GPU CEO speaks to regulators about change in utility industry.

PARSIPPANY, N.J.--(BUSINESS WIRE)--July 10, 1995--The chairman and chief executive officer of General Public Utilities Corporation told a gathering of utility regulators today that the employees of GPU's companies will be the key to the company's success in an increasingly competitive electric utility industry.

"It's the people, stupid," said James R. Leva at the 1995 Great Lakes Conference of Public Utilities Commissioners in White Sulphur Springs, W. Va. "That's what I keep telling myself. Our people will carry us forward into this new competitive era."

Leva, who began his utility career at GPU's Jersey Central Power & Light Co. 43 years ago as a utility worker, is also GPU's president. He was part of a panel that consisted of Hugh Stallard, president and CEO of Bell Atlantic; George Johnstone, president of American Water Works, and Oliver G. Richard, chairman and president of Columbia Gas Systems Inc. The theme of the conference was "The Road to Competition."

In his remarks, Leva focused on what would happen to GPU if the company had done nothing since the passage of the Energy Policy Act of 1992, which introduced greater levels of competition to a highly regulated industry.

"The cost of doing nothing in this environment would be disastrous," he said. "That's why it has not been an option for GPU."

Leva, whose views on managing change were featured as part of an executive roundtable discussion in the June issue of Chief Executive magazine, said that GPU has undertaken several major initiatives over the last two years to prepare itself for increased competitive pressures. They are:

o The functional merger of GPU's two Pennsylvania operating subsidiaries, Metropolitan Edison and Pennsylvania Electric,

o The formation of a separate fossil and hydroelectric generating company called GPU Generation,

o An 11 percent workforce reduction by a voluntary enhanced retirement program, and

o A comprehensive performance improvement effort at all GPU companies designed to save at least $80 million a year.

"We are also shaping our destiny by seeking reform of two federal laws that have outlived their usefulness: the Public Utility Regulatory Policies Act of 1978 and the Public Utility Holding Company Act of 1935, and by reducing our exposure to costly NUG (non-utility generator) contracts," Leva said.

Citing the utility's brush with financial collapse after the Three Mile Island accident in 1979, Leva said, "In some ways, the crisis of competition is more threatening, but less evident. You can't see it, smell it or taste it, but it's there."

One of his biggest challenges, then, is continuing communications with GPU's 10,500 employees.

"Convincing our people is the key, and we're not there yet. I harbor no illusions that I have successfully gotten the message to all of our employees."

A part of the extensive cultural change process throughout the GPU companies is the involvement of the employees in the process improvement effort.

"I want our people asking questions about their jobs, questions like, `Is this task necessary? Is the only reason I'm doing this because we've done it like this for years? If it is necessary, is there a better way?'

"If the employees feel involved, if they feel that someone is listening, then they will help you change. It's not rocket science, but it's starting to pay dividends," he said.

In 1994, Leva contributed a chapter to a book on cultural change in the electric utility industry, "Lessons in Cultural Change," published by Public Utilities Reports. He devotes much of the chapter to the importance of GPU's employees.

In his remarks, Leva kept the audience focused on the future.

"I think we have spent too much time remembering the `good old days' in our industry. What we're finding is that they really weren't so good after all. They have precious little to offer us today."

In fact, Leva told the commissioners that looking back was just as dangerous as doing nothing.

"That's why neither is an option for GPU," he said.

With 1994 earnings of $3.65 billion, GPU is one of the nation's 20 largest electric utility systems.

GPU is a registered utility holding company whose three operating utility subsidiaries - Met-Ed, Penelec and JCP&L -- provide electric service to more than 1.9 million customers in New Jersey and Pennsylvania.

CONTACT: General Public Utilities Corporation

John T. Fidler, 201/263-6479

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