The General Public Utilities Corp. gave its stockholders more bad news today: nearly 600 jobs will be eliminated in the company, and other drastic financial steps will have to be taken before the beleagured owner of the Three Mile Island nuclear facility is back on its fiscal feet.
But in a surprisingly calm and orderly three-hour session attended by 1,035 stockholders - the largest turnout ever for a GPU annual meeting - Chairman William G. Kuhns found a receptive audience for his outline of austerity measures to bring the utility back to profitability after experiencing the worst nuclear accident in U.S. history.
"We are currently negotiating with a group of banks for a $450 million revolving credit agreement to meet short term needs," Kuhns told stockholders, reporting also the most significant uninsured cost now faced by the company is a $24 million monthly bill for the purchase of replacement power.
He said that bill will drop to $10 million a month when Three Mile Island unit one (TMI-1) - not involved in the accident - is put back in operation after a fuel loading, perhaps within six months.
In an early morning press conference Kuhns told reporters that despite the accident at TMI-2, GPU's goal of having 50 percent of its power generated by nuclear energy remains unchanged. "We haven't changed our outlook at this point," he said, even adding that "we contemplate reopening that facility (within) two or three years."
Kuhns said in the meantime several other cost cutting measures would be taken. He said the planned construction program for GPU's three subsidiary power companies - Metropolitan Edison Company (Met Ed), Pennsylvania Electric Company (Penelec) and Jersey Central Power & Light (JCP&L)-would be cut back $125 million this year and $225 million next year, representing cuts of 30 percent adn 45 percent respectively.
Attempts are also being made, he said, to get relief from public utility commissions in Pennsylvania and New Jersey in the form of increased power bills to consumers.
And, Kuhns said, the compensation of GPU directors and officers has been cut. Board members cut their annual retainer fee of $7,500 to $6,000-a 20 percent drop-and eliminated a scheduled $100 increase in their $300 per meeting fee. Company officers, with the exception of Kuhns and President Herman Dieckamp, were cut back 7 percent to 1978 pay levels. Kuhns and Dieckamp were cut back to 1977 pay levels. For Kuhns, that represented a cut from $265.000 annually to $230,000, while Dieckamp drops from $207,000 to $180,000.
At one point stockholders suggested that the company officers should take an even sharper cut in pay, "and pay yourself with company stock."
The major effects of the construction cutbacks will be a delay in the completion of another nuclear plant at Forked River, N.J., and the construction of a planned coal-fired plant some 25 miles from here.
"Your company has been seriously wounded," Kuhns told the stockholders. "But the healing process is underway." He would not predict how long the quarterly stock dividend paid by the company would remain at 25 cents. It was from 45 cents two weeks ago.
But he did say it was the goal of the company to have the costs of the Three Mile Island accident shared among stockholders, customers and employes. Besides the dividend cut, stockholders have also already experienced a nearly 50 percent drop in the value of their stock-from nearly $19 to under $10 per share-since the Three Mile Island accident, Kuhns said the drop in value of GPU's equilty was almost half a billion dollars.
He said the burden was particularly tough since more than half of GPU's 175,500 stockholders are retired, according to a company survey, and the majority of all the stockholders have total family incomes of under $20,000.
The employe cuts will be spread company-wide over the next several months, with 200 each coming from the JCP&L and Penelec, and between 150 and 200 coming from Met Ed. Kuhns said he hoped a significant portion of the cuts will be taken care of by attrition and said that employes whose jobs are eliminated will be allowed, if they have an applicable skill, to instead tranfer to a job at the troubled Three Mile Island site.
He said the customers of the ultilities should share the costs of Three Mile Island because they have been the major beneficiaries of nuclear power until now. "The operations of TMI-1 and Oyster Creek nuclear facilities have already saved our customers about $700 million through 1978," he said. "In the light of this it seems equitable that our customers bear some of the financial risk, of nuclear power and share in the burden of the TMI-2 accident."
A predicted protest outside the War Memorial hockey arena-site of the annual meeting-barely materialized. Only a couple a dozen picketers held up anit-nuclear signs and were outnumbered by pro-nuclear demonstrators from local trade unions. Inside, stockholder John Feather Jr., a Lebanon, Pa., Lawyer, introduced a stockholder's resolution to force the company to close both Three Mile Island nuclear units forever because, "no guarantee can be made that such errors and failures (that occured there) will not be repeated at either unit," but the motion was defeated 44,786,501 votes to 22.25 votes.
Almost all of the dozens of speakers at the annual meeting were sympathetic to company problems, leading a "pleased" Kuhns to call the gathering "the best we have ever had," after it was over. "I was very impressed with the level of interest and the quality of the questions," he said.
Company sources said the meeting was not even the longest in company history. Several years ago one of the meetings in New York City lasted five hours while two stockholders virtually read the entire annual report aloud, asking clarification for several figures.