April 23, 2000

Dear Mr. Katz:

GPU, Inc., headquartered in Morristown, NJ, is a registered public utility holding company providing utility and utility-related services to customers throughout the world. GPU serves 4.6 million customers directly through its electric companies -- GPU Energy in New Jersey and Pennsylvania, GPU Power UK in England, and Emdersa in Argentina. It serves an additional 1.4 million customers indirectly through GPU GasNet, its gas transmission subsidiary in Australia. GPU's other subsidiaries include MYR Group Inc., GPU Advanced Resources, Inc., GPU Nuclear, Inc., GPU Service, Inc. and GPU Telecom Services, Inc. and GPU Diversified Holdings LLC. http://www.gpu.com/home/

GPU, and its subsidiaries and affiliates, maintain millions of records. Electronic storage technology increases the speed, reliability and flexibility, while reducing the cost, in maintaining, managing and retrieving these records. GPU therefore supports the Commission's proposal to amend 17 CFR 257.1(e) regarding electronic recordkeeping by public utility holding companies, subject to the following comments:

(1). Proposed rule (e)(2)(i) would require that the arrangement and indexing of electronic records permit for "easy" location, access and retrieval. GPU believes that so long as the record and related information is producible by the company within the time frame ultimately adopted by the SEC under (e)(2)(ii) [see comment 2. below], the objective of "easy" access will have been satisfied. In other words, section (e)(2)(ii) negates the need for (e)(2)(i), since (e)(2)(ii) requires regulated companies to have the ability to promptly get a copy of any record, a printout of any record, and to access, search, view, sort and print the record. This essentially defines the "ease" desired in locating, accessing and retrieving records. Otherwise, GPU requests that the Commission publish for comment a proposed definition of "easy" which would not impose an unreasonable burden on companies in terms of the costs incurred to make the location, access and retrieval "easy."

(2). Proposed rule (e)(2)(ii) would require that copies of records be "provide[d] promptly (but in no case more than one business day after the request)" to the SEC. This generic one-day requirement has no basis, is potentially unduly burdensome and costly, and is too stringent given the various functions, systems, formats and locations (potentially off-site) that may be involved in producing any particular record. GPU does not believe that there is any generically reasonable time frame within which to produce a business record, and therefore proposes that the rule require a record to be produced "as soon as reasonably practicable".

(3). Proposed rule (e)(2)(iii) would require that the company "separately store" a duplicate copy of the record. "Separately" is not defined, and may be subject to varying interpretations. Would this mean storage within the same department, but in a different location; or in an altogether different building; or in a different media; or by a different individual; or on a different computer? In terms of record management strategies, it would be extremely difficult to keep track of the various locations where duplicates of different records might be stored. To the extent that there is a need for duplicate copies at all [see comment 4. below], GPU proposes that the Commission publish for comment a proposed definition of "separately"; and one that would not impose an unreasonable burden on companies in terms of the costs incurred to "separately" store duplicate records.

(4). Proposed rule (e)(2)(iii) would seem to require that a duplicate copy of every record be stored for the entire record retention period, for, under the heading of "General Requirement", it states that the company must "separately store...a duplicate copy of the record stored on the micrographic or electronic storage media or any media allowed by this section." Such a requirement is not only overly burdensome, but is contrary to Section (a)6 of the regulations [(17 CFR 257.1(a)(6)], which allows the destruction of most duplicate copies:

"Duplicate copies of records which contain no significant information not shown on the copy preserved may be destroyed at any time. If the same document would be required under more than one scheduled item, such as an indenture also included as an exhibit in a filing required to be retained, only one copy need be preserved if cross references are substituted for the additional copies." 17 CFR 257.1(a)(6).

GPU therefore requests that companies continue to be allowed to determine what records need to be kept in duplicate, subject to the requirements of 257.1(a(6). The practice of duplicating records is generally and properly limited to those records that are considered vital to one's organization, or legally required to be kept in duplicate form.

(5). Proposed Rule (e)(3)(ii), under the heading "special requirements for electronic storage media", would require that access to electronic records be limited "to properly authorized personnel, the directors of the company, and the Commission....". GPU believes this special requirement for electronic records to be unlawful as inconsistent with the objectives of the Electronic Signatures in Global and National Commerce Act ("Act"), not authorized by the Act, and otherwise unjustified. Access to a company's electronic records should be treated no differently than access to a company's other business records. In terms of corporate strategy, training and operations, employees should be able to access and maintain sensitive electronic records as they are able to access and maintain sensitive records stored on other storage media. As long as a company has adequate safeguards in place for treatment and maintenance of all of its sensitive or confidential records, regardless of the storage media in which the records are kept, it should not matter that the records are stored electronically. Under the current legal scheme, GPU does not believe that the SEC has the authority to determine the circumstances under which access to electronic records may occur. GPU would urge the Commission to remove this section consistent with the purpose and goals of Section (d)(2) of the Act, which provides that records remain accessible to all persons who are entitled to access by law for the required period in a form that is capable of being accurately reproduced for later reference, whether by transmission, printing or otherwise.

GPU appreciates this opportunity to comment, and commends the Commission for continuing to update its regulations to reflect developing technologies, including the modernization of recordkeeping.

Sincerely,

Scott Guibord
Secretary
GPU, Inc.