979 and reflects the austere expense - curtailed financial planning of the immediate post - TMI accident situation. Met-Ed's 1980 bud; ting process has been continuing and the official 1980 budget is exuected to be approved by the Board of Directors in late December of 1979 or early Januc y of 1980. The income statement is a key document in the quant ificat ion. of a utility's base revenue requirements for a given period. All of the data is summarized on page 1. The first column on that page displays Met-Ed's revenues, expenses and net income, as taken from the preliminary budget of the Company for the year ending December 31, 1980. The second column shows a minimum number of adjustments to normalize revenues and expenses, with the identi-fying adjustment numbers appearing adjacent to the respective items in column two. The normalizing adjustments in this presentation have been held to a minimum in order (a) to save time in the preparation of this presenta-tion for the present hurried proceedings and (b) to avoid areas of contro-versy (i.e. , to forego additional normalization adjustments which Met-Ed considers to be proper and appropriate for ratemaking purposes but which the staff and others have opposed in the past). The third column shows the situation after giving ef fect to such normalizing adjustments. The fourth
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and sixth columns show the budgeted expenses and related tax adjustments which would be necessary if one were to exclude TMI-2 and TMI-l expenses, h re s pec t ively. The situation illustrating the exclusion of TMI-2 expenses Nith which Met-Ed does not agree) is reflected in the. fifth column and the situation illustrating the possible exclusion of both TMI-l and TMI-2 expenses (with which Met-Ed likewise does not agree) is reflected in the seventh column. Columns eight and nine are included on this schedule to provide a mechanism for adjusting base revenues to reflect a required rate of return under the applicable circumstances. Q. What is shown in Adjustment No. l? A. This adjustment to operating revenues: (a) reduces base revenues by $1,255,000 to reflect the more recent revision of budgeted 1980 sales and revenues used in the Met-Ed energy clause increase filing (i.e. , the petition for modification of the levelized energy adjustment clause charge filed in the Commission Order entered June 19, 1979), (b) eliminates the 1980 budgeted revenues from Hershey Electric Company, of $1,942,000 for January and Februrry which will cease to be a FERC customer of Met-Ed on March 1, 1980, (c) reduces base revenues associated with FERC customers by $772,000 to reflect the proposed settlement of fer in the pending FERC rate case, (d) eliminates tax surcharge revenues of $17,894,000 and energy clausa revenues (exclusive of gross receipts tax) of $105,955,000 to eliminate non-base rate revenues from this base rate income statement presentation and (e) adjusts delayed payment charge revenues by $184,000 and other revenues by $305,000 to reflect the above mentioned revised projection of 1980 sales. O
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. . Q. Please describe Adjustment No. 2. A. In this adjustment, energy-related costs are adjusted to the level recover-able through base rates, (excluding sales to Hershey Electric which has been normalized out of the case). The retail energy clause base cost (i.e., the portion of energy costs recovered by retail base rates) of 8 mills per KW11 reflects the PUC Order at I.D. 214. The FERC energy base cost of 11.303 mills per KWH reflects the rate proposed in the currently pending FERC rate filing , Docke t No. ER 79-58. The net ef fect of this adjustment is to reduce the budgeted energy costs, exclusive of coal and ash handling, nuclear handling and reserve capacity costs, by $108,574,000 to the level of $66,243,000. Q. Wh at is Adjustment No. 3? A. The first portion of this adjustment reflects the elimination of S96,000 of an area of controversy, namely, depreciation expense associated with the TMI-l ring girder (which was removed from measures of value under prior Commission orders). Further, the depreciation expense accrual was reduced by $264,000 to reflect the dif ferences between it and the calculated depre-ciation expense prepared by Mr. W. D. Garland, who will of fer testimony supporting this adjustment. Q. Flease explain Adjustment No. 4. A. In its State Tax Adjustment Procedure Order of March 10, 1970, the PUC permitted utilities to recover portions of certain taxes via a surcharge. Since the normalized revenues shown on page 1 do not include any revenues from that surcharge, this adjustment is necessary for the purpose of this base rate presentation, to remove ( from taxes other than income taxes) those items not recoverable via base rates (i.e., those items recoverable through the surcharges).
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As detailed in this adjustment, 40% of the total rate for the Capital Stock Tax is subject to collection by the state tax surcharge, thus resulting in a normalizing adjustment of $2,400,000. The Public Utility Realty Tax of $5,590,000 and the City of York Gross Receipts Tax of $377,000 are fully recoverable through surcharges and are therefore totally eliminated. The Pennsylvania Cross Receipts Taxes were adjusted downward by $12,600,000 to normalize the income statement to reflect only the 2% rate recoverable through base rates. In summary, the total adjustment to taxes other than income taxes is a reduction af $20,967,000. Q. Would you please describe briefly the computation of federal and state income taxes in Adjustment No . 5? e A. This adjustment is shown on three separate pages in oraer to show the computation of federal and state income tax reflected in columns two, four and six, respectively, of page 1 of Exhibit B-1. The following is a descrip-tion of the format utilized on each of these three pages (i.e. pages 6.1, 6.2 and 6.3). The schedule on each of such pages recaps the computation of the net operat-ing income before income taxes from data shown on page 1 of Exhibit B-1 (i.e., line 7 less line 23, of the respective columns on page 1 of Exhibit B-1). From this amount is deducted (on line no. 9) the interest charges that are computed by multiplying the adjusted measures of value by the rate of return associated with long-term debt (footnote (A) of this adjustment)
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. . to determine net income before further adjustments to taxable income
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for computing federal and state income taxes. The next four adjustments are additions which increase taxable income. The first adj us tment (line no. 11) is the amount of federal income taxes paid on behalf of a lessor company which is not allowed as a deduction under the tax laws. The next adjustment (line no. 12), taxes assumed on customer deposits, is not allowed under the tax laws. 'Ihe next adjustment (line no.
- 13) adds to taxable income the amortization of net salvage. Finally, the amortization of deferred energy costs (line no. 14) is added to taxable income because it had been taken as a deduction in prior years (this has no ef fect on rates to the customer because of a deferred tax credit).
The remaining six adjustments to net income are deduct ions which reduce taxable income. The first of such adjustmenta reflects (on line no. 15) the adjustment of depreciation to a tax basis utilizing accelerated depreciation (SYD method and ADR short lives) where permitted on average eligible propercy. The next two items, payroll taxes capitalized and pension costs capitalized, are treated as current deductions in determining taxable income and eliminated from or olant accounts for tax purposes. The preferred dividend deduction and dividend re meived exclusion are deductions allowed by the tax laws. The cost of removal of retired facilities is treated as a current deduction for tax purposes in the year in which incurred. The net amount of these adjustments (line no. 21) is deducted from net income before income taxes (line no. 10) to determine the income subject to state income tax. The state and federal income tax calculations then _,_ \474 \80
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fo llow. Pa. state income taxes are computed at a rate of 6.9767%, which reflects only that portion not recoverable by the surcharge. The federal income tax is then computed at a 46% rate with final adjustments to the federal tax computation to reflect the Job Development Tax credits and the deduction of the consolidated tax savings associated with the deduction .on a consolidated GPU System income tax return) of interest paid on GPU dabt (footnote (C) of this adjustment). Q. What is normalization Adjustment No. 6? A. This adjustment reflects the elimination of several items frem the budgeted deferred income taxes as follows: a) The elimination of deferred taxes associated with the elimination of deferred energy costs, reflecting a base rate presentation, b) The elimination of deferred taxes on post-1969 non-expansion property (as this relates only to FERC jrr'sdictional customers), 9 c) The elimination of deferred taxes associated with the PURTA refund received by Met-Ed with respect to prior years, and d) The elimination of deferred taxes associated with miscellaneous tax benefits which are taken as a current tax deduction in computing the federal and state income taxes. Q. What is shown in Adjustment No. 77 A. That adjustment of $135,000 reflecte past commission orders requiring the amortization over a 10 year period of income tax refunds including interest rec e ived .
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. . Q. Mr. Huff, are you familiar with Met-Ed 's budgeted level of administrative and general expenses as utilized in Exhibit B-l? A. Yes I am. Q. Wh at opinion, if any, do you have as to the budgeted level of such expenses? A. In my opinion, such level of expenses is a conservative statement of what Met-Ed would be expected to incur during 1980. Q. Mr. Huff, I show you an exhibit which has been marked for identification as Met-Ed/Penelec Exhibit B-2 and ask you what parts thereof have been prepared by you or under your supervision? A. That exhibit has basically been prepared under my supervision. There are, however, other witnesses who have furnished various data to me and they will support that data with their testimony. Q. Would you please identify those witnesses who will support such data and the general areas of their testimony. A. Yes, Mr. W. D. Garland will testify as to the adjustments necessary to reflect a calculated depreciation reserve and Mr. F. D. Ha fer and Mr. J. G. Graham will jointly sponsor testimony relative to energy costs and related matters. Mr. R. M. Klingaman will of fer testimony with respect to the desired coal and oil inventory levels. Q. Please describe the contents of Met-Ed/Penelec Exhibit B-2? A. That Exhibit shows the Met-Ed budgeted 13 period average original cost measures of value for the year 1980, together with various normalization adjustments, including those required if Met-Ed's investment in TMI-2 and TMI-l were eliminated from the respective measures of value. As was the case with Mec-Ed's income statement (Exhibit B-1), the data used as the
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6 tart ing point for Exhibit B-2 was derived from Met-Ed's preliminary 1980 budget. Q. Would you please describe what is contained on the first page of Exhibit B-2.
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Page one summarizes (in column one) Met-Ed's 13 period average measures of vs.lue per budget for the year 1980, with a minimum number of normalization adjustments (in column two) to adjust several items for ratemaking purposes. Each adjustment is identified by a number appearing adjacent to the respec-tive items in column two. Further adjustments (in column four and column six) reflect the elimination, from measures of value, of '4et-Ed's 50% interest in TMI-2 (with which Met-Ed does not agree) and the possible elimination of Met-Ed's 50% interest in TMI-l (with wh ich Met-Ed likewise does not agree). Column seven represents the year 1980 average measure of value excluding TMI-2 and TMI-1. As was the case with Met-Ed's income statement, normalizing adjustments in this presentation have been held to a minimum in order to save time and to avoid areas of controversy. Q. Please describe the first normalization adjustment. A. In Adjustment No. 1, Met-Ed's budgeted average electric plant in service of
$1,310,787,000 is sijusted downward by S3,150,000 to re flec t the elimination of TMI-l ring girder costs, in accordance with past Commission Orders, in order to avoid an area of controversy.
Q. What is reflected in Adjustment No. 2? A. To eliminate another area of controversy adjustment No. 2 reduces the budgeted average balance of plant held for future use from $12,577,000 down to S984,000, the latter figure representing only those properties which are 9
. . presently planned to be used in ten years or less, consistent with the Commission's Order that concluded Met-Ed's rate case at R.I.D. 170 & 171. Th is adjustment eliminates $11,593,000 from Met-Ed's rate base. Q. What is reflected in Adjustment No. 3? A. Adjustment No. 3 shows a reduction in the average depreciation reserve of
$11,945,000 which represents (a) $51? ,000 of depreciation reserve associated with the previously mentioned TMI-l ring girder costs and (b) a decrease of $11,428,000 to reflect a calculated reserve level. Mr. W. D. Garland will of fer testimony supporting this adjustment .
Q. Please describe Adjustment No. 4.
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That adj us tment normalizes the average coal inventory to the desired inven-tory level at each coal plaat. The prices used to value this inventory are the average budgeted cost of coal in inventory at the respective stations during 1980 resulting in a nortslized investment in coal inventory of
$11,856,000. As previously mentt7ned, Mr. R. M. Klingaman's testimony will support the desired levels of such coal inventory.
Q. Please describe Adjustment No. 5. A. That adjustment normalizes the average oil inventory to reflect the desired levels of oil inventories. These desired levels were also utilized in Met-Ed's petition for modification of its levelized energy cost adjustment charge. The ef fect of this adjustment is to increase the level of oil inventory by $358,000, to an average of $2,906,000. Q. Please describe Adjustment No. 6. A. That adjustment normalizes the average deferred energy cost balance to an average level that would result from the proposed increase in energy clause
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revenues requested in Met-Ed's petition for modification of its energy cost adjustment charge. The ef fect of this adjustment is to decrease the level of the average deferred balance by S20,726,000 to an average of $81,092,000. Q. Please describe Adjustment No. 7. A. In order to avoid an area of controversy, this adjustment of $2,469,000 includes in the measures of value a cash working capital requirement of only the amount allowed in R.I.D. 626. Q. Normalization Adjustment No. 8, addresses Accumulated Deferred Income Taxes. Would you please describe this adjustment? A. les. This adjustment eliminates S823,000 for those deferred taxes asso-ciated only with FERC customers (capitalized taxes and poet-1969 non-expan-sion property) It also adjusts deferred taxes associated with deferred energy costs, in accordance with Adjustment No. 6 reflecting the proposed change in Met-Ed's energy cost adjustment charge. Finally a reduction in O the amount of S561,000 in the average deferrals associated with accelerated depreciation is made to reflect the maximum rate base deduction allowable in a future test year, according to IRS regulations under Section 1.167(1) - (1)(h)(b) af the Internal Revenue Code. The total normalized accumulated de fe rred income tax balance deducted from measures of value af ter these adjustments is $111,700,000. Q. Mr. Huf f, does this complete your direct testimony? A. Yes, it does. 1474 185 0
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. APPENDIX A Resume - Education and Experience of David L. Huff Education: 1955 1964 Bachelor of Science degree in Accounting - Husson College MBA degree in Economics - Rutgers University Other: 1966-67 Completed three courses in Mathematics at Fairleigh Dickenson University 1967 Professional Series of the Depreciarion Seminar at Western Michigan University 1968 Nuclear Fuel Management - short course at Purdue University Experience: 6/55 - 2/65 Accountant and Supervisor-Chevron Oil Company 2/65 - 6/67 Employed as Accountant - Jersey Central Power & Light Company ("JCP&L") 7/67 - 6/71 Senior Accountant - Depreciation and Nuclear Matters - JCP&L 6/71 - 7.*73 Senior Accountant - Budgets - JCP&L 7/73 - 6/76 Supervisor of Budgets - JCP&L 6/76 - Present Assistant Comptroller - Metropolitan Edison Company 1474 186
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Page 2 of 8 METROPOLITAN EDISON COMPANY O Normalization Adjustment No. 1 (S000) Adjustment To Operating Revenue s : To adjust revenues to re flect (1) the currently projected sales and revenue level, as shown in Met-Ed's petition for modification of the levelized energy adjustment clause, (2) for the loss of Hershey Electric Company as a FERC customer on March 1,1980, (3) to reflect proposed settlement rates with remaining FERC customers, (4) to eliminate tax surcharge and energy clause revenues which are not collected via base rates and should therefore be excit Jed from this base rate presentation and (5) to reflect the level of revenues for delayed payment charges and other revenues utilized in Met-Ed's petition for modification of its levelized energy cost adjustment charge. Line No. Description Revenues (1) (2) 1 To adjust base revenues (excl. Hershey) to reflect the revised sales level used in Met-Ed's petition for modification of its levelized energy cost adjustment charge S (1,255) 2 Hershey Electric base revenues budgeted (1,942) 3 Budgeted base rate increase to FERC customers S 1,487 4 Percentage reflecting proposed settlement level 51.97. 5 Fa te increase, FERC customers at proposed settlement level (772) 6 Total adjustment to base revenues A (3,969) 7 Adjustment to eliminate tax surcharge revenues S (17,894) 8 Adjustment to eliminate energy clause revenues S(105,955) 9 Adj ustme nt to delayed payment charge S 184 10 Ad j u stme nt to other revenues S 305 1474 i88 O
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Page 3 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No . 2 (S000) Adjustment To Energy Costs Adjustment of energy-related costs to the level recoverable through base rates. Line No. Desc ript ion Total Energy Costs (1) (2) 1 Retail sales - MWH 7,972,349 2 Energy cost per MWH recoverable by retail base rates 8.000 3 Energy cost recoverable from retail customers (line 1 x line 2) S 63,779 4 Resale sales - MWH 272,025 5 Hershey Electric sales - MWH (54,045) 6 Adjusted resale sales - MWH 217,980 7 Energy cost per MWH recoverable by resale base rates 11.303 8 Energy cost recoverable from resale customers (line 6 x line 7) 2,464 9 Total amount recoverable through base rates S 66,243 10 Less: energy-related costs per budget 174,817 11 Normalizing adjustment (line 9 - line 10) S(108,574) 1A74 189
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e 8 Page 4 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 3 (S000) Adjustment to Depreciation Expense To adjust the annual depreciation accrual from budgeted accrual to calculated accrual and to eliminate the TMI-l ring girder accrual consistent with ratemaking treatment in previous orders of this Commis-sion, in order to avoid an area of controversy. Line No. Description Amount (1) (2) 1 Elimination of TMI-1 ring girder $ (96) Adjustment of budgeted accrual to recalculated level: 2 Recalculated accrual $ 38,495 (A) 3 Less: Accrual per budget 38,759 4 Adjustment (264) 5 Total normalizing adjustment S (360) O
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(A) TMI-2 accrual for 1980 is re flected in line 2. 1474 190 0
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Page 5 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 4 (S000) Adjustment To Taxes Other Than Income Taxes To eliminate, from taxes other t'. income taxer, those portions of taxes recovered by surcharge. Line Taxes Other Than No. Description Income Taxes (1) (2) Capital Stock Tax 1 Capital Stock Tax budgeted S 6,000 2 Amount recoverable by surcharge (40%) x .40 $ (2,400) Public Utility Realty Tax 3 S5,590 is budgeted for this tax, all of which is recoverable through the surcharge (5,590) City of York Gross Receipts Tax 4 $377 is budgeted for this tax, all of which is recoverable through the surcharge (377) Pennsylvania Gross Receipts Tax 5 Normalized revenues, including forfeited discounts $275,800 6 Less revenues exempt from t ax 5,643 7 Normalized tax base $270,157 8 Portion of tax percent age recoverable through base rates. x 2.0% 9 Normalized Pa. Gross Receipts Tax collected through base rates S 5,404 10 Less budgeted amount 18,004 11 Normalizing adjustment for Pa Gross Receipts Tax (12,600) 12 Total normalizing adjustment to taxes other than income taxes S (20,967)
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- Page 6.1 of 8 METROPOLITAN EDISON COMPANY Normalization Adj stment No. 5 (S000)
Computation of Federal & State Income Taxes - Normalized (Col. 2 o f Income Statement) Taxes Line Be fo re No. Calculated Taxes Adj. Adjustment (1} (2) (3) (4) 1 Total operating revenue S 284,556 2 Less: Total O&M expense S 151,852 3 Depreciation expense 38,399 4 Average aet salvage 132 5 Decommissioning 68 6 Taxes other than inc ome taxes 13,947 7 Total deductions 204,398 8 Net operating income be fore income taxes S 80,158 9 Less: Interest cha.ge s ( A) 42,229 10 Net income be fo re inc ome taxes S 37,929 Adjustment s to taxable income: Add: 11 Accrued rent-Reading Elec. Light & Power S 2 12 Taxes assumed on customer deposits 1 13 Average net salvage 132 14 Amortizat ion of de ferred energy costs 5,947 Deduc t : 15 Adjustment of booked depreciation to tax basis (B) 38,386 16 Payroll taxes capitalized 603 17 Pension costs capitalized 840 18 Preferred dividend deduction 134 19 Dividend received exclusion 2 20 Cost of removal 388 21 Net adjustment S (34,271) 22 Income subject to state income tax S 3,658 23 State income tax @ 6.9767% 255 9 - S ?SS 24 Income subject to federal inc ome tax $ 3,403 25 Federal income tax (462 less $39) $ 1,526 26 Less JDTC (7 824) 27 Total federal tax before consolidated savings S 9,350 28 Consolidated savings (C) 1,849 29 Total federal tax $ 7.5n1 S(26.498) S 13.459 (A) Computation of interest charges: Total measure of value ?85,585 In t er e s t compo nen t of rate of return 3.89% Interest expense (B) Adj. of booked depreciation to tax basis: S 42.224 j }w Tax depreciation )i { S 76,785 Book depreciation 38,399 Depreciation adjustment S 3A . 398 (C) Computation of consolidated savings: GPU interest allocated to Met-Ed S 4,020 Federal tax rate 46% Consolidated savings S 1.849
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Pate 6.2 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 5 (S000) Comput ation o f Federal & St ate Inc ome Taxes - TMI-2 Eliminated (Col. 4 o f Income Statement) Taxes Line Be fo re No. Calculated Taxes Adj. Adjustment (1) (2) (3) (4) 1 Total operating revenue S 284,556 2 Le s s : Total O&M expense $ 158,268 3 Depreciat ion expense 27,107 4 Average net salvage 132 5 Dec ommi s s ion ing 68 6 Taxes other than t' nc ome t axe s 13,947 7 iceal deduc t ions 199,522 8 Ne t operat ing income be fore income taxes S 85,034 9 Le s s : Interest charges (A) 28,959 10 Net income before inc ome t axe s S 56,075 Adjustment s to taxable income: Ad d : 11 Accrued rent-Re ad ing Elec . Light & Powe r S 2 12 Taxes assumed on customer de po s i t s 1 13 Average net salvage 132 14 Amortization of deferred energy costs 5,947 Deduc t : 15 Adjustment of booked depreciat ion to tax basis (B) 22,741 16 Payroll taxes capit alized 603 17 Pension cost s capitalized 840 18 Preferred dividend deduction 134 19 Dividend received exclusion 2 20 Cost cf removal 388 21 Ne t ad j ustmen t S (18,626) 22 Inc ome subject to state income tax S 37,449 23 State income tax @ 6.9 76 7% 2.613 S 75% S2.35R 24 Income subject t o f ede r al inc ome tax $ 34,836 25 Federal income tax (46% less $39) $ 15,986 26 Le s s JDTC (7,824) 27 Total federal t ax before consolidated savings S 23,810 28 Consolidated savings (C) 1,849 29 Total federal t ax S 71.961 S 7.501 S 14,4Ao (A) Comput ation of interest char ge s : Total measure of value $ 744,453 Interest c om ponen t of rate of return 3.89% Int er e s t expense S 28.953 (B) Adj. of booked depreciation to tax basis: Tax depreciation $ 49,848 Book depreciation 27,107 Depreciation adjustment Q (C) Computation of consolidated savings: S 22.741 [ h / CPU interest allocated to' Met -Ed S 4,020 Federal t ax rate 46% Cor.solidated savings S l 8 49
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Page 6.3 of 8 METROPOLITAN EDISON COMPAh7 Normalization Adjustment No. 5 ($000) Computation of Federal & State Income Taxes-TMI-I & 2 Eliminated (Col. 6 of Income Statement) Line Taxes No. Be for e Calculated Taxes Adj. Adjustment (1) (2) (3) (4) 1 Total operating revenue S 284,556 2 Le s s : Total O&M expense $ 160,041 3 Depreciation expense 20,727 4 Average net salvage 132 5 Dec ommi s s ioning - 6 Taxes other than income taxes 13,947 7 Total deductions 194,847 8 Net operating income before inc ome taxes S 89,709 9 Le s s : Intet est charges (A) 21,988 10 Net income before inc ome taxes S 67,721 Adjustment s to taxable inc ome : Add : 11 Accrued rent-Reading Elec . Light & Power S 2 12 Taxes assumed on custemer deposits 1 13 Average net salvage 132 14 Amortization of deferred energy costs 5,947 Ded uc t : 15 Adj us tme nt of booked depreciat ion to tax basis (B) 10,656 16 Payroll taxes capitalized 603 17 Pension costs capitalized 840 18 Preferred dividend deduction 134 19 0;vidend received exclusica 2 20 Cost of removal 388 21 Net ad j u s tme nt S (6,541) 22 Income subject to state inc ome tax S 61,180 23 State income t ax @ 6.9767% 4.26A $ 7.613 31.655 24 Income subject to federal inc ome tax $ 56,912 25 Federal income tax (46% less $39) $ 26,141 26 Le s s JDTC (7,824) 27 Total federal tax be fore consolidated savings S 33,965 28 Consolidated savings (C) 1,849 29 Total federal tax S 12.116 S 21.961 s in,15s (A) Computation of interest charges: Total measure of value S 565,256 Interest componen t of rate of return 3.89% In tere st e x pen se $ 21.4d8 (8) Adjustment of booked depreciation to t ax basis: Tax depreciation 3 31,383
&)ok depreciation Depreciation adjustment 20,727 j S lo.As6 l (C) Computation of consolidateo savings:
GPU interest allocated to Met-Ed S 4,020 Federal t ax rate 46% Consolidated savings S 1.844
. . Page 7 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 6 ($000) Adjustment to Provision for Deferred Income Taxes Adjustment to the Provision for De ferred Income Taxes - Net - Federal, and Provision for Deferred In .ue Taxes - Net - State to reflect (1) the elimination of deferred taxes associated with deferred energy costs due to the elimination in normalization adjustment no. 1 of energy clause revenues, ( 2) the eliminat ion of de ferred taxes associated with accelerated depreciation of post-1969 non-expansion property, (associated with FERC jurisdictional customers) (3) the elimination of deferred taxes associated with the PURTA refund, and (4) the elimination of miscellaneous deferred tax benefits. Provision For Provision For Line De ferred Taxes Deferred Taxes No. D escript ion Net - Federal Net - State (1) (2) 1 De ferred t axes per budge t , 12 months ended 12/31/80 _S__39,078 S (541) Normalizing adjustments: 2 Deferred energy costs S(26,973) S (76) 3 Post-1969 non-expansion property (241) - 4 PURTA refund 836 - 5 Miscellaneous deferred tax benefits (340) (96) 6 Normalizing adjustment S(26,718) S (172) 7 Deferred taxes as adjusted for 12 months ended 12/31/80 S 12,360 S (713) (A) In accordance with the Tax Reform Act of 1969 and the Commission's Statement of Policy of June 24, 1970, in R.I.D. 64 the Commission allowed the Company to c.ormalize the tax reductive effect of liberalized depreciat ion on post-1969 plant additions that increase capacity, usin ADR short lives on post-1970 plant ad di t io ns .
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Page 8 of 8 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 7 O (S000) Adjustment for Income Tax Refunds This adjustment reflects the Commission's Orders at R.I.D. 64 and at R.I.D. 170 & 171 requiring the amortization of income tax refunds over a 10 year period. Line Amortization No. Description Refunds of Refund (1) (2) 1 Refunds received in 1971 & 1973 $ 196 S (19) 2 Refunds received in 1976 & 1977 1,158 (116) 3 Total S 1,354 S (135) 4 Amortization of refunds budgeted - 5 Normalizing adjustment S (135) O 3474 196 O
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METROPOLITAN EDISON COMPANY Average Measure of Valt,e, Year 1980, at Original Cost Normalized and Adjusted to Reflect Possible Fxclusion of TM1 t' nit s 1 & 2 ($000) Measure of Measure of 13 Month Average Normalized laes: Value Leae: Value Measure of TM1-2 Excluding TM1-1 Excluding Measure of Value Value Measure of TM1-2 Measure of TMI-I & TM1-2 Line Normalizing Adj. ( Co l 5-Co l 6 ) No. Description Per Budget Adjustments No. (Col l+ Col 2) Value (Col 3-Col 4) value (1) (2)
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(3) (4) (5) (b) (7) Electric Plant: 741,504 1 Plant in service $ 1,310,787 $ (3,150) 1 $ 1,307,637 $ 360,157 $ 947,480 $ 205,976 $ (11,593) 984 984 - 984 2 Plant held for future use 12,577 2
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3 Nuclear fuel in reactor 22,440 - 22,440 - 22,440 22,440 - 12,583 12,583 12,583 12,583 - 4 Nuclear fuel-spare assemblies -
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742,488 5 Total electric plant $ "i~,3 58,38 7 $ (14,743) $ 1,343,644 $ 360,157 $ 983,487 $ 240,999 $ Depreciation & Amortization Reserve: 6 259,891 $ (11,945) 3 $ 247,946 $ 2,844 $ 245,102 $ 35,056 $ 210.046 Plant in service $ 7 Nuclear fuel in reactor 7,817 - 7,817 - 7,817 7,8I7 - 8 Total depreciation & (11,v45) $ 255,763 $ 2,844 $ 252,919 $ 42,873 $ 210,046 amort ization reserve $ 267,708 $ 9 Net Electric Plant $ 1,090,679 $ (2,798) $ 1,087,881 $ 357,313 $ 730,568 $ 198,126 $ 532,442 Additions: 11,856 10 Coal inventories $ 12,679 $ (823) 4 $ 11,856 $ -
$ 11,856 $ - $
2,906 2,906 - 2,906 11 0i1 inventories 2,548 358 5 - 14.513 14,513 9,288 5,225 12 Other M & S inventories 14,513 - - 81,092 81,092 - 81,092 13 Deferred energy cost s 101,818 (20,726) 6 - 5,203 14 Cash working capital - 2 ,44,9 7 2,469 (1,303) 3,772 (1.4311 131,558 $ (18,72f) $ 112,836 $ (1,303) 3 !!4,139 $ 7,857 $ 106,282 15 Total additions $ Ded uc t ion s : 600 16 Customer deposits S 600 $ - S 600 $ -
$ 600 $ - $
500 - 500 - 500 17 Customer advances for constr. 500 - 18 Unamortised gain on 1,031 reaquired debt 1,031 - 1,031 - 1,031 - 19 Acc. de ferred investment ecg tax credit (32) 20 - 20 - 20 - 20 5* Zr 20 Acc. deferred income taxes 122,608 (10,908) 8 111,700 14,878 96,822 26,786 70,036 ,a k 1,031 - 1,031 - 1,031 .~ 21 Income tax re f und s 1,0 31 - --. 4 22 Operating reserves - pensions 250 - (10,908) 250
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14,878 $ 250 100,254 5
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26,iMb $ 250 73,46A
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- q 23 Tot al deduc t ions $ 126,040 $ 5 l i 5,132 D (10.612) 341.132 $ 744AS,3, $ 179.192 $ % 5.2 %
2- Measure of Value (Rate Base) $ 1.096.197 $ (1285.58_5 S EE " n. -
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Page 2 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 1 ($000) Adjustment To Plant In Service To avoid an area of controversy, this adjustment eliminates the cost of the TMI-l ring girder repairs, consistent with ratemaking treat-ment in previous rate orders of this Commission. Line No. Description- Amount (1) 1 TMI-l ring girder S (3,150) O rs14 \98 9
. Page 3 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 2 t$000) Adjustment To Plant Held For Future Use To avoid an area of controversy, plant held for future use has been reduced to include only items planned to be used in ten years or less, Year of Line Planned No. Description Use Amount (1) (2) 1 Land - Weis substation 1985 S 7 2 Right of way - Germantown - Orrtanna 115 KV Line 1986 283 3 Right of way - Lynns substation to 230 KV number 1001 line 1983 190 4 Right of way - Germantown - Fairview 115 KV Line 1984 504 5 Total plant held for future use with projected dates of use within 10 years S 984 6 Average plant held for future use in 1980 12,577 7 Normalizing adjustment S(11,593)
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Page 4 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 3 O ($000) Adjustment to Depreciation Reserve This adjustment reflects the exclusion of the depreciation reserve applicable to the previously mentioned TMI-l ring girder, and adjusts the budgeted reserve to a calculated basis for rate-making purposes. Line No. Description Amount (1) (2) 1 Eliminate TMI-l ring girder S (517) Adjustment of budgeted reserve: 2 Calculated reserve S 248,463 3 Reserve per budget 259,891 4 Adjustment (11,428) 5 Normalizing adjustment S(l1,945)
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Page 5 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 4 ($000) Adjustment to Coal Inventories To adjust coal inventories to desired levels. Average Cost of Coal De s i red Inventory Cost of Coal Line Inventory Year 1980 In Inventory No. ~ S' at ion Level (Tons) (S/ Ton) (Col. I x Col. 2) (1) (2) (3) 1 Conemrugh 93,000 S 35.37 $ 3,289 2 Titus 90,000 36.51 3,286 3 Portland 145,000 36.42 5,281 4 Co s t of coal inventory as adjusted S 11,856 5 Cost of coal inventory per budget 12,679 6 Normalizing adjustment S (82]) 1474 20I
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Page 6 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 5 (S000) Adjustment to Oil Inventories To adjust oil inventories to reflect desired levels. Line No. Description Amount 1 Adjusted average oil inventories S 2,906 2 Average oil inventories as budgeted 2,548 3 Normalizing adjustment S 358 O
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. Page 7 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 6 ($000) Adjustment to Deferred Energy Costs To adjust deferred energy costs to the average level that would result from the level of revenues requested and energy costs assumed in Met-Ed's petition for modification of its levelized energy cost adjustment charge. Line No. Desc ript ion Amount 1 Average deferred energy costs based on Fet-Ed's petition S 81,092 2 Avurage deferred energy costs per budget _101,818 3 Normalizing adjustment S(20,726) 1474 203
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Page 8 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 7 Adjustment to Cash Working Capital To avoid an area of controversy, this adjustment reflects a cash working capital claim of only $2,469,000
- hat was allowed by the Commission's Order at RID 626.
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. . Page 9 of 9 METROPOLITAN EDISON COMPANY Normalization Adjustment No. 8 ($000) Adjustment to Accumulated Deferred Income Taxes This adjustment (a) eliminates deferred income taxes associated with capitalized taxes and post-1969 non-expansion property, since these deferrals are associated only with FERC jurisdictional cus-tomers, (b) adjusts deferred taxes associated with deferred energy costs (see normalization adjustment No. 6) reflect the clause revenue level proposed under Met-Ed's petition for modification of the levelized energy cost adjustment charge and (c) adjusts deferred taxes to reflect the maximum rate base deduction allownt under Section 1.167(1) - 1 (h)(6) of the Internal Revenue Code in con-nection with the use of liberalized depreciation. Line No. Description Amount (1) (2) Eliminate deferred taxes associated with: 1 Capitalized taxes S (70) 2 Post-1969 non-expansion property (753) 3 Deferred taxes on energy at the clause revenue level resulting from the requested modification of the levelized energy cost adjustment charge S38,000 4 Deferred taxes on energy per budget 47,524 5 Adjustment for deferred energy (9,524) 6 Maximum allowable rate base deduction S74,329 7 Average deferred taxes associated with liberalized depreciation 74,890 8 Adjustment for maximum rate base deduction (561) 9 Normalizing adjustment $(10,908) 1474 205
t Met-Ed/Penelec S ta te ment C Witness : F. A. Donofrio Q. Would you please state your name and address? A. F. Allen Donof rio , 2123 Woodcrest Drive , Johnstown, Pennsylvania 15905 Q. By whom are you employed and in what capacity? A. I am Comptroller for Pennsylvania Electric Company, to which I shall f rom time to time refer to as the " Company" or as "Penelec ." Q. What is your educational and professional background? A. I was graduated f rom Fairleigh Dickinson University with a Bachelor of Science Degree in Accounting. I have been employed by the General Public Utilities Corporation since 1964, beginning my career with Penelec's sister company at Jersey Central Power and Light Com pany . I have held various management positions throughout the GPU System until being elected Comptroller of Penelec on August 2, 1976. I am also a member of the Accounting Division Executive Committee of Edison Electric Institute. This is more fully described in the attached Appendix A. Q. What are your duties and responsibilities with the Company? A. As Comptroller, I am directly responsible for all accounting books ano records of the Company and for the accounting controls and procedures. Q. Does the Company adhere to a system of accounts prescribed by the Pennsylvania Public Utility Conmission ("PU C") ? A. Yes. The Company's accounting records are maintained in acccrdance with the Pennsylvania Public Utility Regulations at 52 Pa . Code , S ec . 57.41 et . seq. and in conformity with the Uniform System of Accounts prescribed by both the Federal Energy Regulatory Commission (" FERC") and the PUC. 1474 206
Q. A re the Company's accounts audited ? O A. Yes. They are audited at least annually by an independent certified public accounting firm; and, in addition, the FERC , f ormerl y F PC, conducted compliance udits in 1966, 1967, 1971 and in 1978. Also , in 1972, this Commission reviewed our plant accounts and procedures . Q. Has an original cost determination been made of the Company's utility plant? A. Yes. An original cost determination was made as of December 31, 1943 by Order of this Commission dated January 15, 1945 at Docket Nos. EOC 32, MGPC 17, EOC 7, EOC 13, EOC 14, EOC 22 and EOC 44. Original cost deter-minations were also made for the following major companies which were later merged into Penelec : Pennsylvania Edison Company at Docket Nos. EOC 31 and MCOC 16 by Order dated November 1, 1946 approving balances at July 2, 1946; 9 Northern Pennsylvania Power Company at Docket No. EOC 29 by Order dated January 2, 1946 approving balances at December 31, 1944; llome Electric Company at Doc ke t No. EOC 21 by Order dated August 20, 1945 approving balances at January 1, 1938. Q. I show you an exhibit which has been marked for identification as Met-Ed/Penelec Exhibit C-1 and ask you has this been prepared by you or under your supe rv ision ? A. Yes, Exhibit C-1 has basically been prepared under my supervision. There are , however , other witnesses who have furnished to me various data used in preparing Exhibit C-1 and they will support that data with their testimony. Q. Would you please identify those witnesses who will support such data and the general areas of their testimony? 1A7A 207
. A. Yes, W. D. Garland will testif y to depreciation accrual rates and Mr. F. D. Itafer and Mr. J. G. Graham will jointly of fer testimony with respect to def erred energy. Q. Please desc ribe what is contained in Exhibit C-1. A. Exhibit C-1 is Penelec's proj ected budgeted income statement for the year ending December 31, 1980. The preliminary 1980 budgeted data which is the starting point of this exhibit was prepared in July of 1979 and reflects the austere , expense-curtailed financial planning of the immediate post-TMI accident situation. Penelec's 1980 budgeting process has been con-tinuing and the official 1980 budget is expected to be approved by the Board of Directors in late December 197) or early January 1980. The incone statement is a key document in the quantification o f a ut ility's base revenue requirement f or a g iven pe riod . Q. Would you please describe Page 1 of 15 of Exhibit C-1. A. Column 1 reflects the Company's 1980 net income, as taken from its prelim-inary 'audget. Column 2 shows a minimum number of adj ustments to normalize revenues and expenses with the identif ying adj ustment nunbers appearing adj ac ent to the respected items in Column 2. The normalizing adjtstments in this presentation have been held to a minimum in order (a) to save time in preparation of this presentation for the present hurried proceedings and (b) to avoid areas of controversy (i.e., to f orege additional normaliza-tion adj ustments which Penelec considers to be proper and appropriate for rate making purposes but which the staff and others have opposed in the past). Column 3 shows the situation af ter giving ef fect to such normalizing adj ust ments . Columns 4 and 6 show the budgeted expenses 1A74 208
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and related tax adj ustments which would be necessary if one were to exclude O Tt11-2 and TMI-1 expenses respectively. T he situation illustrating the exclusion of TMI-2 expenses (to which Penelec does not agree) is reflected in Column 5 and the situation illustrating the possible exclusion of both Tnt-1 and 2 expenses (with which Penelec likewise does not agree) is re-flected in Column 7. Columns 8 and 9 are included in this schedule to provide a mechanism for adj usting base revenues to reflect the required rates of return under the applicable circumstances. Q. Please explain Normalization Adj ustment No. 1 of Exhibit C-1. A. This adj ustment reflects currently projected level of sales as well as proposed settlement level of resale rates. Q. What is Normalization Adj ustment No. 2? A. This adj ustment eliminates the tax surcharge revenues including the tax portion of energy clause revenues to reduce revenues to the base rate level (Exhibit C-1, Page 3 of 15). Q. What is Normalization Adj ustment No. 3? A. This adj ustment eliminaces energy clause revenues excluding the tax portion to reduce revesues to the base rate level . (Exhibit C-1, Page 5 of 15) Q. Please explain Normalization Adj ustment No. 4. A. This adj ustment was included to normalize forfeited c.iscounts to reflect recent customer payment patterns. (Exhib it C-1, Page 5 of 15.) Q. What is Normalization Adj ustment No. 5? \ A. This adj ustment reflects a reduction of 23 Mw wheeled to the Allegheny Rural Electric Cooperative , Inc . f rom the Power Authority of the State of New
York. This power has been reallocated to the Association of Municipal Power Compa nies-Ohio , Inc. Q. What is Normalization Adj ustnent No. 6? A. In this adj ustment, energy related costs are normalized to the levels recoverable through base rates af ter giving ef f ect to the normalized Mwh sales . (Exhibit C-1, Page 7 of 15.) Q. What is Normalization Adj ustment No. 77 A. This is to reflect the amortization of the "old clause" balance consistent with currently projected Pa. retail sales. Q. Please explain Narmalization Adj ustment No. 8. A. This adj ustment ic to reflect a calculated depreciation accrual . In addition, adj ustments were made to eliminate depreciation accruals associated with the TMI-l ring girder repair c ;ts (to avoid area of controversy) the Front Street Station allecation to steam heating and the allocation of generci plant to other utility services. (Exhibit C-1, Page 9 of 15.) Q. What is Normalization Adj ustment No. 97 A. To avoid an area of controversy, this adj ustment eliminates the amortization of book depreciation reserve deficiency. (Exhib it C-1, Page 10 of 15.) Q. Please explain Normalization Adj ustment No. 10. A. This adj ustment to Taxes Other Than Inc'me Taxes reflects the elimination from the budget of the Pa. Public Utility Realty Tax and 40% of the capital stock tax which is recovered through the Tax Adj ustment Surcharge. T he Pennsylvania and New York State Cross Receipts Taxes have been adj usted f or normalized sales and to a level recoverable through base rates. (Exhibit C-1, Page 11 of 15.) 3474 210
- y. W ha t is Normalization Adjtstment No. 11?
O A. This adjimtment and corresponding calculations, which are showri on Page 11 of 15 of Ex hib i t C-1, reflect Federal and State Income Taxes after y ving effect to the aforementioned normalizat ion adj ustments. r, Please desc ribe Normalization Adj tstment No. 12. A. Page 13 of 15 of Exhibit C-1 shows a computation of the Federal and State Income Taxes reflected in Column 4 of the Income S ta t e me n t presentation. Q. Please desc ribe Adj ust ment No. 13. A. This is tne computat ion of the Federal and State Income Taxes reflected in Col umn 6 of the Income Sta tement presentation. (Exhibit C-1, Page 14 of 15.) Q. What does the last adj tst ment , No. 14, on Page 15 of Exhibit C-1 represent? A. This adjtstment to the Provision for Deferred Taxes was made to remove the deferred taxes associated with the PURTA adj us 6 ment s . In addition, the deterred taxes associated with deferred energy were adj usted concurrent with the adjtstment to deferred energy. Q. Mr. Donofrio, are you f amiliar with Penelec 's budgeted level of Administration and General-operation and maintenance ex penses as utilized in Exhibit C-l? A. Yes I am. Q. Wha t opin io n , if any, do you have as to the budgeted level of such expenses? A. In my opinion, such level of expense is a conservative statement of what Penelec would be expec ted to inc ur during 1980.
}k]k Q. Mr. Donofrio 1 show you an exhibit which has been marked for identification as Meted /Penelec Exhib i t C-2 and ask you what parts thereof have been pre- 9 pared by you or under your supervision.
. A. T ha t exhibit has basically been prepared under my supervision. There are however other witnesses who have furnished to me various data used in pre-paring Exhibit C-2 and they will support that data with their testimony. Q. Please identify the witnesses. A. M r. W. D. Garland will tee'.ify as to the adj ustments necessary to reflect the calculated depreciation reserves, and Mr. F. D. Hafer and Mr. J. G. Graham will j ointly sponsor testimony relative to deferred energy balances. Mr . R . W. Conrad will offer testimony with respect to the desired coal and oil inventory level . Q. Please describe what is contained in Met-Ed/Penelec Exhibi t C-27 A. Exhibit C-2 contains Penelec's budgeted 13 period average original cost measures of value for the year ending December 31, 1980, as was the case with Penelec's income statement (Exhibit C-1), the data used as a start-ing point for Exhibit C-2 was derived f rom Penelec's preliminary 1980 budg et . Page 1 of Exhibit C-2 summarizes (in Column 1) Penelec's 13 period average measures of value per budget for the year 1980 with a minimum numr ber of normalization adj ustments (Column 2) to adj ust several items for rate making consideration. Further ad.t ust nents (in Columns 4 and 6) reflect the elimination from measures of value of Penelec's 25% interest in TMI-2 (with which Penelec doe s not agree) and the possible elimination of Pene-1ec's 25% interest in TMI-1 (with which Penelee likewise does not agree) . Column 5 shows the ef fect of the exclusion of TMI-2 and Column 7 represents 1980 average conaitions excluding TMI-1 and 2. As was the case with Penelec's income statement, normalizing adj ustmenta have been held to a minimum to save time and to avoid areas of co stroversy.
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Q. Please desc ribe Normalization Adj ustment No. 1. O A. This adj usts the budgeted electric plant ir. service to reflect (a) the removal of the TMI-l ring girder repair costs (in order to avoid an area of controvers t), (b) the allocation of Front Street Generating Station to steam heating and (c) the general plant allocated to other utility services. Q. Expla f n Normalization Adj ustment ho. 2. A. This adj ustment to Electric Plant Held for Future Use (1) removes the cost of all items with a projected in-service date beyond ten years (to avoid another area of controversy), (2) removes the cost of a portion of jointly-owned project items to be transferred to af filiated utilities and (3) re-flects the acquisition of the Robindale Site for the Seward No. 7 Generating Station. O Q. What is Normalization Adj ustment No. 3? A. This is to adj ust the average depreciation reserve to the average calculated reserve level and to remove the average calculated reserve associated with (1) the TMI-l ring girder (to avoid an area of controversy), (2) the alloca-tion of a portion of the Front Street Generating Station to steam heating and (3) the general plant allocation to other utility services. Q. What are Normalization Adj ustment Nos. 4 and 5? A. Adj us t ment No. 4 is to adj ust coal inventories to a desired level. Adj ust-ment No. 5 reflects the oil inventories at a desired level. Mr. R. W. Conrad will testify as to the levels o f the coal and oil inventories. Q. Please desc ribe Normalization Adj ustment No. 6 for Deferred Energy Costs . A. Adj ust ment No. 6 is to adj ust def erred energy costs to reflect the currently projected level of sales and to normalize the Levelized Energy Adj ustment Clause rate to 6.5 mills per Kwh as allowed at I-79040308.
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. Q. Wh.i t is Normalization Adj ustment No. 77 A. In order to avoid an area of controversy this adj ustment reflects a Cash Working Capital required of only the amount allowed at RID 599. Q. What is Normalization Adj ustment s'o . 8 7 A. Likewise to eliminate an area of controversy, this adj ustment , eliminates the average balance of unamortized rate case and flood expenses, in accor-dance with the Commission's Order of RID 599. Q. Please describe Normalization Adj ustment No. 9. A. This adj ustm ant eliminates accumulated deferred income taxes associated with Johnstown flood expenses, and the PURTA adj ustments; reflects the de-ferred incone taxes associated with the revised deferred energy balance; and reflects the maximum rate base reduction allowable with respect to de-ferred income taxes associated with liberalized depreciation, according to IRS regulations under Section 1.lb7(1)-(l)(h)(6) of the Internal Revenue Code. (Exhibit C-2, Page 10 of 10.) Q. Does this complete your direct tes t imony ? A. Yes, it does. 3A74 214
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APPENDIX A PROFESSION AL QUALIFICATIONS OF F. ALLEN DON 0FRIO B. S. Degree - Fairleigh Dickinson University - Major in Accounting. Graduate courses in Business Administration leading to Masters Degree. Present member of the Accounting Division Executive Committee of Edison Electric Institute. Former member of the Taxation Committee and the Budgeting and Financial Forecasting Committee. Graduate of the University of Michigan Public Utilities Executive Program. August, 1976 to date: Comptroller of Pennsylvania Electric Company, Waverly Electric Light and Power Company, and the Nineveh Water Company, Johnstown, Pennsy lvania . February, 1976 to August, 1976: Principal Financial Analyst of the Management Systems Section of General Public Utilities Corporation located in Reading, Pennsylvania; Analysis and improvement of the Corporation's financial budgeting process, as well as, other financial reporting and analysis duties . July, 1973 to February, 1976: Manager, S;ecial Accounting of Jersey Central Power & Light Company, Morristown, New Jersey - Responsible for the Coordination and review of all company financings, regulatory filings, rate cases, and federal and other taxes. January, 1972 to July, 1973: Staf f Accountant of Jersey Central Power & Light Company, Morristown, New Jersey - Preparation of rate case schedules and testimonies, and all required filings with SEC, etc., required for financings. June, 1969 to January, 1972: Supervisor, General Accounting of Jersey Central Power & Light Company, Morristown, New Jerse 7 - Responsible for supervision of all General Accounting functions provided by the General Books, the Accounts Payable , and the Statistical Typing Sections . August, 1964 to June, 1969: Various positions within Accounting Department of Jersey Central Power & Light Company, Morristown, New Jersey leading up to being made Senior Accountant responsible for the General Books Sec tion in June , 1967. 1474 215 O
FEENSTLsentA ELECTRIC COMPANY S tat e ment of Operet tog lacose and Net l oc ome , Year 1980
'
Normalis ed and Adj ust ed to Reflect Fosetble Esclusion of T41-1 and 2 Coe t s, and to Reflect R eve s ue M e cis s a t Y to Achieve Required Return ( $000 ) Cc1. 5 Wo rmalised Normalised Adj ust ment s or Col . 7 Lees: Escluding L,ss: E sc l udi ng to Achieve i nc l udi ng time As Nor mal l a t ng Adj. Mor aal ised T41-2 Adj. TMI-2 Ty g .g 3 aj . 74 g 1 & Tq t -2 R eq ui r ed R eq ui r ed p_ o_._ Desc r ipt ion buon1*( .Aihe t een t e No. (cci i + Col 23 Costs up,2 (Col 3-Col 4) (osts 2_S (Cel 5-Col 63 R el y.rn _Relvr_L (is (2) (3) (4) (5) (6) (7) (8) (9) Operating revenues : 1 Base rates $436 092 $ (2 529 ) (1) 5433 563 $ -
$433 563 $ - $433 563 $ * $
- 2 Tas su rc har ge 28 921 (28 921) (2) - - -
. . . .
3 Energy clause 83 091 [91_02}) ( 3) - - - . . . . 4 S ub-tot al 548 018 (114 455) 433 563 - 433 563 - 433 563 *
- 5 Forfetted disc oun t s 54 9 262 (4) 811 - 811 . 31g . ggg 6 Other operet tes revenue 10 311 (722) (5) 9 540 -
9 590 . 9 390 . 9 3eg
' 443 964 Total operating re venue 5%8 879 (114 91)) 4*)9** - -
443 964
- e Opera ting ex penses :
8 F umi 172 834 9 Interchange 6 purchased po we r 53 537 10 Def erred energy costs 119_16J ) 11 Tot al energy costs 234 408 ( E4 8.9 ) (6) 117 559 - 117 559 . 117 559 . gg7 339 12 Beeerve capacit y (4 507) - (4 507) (2 196) (d 311) (2 730) 419 . e 13 Fuel 4 ash hand 1 Lag, coal clesotag 9 542 - 9 542 - 9 542 - 9 542 - 9 542 14 Core management - - - - -
- - . .
15 Fayroll - oper . 4 maint . 49 315 - 49 315 - 49 315 - 49 315 . 49 3gs 16 Othe r oper . 4 estat . 73 197 - 73 197 1 310 71 887 3 379 68 508 - a s1 Amortisation of deferred ,'oerg y coste (old clause) 5 777 (11[) ( 7) 5 599 - 5 549 - 5 599 - 5 999 18 Tot al oper . 4 maint . e sp. 339 682 (88 977) 250 705 (886) 251 591 649 250 942 - e 19 Depreciation - accrual 45 F68 ( 263 ) (8) 45 605 5 66. 39 941 3 174 36 767 -
- 20 - net esivage 1 238 - 1 238 -
1 238 - 1 238 - 1 238 21 Amorti r.ation of ba9h reserve def ic ienc y 333 (333) (9) - - - . . . . 22 Deco mm iss ioning lll - 111 65 46 46 - - e 23 Tames other than incosa taaes _4t_010 (23 118) (10) 17 910 - 17 910 - _17_110 *
- 24 Total operat ing empenses 426 260 (112 691) 315 569 4 843 310 ??6 3 F69 Jp6 $5i *
- 25 O pe r a t i ng income bef ore income t e ses 130 61} (7 224) 128 395 14_84}) 1}) 73R 11_8611 137 107 *
- I nc ome taxes:
26 C ur rent can - f ede ral 15 359 6 414 (11) 21 773 (8 704) (12) 30 477 (4 858) (13) 35 335 e e 27 - state 2 746 126 (11) 2 872 (1 419) (12) 4 291 (192) (13) 5 083 *
- 2S Def erred - f edersi 18 196 (7 088) (14) 11 108 3 239 7 869 1 646 6 223 - e 29 - state 1 196 (1 DOS) (14) (61 2 ) -
(612) - (612) - ( 61 2) 30 I nvest ment tan credit (6 312) - (6 312) - (6 312) - (6 312) - (6 312) 31 Amorti zation of invest ment can c r edit f t 481) - (LjB]) (273) __(LJJg) __J126) (1 108) - e 32 Total ineone tases 29 698 (2 356) 27 34_1 (7 157) 34 499 (4 110) 36 e09 *
- 33 set ut ility operating inco me 1103 921 $____1_}l - $ _101. _011_ $2_111 $ 9R 739 5 241 $ 94 494 $ *
- s 34 TMI eu penses including
.p2m de p rec ia t i on 5 -
$ 2 314 $ 2 555 $ e
' '"i 35 other inc o me and ded ue t tons 3 697 3 697 3 697 3 69? 2IE 36 Less: Interest em pe nse 32 %)1 52 901 5 + 901 52 901 5SI
.$23n 37 F re f e r red dividend s 14 487 la 487
_L4 4 9 7 14 se7 -** E 38 Net inc o me available f or commen 1_3I_2J0 $ 3? 362 $ 3 ' 16 2
- g h 2
N 39 Rate of return on rate base ]. 2g! 9.44% _1_q . 3p, _e_ 07;
>n ===* 40 R at e of return on common equit y devoted ta rate base ggI _Il- "I _ 14.42% __e 41 Rate of return on total + cm m E%
quit y . _ . _8_ " _ _ " _ __9*"__
- - - - _p . 9 ;* ___. _
- Ei n, 42 In re t t uv e r age r et ta .-? __ '.*3 2 ;% e
*To be e otied.
Page 2 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 1 ($000 ) Adiustment To Base Rates To adj ust base revenues to reflect currently projected level of sales as well as proposed settlement level of resale rates. 1,i n e Base No. Rates 1 Base rates per budget for the 12 months ended 12/31/80 $436 092 Cwh Revenues 2 Pa. Retail (234) $(1 497) 3 N. Y. Retail 1 (12) 4 Resale 41 (1 020) 5 Total (192) $(2 529) 6 Normalization adj ustment (2 529) 7 Base rates per 1udget for the 12 months ended 12/31/80, as adj us ted $433 563 1474 217 9
. . Page 3 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 2 (S000) Adjustment of Tax SurcharRe Revenues To eliminate Tax Surcharge Revenues (including tax portion of energy clause revenues). Line Tax Surcharge No. Revenues 1 Tax Surcharge revenues per budget for the 12 months S 28 921 ended 12/31/80 2 Normalization adj ustment (28 921) 3 Tax Surcharge revenues per budget for the 12 months ended 12/31/80, as adj usted S -
)k].h , . .
, .
Page 4 of 15 PENNSYINANIA ELECTRIC COMPANY Normalization Adiustment No. 3 ( $000 ) Adjus t men t o f Enc ry,y Clatise Revenues To eliminate Energy Clause Revenues (excluding tax portion) . l.Ine Energy Clause No. Revenues
! Energy clause revenues per budget for the 12 months S 83 005 ended 12/31 /80 2 Normalization adj ustment ,83
( 00_5) 3 Energy clause revenues per budget for the 12 months ended 12/31/80, as adj usted $_ _ _--- - - - O
\ 47 4 L Yi e
. . Page 5 of 15 PENNSYLVANIA ELECTRIC COMPANY Nort.alization Adjustment No. 4 ($C00) Adjustment to Forfeited Discounts To adj ust forfeited discounts to reflect most recent customer payment patterns. Line Forfeited No. Discounts 1 Forfeited Discounts per budget for the 12 months ended 12/31/80 $549 2 Normalization ^ O ttstment 262 3 Forfeited Discout..s per budget for the 12 months ended 12/31/80 as adj usted $811 1474 220
. .
Page 6 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. ; ($000) A<Qustment to_0ther Operating Revenues Tri reflect reduction of 23 nr wheeled to Allegheny Rural Electric Co-cp, Inc., f rom Power Authorit y of the State of New York (PASNY). This is due to a re n llrie ntion of PASNY power to the Association of Municipal Power Companies-Ohio , I ne . Line Other Operating No. Revenues 1 Other Operacing Revenue per budget for the 12 months ended 12/31/80 $10,312 2 Normalization Adj ustment (722) 3 Other Operating Revenue per budget for the 17 months ended 12/31/80 as adj usted S 9 590 0 1474 221 0
. . Page 7 of 15 PENNS YLV ANIA ELECTRIC COMPANY Normalization Adiustment No. 6 ($000 ) Ad_just.ent to Total Energy Costs To adj ust energy costs to the level recoverable by base rates. Line Total Energy No. Costs 1 Total energy costs per budget for the 12 months ended 12/31/80 $206 408 2 Normalized MWH sales-PaPUC 10 584 652 3 Rate ($/MWH) recoverable through base rates $__ 10.000 4 Amount recoverable $105 847 5 Normalized MWH sales - N.Y. PSC 77 669 6 Rate ($/MWH) recoverable through base rates S 2.270 7 Amount rec ove rab le 176 8 Normalized MWH sales - FERC 954 505 9 Rate ($/MWH) recoverable through base rates $ 12.086 10 Amtmt recoverable 11 536 11 Total amount recoverable through base rates 117 559 12 Less Energy - related costs per books 206 408 13 Normalization adj ustment (88 849) 14 Energy costs per budget for the 12 months ended 12/31/80, as adj usted $117 559 1474 222
. .
Page 8 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 7 ($000 ) Adjustment to Amortization of Deferred Energy Costs To reflect amortization of "old cla.ase" balance consistent with currently p ro ject ed Pa . Retail Sales . Amortization of I' I "" Deferred Energy N"* Costa 1 Amortization of def erred energy costs per budget for the 12 months ended 12/31/80 $5 727 2 Normalization Adj ustment (128) 3 Amortization of deferred energy costs per budget for the 12 months ended 12/31/80 as adj usted $5 599 O 1,474 223 O
. Page 9 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 8 ( $000 ) Adjustment to Devreciation Expense To adj ust Depreciation Expense to reflect calculated accruals for rate-making purposes, to eliminate the depreciation acurual relating to the TMI #1 ring girdar repair costs (to avoid an area of controversy), and to eliminate depreciation accruals with respect to plant allocated to non-electric utility services . Line No. Depreciation 1 Depreciation per books f or the 12 months ended 12/31/80 $45 868 2 A. Adj us t cent to reflect calculated dep';eciation accruals $ (16 ) 3 B. Adj ust ment to eliminate depreciation accrual related to TMI #1 ring girder (48) 4 C. Adj us t ment to eliminate a portion of the depreciation accrual related to the boiler and associated equipment located at the F ront Street Generating Station allocated to Steam Heating Plant in Service (192) 5 D. Adj ust ment to eliminate depreciation accrual on general plant allocated to Steam Heating and Nineveh Water Company (7) 6 Total normalization adj ustment (263) 7 Depreciation per budget, 12 months ended 12/31/80 as adj usted $45 605 1,474 224
. .
Page 10 of 15 PENilSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 9 ($000) Adjustment to Amortization of Book Deprecie. tion Reserve Deficiency To eliminate Amortization of Book Depreciation Reserve Deficiency (to avoid an area of controversy). Amortization of Depreciation Line Reserve No. Deficiency 1 Amortization of depreciation reserve deficiency per budget for the 12 months ended 12/31/80 $ 333 2 Normalization adj ustment (333) 3 Amortization of book depreciation reserve deficiency for the 12 months ended 12/31/80, as acj usted S
-
O 10 g nb - O
- ,
Page 11 of 15 1 f24NSYLVANIA ElICTRIC COMPANY No.Talizaticn * 'ustment No. 10
<o03)
Adjustment .o Taxes Otha. ,r- Taxes
' o adj ust Tex a s a s me Taxes to the level recoverable by base ates.
Taxes Other Line Than Incore _No, Taxes 1 Taxes Other Than Itarse ' axes per budget for the 12 Months Ended 12/31/80 $ 41 028 2 A. Public Utili;y Realty Tax To eliminate Public Utility Realty Tax (electric portio, only) which is recovered through the Tax Adj ustment S urc ha r ge S (5 688) B. Pennsylvania Capital Stock Tax To eliminate 40% of the Capital Stock Tax (electric portion only) whic h is recovered through the Tax Adj ustment Surc ha rge 3 Pennsylvania Capital Stock Tax f or the 12 Months Ended 12/31/80 $ 6 287 4 Portion recoverable t! rough Tax Adj ust eent Surc har ge x .4 5 Normalization Adj ustment (2 515) C. New York Cross Receipts To adjtst New York Gross Receipts Tax for normalized sales 6 Normalized New York Sales Revenues S 1 757 7 New York Forfeited Discounts 11 8 Normalized New York Tax Base 1 768 9 Tax Rate x .0375 10 66 11 Less Cross Receipts Tax budgeted 12 Months Ended 12/31/80 77 12 Normalization Adj ustnent (11) D. Pennsylvania Gross Receipts Tax To adj ust Pennsylvania Gross Receipt s Tax Expense f or normalized sales to a level recoverable through basc rates 13 Pennsylvania Normalized Sales Revenues $401 250 14 Penns y lva nia Forfeited Discounts 800 15 Pennsylvania Gross Receipt s Tax Base 402 050 16 Tax Recoverable through base rates x .02 17 Normalized Pennsylvania Gross Receipts Tax 8 041 18 Less Pennsylvania Gross Receipt s Tax budgeted for the 12 Months End ed 12/31/80 22 996 E. Pennsylvania Gross Receip's Tax - Resale Custs. (14 955) To adj ust Pa. Gross Receipts Tax f or normalized resale sales 19 Normalized Sales Revenues $28 037 20 Tax Rate x .045 21 Associated Gross Receipts Tax 1 262 22 Less Gross Receipts Tax Per Budget 1 211 51 23 Total Normalization Adj ustment $(23 118) 24 Taxes Other Than Incore Taxes per budget 12 Months Ended 12/31/80 as Adj usted S 17 910
)
.
Page 12 of 15 PD4NSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 11 ( $000 ) Computation of Federal & State Income Taxes - Normalized LCol. 2 of Income Statement) Taxes Line Before No. Calculated Taxes Adi. Adiustment (1) (2) (3) (4)
! Total operating re venue $ 443,964 2 Less: Total O&M expense $ 250,705 3 Depreciation expense 45,605 4 Ave ra ge net salvage 1,238 5 Dec o mmis s io ning 111 6 Taxes other than income t a xes 17.910 7 Total deductions 315 569 8 Net operating income before income taxes $ 128,395 9 L es s : Interest charges (A) 52.582 10 N et income bef ore incore ta xe s $ 75.813 Adj ust ments to taxable inco ce :
Add: 11 AFUDC on nuclear f uel $ - 12 Average net salvage 1.238 13 Amortization of deferred energy costs 5,599 Ded uc t : 14 Adj us t ment of booked depreciation to tax basis (B) 38.548 15 Payroll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Pref erred dividead deduction 784 18 Other 250 19 Net adj ust ment $ (34.6'l) 20 Income subject to state income tax $ 41,162 21 State income ta x @ 6.9767 % 2.872 $ 2.746 $ 126 22 Income subject to federal income tax $ 38.290 23 Federal income tax (46% less $19) $ 17,595 28 Less JDTC (6.312) 25 Total federal tax before consolidated savings $ 23.907 26 Consolidated savings (C) 2.134* 27 Total federal tax $ 21.773 $ 15.359 $ 6.414 (A) Comput ation of interest charges: Total measure of value $1,217,167 Interest c om ponen t of rate of retue* 4.32% Interest ex pe n se $ 52.582 (B) Adj . of booked depreciation to tax basis : Tax depreciation S 84,153 Book depreciation 45.605 Depreciation adj ustm at $ 38.548 (C) Comput ation of consolidated savings : GPU interest allocated to Penelec $ 4,267 Federal tax rate 46% Consolidated savings $ 1.963
- Includes amortization of FIT ref unds.
a , Page 13 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adiustment No. 12 ( $000 ) Computation of Federal & State income Taxes - TMI-2 Eliminated (Col. 4 of Income Statement) Taxes Line Before No. Calculated Taxes Adi. Adiustment (1) (2) ( 3) (4) 1 Total operating revenue $ 443,964 2 Less: Total 0&M expense $ 251,591 3 Depreciation ex pense 39,941 4 Average net salvage 1,238 5 Dec o mmiss io ning 46 6 Taxes other than income taxes 17.910 7 Total deductions 310.726 8 Net operating income before income taxes $ 133,238 9 Less: Interest charges (A) 45.165 10 Net income bef ore income taxes $ 88.073 Adj ust ment s to taxable incone: Add: 11 AFUDC on nuclear f uel $ - 12 Average net salvage 1,238 13 Amortization of deferred energy costs 5,599 Ded uc t : 14 Adj ust ment of booked depreciation to tax basis (B) 30,465 15 Pa; roll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Pref erred dividend deduction 784 18 other 250 19 Net adj ust ment $ (26.568) 20 1- ome subj ect to state income tax $ 61.505 4.291 $ 2.872 $1,419
- 2. State inc o me tax @ 6.9767%
22 Income subject to federal income tax $ 57.214 23 Federal income tax (46% less $19 ) $ 26,297 24 Less JDTC (6.312) 25 Total f ederal tax bef ore consolidated savings $ 32,611 26 Consolidated savings (C) 2.134* 27 Total federal tax $ 30.477 $ 21.773 $ 8.704 (A) Comput ation of inte rest charges: Total measure of value $1,045,475 Interest c om ponen t of rate of return 4 32: Interest ex pen se $ 45.165 (3) Adj . of booked depreciation to tax basis : Tax depreciation $ 70,406 Book depreciation 39.941 Depreciat ion adj ust uwnt } 30.465 (C) Computation of consolidated savings : GPU interest allocated tn Penelec $ 4,267 Federal ta x rate 46% Consolidated savings $ 1.963
} ~ *1ncludes amortization of FIT refunds. g .
e Page la of 15 PENNSYLVANIA ELECTRIC COP PANY Normalization Adjustment No. 13 ( $000 ) Computation of Federal & State Income Taxes-THI-l & 2 Eliminated (Col. 6 of Income Statement) Taxes Line Before No. Calculated Taxes __Adj. Adjustment (1) (2) ( 3) (4) 1 Total operating revenue $ 443,964 2 Less: Total O&M expense $ 250,942 3 Depreciation ex pense 36,767 4 Average net nalvage 1,238 5 Dec o mm iss io ning - 6 Taxes other than income t a xes 17,910 7 Total deductions 306.857 M Net o pe rat ing income before income taxes $ 137,107 9 Less: Interest c ha r ge s (A) 41.311 10 Net inc o me before incone ta xe s S 95,796 Adj ust ment s to taxable inc o ne : Add: 11 AFUDC on nuclear f uel $ - 12 Average net salvage 1,238 13 Amortization of deferred energy costs 5,599 Ded uc t : 14 Adj us t ment of booked depreciation to tax basis (B) 26,836 15 Payroll taxes capitalized 1,030 16 Pension costs capitalized 876 17 Preferred dividend deduction 784 18 Other 250 19 Net ad j us t ment $ (22.939) 20 Income subject to state income ta x $ 72,857 21 State inc o me ta x @ 6.9767% 5.083 1__4.291 $ 792 22 Income subject to federal income tax $ 67.774 23 F ede ral income tax (46% less $19) $ 31,157 24 Less JDTC (6.312) 25 Total f ederal tax bef ore consolidated savings $ 37,469 26 Consolidated savings (C) 2.134* 27 Total federal tax } _ 352 35 L_30._4 7 7 _ __ ___ L 4.R58 (A) Comput ation of interest charges: Total measure of value $ 956,283 Interest com po nen t of rate of return 4.32% Interest expense $ 41.318 (B) Adj ustment of booked depreciation to tax basis : Tax depreciation $ 63,603 Book depreciation 36 t767 Depreciat ion adj ust ment $ 26.836 (C) Computation of consolidated savings: )( CPU inte rest allocated to Penelec Feieral tax rate
$ 4,267 46%
[ '_)
/
Consolidated savings $ 1.963
- Includes amortization of FIT ref inds.
. . Page 15 of 15 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 14 ($000) Adjustment to Provision for Deferred Income Taxes The provision for deferred income taxes was adj usted to remove taxes associated with PURTA adj ustments , and to reflect taxes associated with the revision of def erred energy costs . ' Provision for Deferred Li.te Income Taxes No. Federal State 1 Provision for Deferred Income Taxes per budget for the 12 months ended 12/31/80 $18 196 $1 196 2 Adj us t ment to remove the deferred taxes associated with PURTA adj ustments 1 079 275 3 Adj ustment to reflect taxes associated with revised deferred energy (8 167) (7 083) 4 Normalization Adj ustment (7 088) (1 808) 5 Provision for Deferred Income Taxes per budget for the 12 months ended 12/31/80 as adj usted $11 108 $ (612)
'hb O \414 -
. .
PENNSYLVANIA ELFCTRIC COMPANY Average Measure of Value. Year 1980, a t Original Cost Marma11 red and Adiusted to Reflect Possible Exclusion of TM1 Units 1 & 2 (5000 ) 13 Month Measure of Measure of Average Normalized Less: Value Less: Value Measure Measure of TM1-2 Excluding TM1-1 Excluding Line of Value Normalizing Adj. Value Measure of TMI-2 Measure of TM1-1 & TM1-2 _N o2 Description Per Budget A_dlustments No. (Col 1 + Col 2) Value (Col 3-Col 4) value (Col 5-Col 6) (1) (2) (3) (4) (5) (6) (7) Electric Plant 1 Plant in se rv ic e $1 581 761 $ (6107) (1) $1 575 654 $180 390 $1 395 264 $102 327 $1 292 937 2 Plant held for future use 8 904 (2 203) (2) 6 701 - 6 701 6 701 3 Nuclear fuel in reactor 11 179 - 11 179 - 11 179 11 179 - 4 Nuclear f uel-spare assemblies 6 291 - 6 291 - 6 291 6 291 - 5 Total electric plant 1 608 135 (8 310) 1 599 825 180 390 1 419 435 119 797 1 299 638 Depreciation & Amortization Reserve: 6 Plant in se rvic e 378 893 (4 001) (3) 374 892 1 420 373 472 17 602 355 870 7 Nuclear fuel in reactor 3 687 - 3 687 - 3 687 3 687 - 8 Total depreciation & amort ization reserve 382 580 (4 001) 378 579 1 420 377 159 21 289 355 870 9 Net Electric Plant 1 225 555 (4 309) 1 221 246 178 970 1 042 276 98 508 943 768 Add itions : 10 Coal inventories 30 998 (7 848) (4) 23 150 - 23 150 - 23 150 11 011 inventories 1 557 (67) (5) 1 490 - 1 490 - 1 490 12 Other M & S inventories 14 546 - 14 546 - 14 546 4 644 9 902 13 Unauer ti zed coal mine development costs 7 662 - 7 66? - 7 662 - 7 662 14 Def erred energy costs 25 861 3 663 (6) 29 Si> - 29 524 - 29 524 15 Cash working capital - 5 448 (7) 54.8 327 5 121 (809) 5 930 16 Unamortized rate case and f lood expenses ___ 1 600 (1 600_j_ (8) - - - - - 17 Total additions 82 224 (404) 81 820 327 81 493 3 835 77 658 Ded uc t ion s : 18 Customer deposits 573 - 573 - 5 73 - 573 19 Customer advances for constr. 1 473 - 1 473 - 1 473 - 1 473 20 Unamortized gain on reaquired debt i 190 - 1 190 - 1 190 - 1 190 21 Acc . def erred in ve s t - ment tax credit (3%) 16 - 16 - 16 16 98 C 2 22 Acc. deferred income t a xe s 78 770 425 (9) 79 195 7 605 71 590 58 439 ({y 23 Inc ome tax ref unds 1 821 - 1 821 - 1 821 1 821 *m 24 Operating reserves 1 631 - I 631 - 1 631 - 1 631 ~ED A 25 .St al d ed uc t ion s 85 474 425 85 899 7 605 78 294 13 151 65 143 E f N E? *-- 26 Measu re of Value (Rate Base ) St 222 305 IJ5 138l S l_j i 7 167 1171 692 11 045 475 1 89 192 .$ 956 283 3
* $
N : ;; LN 5; - o7~
.
- Page 2 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Ad_iustme.it No. 1
($000 ) Ad_iustments to Electric Plant In Service These several adj ustments (a) temove from Plant In Service the cost of the TMI-l ring girder repairs (to avoid an area of controversy), (b) allocate a portion of the cost of Front Street generating station to Steam Heating , and (c) allocate a portion of the cost of General Plant to other utility services . Line Electric Plant No. In Service 1 Average per budget for 1980 $1 581 761 2 TMI-1 ring girder repair costs (1 575) 3 Allocation of cost of Front Street generating station (4 250) 4 General Plant allocated to other utility services ( 282) 5 Normalization adj ustment (6 107) 6 Electric Plant In Service as adj usted $1 575 654 1474 232 9
e . Page 3 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Ad_iustment No. 2 ($000 ) Adjustment to Plant Held for Future Use To adj us t Plant Held for Future Use to incit Je only items with projected in-service dates within 10 years, the Robindale land purchase , and eliminate the portion of jointly-owned projects to be owned by affiliated utilities (Met-Ed and Jersey Central). Line Electric Plant Held No. For Future Use 1 Average per budget for 1980 $8 904 2 Adj ust ment to eliminate items with projected in-service dates beyond ten years (380) 3 Elimination of portions of jointly-owned projects to be owned by affiliated utilities (3 823) 4 Land acquisition, Robindale Site 2 000 5 Normalization Adj ustment (2 203) 6 Electric Plant Held for Future Use as adj usted $6 701 1474 233
. .
Page 4 of 10 PENNSYLVANIA EIECTRIC COMPANY Normalization Adjustment No. 3 ($000 ) Adjustment to Depreciation Reserve To adj ust the average book depreciation reserve to the average reserve calculated for rate-making purposes, and to eliminate the average calculated reser ies associated with (a) the TM1-1 ring girder (to avoid an area of contro-versy), (b) a portion of Front Street Generating Station allocated to steam heating, and (c) a portion of General Plant allocated to other utility services. Line Depreciation No. Reserve 1 Average per budget for 1980 $378 893 Adj us tment to reflect calculated reserves : 2 Average calculated reserve $377 606 3 Average budgeted reserve 378 891 4 Normalization adj ustment $(1 2115) Calculated reserve associated with: 5 TMI #1 ring girder (260) 6 Front Street Generating Station allocated to Steam Heat (2 375) 7 General Plant allocated to other utility services (81) 8 Normalization adj ustment (4 001) 9 Depreciation reserve as adj usted $374 892 1474 234 O
4 Page 5 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 4 ($000) Adjustment to Coal Inventories To adj ust coal inventories to desired levels. Line No. Coal Inventories 1 Average per budget for 1980 $30 998 2 Normalization adj ustment (7 848) 3 Coal inventories as adj usted $_23 150 Computation of Cost of Normalized Coal Inventory: Desired Average 1980 Normalized Level Price Cost of (Tons) Per Ton Inventory Homer City Units #1 and #2 (50% share) 189 897 $33.608 $ 6 382 Homer City Unit #3 (50% share) 149 208 39.530 5 898 Seward 93 773 31.903 2 992 Warren 39 294 26.166 1 026 Front Street 51 883 30.214 1 568 Williamsburg 14 785 23.333 345 S nawville 195 928 25.198 4 937 Totals 734 768 $23 150 L
)h 4
&
Page 6 of 10 PENNSYLVANIA EIECTRIC COMPANY Normalization Adjustment No. 5 (S000 ) Adjustment to Oil Inventories To adj ust oil inventories to desired levels. Line No. Oil Inventories 1 Average per budget for 1980 $1 557 2 Normalization adj ustment (67) 3 011 inventories as adj usted $1 490 0 1474 236 O
e . Page 7 of 10 PENNSYLVANIA ELECTRIC ( OMPANY Normalization Adjustment No. 6 ($000) Adjustment to Deferred Energy To adj ust the average balance of deferred energy costs to reflect the currently projected level of sales and to reflect the Levelized Energy Adj ust-ment Clause rate of 6.5 mills /Kwh (as allowed at I-79040308) instead of 7.6.. mills /Kwh , as budgeted . Line No. Deferred Energy 1 Average per budget for 1980 $25 861 2 Normalization adj ustment 3 663 3 Deferred Energy as adj usted $29 524 1474 237
.
- Page 8 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 7
($000) Adiustment to Cash Working Capital To avoid an area of controversy, this adj ustment reflects only the level of cash working capital allowed in RID 599: Cash Working capital requirement $5 448 O 1474 238
.
9
a . Page 9 of 10 PENNSYLVANIA ELECTRIC COMPANY Normalization Adjustment No. 8 ($000) Adiustment to Eliminate Unamc rtized Rate Case and Flood Expenses To avoid areas of controversy, this adj ustment eliminates the average balance of unamortized rate case and flood expenses, in accord-ance with the Commission's Order in RID 599. Unamortized Rate Line Case and Flood No. Expenses 1 Average per budg:.. for 1980 $ 1 600 2 Normalization adj ustment (1 600) 3 Unamortized rate case and flood expenses as adj usted S - 1474 239
.
- Page 10 of 10 PENNSYLVANIA ELECTRIC COMPANY k Normalization Adjustment No. 9
($000 ) Adjustment to Accumulated Deferred Income Taxey This adj ustment (a) eliminates accumulated deferred income taxes asso-ciated with Johnstown flood expenses , (b) eliminates the deferred income taxes associated with the PURTA adj ustments; (c) reflects the deferred income taxes associated with the revised deferred energy balance; and (d) reflects the maxi-mum rate base reduction allowable with respect to deferred income taxes associ-ated with liberalized depreciation, under Section 1.167 (1 )-1 (h) (6 ) of the Inter-nal Revenue Code. Line Accumulated Deferred No. Income Taxes 1 Average per budget for 1980 $78 770 2 Adj us tment to eliminate accumulated deferred income taxes associated with Johnstown flood expenses $ (519) 3 Adj ustment to eliminate accumulated deferred income taxes associated with PURTA ref unds (374 ) 4 Adj us tment to reflect the deferred income taxes associated with the revised deferred energy balance 1 843 5 Adj us t ment to reflect the maximum rate base reduction allowable with respect to deferred income taxes associated with liberalized depreciation (525) 6 Normalization Adj ustment 425 7 Accumulated deferred income taxes as adj usted $79 195
)h k L
ME/PN Exhibit F-1 Witness: H. M. Dieckamp < METROPOLITAN EDISON COMPANY AND PENNSYLVANIA ELECTRIC COMPANY REVIEW BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION SEPTEMBER 2L 1979 Mat-Eti ACDH ]&ff.l MEMBER COMPANIES OF THE GENERAL PUBLIC UTILITIES SYSTEM. 1474 20I
IABLE OF CONTcNTS PACc UdSCRI PT 1014 KtFERENCE tsACKGROUND lhF0knATIUra:
- GPU SYSTEM flap 1 - MET-ED/PENELEC STATISTICS 2 CUSTOMER ELECTRICITY COSTS:
A. THREE f10NTHS ENDif4G JUNE 30, 1979 AVERAGE RATE COMPARISONS - pef 4NSYLVAi41 A UT ILITIES:
- RESIDENTIAL CLASS 3 - CortMERCI AL CLASS 4 - INDUSTRI AL CLASS 5 - COMPOSITE RESIDENTlaL, COMMERCIAL AND INDUSTRIAL CLASSES O D. hEPTEMBER 1, 1979 IYPICAL OILL cot 1 PARIS 0NS -
PENf4SYLVANIA dTILITIES: tiESIDEfill AL NO ELECTRIC DATER HEATif1G 500 KWH PER MONTH 7
- RcdlDElliI AL WITH ELECTRIC WATER HEATluG 1000 KWH PER MONTH 8 500 KWH PER M0f4T.1 9 -- C0f1MtRCIAL COMMERCIAL 50 lb 500 KW, KW, 12,0,000 KWH PER M0ilTH 10 - INDUSTRIAL 10,000 KW, 5,000,000 KWH PER M0f4TH 11 C. 1979 - StPTEMBER 1, 1979 HISTORICAL IYPICAL blLL COMPARISONS -
pef 4!4SYLVANIA UTILITIES:
- RESIDEf4T I AL Wu t'.LECTRIC DATER HEATit4G 500 KWH PER M0!lTH 12 - HESluEf4TIAL WITH ELECTRIC HATER HEATING 1000 KWH PER MONTH 15 - LOMMERCI AL 50 KW,12 500 KWH PER MONTH 14 - COMMERCIAL 500 KW, 150,000 KhH PER ' O'lTH 15 - IflDUSTRI AL 10,000 Kw, 5,000,000 KWH F ER MONTH 16
- d. 1907-1979 AVERAGE Afil10AL ELECTRIC blLL AS A PERCEf4T OF AflNUAL INC0f1E:
1 FEDERAL MlfilMUM WAGES AND PRODUCTION WORKERS WAGES
- MET-LD RESIDtNT I AL NO ELtCTRIC WATER HEAT IfiG 17 RtSIDEf4TIAL WITH ELECTRIC WATER HEATING 18 RESIDENTIAL ALL ELECTRIC 19 - Pt!,4ELEC RESIDENTIAL h0 ELECTRIC WATER HEATit1G 20 RESIDEf4TIAL WITH ELECTRIC WATER HEATING 21 RESIDENTIAL ALL ELECTRIC 22 1A7A 242
IABLE OF LONTENTS (CONT.) FAGE DESCRIPTI0ft REFERENCE 2 MINIMUM AND MAXIMUM SOCIAL SECURITY BENEFITS
- MET-bD RESIDENTIAL NO ELECTRIC WATER HEATING 23 RESIDENTIAL WITH ELECTRIC WATER HEATING 24 RESIDENTIAL ALL ELECTRIC 23 - PENELEC RESIDENTIAL NO ELECTRIC WATER HEATING 26 RESIDENTIAL WITH ELECTRIC WATER HEATING 27 RESIDENTIAL ALL ELECTRIC 28 TM1-1 RESTART PRUCEEDINGS: - PLANT AND PROCEDURE MODIFICATIONS 29 - IENTATIVE NkC HEARING SCHEDULE 30 ENEkGY CUSIS:
A. COST OF ENERGY 1978 - 1981
- MET-ED COST OF ENERGY BY WEIGHTED COMPONENTS 31 - PENELEC COST OF ENERGY BY WEIGHTED COMPONENTS 32 B. Fuet OIL PRICES - NO. 2 OIL 1972-1980 33 - NO. 6 OIL 1972-1980 34 C. 1980 FORECAST SYSTEM ENERGY COSTS RELATED TO TMl-1 DELAY, FUEL PRICE INCREASES AND SHORT IERM PURCHASES - MET-ED 3S - PENELEC 36 D.
SUMMARY
OF TMI ACCIDENT RELATED SHORT IERM POWER PURCHASES
- JULY 1979 37 - MAY THROUGH JULY 1979 38 E. PJM/IMI - PJM/TMI PROV!SIONS 39 - CURRENT ESTIMATED IMPACT OF PJM/TMI 40 - CURRENT ESTIMATED 1980 PURCHASE POWER SAVINGS 41 F. DEFERRED ENERGY COST BALANCES AND ENERGY COST BILLING RATES 1979 - 1981 - PENELEC ENERGY COST [lLLING RATES (EXCLUDING IAXES) 42 DEFERRED ENERGY BALANCES 43 - MET-ED ENERGY COST BILLING RATES (EXCLUDING IAXES) 44 DEFERRED ENERGY BALANCES 45 3A7A 243
IABLE OF CONTENTS (CONT.) PAGE DESCRIPTION REFERENCE UPERATION & MAltlTENAllCE BUDGET REDUCTION:
- PENELEC PAYROLL AND OTHER OSM EXPENSES 46 Af1ALYSIS OF PERSONNEL CHANGES 47 CONSTRUCTION BUDGET BEFORE TMI ACCIDENT 48 CURRENT CONSTRUCTION FORECAST 49 - MET-ED PAYROLL AND OTHER 0&M EXPENSES 50 AtlALYSIS OF PERSONNEL CHANGES 51 CONSTRUCT!0f4 BUDGET BEFORE TMI ACCIDENT 52 CURRENT CONSTRUCTION FORECAST 53 - EFFECTS OF kEDUCED 1979 CONSTRUCTION EXPENDITURES 54 CASH !!EEDS AND SOURCES OF FUNDS:
A. CASH NEEDS, INTERNAL AND EXTERNAL SOURCES 1979 - 1981 55 B. EXTERNAL FINANCING REQUIREMENTS - SHORT IERM DEBT
- MET-ED 56 - PENELEC 57 INCUME STATEMEllTS AND TMI-2 REVENUE REQUIREMErlTS: - MET-ED CONDErlSED INCOME STATEMENTS - 12 MONTHS ENDED 12/31/80 58 kEVENUES ASSOCIATED WITH COMPONENTS OF TMI-1 & 2 59 IMPACT OF RATE INCREASES FOR COMPONENTS OF TMI-2 COSTS 60 - PENELEC CONDENSED INCOME STATEMENTS - 12 MONTHS ENDED 12/31/80 61 REVENUES ASSOCIATED WITH COMPONENTS OF TMI-1 & 2 62 IMPACT OF HATE INCREASES FOR COMPONENTS OF TMI-2 COSTS 63 STUCKHOLDER IMPACT: - GPU BOOK / MARKET EQUITY VALUES - BEFORE AND AFTER IMI ACCIDENT 64 - ELECTRIC UTILITY INDUSTRY 800K YIELDS JULY 31, 1979 65 PkUPOSED LOAD & CAPACITY 1979-1999: - MET-ED 66 - PENELEC 67 CUllCLUSIONS 68 TA74 244
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2 Metropolitan Edison Company Pennsylvania Electric Company Key Statistics (12 Months Ended 8/31/79) Met-Ed Penelec Service Territory (sq. miles) 3,300 17,600
/ /
Customers (at 8/31/79): Residential 314,400 88 447,100 88 Commercial 35,900 10 53,700 11 Industrial 2,200 1 4,700 1 Other 2,600 1 700 - Total 355,100 100 506,200 100 Sales (MWH): Residential 2,535,000 31 3,197,000 29 Commercial 1,532,000 19 2,334,000 21 Industrial 3,340,000 41 4,859,000 43 Other 717,000 9 812,000 7 Total 8,124,000 100 11,202,000 100 Net System Requirements (MWH) 8,783,000 12,172,000 Installed Capacity (Summer Rating): Nuclear 828 41 414 16 Coal 915 45 1,983 74 Other 287 14 264 10 Total (Summer Rating) 2,030MW 100 2,661MW 100 Total (Winter Rating) 2,144MW 2,743MW Annual peak to Date (2-12-79) 1,571 MW 2,124MW Annual Load Factor 63.8 % 65.4% 1474 246
3 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Residential 7 6.0 .c 6 5 6 - g 5.48 5.30 4.81 f5
- -
4.54 4.03 $4 _ 9 3 - 4 g2 - j -
- -
1 O A
%, ho 8/o 6/eg '^&q Al '*! p 1474 247
4 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Commercial 8 h ~6.:7
-
y6 - - 2e 5 5.04
-
4._8,4 4.66 - 0 4.41 4.27 $4
-
3.55
~
h 3 - -
@2 - $ - > 3 4 1 - G _
O . s, "o
% .%g, *%y ,% e,,, % %,,%,,% ,%e ,
4 1474 248
5 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Industrial 4.0
5 3.5 - 3.39 3.37 - 3.14 3.08 3.04 $3.0 23
- $ 2.51 2.5 - -
3 2.0 - - [c fh e 1.5 - B
-
E 5 1.0 -
$g 9
0.5 - -
'
h
" % %,,,%l% %l***l;s, a,
6 Average Rate Comparison Pennsylvania Utilities Three Months Ending June 30,1979 Combined Residential, Commercial & Industrial 5.0 _ 4.41 4.?9 4.26
~~
4.00 3.54 3.86 h 4.0 -
-
Em - E, E & 3.11 g 3.0 - g -
- % -
S. g C 2.0 - j!
$ f3 -
g - f1.0 - g
- .
g - O.O E
ese 9% %,**o, t *^er %p, 1474 250
7 Typical Bill Comparisons Pennsylvania Otilities Rates in Effect September 1,1979 Residential No Water Heating 500 KWH/ Month 35 33.47
'
3 0 .- 27.73 ,
' -
27 42 g 25 - p 23.16 22.77 - 3O 20 - f
& -
H 15 - 92 - 10 - 5 - 9 - O en C/o A o */oo '&q d %g 1474 251
, .
8 Typical Bill Comparisons Pennsylvania Utilities Rates in Effect September 1,1979 Residential With Water Heating 1000 KWH/ Month 54.15 54 33
-
51.37 50.27 50 46.24
- 40
? 40.22 - ,
37.76 . . 30 -
, _
- e 20 y - a 10 h _ 0
^* ^ * *^ ^%,,% %,,%,% % *%,
1474 252
9 Typical Bill Comparisons Pennsylvania Otilities Rates in Effect September 1,1979
* * * ' ' ' '
1000
- 870 ~
820 800 - ,
-
69_1 659 - 606 599 E aa 600 - 7 _ g ,;j 480 - 1 400 - l'j -
- -
200 - {h
$ -
0 k*h
#4 %, % OA < &q *!g 1474 253
10 Typical Bill Comparisons Pennsylvania Utilities Rates in Effect September 1,1979 Commercial 500 KW 150000 KWH 10,000 9808 _
- 8,000 -
7600 25 66q; ' 60598 6223 3 6,000 -
'
5603
- 4614 4,000 -
,
i 2,000 - l -
! '
0
/ &o %, */oo A &q d *! A 9
1,474 254
.
11 Typical Bill Comparisons Pennsylvania Utilities Rates in Effect September 1,1979 Industrial 10000 KW 5000 MWH 240,000
. -
200,000 - 184,829 184,132
-
168,256
~
160,000 -
,
148,517 146,734
- '
--120,000 -
! 115,435 _
E -
-
_ g 80,000 - _ 40,000 -
- -
0 . 8/e %, *4g OA g '&q l *4 p 3A7A 255
12 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Residential No Water Heating 500 KWH/ Month i i i i Duquesne y ,,,
, ',j 32 - .-
e#,, , . 'l
* -
j ,-
'/ APhil Elec 78 -
TP, .p.pr#
..........- l s ..... -
Penelec
-
g y-J Met -SEd - U E 24 - . ~~.. ~~,,.. ../,/' Penn Power
,_-
I ppg
- ',,. y, ' ~
N,. -West Penn l
',.,. '
j ',,.' , 20 '
- - '.
I
- ,. l ,, c 0 , -
l l
' ' ' ' ' '
16 m 1975 1976 1977 1978 1979 t c
- Year 1474 2%
Source: Edison Electric Institute Typical Bill Comparisons
13 Major Pennsy!vania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Residential with Water Heating 1000 KWH/ Month 55 i i , i ; ; i
~
D u quesne ->7',ril'l<' Power Pen
/' f' /l\ enelec P '
j' *l il f
+ Met Ed l * *5 ...' ... Phi l Elec.h ~ ;:::L. * *** 7 " " ' " ' ~ \ .. _ ........ I CD ,/, ,/ PP&L - ~ /' ,sfy ~ - /,- ,. -;
35 .-.h x',,,,/ ' '
,' ' - ' I .
N
* ,.s , / '. *s. ,/ - ,,. West Penn l ,
_- , I I
' ' ' ' ' '
25 e 1975 1976 1977 1978 1979 t
- -
- Year Source: Edison Electric Institute Typical P'..I Comparisons
. Revised 10/24/79 147A 257
14 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Commercial 50 KW 12500 KWH 900 i i i i i i
'- i Phil Elec x.d D g esne 800 - % ',.,/<4 _
l
...."'....,,,/,l l
- 700 -
. **... -#,/ ~~'I Penelec -- ) -
j, x ,
=
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Y~. '- Penn Power 500 -- I -
-N N- N... iWest Penn ; ***,.
400 s.s. 1 I l 300 I I - I c) 1975 1976 1977 1978 1979 t .
- -
- Year 147A 258 Source: Edison Electric Institute Typical Bill Comparisons
15 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Commercial 500 Kw 150000 Kwh/ Month 10 i i i i i
- . i Phil Elec /]
9 -
\,/ j -
- I
- :
O O 8 -
/ !- -
O ... .... ...Duquesne
^.....*.....,..:,, 'l, ,,. Penn i * -
7
..............................
v,,,',f Power I -
@ ',,/, ,/' ~ O - .- '"'P e n ele c Met Ed D ., - - -i 5 -=___. /',,' d~ /- ' ' S~ppat i
_. f , C- .~.._.._. I
'' l 4 X West Penn l ~..._._._. l 3 5 ' ' ' I cn 1975 1976 1977 1978 1979 C a
Year 1474 259 Source: Edison Electric Institute Typical Bill Comparisons
16 Major Pennsylvania Utilities Typical Bill Comparison Total Bill for Service including All Adjustments Industrial 10000 KW 5000 MWH 200 i i i i i ii i Dugi.esne i 180 k'"'~'~.'.f
-- / i g Phil Elec /,/ ,/ ' ,,
o160 Penalec #
'I I
O
- $140 . .. . . . . . . . . . . . . . . . . . ~ ~ 'f , /.7^. . . * * *fl. ,
_ , ,, ,/,/ Penn Power p l l PP&l. ___ , ,, ', / z120 -
'/ g ' ' ? _[_ , ,il 100 - /, ' .- - ,3-West Penn l i -
s s' I i 80 I.. ' ' I ' m 1975 1976 1977 1978 1979 $ a Year 147A 260 Source: Edison Electric Institute Typical Bill Comparisons
17 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income' Residential No Electric Water Heating 7 i i i i i i i i iii Avg Annual KWh Usage
~ ~< , 2 . , gig ' --
- 5 gj;- 4
-
E T Federal y 8 .E 4 - # % Ng; _ #Minimum 9** g 1967 Avg KWh Usage g 3 _ _ 8 Avg Annual KWh ..............,............
..)...?.... -
hgk"er
$ 1967 Avg KWh Usage wages
_ _ 3 O ' ' 1968 1970 1972 1974 1976 1978 Year
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels. 3 47 A 2bT
18
'
Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income' Residential with Electric Water Heating 9 i i i i i i i i i i i Avg Annual KWh Usage y '*
8 -
- . -
Federal 7 - - Minimum y % - Wages g 6 1967 Avg KWh Usage 5 ,,,
-
p 4 - Avg Annual KWh Usage S .
.
Production 2 3 -
..-; : :r ::-/ ' ~ -
Workers $ g Wages 1967 Avg KWh Usage 1 - _ Q I I l l I I I l l l l 1968 1970 1972 1974 1976 1978 Year
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels.
474 262
19 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income' Residential All-Electric 20 . . . . . . , . i
.
i 1967 Avg KWh Us g 18 - Federal e 16 .WWWY$b g.
-
a s 14 - Avg Annual KWh Usage
-
c 12 .,
' '
o 10 -
' -
!8 _1967 Avg KWh Usage p k ggila,iH;}}i;2;;,a,
""'
2_ Production Workers W ges
'
6 . 4 - Avg Annual KWh Usage 2 -
' ' ' ' ' ' ' ' '
O 1968 1970 1972 1974 1976 1978 Year
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels.
1474 263
20 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income' Residential No Electric Water Heating 5 i i i i i i i i
..r .. i Avg AnnuaI '.... . . . . . . .. . ...
gj ... '.. '
,'
KWh Usage 4 _ Federal
- Minimum
- ' / Wages B ........ - < Avg KWh Us% age g 3 % 1967 -
2 E 2 Avg Annual KWh Usage - g g,,.........................""""""""""""- Production 5 W """' Workers
- c. -
, Wages -
1 1967 Avg KWh Usage
- '
0 ' ' ' ' ' ' ' ' 1968 1970 1972 1974 1976 1978 Year
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage. levels.
1474 264
21 Pennsylvania Electric Company Average Annual Electric Bill as a Percent c: Annual Income' Residential with Electric Water Heating 9 i i i i i i i i i i i 8 - Avg Annual KWh Usage 7 - g,,,,...*,..-...^~'- - Federal Minimum o ,.. *... ' Wages !6 o
- .- , ,./ -
_A-c 9 -
- * -
Z 1967 Avg KWh Usage o ~ 4 N""'""'...- - E Avg Annual KWh Usage "........ -.-.~.-~~. - Production 2 3 t Workers o .... ........ 3. ,,...................... ' Wages ' 2 g - 1967 Avg KWh Usage 1 - - 0 ' ' ' ' ' ' ' ' ' ' 1968 1970 1972 1974 1976 1978 Year
' income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels. 1 A7 A N
22 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income' Residential All-Electric I ! I I i l i i 20 - 1967 Avg KWh Usage Federal 18 -
% -
Minimum
*""""'
Wages e 16 - - g ,, _ g.......................** [c 12 Avg Annual KWh Usage _ h.............- 10 - - c 1967 Avg KWh Usage / Production o 8 -
- -
Workers
" " "" " " " """ '" " W 9
h a %. . . . . . . _ _ , " - ~ ~ . . . . . . . . . . . . . 4 Avg Annual KWh Usage - 2 - -
' ' ' ' ' ' ' ' '
0 1968 1970 1972 1974 1976 1978 Year
' Income is based upon Pennsylvania statewide average hourly wages for production workers in the total manufacturing category as compiled by the US Bureau of Labor, Department of Labor Statistics or Federal minimum wage levels.
p4 2s6
23 Metropolitan Edison Company Average Annual Electric Bill as a Percent af Annual Income,,2 Residential No Electric Water Heating 12 i i i i i i i i i i i Avg Annual KWh Usage ' __ en s o 6 - 1967 Avg KWh Usage
'-
E O 4- Avg Annual KWh Usage
-
Maximum 2 - i .
-
social T 1967 Avg KWh Usage Security Benefits
' ' ' ' '
0 ' ' ' 1968 1970 1972 1974 1976 1978 Year
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration.
2 Senior citizen annual usage: 68.6% of rate group average. 1474 Zb7 .
24 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential with Electric Water Heating 16 i i i i i i t...... i i Avg AnnualKWh Usage;" Minimum 34 . Social
" 7b,w.' Security ^*
Benefits e 1 2 '- ' ' E .. 5 0 10 -
-
1967 Avg KWh Usage _ .5 o 8 - E y6 Avg Annual KWh Usage
-
$ 4 --~.............,. _ Maximum
~7 '
1967 Avg KWh Usage h .._. * % 8 _ Social 2 - e s
'
0 ' ' ' ' -
' '
1968 1970 1972 1974 1976 1978 Year
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration.
2 Senior citizen annual usage: '1.5 % of rate group average. i474 2b8
25 Metropolitan Edison Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential All-Electric 45 i i i i i i i i i i i 40 - Minimum Avg Annual KWh Usage je , ' social 35 : security e ~' [, >y,u
-
g'" ' '" Benefits E ' " " ' o 30 O
-
s '
-
5 25 - 1967 Avg KWh Usage - o - E 2 15 Avg Annual KWh Usage - ' 3o """ % _.__..... N-=<- - focjUm 5 security 5 - 1967 Avg KWh Usage - Benefits O I I I I i i i I i 1968 1970 1972 1974 1976 1978 Year
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration.
2 Senior citizen annual usage: 79.6% of rate group average. 1474 269
26 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income'< Residential No Electric Water Heating 9 Avg Ann ual KWh Usage ,.................i "'ts., i i i iiiiii 8 ,...,,. ' , , . " ,
. -
i, - Minimum
... - ,,...., ...,, '
Sociai
'..-
e 7 .,,,,* Security E Benefits o 6 - - + 5 '- 1967 Avg KWh Usage O y 4 - o 8 3 Avg Annual KWh Usage _ $ ..............,h..........-.......,,,,,,,_____ g g k m Security 1 1967 Avg KWh Usage Benefits
' ' '
0 ' ' ' ' ' ' ' 1968' 1970 1972 1974 1976 1978 Year
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration.
2 Senior citizen annual usage: 68.9% of rate group average. 1474 270
27 Pennsylvania Electric Company Average Annual Electric Bill as a Percent of Annual Income,,2 Residential with Electric Water Heating 16 i i i i , i i i i i i
. Minimum 14 -
Avg Annual KWh Usage ,........ """ '-
. . $c r'ity ,, '
Benefits
,,2 8... .... _ .... ...... - , . ...- "
0 10 - T- .E }8 1967 Avg KWh Usage
- -
C g 6 - Avg Annual KWh Usage -
*
- -
gegum a Q ........... %.................................................
- " w Security 2 -
g1.967 Avg KWh Usage - Benefits
' ' ' ' i ' '
O I I i 1968 1970 1972 1974 1976 1978 Year
' Income is based upon minimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benefit information was supplied by the Social Security Administration.
2 Senior citizen annual usage: 69.7% of rate group average. 1474 27I
28 Pennsylvania Electric Compan, Average Annual Electric Bill as a Percent of Annual Income,,2 Residential All-Electric 45 i i i i i i i i i i i 40 - - Minimum 35 967 Avg KWh Usage [_ Nc$rity e % Benefits E o 30 o
~..... - '.'.. - . . ' ' ' *'.^ . ............... - -
.5 gg _
~...'us ' . . * . . ..Q .. .
_ o Avg AnnualKWh Usage p 20 - e y 15 - 1967 Avg KWh Usage
-
10 - N {ej"*
........ ,...._. C...... .,,.................
T Security 5 Avg Annual KWh Usage- Benefits
' ' ' ' ' '
O 1968 1970 1972 1974 1976 1978 Year
' Income is based upon rainimum and maximum Social Security old-age benefits payable to a husband and wife retiring at age 65. Benerit information was supplied by the Social Security Administration.
2 Senior citizen annual usage: 74.0% of rate group average. 1474 272
29 TMI-1 Restart i Operator Retraining & Reexamination 11 Procedure Reviews & Revisions 111 Emergency Preparedness IV Plant Modifications V isolation of TMI-1/TMI-2 V1 Waste Management Vil Management Vill Finance 1474 273
30 TMI-1 Restart Schedule Day 80 Day 365 11/2/79i 8/13/80I Publication Day 180 Decision by NRCl of Pre-hearing l 2/10/80 Conference Begin Day 335 j Order Hearings 7/14/80! j (Depositions, ASLB Certification document of Record ; production)
!
V V 1% V 2~
.
4}p. [ }. A
. .
1 . j g f / 9 ?.i y t , Ak Ak 4k 4/12/80 Complete 1/1/80 Hearings Pre-hean,ng 8/15/79 (Filing of & reply Conference to proposed Publication of (Preparation & findings) Notice filing of (This period is for testimony) Day 240 refining contentions, consolidating parties Day 140 1 matters)
& resolving procedural Day 0 347A 274
31 Metropolitan Edison Company Computation of Cost of Energy by Weighted Components Percent of Effective Fuel Cost MWH $1MWH Total MWH $1MWH (Million $) (000's MWH) 1978 Interchange Delivered $(16.4) (795.2) $(20.66) (9.2) % $(1.90) Interchange Received 30.0 975.3 30.72 11.4 3.50
-
Purchased Power - -
- -
Hydro - 131.2 - 1.5 - Oil & Other 7.5 189.7 39.53 2.2 .87 Coal 69.5 4 897.0 14.20 57.1 8.10 Nuclear 4.9 2 846.2 1.72 33.2 .57 Nuclear (Test) - 326.7 - 3.8 - Total 1978 $ 95.5 8 570.9 100.0% $11.14 1979 Interchange Delivered $(9.1) (305.1) $(29.86) (3.4) $d.03) Interchange Received 58.4 1 714.6 34.05 19.4 6.60 Purchased Power 44.9 1 602.8 28.01 18.1 5.07 Hydro - 138.8 - 1.6 - Oil & Other 5.8 109.0 53.53 1.2 .65 Coal 68.4 4 520.9 15.13 51.0 7.72 Nuclear 3.4 1 074.8 3.19 12.1 .39 Total 1979 $171.8 8 855.8 100.0% $19.40 1980 Interchange Delivered $ (5.2) (127.1) $(41.29) (1.4) $ (.58) Interchange Received 90.5 1 991.0 45.48 22.2 10.11 Purchased Power 43.7 1 332.6 32.76 14.9 4.87 Hydro - 147.6 - 1.6 - Oil & Other 9.6 111.9 85.99 1.3 1.08 Coal 95.0 5 497.0 17.28 61.4 10.61 Nuclear - - - - - Total 1980 $233.6 8 953.0 100.0% $26.09 1981 Interchange Delivered $ (8.1) (281.9) $(28.86) (3.1) $ (.88) Interchange Received 90.7 1 690.1 53.66 18.3 9.83 Purchased Power - - - - - Hydro - 152.0 - 1.7 - Oil & Other 12.3 117.i 104.85 1.3 1.34 Coal 99.4 5 145.E 19.31 55.7 10.76 Nuclear 5.7 2 407.4 2.38 26.1 .62 Total 1981 $200.0 9 231.1 100.0% $21.67
.
1474 275
32 Pennsylvania Electric Company Computation of Cost of Energy by Weighted Components Percent of EIIective Fuel Cost MWH $lMWH Total MWH JMWH (Million $) (000's MWH) 1978 Interchange Delivered $(26.1) (1 369.8) $(19.05) (1 1.51 % $(2.19) Interchange Received 25.6 853.6 29.99 7.2 2.16
- -
Purchased Power - - - Hydro - 58.3 - 0.5 - Oil & Other 5.1 144.1 35.73 1.2 .43 Coal 135.0 10 534.3 12.82 89.2 11.43 Nuclear 2.5 1 423.1 1.76 12.0 .21 Nuclear (Test) - 163.3 - 1.4 - Total 1978 $142.1 11 806.9 100.0% $12.04 1979 Interchange Delivered $(38.3) (1 633.6) $(23.15) (13.1) $(3.09) Interchange Received 15.9 435.4 36.52 3.5 1.28 Purchased Power 20.2 708.3 28.52 5.7 1.63 Hydro - 77.3 - 0.6 - Oil & Other 2.2 63.0 38.92 0.5 0.18 Coal 158.5 12 243.9 12.95 98.5 12.75 Nuclear 1.7 540.1 3.15 4.3 .13 Total 1979 $160.2 12 434.4 100.0% $12.88 1980 Interchange Delivered $(28.6) (942.5) $ (30.36) (7.3) $(2.19) Interchange Received 60.3 1 284.1 46.98 9.9 4.65 Purchased Power 21.8 666.3 32.75 5.1 1.67 Hydro - 49.8 - 0.4 - Oil & Other 4.0 67.4 58.89 0.5 .29 Coal 168.9 11 871.9 14.22 91.4 13.00 Nuclear - - - - - Total 1980 $226.4 12 997.0 100.0% $17.42 1981 Interchange Delivered $(36.1) (1 323.0) $(27.27) (9.9) $(2.69) Interchange Received 52.7 971.4 54.23 7.3 3.96 Purchased Power - - - - - Hydro - 48.8 - 0.4 - Oil & Other 6.4 82.9 77.01 0.6 .46 Coal 190.5 12 357.2 15.42 92.6 14.28 Nuclear 2.9 1 203.7 2.38 9.0 .21 Total 1981 $216.4 13 341.0 100.0% $16.22 1474 276
33 GPU System No. 2 Fuel Oil Prices Actual & Projected i i i i i i i i 4g _
,
_
"" "
July 79 = 53% Actual July 78 Forecast k - 3 32 -
/ -
Dec.80 t'
= 59% Projected "
m July 79 ' Actual - E5 24 - -
- n. '
g .........g-g 16 - Pre TMI
-
Q Accident 8 - -
' ' ' ' ' ' '
0 1972 1973 1974 1975 1976 1977 1978 1979 1980 Year Source of Historical Costs: FPC Form 423 Fuel Cost Data T474 277
34 GPU System NO. 6 Fuel Oil Prices Actual & Projected I I '- 40 - I I I I I
"' ' ""'"'
To
-
32 - ForecastY' ec. 80
= 45% Projected /
5 24 n-
- "'# / -
Actual + m
- % ....... ;
3g_ $ Pre TMI Accident 8 -
' ' ' ' ' ' ' '
0 1972 1973 1974 1975 1976 1977 1978 1979 1980 Year Source of Historical Costs: FPC Form 423 Fuel Cost Data 1474 278
35 Metropolitan Edison Company Forecast System Energy Clause Costs Estimated Effects of TMI Accident, Fuel Price Increases and Short Term Purc'hases Calendar Year 1980 Original Estimate Docket Current I79040308 Estimate Average GPU Oil Cost. $lBBL 17 31 Net System Requirements GWH 8,953 8,953 Energy Cast with $million 91.2 106* Normal TMI Operation $lMWH 10.2 11.8 incremental Effect $million 40.4 64 TM1-2 Removed incremental Effect $million 0 90 TMI1 Removed incremental Effect $million 0 (26) Short Term Purchases Energy Cost without TMI, $million 131.6 234* with short term purchases $lMWH 14.7 26.1 PUC Allowance per $million 121.5 13,6 l474 27 June 15,1979 Order $lMWH
- 0fficial Budget does not include the PJMITMI special provisions.
36 Pennsylvania Electric Company Forecast System Energy Clause Costs Estimated Effects of TMI Accident, Fuel Price increases and Short Term Purchases Calendar Year 1980 Original Estimate Docket Current 1-79040308 Estimate
$lBBL 17 31 Average GPU Oil Cast GWH 12,997 12,997 Net System Requirements Energy Cost with $million 174.7 161*
Normal TMI Operation $lMWH 13.4 12.4
$million 22.7 38 Incremental Effect TMI-2 Removed $million 0 37 incremental Effect TMI-1 Renioved incremental Effect $million U (10)
Short Term Purchases Energy Cost without TMI, $million 197.4 226' with short term purchases $lMWH 15.2 17.4 PUC Allowance per $million 191.7 June 15,1979 Order $lMWH 14.7 14M 280
' Official Budget does not include the PJMITMI special provisions.
37 Penelec/ Met-Ed/ Jersey Central Summary of TMI Accident Related Short Term Power Purchases July,1979 Energy Purchased (Proportional to TMI Ownershig) Estimated Estimated Energy & Alternate Energy & Op. Op. Cap. Demand Total Cost Cost Cap. Savings GWH $1,000 $1,000 $1,000 $1,000 $1,000 APS (Start 5 79) GPU 13.2 213 55 268 310 42 AEP and West (Start 6 79) GPU 500.8 11,025 2,817 13,842 17,791 3,949 PP&L (Start 6 79) GPU 73.6 2,733 0 2,733 3,258 525 Ontario (Start 7-79) GPU 94.1 2,424 394 2,818 3,704 886 Jamestown (Start 7 79) GPU 4.3 101 0 101 184 83 . Total Penelec 171.5 4,116 817 4.933 5,270 337 Met Ed 343.0 8,232 1,632 9,864 12,882 3,018 Jersay 171.5 4,148 817 4,965 7,095 2,130 GPU 686.0 16,496 3,266 19,762 25,247 $5,485 1474 281
38 Penelec/ Met-Ed/ Jersey Central Summary of TMI Accident Related Short Term Power Purchases May thru July,1979 Energy Purchased (Proportional to TMI Ownership) Estimated Estimated Energy & Alternate Energy & Op. Op. Cap. Demand Total Cast Cast Cap. Savings GWH $1,000 $1,000 $1,000 $1,000 $1,000 APS (Start 5 79) GPU 197.0 3,421 817 4,238 6,121 1,883 AEP and West (Start 6 79) GPU 607.9 13,443 3,442 16,885 20,990 4,105 PP&l. (Start 6 79) GPU 114.9 4,087 0 4,087 4,909 822 Ontario (Start 7 79) GPU 94.1 2,424 394 2,818 3,704 886 Jamestown (Start 7 79) GPU 4.3 101 0 101' 184 83 Total Penelec 254.6 li,858 1,164 7,022 7,589 567 Met Ed 509.0 11,713 2,325 14,038 18,280 4,242 Jersey 254.6 5,905 1,164 7,069 10.039 2.970 GPU 1,018.2 23,476 4,653 28,129 35,908 $7,779 1474 282
39 PJM/TMI Provision (1980D Amount 7000 GWHRSiiR at no more than 1100 MWHRS/HR Price 10% above supplier's average cost of sales Effective FERC Filing Date Duration Thru 1980 File By the end of October Contingent FERC, PaPUC and other States Commission Approval 1474 283
40 Current Estimated Impact of PJM/TMI (1980? PJM 24 Hr. Cost 38 Mills per KWH Current Split Savings / Cost 8 Mills per KWH
@ 10% Markup 4 Mills per KWH Savings 4 Mills per KWH X 7000 GWHRS* = $30 Million*
- Max Take on GPU Basis 1474 284
41 Metropolitan Edison Company Pennsylvania Electric Company Current Estimated 1980 Purchase Power Savings Source Met-Ed Penelec Purchased Power * $26 Million/Yr $10 Million/Yr From PP&L 200 MW (2) (1) From PJM Inter-change On Cost Pius 10% Basis 8 5 Total Savings $32 Million/Yr $14 Million/Yr
*To the extent energy is available and cheaper than PJM/TMI special provision, such energy from APS and the West could increase this savings.
1474 285
42 Pennsylvania Electric Company Energy Cost Billing Rates (Base and Clause Rates Excluding Taxes) _ iiiiiiiiiiiiiiiiiiii iiiiiiiisiiiisi_ _ 22 - - Normal Clause 20 ,r 18 - _ _____ g_il,Is . - C - I
\ .2 6 Mills 2 3
g 14 -
- 1 -
5 12 :y, j ' 10 FA
. 4 - . ::
I:!!
!
- '.::
5S 4:':::
!!!!!
8 _is I
-
2 !!!i!! lill s gii! s:Is :::Is 6 j!!j!! jj!Il10 Mills included in Base Rates! _i!!! 4 - pi!! li!!s !!ils .
-
i!!! li;liil !!!!!!! 2 [!!! jj!!j! lll1lii 0
~ **~'*"Nl *** '** * ** " " * " *** " E~
JM J S D M J S D M J S D 1979 1980 1981 Assumes TMI-1 Returns to Service 1/1/81 1474 286
43 Pennsylvania Electric Company Deferred Energy Balances (10.0 Mills included in Base Rates) 60 iiiii iiiiiiiiiiiiiiii iiiiiiiiiiiii 6.2 Mill EAC 7/1/79 - Note: 50 Short Term Debt - Limit $118 Million - 40 - 7.2 Mill EAC f/ 1/80-
/
E 30 = 2 - 20 N /80 10 8@ ort e rR a , p .ormal Clause Operation - O * ******' ' ' 's JM J S D M J S D M J S D 1979 1980 1981 Assumes TMI-1 Returns to Service 1/1/81 1A7A 287
44 Metropolitan Edison Company Energy Cost Billing Rates (Base and Clause Rates Excluding Taxes) 36 iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii _ _ _ 30 - _
, ._ _ _
20 Mills,_
- I 17 Mills -
_c 24 - 3 - Normal l ,1 2. Mills - M - Clause 1
-
p 18 - I
,8.4 Mills -
.= / i = 1 1 2 12 - 1 I
-
1 1 -
-
l . . . - z.m. ...e., -
.. . . . .
6 llll lllllll ll - l!l[ M ii 1l
.!ll;ll !!!Allll8 Mills included in . )lt!!! ;-
0 5!!ii 1 i s i1!i*iiil5i4:i:stii!E!!!' i 'si i!Yiiif i li ii!!i i 1 i:s:i:ssi!!!*i!!i:!!!'5' i si!!i i f i l: i tsi i:ii:iis!!!s:!:lisi JM J S D M J S D M J S D 1979 1980 1981 Assumes TMI-1 Returns to Service 1/1/81
'474 288 ,
45 Metropolitan Edison Company Deferred Energy Balances (8.0 Mills included in Base Rates)
'''''''''''''''''''''''''''''''
220 _
-
_ 200 - 8.4 Mills EAC
-
180 - _ g r
- -
160 - - 12.9 Mills EAC _
- 140 -Short Term Debt Limit my /_
~
g120 - _ $ 100 _ 17 Mills EAC _ g - r _ 80 - 4 - 60 -
- ^% _
_
-
20 Mills EAC ' 40 -
~ 'N - -
20 # Unamortized - Prior 7/1/78 'N
..,,';; -
u.:. f [:fffp?$fff}}fe/f3fffe?(fp?yt:{:p%.te:Z 'y:.gf:.j:f3t;y:gyte:<.p,:.p,;3.c,3.,
. _
JM J S D M J S D M J S D 1979 1980 1981 Assumes TMI-1 Returns to Service 1/1/81 1474 28
48 Pennsylvania Electric Company Comparison of Pre-TMI Budget with Current Forecast Payroll & Other O&M Expenses ($ Millions;l 1979 Original Budget $ 123.8 Reductions: Eliminate Budgeted Personnel Additions $ .9 Reduce Overtime .4 Reduce Outside Services 1.9 GPUSC Cost Reduction Programs 1.9 Defer Fossil Generation Maintenance 4.8 Tree Trimming 1.6 Employee Reduction Program 1.3 Total Reductions 12.8 1979 Current Forecast $ 111.0 3474 290
47 Pennsylvania Electric Company Analysis of Personnsi Changes 3/31/79 - 12/31/79 Employees at 3/31/79 4,202 Changes: Laid off 7/1/79 (150) Early Retirements (60) Total Change (210) Estimated Employees at 12/31/79 3,992 1474 29I
48 Pennsylvania Electric Company Construction Budget Before TMI Accident ($ Millions) 1979 1980 1981 1982 1983 1984 1985 New Generation Seward $11 $ 16 $ 17 $ 50 $ 94 $113 $120 Coho 1 1 1 3 5 21 39 Combustion Turbines 1 2 22 13 2 18 10 Other J 2 10 4 2 7 9 Total $14 $ 21 $ 50 $ 70 $103 $159 $178 Existing Generation 25 26 31 24 18 17 13 Nuclear Fuel 11 12 19 20 21 14 25 Transmission 8 12 23 31 28 27 26 Distribution 27 42 43 47 49 54 54 Other 6 5 2 2 2 2 2 Total Construction $g $118 $168 $194 $221 $273 $208 1474 292
49 Pennsylvania tilectric Company Current Construction Forecast ($ Millions) 1979 1980 1981 1982 , 1983 1984 1985 New Generation Seward $3 $ 8 $ 21 $ 62 $119 $135 $140 Other 3 1 10 5 - - - Total $6 $ 9 $ 31 $ 67 $119 $135 $140 Existing Generation 21 23 24 27 23 20 15 Nuclear Fuel 10 8 4 21 14 19 27 Transmissica 5 7 12 14 14 21 21 Distribution 24 38 32 41 45 43 50 Other 5 4 6 2 3 2 2 Total * $71 $ 89 $115 $172 $218 $240 $255 Nuclear Fuel Deferral & Retentions (3) 1 6 - - - - TMI-2 Restoration *" 24 27 17 12 2 - - Total Construction $g $117 $138 $184 $220 $240 $255 aConstruction Budget Pre TMI Accident $91 $118 $168 $194 $221 $273 $298 ' Replacement Nuclear Fuel Core included in Nuclear Fuel g4 7g3
50 Metropolitan Edison Company Comparison of Pre-TM] Budget with Current Forecast Payroll & Other O&M Expenses C$MillionsD 1979 Original Budget $ 90.8 Reductions: Eliminate Budgeted Personnel Additions $1.6 Reduce Overtime .1 Reduce Outside Services 1.7 GPUSC Cost Reduction Programs 1.7 Defer Fossil Generation Maintenance 2.1 Tree Trimming 1.7 Diversion of Employees to TMl 1.5 Total Reductions 10.4 1979 Current Forecast $ 80.4 1474 294
51 Metropolitan Edison Company Analysis of Personnel Changes 3/31/79 - 12/31/79 Non TMI TM1 Total Employees at 3/31/79 2,284 508 2,792 Changes: Attritions (29) - (29) Regular Retirements (27) - (27) Early Retirement Program (53) - (53) Additions & Replacements 38 - 38 Temporary Assigned to TMI (215) 215 - Additional Requirements at TMl - 164 164 Total Change (286) 379 93 Estimated Employees at 12/31/79 1,998 887 2,885 1474 295
52 Metropolitan Edison Company Construction Budget Before TMI Accident ($ Millions) 1979 1980 1981 1982 _ 1983 1984 1985 New Generation Seward $1 $2 $2 $ 6 $ 12 $ 14 $ 16 Coho - - - 1 3 10 20 Combustion Turbines - - 1 9 7 18 10 Other 4 5 4 6 4 9 11 Total $5 $7 $7 $ 22 $ 26 $ 51 $ 57 Existing Generation 14 10 9 6 6 6 6 Nuclear Fuel 23 24 38 39 41 27 49 Transmission 2 6 7 9 7 13 5 Distribution 19 22 24 24 26 26 27 Other 2 1 1 - 1 3 2 Total Construction $65 $70 $86 $100 $107 $126 $146 1474 296
.
53 Metropolitan Edison Company Current Construction Forecast ($ Millions) 1979 1980 1981 1982 1983 1984 1985 New Generation Seward $1 $1 $3 $8 $15 $17 $17 Other 2 1 3 3 2 - - Total $3 $2 $6 $11 $17 $17 $17 E::::; ting Generation 14 5 9 7 6 6 6 Nuclear Fuel 19 15 8 41 27 37 54 ansmission 1 4 5 14 10 7 7 Distribution 17 20 24 26 27 29 31 Other 1 2 1 1 1 2 3 Total * $55 $48 $53 $100 $88 $98 $118 Nuclear Fuel Deferral & Retentions (5) - 10 - - - - TMI 2 Restoration" 48 54 34 24 4 - - Total Construction $98 $102 $g $124 $g $98 $118 _ = Construction Budget Pre TMl Accident $65 $ 70 $86 $1G0 $107 $126 $146
** Replacement Nuclear Fuel Core included in Nuclear Fuel i474 297
54 Possible Effects of Reduced 1-979 Construction Expenditures ($ Millions) Reductions Project Met Ed Penelec Impact of Cutbacks New Generation $1.7 $7.4 Higher Expenditures in Future Years Nuclear Fuel 3.4 1.6 None Existing Generation 0.9 4.1 Up to One Year Delay in Achieving Performance improvements
- Loss of Generation Output through Higher Unavailability - Higher Energy Costs - Higher Maintenance Costs T&D Transmission 0.8 Reduced System Design Criteria 2.4 {
Distribution 1.9 Resulting in: 2.5 )
- Premature Equipment Failure Due to Overloading - Reduced System Back Up Capability in Time of Emergency -Increased Frequency & Duration of Outages - Higher Maintenance Costs - Higher Future Capital Costs Due to Short Term Solutions Other 1.3 1.9 Delay in Office Additions Total $ 10.0 $19.9 1474 298
55 GPU Operating Companies Statement of Cash Needs, Internal Sources & External Sources - 1979,1980, & 1981 [$ Millions) Year 1979 Year 1980 Year 1981 ME PN ME PN ME -- PN Needs for Cash Construction $ 50 $ 68 $ 48 $ 90 $ 63 $121 TMI 2 Restoration
- 48 24 54 27 34 17 Refinancings 2 14 14 5 2 10 Deferral of Energy Costs 52 (8) 53 14 (26) 4 Total $152 $ 98 $169 $136 $ 73 $152
_ _ internal Sources of Cash Net income Before Preferred Div. 30 54 22 54 23 53 Depreciation & Amortization 41 48 39 47 45 52 Deferred Taxes & ITC (net) 37 10 30 13 17 29 Changes in Working Capital 3 9 2 (8) 3 (6) TMI 2 insurance Proceeds 18 9 60 30 36 18 Dividends on Pmferred & Common (17) (49) (10) (49) (20) (50) Total $112 $g $143 $g $104 $ 96 Cash Deficiency $ 40 $ 17 $ 2_6 $ 49 $(31) $ 56 External Sources of Cash Long Term Financings - 50 - - - 50 Capital Contributions - - - - - - Bank Borrowings 40 - 26 16 (31) 6 Temporary investments - (33) 33 __ _ _- Total $ 40 $ 17 $ 26 $ 49 $ (31) $ 56 _ _ _ _ _ _ Short Term Debt Balance $ 75 -
$101 $ 16 $ 70 $ 22 Temporary investments - $ 33 - - - -
- Nuclear Fuel included in Construction
56 Metropolitan Edison Company Cumulative External Financing Requirements 140 ii i i i i i i i i i i i i i i Short-term Debt Limit g
........................................... .....................................
120 - 100 <> m 80 - C .9 y60 - 40 - 20 0 ' ' ' ' ' ' ' ' ' ' ' I I AS N J M M J SNJMMJ SND 1979 1980 1981 Assumptions:
-No Permanent financings - No GPU Contributions -Energy Cost Adjustment (excl. taxes) *1979 at 8.4 mills *1980 at 12.9 mills *1981 at 17.8 mills ]474 '00 -TMI-1 Returns to Service 1/1/81 -8.0 Mills Energy Cost included in Base Rates
57 Pennsylvania Electric Company Cumulative External Financing Requirements 140 i i i , , i i i i i i i i i i 120 ....................................................................................... 100 Short-term Debt Limit 8 80 - - 60 -
-
u> m 40 - C $ 20 - - 5 o _ $ 50 million Bond
- 20 - -40 - - -60 - - -80 ' ' ' ' ' ' ' ' ' ' '
AS NJMMJ SNJMMJ SND 1979 1980 1981 Assumptions: No GPU Contributions Energy Cost Adjustment (excl. taxes)
*1979 at 6.2 mills 1474 01
- 1980,1981 at 7.2 mills TMI-1 Returns to Service 1/1/81
~10.0 Mills Energy Cost included in Base Rates
58 Metropolitan Edison Company Condensed Income Statements 12 Months Ended 12/31/80 ($ Millions) Total Rate Making Line Company No. Treatment (A) (1) (2) 1 Revenue $411.9 $ 411.9 Expenses: 2 Energy $ 180.8 $ 180.8 3 Payroll 37.9 36.7 4 Other O&M 41.7 40.3 5 Depreciation 39.0 27.7 6 Taxes, Other 34.9 34.9 7 income Taxes 3.1 18.2 8 Total Expense $337.4 $338.6 9 Return on Rate Base $ 74.5 $ 73.3 10 Int. & Pref. Div. 62.1 35.2 11 Equity Return $ 12.4 $ 38.1 Rates of Return 12 On Rate Base - 9.80 % 13 On Total Capital 6.54 % - 14 On Common Equity Devoted to Rate Base - 13.39% On Total Common Equity 3.19% - Coverage Ratios 16 Interest Coverage 1.76 17 Preferred Stock 1.19 147A 02 (A) Excludes TMI-2
59 Metropolitan Edison Company Revenues Associated with Components of TMl-1 & 2 Costs and Impact on Costs to Customers, Interest Coverage Ratios and Return on Common Equity (1980) Impact on impact on Change in Interest ROR on Avg Customer Coverage Total Common Revenues Costs 1 Ratio Equity ($ Millions) (%) (%) Current Forecast Excluding TMI 1 $377.8 (9.3)% 1.04 (.85)% TMI1: Interest 7.3 2.0 .15 .88 Preferred Dividends 3.7 1.0 .08 .44 Depreciation 3.9 1.1 .08 .47 Return on Common Equity 17.0 4.7 .36 2.00 Operating Expenses 2.2 .5 .05 .25 Total TMl 1 $34.1 9.3% .72 4.04% Current Forecast: $411.9 - 1.76 3.19% TMI 2: Interest 13.7 3.8 .29 1.62 Preferred Dividends 6.7 1.8 .14 .80 Depreciation 9.0 2.5 .19 1.08 Return on Common Equity 31.8 8.6 .66 3.80 Operating Expenses 2.8 .7 .06 J Total TMI 2 64.0 17.4% 1.34 7.63 % Forecast, AAsted to include TMI-2 $475.9 17.4% 3.10 10 ;2%
' Compared to Current Rates 3474 '03
60 Metropolitan Edison Company Impact of Rate increase for Components of TMI-2 Costs Upon Charges to Customers, Interest Coverage Ratios & Return on Common Equity (1980D 3.1 , , , , , , , , , , , 10.8 _
,0 9 Exp -
10.5 2.9 2:, K Common <
"
e 2.7 -
-- --
8.6 H z
$ -
si.$
% Common Equity $ 2.5 g $,
O O o - ___________ e,7 3p
~
2.3 B g s a~E Depreciation O m o -
- - - - - - - - - - - - - - - -
5.6 m
.E 2.1 - Preferred Dividends s 4'8 @ O 2.0 - - ------------------
Interest (b 1.7 ' ' ' ' ' i i ' i i i i ,3. 2 0 4 8 12 1617.4
% increase to Customers (Rev 9/26/791 1A7A :04
61 Pennsylvania Electric Company Condensed Income Statements 12 Months Ended 12/31/80 ($ Millions ? Line Tntal Rate Niaking No. Compc'iy _ Treatment (A) (1) (2) 1 Revenues $ 558.9 $ 558.9 Expenses: 2 Energy $ 212.1 $ 212.1 3 Payroll 49.3 49.3 4 Other O&M 78.3 72.3 5 Depreciation 47.3 41.6 6 Taxes, Other 41.0 40.9 7 income Taxes 30.8 40.4 8 Total Expenses $458.8 $456.6 9 Return on Rate Base $ 100.1 $ 102.3 10 Int. & Pref. Div. 64.2 57.1 11 Equity r.eturn $ 35.9 $ 45.2 Rates of Return 12 On Rate Base - 9.72% 13 On Total Capital 7.94% - 14 On Common Equity Devoted to Rate Base - 13.24% 15 On Total Common Equity 8.60 % - Coverage Ratios Interest Coverage 2.68 Preferred Stock 1.50 (A) Excludes TMI-2 g474 .05
62 Pennsylvania Electric Company Revenues Associated with Components of TMI-1 & 2 Costs and impact on Costs to Customers, Interest Coverage Ratios and Return on Common Equity (1980) Impact on impact on Cha'ge in Interest ROR on Avg Customer Coverage Total Common Revenues Costs 1 Ratio Equity ($ Millions) (%) (%) Current Forecast Excluding TMI.1 $542.6 (3.1)% 2.42 6.80% TMI 1: Interest 3.9 .7 .07 .42 Preferred Dividends 2.1 .4 .04 .23 Depreciation .9 .2 .02 .10 deturn on Common Equity 7.6 1.4 .12 .85 Operating Expenses 1.8 .4 .03 .20 Total TMI.1 $ 16.3 3.1 % .28 1.80% Current Forecast: $558.9 - 2.70 8.60% TMI 2: Interest 7.3 1.3 .13 .81 Preferred Dividends 4.0 .6 .07 .44 Depreciation 3.0 .6 .05 .33 Return on Common Equity 14.4 2.6 .25 1.60 Operating Expenses 3.1 .6 .05 .33 Total TMI 2 31.8 5.7% .55 3.51 % Forecast, Adjusted to include TMI2 6590.7 _5.7 % 3.25 12.11%
' Compared to Current Rates ;06 3A7A
63 Pennsylvania Electric Company impact of Rate increase for Components of TMI-2 Costs Upon Charges to Customers, Interest Coverage Ratios & Return on Common Equity (1980) 3.25 i i i i i i i i i i , 12.1
"*"
3.20 - 11.8
- > < % Common c Equity -{
3'10 -
$ ------
11.0 2 x ER E o*
-
8 % Common Equity o$ o 3.00 o B g 0
- ------------
Depreciation 10.2 3l C2 2 y 2.90 - _ _ _ _ . _ _ _ _ . _ _ _ _ _ . _ . 9.8 m3 3 Preferred Dividends $ y$ _
, - - - - - - - - - - - - - - - -
9.4 2.80 Interest 2.70 ' ' ' ' ' ' ' '
, ,8.6 0 1 2 3 4 5 5.7 % increase to Customers 1474 07 (Rev 9/26/791
64 Impact of TMI-2 Accidunt on GPU Common Stockholder Common Stockholder Investment vs Market Worth 1400 ._ a ^ ^ a 1200 299 ! 328
,r 384 y --
y 1010 - -
!g- ; ,3 g- 77ti
- 800 -
, -
i A 9 e ki i'y
-
i k gj O E h
' $! d .9 e a s ,,
j 600 -
'
[j g-s R 400 41 d@ 5 k: if ft g y B 3 s a a g% a 200
' - % % - $ .
4th Qt Jan-Feb Mar'79 July'79
'78 '79 Book Value 147a DB E Closing Market Price at end of Period Multiplied by Shares Outstanding at end of Period
65 Imp..et of TMI-2 Accident on GPU Common Stockholder Dividend Yield on Book Value 10.0
. -
Pre Accident _
#
g 6.0
.9 Post
( Accident 4.0 - 5 h 3 2.0 - ij ,
-
s
! ff vg;.;g;,, 'ly P,ook Value Og GPU Pre Accident Annual Dividend Rate @ 12/31/78 l$1.80) Book Value @ 12/31178
($22.41) GPU Post Accident and Utility Sample: Per Salomon Brothers Stock Research Report - 8/1/79 (Annual Dividend Rate @ 7131179
+ Book Value @ 3/31179) 1474 M
66
.
Metropolitan Edison Company Installed Capacity & Obligation Proposed Capacity Plan 6000 5000 -
" ~ -
o 2 -Ei 4000 - get.Ed Total installed E $m e
-
Capacity Obligation - 1-m E. - i f3000 Met Ed installed Peaking Capacity V f N m 2000 y rms# # -
, , , , A _, Base + Intermediate Capacity Goal 1000 ~; ..l Installed Base + . >
Intermediate Capacity /
, ,, --- , , ~
0 '
>
79 80 81 82 83 84 85 86 8788 89 90 91 92 93 94 95 96 97 98 99 Year TMI Capacity
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67 O
.
Pennsylvania Electric Company Installed Capacity & Obligation Proposed Capacity Plan 6000 -
"
- e 5000 -
s 1 1
- _
Penelec Total Installed g - ; 7m_
= .a =3 8 Capacity Obligation ! 3 E. " "
EWW Edu 4000 - Penelec Installed *
" E50 Peaking Capacity % 5- =
_ 3 3000 - V
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2 y~ an
- '
Base + lntermeauate
~~ - . -
Capacity Goal
, . . ,
2000 3
, _. Q Installed Base +
_ 1000 .' l"lermediate Capacity
,. ; . ,
i . . 0 79 88 81 82 83 84 85 86 87 88 89 98 91 92 93 94 95 96 97 98 99 Year TMI Capacity 1474 all
68 Conclusions e Currently and Historically, Met Ed and Penelec Rates Compare Favorably with Other Pennsylvania Utilities.
- The Percent of income Required for Payment of Electricity Measured Against Wages, and Social Security Benefits Has Been Relatively Stable Over the Last Several Years e TMI1 Restart Schedule Hinges Upon NRC Proceedings.
- Energy Costs Are Extremely Sensitive to Oil Prices and Nuclear Generation Availability, e TMI Short Term Power Purchases and PJMlTMI Emergency Provisions Will Substantially Reduce Replacement Power Costs.
e Met Ed Deferred Energy Balance Requires Modification of Levelized Cost Rate.Penelec Could Revert to Standard ECR.
- Reductions in Construction, O&M Expenses, and Personnel Will Provide Short Term Savings But May Affect Service Reliability and Long Term Costs.
- External Financial Requirements Continue to Pose Formidable Barriers (Short Term Limits and Coverage Tests). New Equity issues Unlikely.
- Modest TMI Related Revenues Can Restore Credit Worthiness.
- Future Construction of Generation Required to Meet Load Growth Needs to Be Addressed.
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