GPU chief hails SEC staff action on PUHCA reform.

PARSIPPANY, N.J.--(BUSINESS WIRE)--June 22, 1995--The chairman and chief executive officer of General Public Utilities Corp. (NYSE:GPU) today hailed recommendations by the staff of the Securities and Exchange Commission that would make it easier for GPU to compete in a rapidly changing electric utility industry.

In its report, the staff recommended the conditional repeal of the Public Utility Holding Company Act of 1935, a law that requires registered utility holding companies like GPU to seek approval from the SEC for most of their financial transactions. Those approvals can take months, and in some cases, years.

"I'm very pleased by these developments. The SEC staff has reaffirmed our longstanding belief that PUHCA has outlived its usefulness, and is a barrier to competition in our industry," Leva said.

"In a more competitive market, we must be able to make business decisions more rapidly. Repeal of the Act will enable us to move swiftly for the benefit of our 2 million customers," Leva added.

The utility executive explained that the burdensome requirements of PUHCA are having an impact on GPU right now.

"Last year, we announced a major restructuring of GPU, which included the formation of a separate generation subsidiary. One year later, we are still waiting for SEC approval of that request," Leva said.

Both the Pennsylvania Public Utility Commission and the New Jersey Board of Public Utilities have approved the formation of the subsidiary, GPU Generation.

The SEC staff recommendation on PUHCA would repeal the 60-year-old law while preserving necessary consumer safeguards by transferring to the Federal Energy Regulatory Commission the responsibility for dealing with those safeguards, which includes state access to the books and records of companies in a holding company system, federal audit authority and oversight of affiliate transactions.

In addition, the staff recommended that certain "energy related" investments by registered holding companies be exempt from SEC review, as long as the value of the investment does not exceed 15 percent of the holding company's total capitalization or $50 million, whichever is greater.

In January, Leva joined the chairman of nine other utility holding companies in signing a letter to U.S. Senate leaders urging repeal of PUHCA. The law was enacted in 1935 to correct abuses that arose from pyramided holding structures within an industry that was, at that time, a vertically integrated natural monopoly. Abuses included inadequate financial disclosure, excessive leverage and abusive affiliate transactions. Changes since 1935 in the nature of the industry and in the scope of regulatory authority at the state and federal levels would make such abuses highly unlikely today.

GPU is the parent of Jersey Central Power & Light Co., Morristown, N.J. and Metropolitan Edison/Pennsylvania Electric Co., Reading, Pa.

CONTACT: General Public Utilities, Parsippany

John T. Fidler, 201/263-6479

or Home: 201/328-8494