General Public Utilities, the financially strapped owner of the Three Mile Island nuclear plant, said today that it has borrowed $8 million from a group of New Jersey banks to enable one of its subsidaries to pay for the accident at Three Mile Island.
But the company is still a long way from getting an agreement from New Jersey, New York and Pennsylvania banks to lend General Public $400 million to keep the company afloat while it pays for the accident at Three Mile Island.
General Public Utilities Chairman William G. Kuhns said in a statement issued at its Parsippany, N.J. headquarters that the company does not expect to reach any agreements on the bigger loan until rate cases filed before the New Jersey and Pennsylvania public commissions are completed in mid-June.
The $8 million loan announced today will insure that General Public's subsidiary Jersey Central Power & Light has enough cash to pay a $16 million bill from other utilities for electricity Jersey Central bought to replace its lost output from Three Mile Island.
Two other General Public subsidiaries - Metropolitan Edison, which operated the damaged nuclear reactor, and Pennsylvania Electric - have enough money on hand to pay the bills they owe for power they purchased from other utilities during April.
Because both nuclear reactors at Three Mile Island - one damaged, the other undamaged - have been shut down since late March and the Undamaged one will remain closed for several more months at least, the three power companies owned by General Public Utilities will have to continue to purchase large quantities of power from other utilities for some time to come.
The loan negotiated today is for 60 days, and General Public Utilities plans to secure the loan with uranium from its stockpile. The company said it will ask the Securities and Exchange Commissiona and the New Jersey Public Utilities Board for permission to use the uranium as collateral.
General Public Utilities will face huge, and so far untabulated, costs as a result of the nuclear accident. To conserve cash, the company has slashed construction, cut its dividend and reduced some salaries.
It also has requested hefty rate increases from Pennsylvania and New Jersey. It also needs the $400 million in bank loans to keep it afloat as it cleans up. CAPTION: Graph, The Market In Brief, May 21, The Washington Post