Exhibit 1
John T. Fidler
201-263-6479 February 14, 1994
94-002
Immediately
GPU ANNOUNCES CORPORATE REALIGNMENT
Parsippany, N.J., February 14, 1994 -- General Public
Utilities Corporation (NYSE:GPU) today announced plans to realign
its corporate structure to position the corporation for the
increasing level of competition in the electric utility industry.
James R. Leva, GPU chairman, president and chief executive
officer, said that the program being announced today and other
cost reduction initiatives are expected to result in annual cost
savings of some $80 million by the end of 1996.
"As the new competitive structure of our industry unfolds,
further actions may well be necessary. We will focus sharply on
our core business: the generation, transmission and distribution
of electric energy, and renew our emphasis on customer service.
"At the heart of our program are three key strategies," Leva
stated. "First, we will substantially improve our competitive
outlook by the end of 1996 under the industry structure we
foresee. We will also substantially increase our effectiveness
through performance improvements and cost reductions, without
adversely affecting service quality, to position GPU as an
industry leader. "Finally, we will work to create a regulatory
climate that is fair to both our customers and our shareholders,"
Leva said.
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To achieve its goals, GPU will form a new subsidiary, GPU
Generation Corporation, which will operate and maintain the
fossil-fueled and hydroelectric generating stations owned and/or
operated by the GPU companies. GPU Generation will also build
new generating facilities as needed in the future. The ownership
of the generating plants will remain with Metropolitan Edison
(Met-Ed), Pennsylvania Electric (Penelec) and Jersey Central
Power and Light (Jersey Central).
"The goal of GPU Generation will be to provide low-cost
energy that will be priced to compete effectively in the changing
generation marketplace," Leva said.
The new subsidiary will be headquartered in Johnstown, Pa.,
and be headed by Robert L. Wise, now president of Penelec.
GPU will continue its involvement in the independent power
generation market through its subsidiary, Energy Initiatives.
The second element of the GPU realignment program will be
the combination of the remaining functions of Met-Ed and
Penelec.
"Focusing on the customer will be a top priority in the new
competitive world. Customers will be looking for lower costs and
services that are attuned to their needs," said Leva.
The combined operation, which will be accomplished without a
merger of the two corporate entities, will be based in Reading,
Pa., and be headed by Fred D. Hafer, who is now president of Met-
Ed.
Some of these actions will be subject to various regulatory
reviews and approvals.
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The third component of GPU's program will be a performance
improvement initiative that will enhance productivity and
effectiveness and focus on cost reduction. Included in this
effort will be a search for parallel opportunities at GPU Nuclear
Corporation and Jersey Central.
"In a competitive marketplace, we must always look for ways
to reduce our costs and improve our performance. This part of
our program will enable us to do that," Leva stated.
Related to the performance improvement effort is the fourth
element of GPU's program, a review of the corporation's "people
needs" in terms of the size, skills and compensation of GPU's
workforce.
"Staffing levels will be based on the needs of the new
organization. I am certain that the employee population will be
lower," said Leva.
The fifth part of the GPU program will be an examination of
the role of GPU Service Corporation, GPU's corporate service
unit. GPU Service currently provides several corporate
administrative and support functions to the GPU System.
"We'll be looking at all services, and deciding which could
best be provided at the local level, and which through greater
consolidation," Leva said.
"This program is a necessary step in changing the direction
and culture at GPU. Our immediate challenge will be to implement
these changes quickly and effectively. At the same time, we will
develop additional long-term strategies for our organization that
will enable us to capitalize on opportunities to expand as the
competitive markets present them to us," Leva stated.
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