Exhibit D-14
[LETTERHEAD OF XXXX, XXXXXXX, XXXXX & XXXXXXX LLP]
October 31, 2002
Xxxxx X. XxXxxxx, Secretary
Pennsylvania Public Utility Commission
Commonwealth Keystone Building
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: FirstEnergy Service Company Agreement-
Filing pursuant to Public Utility Code Section 2102
Docket No. G-
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Dear Xx. XxXxxxx:
Enclosed herewith for filing are an original and three copies of a form
of Service Agreement pursuant to which FirstEnergy Service Company ("ServeCo")
will provide various services to FirstEnergy Corp. ("FirstEnergy") utility
subsidiaries in Pennsylvania. Also enclosed for reference (as Attachment A
hereto) are copies of an Application that has been filed with the Securities and
Exchange Commission ("SEC") pursuant to the Public Utility Holding Company Act
of 1935 ("PUHCA"), describing the proposed affiliated service company
arrangements and seeking SEC approval for the form of Service Agreement (which
also was attached, as Exhibit N-7, to the SEC Application).
As a result of the FirstEnergy/GPU merger, FirstEnergy became a
registered holding company under PUHCA. The SEC has directed FirstEnergy to file
an application seeking authorization for the ServeCo (as a wholly-owned
FirstEnergy subsidiary) to provide all common corporate services to FirstEnergy
and its utility and non-utility subsidiaries. In summary, the ServeCo will
replace the former GPU Service, Inc. as the primary provider of various
corporate, managerial and administrative support services to Metropolitan Edison
Company ("Met-Ed"), Pennsylvania Electric Company ("Penelec") and Pennsylvania
Power Company ("Penn Power"). The scope of these services is described more
fully in the attached form of Service Agreement as well as in the SEC filing.
2
We are requesting approval from the Commission of the form of Service
Agreement on behalf of Met-Ed, Penelec and Penn Power, pursuant to Section 2102
of the Public Utility Code.
The ServeCo will not perform the "operations" services for FirstEnergy's
Pennsylvania utility subsidiaries, which are organized and conduct their
operations on a regional basis as separate business units.
As described in the SEC filing, the ServeCo will be a mutual service
company in accordance with Rules 87, 88 and 93 under PUHCA. As such, cost
accounting procedures will be implemented consistent with the "at-cost"
provisions of Rules 90 and 91 under PUHCA.
Please contact the undersigned in the event you have any questions with
respect to these affiliated interest arrangements. The SEC has required
FirstEnergy to transfer all service functions to the ServeCo no later than
February 1, 2003. FirstEnergy has asked the SEC to permit a delay in that
implementation date to April 1, 2003, to coincide with the installation of new
SAP Enterprise software. We respectfully request that the Commission take action
to approve the form of Service Agreement, as provided in Section 2102, within a
timeframe that will accommodate the SEC's requirements governing the timing of
the transfer of services.
Very truly yours,
XXXX, XXXXXXX, XXXXX & XXXXXXX LLP
/s/ X. Xxxxx Xxxxx
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X. Xxxxx Xxxxx
Enclosures
