ITEM I

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EAl0BiAWBavuoXYjXFmaNYKrg/GtxYapYvuiw/PBbbtpxwEMVMMSoYabXMuGzSYh jdc7Pe1KadbktuKHScDN1w== 0000003673-02-000108.txt : 20020501 0000003673-02-000108.hdr.sgml : 20020501 ACCESSION NUMBER: 0000003673-02-000108 CONFORMED SUBMISSION TYPE: U5S PUBLIC DOCUMENT COUNT: 43 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLEGHENY ENERGY INC CENTRAL INDEX KEY: 0000003673 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 135531602 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U5S SEC ACT: 1935 Act SEC FILE NUMBER: 030-00081 FILM NUMBER: 02630228 BUSINESS ADDRESS: STREET 1: 10435 DOWNSVILLE PIKE CITY: HAGERSTOWN STATE: MD ZIP: 21740-1766 BUSINESS PHONE: 3017903400 MAIL ADDRESS: STREET 1: 10435 DOWNSVILLE PIKE CITY: HAGERSTOWN STATE: MD ZIP: 21740-1766 FORMER COMPANY: FORMER CONFORMED NAME: WEST PENN ELECTRIC CO DATE OF NAME CHANGE: 19660908 FORMER COMPANY: FORMER CONFORMED NAME: ALLEGHENY POWER SYSTEM INC DATE OF NAME CHANGE: 19920703 U5S 1 finalu5s.htm U-5-S PERIOD ENDING 12/31/01 ITEM I

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM U5S

ANNUAL REPORT

For the year ended December 31, 2001

Filed pursuant to the
Public Utility Holding Company Act of 1935 by

ALLEGHENY ENERGY, INC.

10435 Downsville Pike

Hagerstown, Maryland 21740-1766

ITEM I. SYSTEM COMPANIES AND INVESTMENT THEREIN AS OF DECEMBER 31, 2001

Name of Company Allegheny Energy, Inc. (AYE) Allegheny Energy Service Corporation (AESC) Monongahela Power Company (MP) Mountaineer Gas Company (MGC) Mountaineer Gas Services (MGS) Universal Coil, LLC (UC) Mapcom Systems, Inc. (MSI) The Potomac Edison Company(PE) PE Transferring Agent (PETA) West Penn Power Company (1) (WPP) West Virginia Power & Transmission Company* West Penn West Virginia Water Power Company* Unsecured debt West Penn Funding Corporation (WPFC) West Penn Funding LLC (WPFLLC) West Penn Transferring Agent LLC (WPTA) Allegheny Energy Supply Company, LLC (AES) Allegheny Energy Supply Capital, LLC (AESCAP) Allegheny Energy Supply Conemaugh, LLC (AESCON) Allegheny Energy Global Markets, LLC (AEGM) Allegheny Energy Supply Gleason Generating Facility, LLC (AESGGF) Allegheny Energy Supply Lincoln Generating Facility, LLC (AESLGF) Allegheny Energy Supply Wheatland Generating Facility, LLC (AESWGF) Energy Financing Company, L.L.C. (EFC) Lake Acquisition Company, L.L.C. (LAC) Allegheny Energy Supply Development Services, LLC (AESD) Acadia Bay Energy Company, LLC (ABEC) Allegheny Energy Supply Hunlock Creek, LLC (AESHC) Hunlock Creek Energy Ventures (HCEV) Allegheny Ventures, Inc. (AV) AYP Energy, Inc. Allegheny Communications Connect, Inc. (ACC) Allegheny Communications Connect of Virginia, Inc. (ACCVA) Allegheny Communications Connect of Pennsylvania, LLC (ACCPA) Allegheny Communications Connect of Ohio, LLC (ACCOH) Allegheny Communications Connect of West Virginia, LLC (ACCWV) AFN Finance Company No. 2, LLC (AFN) Odyssey Communications, LLC (ODC) AFN, LLC (AFNL) Allegheny Energy Solutions, Inc. (AESOL) MABCO Steam Company, LLC (MABCO) APS Cogenex, L.L.C. (APSCO) Utility Associates, Inc. (UAI) Fellon-McCord Associates, Inc. (FMA) Alliance Gas Services, Inc. (AGS) Allegheny Energy Unit 1 and Unit 2, L.L.C. Ohio Valley Electric Corporation (OVEC) Indiana-Kentucky Electric Corporation (IKEC) Green Valley Hydro, LLC (GVH) Subsidiaries of More Than One System Company Allegheny Generating Company (AGC) Owners: Monongahela Power Company Allegheny Energy Supply Company, LLC Allegheny Pittsburgh Coal Company* (APC) Owners: Monongahela Power Company Unsecured debt The Potomac Edison Company Unsecured debt West Penn Power Company Unsecured debt Alliance Energy Services Partnership (AESP) Owners: Allegheny Ventures, Inc. Alliance Gas Services, Inc.	Holding Service Electric Gas Gas (5) (12) Electric (5) Electric (2) (3) (4) (4) (5) (5) (6) (5) (5) (18) (5) (5) (5) (5) (5) (5) (5) (5) (13) (6) (7) (8) (8) (5) (8) (5) (8) (5) (8) (5) (5) (8) (5) (8) (9) (5) (5) (14) (15) (16) (19) (1) (10) (10) (5) Generating (11) (17)	Common Shares Owned 5,000 5,891,000 1,831,687 100 None 60,150 22,385,000 None 24,361,586 30,000 5 100 None None None None None None None None None None None None None None None 100 100 100 100 None None None None None None 100 None None 111 200 200 None 12,500 17,000 None 229.7160 770.2840 2,500 2,500 5,000 None None	Percentage of Voting Power 100 100 100 100 50 100 100 None 100 100 100 100 100 100 98.033 100 100 100 100 100 100 100 100 100 100 100 50 100 100 100 100 100 100 100 100 40 15.85 100 19.968 50 10 100 100 100 12-1/2 100 100 22.97 77.03 25 25 50 50 50	Issuer's Book Value 50 629,594 239,222 9,612 None 110 383,257 3,140 423,313 2,091 2 7 240,376 4,818 100 1,524,686 1,054,357 1 None 345,212 254,958 299,324 159,627 666 6,889 5 20,416 18,047 124,755 1,662 72,922 1 568 None None 1 533 8,655 8656 2,992 1,456 472 8,419 8,863 None 1,250 3,400 2,196 30,476 102,194 (3,416) 3,495 (3,416) 3,616 (6,832) 7,061 14,953 14,640	Owner's Book Value 50 646,185 239,222 9,612 None 110 384,722 3,140 436,925 2,093 1 7 240,376 4,818 100 1,500,788 1,054,357 1 None 345,212 254,958 299,324 159,627 666 6,889 5 20,416 18,047 124,755 1,662 72,922 1 568 None None 1 533 8,655 8656 2,992 1,456 472 8,419 8,863 None 1,250 3,400 2,196 30,476 102,194 (3,416) 3,495 (3,416) 3,616 (6,832) 7,061 14,953 14,640
* Inactive (1) Exempt from registration as a holding company under Section 3 (a) pursuant to Rule 2. (2) Owns land for power development. (3) Owns land for water power development. (4) See notes below. (5) Limited liability company. An LLC has no common stock. The percentage of voting power represents the percent of Ownership interest in the LLC owned by the system company. Also see notes below. (6) Unregulated nonutility. See notes below. (7) Bulk power marketer. (8) Exempt telecommunications company. (9) Unregulated marketer of electric energy and other energy related services. See paragraph below. (10) Allegheny Energy, Inc. owns 12-1/2% of the capital stock of the Ohio Valley Electric Corporation, the balance owned by unaffiliated companies. OhioValley Electric Corporation owns 100% of the capital stock of Indiana-Kentucky Electric Corporation. These companies were formed October 1, 1952, to build electric generating facilities to supply power under a long-term contract to the Energy Research and Development Administration's (formerly Atomic Energy Commission) uranium diffusion project at Portsmouth, Ohio. See Holding Company Act Release No. 11578. (11) Owns coal reserves as a long-term resource. (12) Software Developer. Mapcom Systems, Inc. was dissolved on June 11, 2001. (13) General Partnership engaged in owning, operating, and marketing of the output of its facilities at wholesale only. (14) Develops and implements field data collection solutions exclusively for the utility industry. (15) Energy procurement and management services. (16) Provides administrative and support services to Fellon-McCord Associates, Inc. (17) General Partnership engaged in purchasing, selling, and marketing of natural gas and other energy related services largely to commercial and industrial end use customers. (18) Allegheny Energy Global Markets, LLC was merged into Allegheny Energy Supply Company, LLC on December 31, 2001. (19) Allegheny Energy Unit 1 and Unit 2, L.L.C. was merged into Allegheny Energy Supply Company, LLC on June 1, 2001.

ITEM 1. SYSTEM COMPANIES AND INVESTMENT THEREIN AS OF December 31, 2001 (Continued)
NOTES

In 1999, West Penn Funding Corporation (WPFC) and West Penn Funding LLC (WPFLLC) were formed. WPFC is the sole member of WPFLLC. WPFLLC was formed for the sole purpose of purchasing and owning Intangible Transition Property (ITP), pledging its interest in ITP and other collateral to bond trustee, and performing activities that are necessary, suitable or convenient to accomplish these purposes.

In 2001, AESUPPLY formed Allegheny Energy Supply Development Services, LLC (AESD). AESD, incorporated in Delaware, is a wholly owned subsidiary of AESUPPLY.

In 2001, AESUPPLY acquired Acadia Bay Energy Company, LLC (ABEC). ABEC, incorporated in Delaware, is a wholly owned subsidiary of AESUPPLY.

In 2000, AESHC and a non-system company formed a partnership called Hunlock Creek Energy Ventures (HCEV). HCEV, partnership formed in Pennsylvania, has a 50% partnership interest owned by AESHC.

In 2000, ACC acquired a 40% ownership interest in Odyssey Communications, LLC (ODC), incorporated in Pennsylvania.

In 2000, AV and several non-system companies formed AFN, LLC (AFNL). AV owns 15.85% of AFNL, incorporated in Delaware.

In 2001, AESOL and several non-system companies formed MABCO Steam Company, LLC (MABCO). AESOL owns 19.968% of MABCO, incorporated in Delaware.

In 2001, AESOL and a non-system company formed APS Cogenex, L.L.C. (APSCO). AESOL owns 50% of APSCO, incorporated in Delaware.

In 2001, AV acquired an ownership interest in Utility Associates, Inc. (UAI). AV owns 10% of UAI, incorporated in Georgia.

In 2001, AV acquired Fellon-McCord Associates, Inc. (FMA). FMA, incorporated in Kentucky, is a wholly owned subsidiary of AV.

In 2001, AV acquired Alliance Gas Services, Inc. (AGS). AGS, incorporated in Kentucky, is a wholly owned subsidiary of AV.

In 2001, AV acquired an ownership interest in Alliance Energy Services Partnership (AESP). AV owns 50% of AESP, a partnership formed in Kentucky. The other 50% is owned by AGS.

ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS.

In the first quarter, Allegheny Energy, Inc. acquired, and assigned to Allegheny Energy Supply Company, LLC, 50% of Potomac Electric Power Company's 166 MW interest ("Pepco's Interest") in the 1,711 MW generating capacity of the Conemaugh Generating Station. The total purchase price for Pepco's Interest was $152.5 million, subject to adjustment for storeroom and coal pile inventories. The purchase price and any adjustment were split equally between Allegheny Energy Supply Company, LLC and PPL Global, Inc. Allegheny Energy Supply Company, LLC and PPL Global, Inc. each paid approximately $76.25 million for their respective shares of Pepco's Interest, or approximately $918 per kW, - a price consistent with other recent auctions of utility assets.

Also in the first quarter, Allegheny Energy Supply Company, LLC acquired outstanding membership interests in five (5) limited liability companies for the sum of $1,028,000,000.00 (one billion twenty-eight million dollars), pursuant to a Purchase and Sale Agreement between Allegheny Energy Supply Company, LLC and Enron North America Corp. ("Enron"), a Delaware corporation, dated November 13, 2000 (the "Agreement"). Under the Agreement, Allegheny Energy Supply Company, LLC agreed to purchase and Enron agreed to sell the outstanding membership interests in five (5) limited liability companies. Three (3) of these limited liability companies are exempt wholesale generators ("EWGs"): Des Plaines Green Land Development, L.L.C.; Gleason Power I, L.L.C.; and West Fork Land Development Company, L.L.C. (collectively the "EWGs"). Two (2) are not EWGs: Energy Financing Company, L.L.C.; and Lake Acquisition Company, L.L.C. (the "Non-EWG LLC's", and, together with the EWGs, the "LLCs"). The acquisitio n netted 1,710 megawatts (MW) of natural gas-fired merchant generating capacity. Allegheny Energy, Inc. and Allegheny Energy Supply Company, LLC financed the acquisition with a combination of debt and equity securities. The transaction closed in the first quarter of 2001.

Otherwise, none, except as reported in certificates filed pursuant to Rule 24 for the year ended December 31, 2001.

ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES

On May 2, 2001, Allegheny Energy, Inc. completed a public offering of its common stock, selling a total of 14.3 million shares priced at $48.25 per share. A portion of the net proceeds of approximately $667 million was used to partially fund Allegheny Energy Supply Company, LLC's acquisition of generating facilities located in the Midwest and for other corporate purposes.

Otherwise, none, except as reported in certificates filed pursuant to Rule 24, Form U-6B-2, Form 10-K/A for the year ended December 31, 2001 and Schedules IX for Allegheny Energy Supply, LLC, Monongahela Power Company, The Potomac Edison Company, and West Penn Power Company.

ITEM 4. ACQUISITION, REDEMPTION, OR RETIREMENT OF SYSTEM SECURITIES

Calendar Year 2001

(Dollar Amounts in Thousands)

Name of

Company

Acquiring,

Redeeming,

or Retiring

Number of Shares or Principal Amount

Commission

Name of Issuer and Title of Issue

Securities

Acquired

Redeemed

Retired

Consideration

Authorization

Monongahela Power Co.

8.00% QUIDS Series A

Monongahela Power Co.

$40,000

Rule 42

8 5/8% First Mortgage Bonds

Monongahela Power Co.

$50,000

$52,095

Rule 42

Bank Senior Secured Credit Facility

Monongahela Power Co.

$100,000

Rule 42

The Potomac Edison Co.

8.00% First Mortgage Bonds

The Potomac Edison Co.

$50,000

Rule 42

8.00% QUIDS Series A

The Potomac Edison Co.

$45,457

Rule 42

West Penn Funding, LLC

6.32% Transition Bonds -

Class A-1

West Penn Funding, LLC

$27,167

Rule 42

6.63% Transition Bonds -

Class A-2

West Penn Funding, LLC

$33,017

Rule 42

Mountaineer Gas Co.

7.00% Property Mortgage

Mountaineer Gas Co.

$15

Rule 42

7.59% Unsecured Note

Mountaineer Gas Co.

$3,333

Rule 42

Allegheny Energy Supply Co., LLC

Allegheny Energy

8.13% Medium-Term Note (1)

Supply Co., LLC

$7,187

Rule 42

$356,176

$358,271

(1) $380 million was borrowed in November 2001 with a maturity date of November 2007. Repayment of the loan occurs during the

construction period of a leased facility based on project cost funding requirements.

ITEM 5.   INVESTMENTS IN SECURITIES OF NON-SYSTEM COMPANIES

1.   Three investments aggregating $30,101.00.

2.   None

ITEM 6. OFFICERS AND DIRECTORS

Part I. Names, principal business addresses, and positions of executives, officers and directors of all system companies as of December 31, 2001.

The following symbols are used in the tabulation:

CH	Chairman	X	Member of Executive Committee
GC	General Counsel	A	Member of Audit Committee
P	President	F	Member of Finance Committee
SVP	Senior Vice President	O	Member of Operating Committee
VP	Vice President	M	Member of Management Review and Director Affairs Committee
T	Treasurer	NB	Member of New Business Committee
S	Secretary	S	Member of Strategic Affairs Committee
C	Controller	VPO	Vice President-Operations
D	Director	VPAP	Vice President & Assistant to President
CA	Chief Accountant	GA	General Auditor
df	Director's fees	s	Salary
VC	Vice Chairman	EVP	Executive Vice President

ITEM 6. OFFICERS AND DIRECTORS - continued PART I Continued
	Allegheny Energy, Inc.	Allegheny Energy Service Corporation	Allegheny Ventures, Inc.	Monongahela Power Company	The Potomac Edison Company	West Penn Power Company
Paul M. Barbas 10435 Downsville Pike Hagerstown, MD	VP	s VP	D P	EVP	EVP	EVP
David C. Benson 800 Cabin Hill Drive Greensburg, PA 15601		s VP
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	VP T	s VP T	VP T	T	T	T
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	s S	S	S	S	S
Peter J. Dailey 800 Cabin Hill Drive Greensburg, PA 15601		s VP
Richard J. Gagliardi 10435 Downsville Pike Hagerstown, MD	VP	s VP	D VP
James R. Haney 800 Cabin Hill Drive Greensburg, PA 15601		s VP		VP	VP	VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD	VP GC	s VP	D VP	VP	VP	VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD	VP C	s VP C	VP C	C	C	C
Ronald A. Magnuson 800 Cabin Hill Drive Greensburg, PA 15601		s VP		VP	VP	VP
Bryan G. Moorhouse 10435 Downsville Pike Hagerstown, MD		s VP
Michael P. Morrell 10435 Downsville Pike Hagerstown, MD	SVP	s SVP		D VP O	D VP O	D VP O
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	D CH P X F NB	s D CH P X	D CH O	D CH X O	D CH X O	D CH X O
Karl V. Pfirrmann 800 Cabin Hill Drive Greensburg, PA		s VP		VP	VP	VP
Jay S. Pifer 800 Cabin Hill Drive Greensburg, PA	SVP	s SVP	D VC O	D P O	D P O	D P O
Victoria V. Schaff 10435 Downsville Pike Hagerstown, MD	VP	s VP		D VP	D VP	D VP
Cynthia A. Shoop 10435 Downsville Pike Hagerstown, MD		s VP
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD	SVP	s SVP	D	D VP	VP D	D VP
Robert R. Winter 800 Cabin Hill Drive Greensburg, PA 15601		s		VP	VP	VP

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Allegheny Energy, Inc.	Allegheny Energy Service Corporation	Allegheny Ventures, Inc.	Monongahela Power Company	The Potomac Edison Company	West Penn Power Company
Eleanor Baum 51 Astor Pl. NY, NY	df D F M	D
James J. Hoecker 3000 K Street NW, Ste 300 Washington, DC	df D	D
Wendell F. Holland 1025 Laurel Oak Road Voorhees, NY	df D A NB	D
Ted J. Kleisner The Greenbrier 300 West Main Street White Sulphur Springs, WV	df D	D
Frank A. Metz, Jr. P.O.Box 26 Sloatsburg, NY	df D F M X S	D X
Steven H. Rice 438 Guard Hill Road Bedford, NY 10506	df D X F M S	D X
Gunnar E. Sarsten 11436 Scarborough's Neck Road P.O. Box 459 Belle Haven, VA	df D NB M S	D
Louis B. Campbell 40 Westminister Street Providence, RI	df D M	D

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Allegheny Generating Company	Allegheny Pittsburgh Coal Company	West Virginia Power and Transmission Company	West Penn West Virginia Water Power Company	Ohio Valley Electric Corporation	Indiana- Kentucky Electric Corporation
Paul M. Barbas 10435 Downsville Pike Hagerstown, MD			D P	D P
David C. Benson 800 Cabin Hill Drive Greensburg, PA	VP				D X
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	VP T	VP T	VP T	VP T
Gus H. Boswell 10435 Downsville Pike Hagerstown, MD			VP	VP
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	S	S	S
Richard J. Gagliardi 10435 Downsville Pike Hagerstown, MD	D VP	D VP	D VP	D VP
James P. Garlick 800 Cabin Hill Drive Greensburg, PA	VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD	D VP	D VP	D VP	D VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD	VP C	VP C	VP GA	VP GA
Michael P. Morrell 10435 Downsville Pike Hagerstown, MD	D P	D P			D	D X
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	D CH	D CH	D CH	D CH	D
Jay S. Pifer 800 Cabin Hill Drive Greensburg, PA			VP	VP
Victoria V. Schaff 10435 Downsville Pike Hagerstown, MD	D
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD	VP	D VP	D VP	D VP

ITEM 6. OFFICERS AND DIRECTORS continued
PART I Continued

	Allegheny Generating Company	Allegheny Pittsburgh Coal Company	West Virginia Power and Transmission Company	West Penn West Virginia Water Power Company	Ohio Valley Electric Corporation	Indiana- Kentucky Electric Corporation
Paul D. Addis 1 Riverside Plaza Columbus, OH					D
John D. Brodt P. O. Box 468 Piketon, OH					s S T	S T
H. Peter Burg 76 S. Main Street Akron, OH					D
E. Linn Draper, Jr. 1 Riverside Plaza Columbus, OH					D X P	D X P
Henry W. Fayne 1 Riverside Plaza Columbus, OH					D
Arthur R. Garfield 76 S. Main Street Akron, OH					D X	D X
Andrew E. Goebel 20 NW Fourth Street Evansville, IN					D	D
David L. Hart 1 Riverside Plaza Columbus, OH					VPAP	VPAP
Ronald G. Jochum 20 NW Fourth Street Evansville, IN						D
David E. Jones P. O.. Box 468 Piketon, OH					VPO s	VPO
William J. Lhota 1 Riverside Plaza Columbus, OH					D
Armando A. Pena 1 Riverside Plaza Columbus, OH					VP	VP
Guy L. Pipitone 76 S. Main Street Akron, OH					D
John C. Procario 139 East Fourth Street Cincinnati, OH					D X

ITEM 6. OFFICERS AND DIRECTORS continued
PART I Continued

	Allegheny Generating Company	Allegheny Pittsburgh Coal Company	West Virginia Power and Transmission Company	West Penn West Virginia Water Power Company	Ohio Valley Electric Corporation	Indiana- Kentucky Electric Corporation
John R. Sampson 101 West Ohio Street Suite 1320 Indianapolis, IN						D
H. Ted Santo 1065 Woodman Drive Dayton, OH					D	D X
Thomas V. Shockley, III 1 Riverside Plaza Columbus, OH					D
A. Roger Smith 220 W. Main Street Louisville, KY					D X
Paul W. Thompson 220 W. Main Street Louisville, KY					D
William E. Walters 110 E. Wayne Street South Bend, IN						D

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Green Valley Hydro, LLC	Allegheny Energy Supply Company, LLC	West Penn Funding Corporation	West Penn Funding, LLC	Energy Financing Company, LLC	Allegheny Energy Supply Capital, LLC
Flavio C. Bartmann 1030 Fifth Avenue, Apt. 2W New York, NY		D
David C. Benson 4350 Northern Pike Monroeville, PA	VP	VP
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	T	T			P	P
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	S	S	S	S	S
Terence A. Burke 10435 Downsville Pike Hagerstown, MD			D	D	D	D
Kristin W. Eppes 23258-2 Renaissance Drive Las Vegas, NV 87119			VP	VP	VP	VP
Mark A. Ferrucci 23258-2 Renaissance Drive Las Vegas, NV 87119				D
Richard J. Gagliardi 10435 Downsville Pike Hagerstown, MD		D
James P. Garlick 800 Cabin Hill Drive Greensburg, PA	VP	VP
Robert W. Grier 23258-2 Renaissance Drive Las Vegas, NV 87119			D VP	VP	D VP	D VP
David R. Hancock 23258-2 Renaissance Drive Las Vegas, NV 87119					C	C
Bryan H. Hanks 800 Cabin Hill Drive Greensburg, PA	VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD	VP	D VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD	C	C
Kim E. Lutthans 23258-2 Renaissance Drive Las Vegas, NV 87119				D
Michael P. Morrell 10435 Downsville Pike Hagerstown, MD	P	D P	P	P
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	CH	D CH
Jay S. Pifer 800 Cabin Hill Dr Greensburg, PA		D

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Green Valley Hydro, LLC	Allegheny Energy Supply Company, LLC	West Penn Funding Corporation	West Penn Funding, LLC	Energy Financing Company, LLC	Allegheny Energy Supply Capital, LLC
Victoria V. Schaff 10435 Downsville Pike Hagerstown, MD		D
Bruce M. Sedlock 800 Cabin Hill Drive Greensburg, PA			D CH	D CH	D	D
Thomas C. Sheppard, Jr. 1310 Fairmont Avenue Fairmont, WV				D
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD		D VP
Keith L. Warchol 10435 Downsville Pike Hagerstown, MD			T	VP T	T	T
Anthony Wilson 10435 Downsville Pike Hagerstown, MD			VP	VP

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Allegheny Energy Solutions, Inc.	West Penn Transferring Agent LLC	Allegheny Communications Connect, Inc.	AYP Energy, Inc.	Allegheny Energy Global Markets, LLC
Paul M. Barbas 10435 Downsville Pike Hagerstown, MD	D P		D P	D P
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	VP T	T	VP T	VP T	VP T
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	S	S	S	S
Kenneth J. Blasko 10435 Downsville Pike Hagerstown, MD					VP
Terence A. Burke 10435 Downsville Pike Hagerstown, MD		VP
Ron E. Cardwell, II 10435 Downsville Pike Hagerstown, MD	VP
John W. Flinko 100 Brush Run Road Greensburg, PA			VP
Richard J. Gagliardi 10435 Downsville Pike Hagerstown, MD	D VP		D VP	D VP
James P. Garlick 800 Cabin Hill Drive Greensburg, PA	VP	VP
Daniel L. Gordon 909 Third Avenue, 33^rd Floor New York, NY					D VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD	D VP		D VP	D VP	VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD	VP C		VP C	VP C
Michael P. Morrell 10435 Downsville Pike Hagerstown, MD					D VC
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	D CH	D CH	D CH	D CH	D CH
Jay S. Pifer 800 Cabin Hill Dr Greensburg, PA	D VC		D VC	D VC	D
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD	D VP	D P	D VP	D VP	D VP

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	PE Transferring Agent, LLC	Allegheny Communications Connect of Virginia, Inc.	Mountaineer Gas Company	Mountaineer Gas Services, Inc.
Paul M. Barbas 10435 Downsville Pike Hagerstown, MD		P D	D VP	D VP
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	T	VP T	VP T	VP T
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	S	S	S
Terry A. Burke 10435 Downsville Pike Hagerstown, MD	VP
John W. Flinko 100 Brush Run Road Greensburg, PA		VP
Richard J. Gagliardi 10435 Downsville Pike Hagerstown, MD		D VP	D VP	D VP
James R. Haney 800 Cabin Hill Driva Greensburg, PA			VP	VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD		D VP	D VP	D VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD		VP C	VP C	VP C
Ronald A. Magnuson 800 Cabin Hill DrivE Greensburg, PA			VP	VP
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	D CH	D CH	D CH	D CH
Karl V. Pfirrmann 800 Cabin Hill Drive Greensburg, PA			VP	VP
Jay S. Pifer 800 Cabin Hill Drive Greensburg, PA		D VC	P D	P D
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD	D P	D VP	D VP	D VP

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Mapcom Systems, Inc.	Allegheny Energy Supply Hunlock Creek, LLC	Allegheny Communications Connect of Pennsylvania, LLC	Allegheny Energy Supply Conemaugh, LLC
Paul M. Barbas 10435 Downsville Pike Hagerstown, MD			P
David C. Benson 4350 Northern Pike Monroeville, PA		VP		VP
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	VP T	T	VP T	T
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	S	S	S
John W. Flinko 100 Brush Run Road Greensburg, PA			VP
Richard J. Gagliardi 10435 Downsville Pike Hagerstown, MD	D VP		VP	D
James P. Garlick 800 Cabin Hill Drive Greensburg, PA		VP		VP
James R. Haney 800 Cabin Hill Driva Greensburg, PA	VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD	VP	VP	VP	D VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD	VP C	C	VP C	C
Ronald A. Magnuson 800 Cabin Hill Drive Greensburg, PA	VP
Michael P. Morrell 10435 Downsville Pike Hagerstown, MD	VP	D P	VP	D P
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	D CH	D CH	D CH	D CH
Karl V. Pfirrmann 800 Cabin Hill Drive Greensburg, PA	VP
Jay S. Pifer 800 Cabin Hill Drive Greensburg, PA	D P		VC
Victoria V. Schaff 10435 Downsville Pike Hagerstown, MD		D
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD				VP

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Allegheny Energy Supply Gleason Generating Facility, LLC	Allegheny Energy Supply Lincoln Generating Facility, LLC	Allegheny Energy Supply Wheatland Generating Facility, LLC	Lake Acquisition Company, LLC
David C. Benson 4350 Northern Pike Monroeville, PA	VP	VP	VP	VP
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	T	T	T	T
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	S	S	S
James P. Garlick 800 Cabin Hill Drive Greensburg, PA	VP	VP	VP	VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD	VP	VP	VP	VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD	C	C	C	C
Michael P. Morrell 10435 Downsville Pike Hagerstown, MD	P	P	P	P
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	CH	CH	CH	CH
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD	VP	VP	VP	VP

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Allegheny Energy Supply Development Services, LLC	Allegheny Communications Connect of West Virginia, LLC	AFN Finance Company No. 2, LLC	Acadia Bay Energy Company, LLC
Paul M. Barbas 10435 Downsville Pike Hagerstown, MD		P	P
David C. Benson 4350 Northern Pike Monroeville, PA	VP			VP
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	T	VP T	VP T	T
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	S	S	S
John W. Flinko 100 Brush Run Road Greensburg, PA		VP	VP
Richard J. Gagliardi 10435 Downsville Pike Hagerstown, MD	D	VP	VP
James P. Garlick 800 Cabin Hill Drive Greensburg, PA	VP			VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD	D VP	VP	VP	VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD	C	VP C	VP C	C
Michael P. Morrell 10435 Downsville Pike Hagerstown, MD	D P	VP		P
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	D CH	CH	CH	CH
Jay S. Pifer 800 Cabin Hill Drive Greensburg, PA	D	VC	VC
Victoria V. Schaff 10435 Downsville Pike Hagerstown, MD	D
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD	D VP		VP	VP

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Allegheny Communications Connect of Ohio, LLC	Fellon - McCord Associates, Inc.	Alliance Gas Services, Inc.	Alliance Energy Services Partnership
Paul M. Barbas 10435 Downsville Pike Hagerstown, MD	P	D	D P	P
Regis F. Binder 10435 Downsville Pike Hagerstown, MD	VP T	VP T	VP T	VP T
Marleen L. Brooks 10435 Downsville Pike Hagerstown, MD	S	S	S	S
Ron E. Cardwell, II 10435 Downsville Pike Hagerstown, MD		VP	VP	VP
Andrew R. Fellon 9960 Corporate Campus Drive Louisville, KY		P	VP	VP
John W. Flinko 100 Brush Run Road Greensburg, PA	VP
Richard J. Gagliardi 10435 Downsville Pike Hagerstown, MD	VP	D VP	VP	VP
Thomas K. Henderson 10435 Downsville Pike Hagerstown, MD	VP	D VP	D VP	VP
Thomas J. Kloc 10435 Downsville Pike Hagerstown, MD	VP C	VP C	VP C	VP C
John C. McCord 9960 Corporate Campus Drive Louisville, KY		VP
Michael P. Morrell 10435 Downsville Pike Hagerstown, MD	VP
Alan J. Noia 10435 Downsville Pike Hagerstown, MD	CH	D CH	D CH	CH
Jay S. Pifer 800 Cabin Hill Drive Greensburg, PA	VC	D VC	D VC	VC
Bruce E. Walenczyk 10435 Downsville Pike Hagerstown, MD		D VP	D VP	VP

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Utility Associates, Inc	AFN, LLC	Odyssey Communications, LLC
David W. Arneson 2 West Second Street Tower II, 16^th Floor Tulsa, OK		S
Paul M. Barbas 10435 Downsville Pike Hagerstown, MD		D
John D. Biery 2 West Second Street Tower II, 16^th Floor Tulsa, OK		VP
Brian L. Cantrell 2 West Second Street Tower II, 16^th Floor Tulsa, OK		P
Patrick J. Carey 7 Piedmont Ctr Ste 330 Atlanta, GA	D S T
Ted M. Davis 7 Piedmont Ctr Ste 330 Atlanta, GA	D P
John W. Flinko 100 Brush Run Road Greensburg, PA			D
Michael P. Friloux 2 West Second Street Tower II, 16^th Floor Tulsa, OK		VP
Bill C. Hampton 2 West Second Street Tower II, 16^th Floor Tulsa, OK		EVP
Kevin Keough 76 South Main Street Akron, OH		D
Holly Koeppel 1 Riverside Plaza Columbus, OH		D
J. B. Manley 2 West Second Street Tower II, 16^th Floor Tulsa, OK		VP
Robert S. McKeeman 7 Piedmont Ctr Ste 330 Atlanta, GA	D
Charles R. Nevins, II 7 Piedmont Ctr Ste 330 Atlanta, GA	D
Joseph M. Opferman 100 Brush Run Road Greensburg, PA			D S T

ITEM 6. OFFICERS AND DIRECTORS - continued
PART I Continued

	Utility Associates, Inc	AFN, LLC	Odyssey Communications, LLC
Jim Quarforth 401 Spring Lane Suite 300 Waynesboro, VA		D
Joe Warnement 5400 Legacy Drive Plano, TX		D
Alex P. Yawny 100 Brush Run Road Greensburg, PA			D P

ITEM 6. OFFICERS AND DIRECTORS (Continued)
PART II. Financial connections of officers and directors as of December 31, 2001

Name of Office or Director (1)	Name and Locations of Financial Institution (2)	Positions Held in Financial Institution (3)	Applicable Exemption Rule (4)
Eleanor Baum Wendell Holland W. J. Lhota A. E. Goebel	United States Trust Company 114 West 47^th Street New York, NY 10036 Bryn Mawr Bank Corporation 801 Lancaster Avenue Bryn Mawr, PA 19010 Huntington Bancshares, Inc. Huntington Center, 41 S. High St. Columbus, OH 43215 Old National Bank Evansville, IN	Director Director Director Director	Title 17, Reg. 250.70(b) Title 17, Reg. 250.70(b) Rule 70 (c) . (f) No interlocking authority required

ITEM 6.
PART III. Disclosures for Allegheny companies are as follows:

(1) Allegheny Energy, Inc. (AE), Allegheny Energy Service Corporation (AESC), Monongahela Power Company (Monongahela and M), The Potomac Edison Company (Potomac Edison and PE), West Penn Power Company (West Penn and WP), Allegheny Energy Supply Company, LLC (Supply), and Allegheny Generating Company (AGC) sections of the combined Annual Report on Form 10-K/A for 2001 of AE, M, PE, WP, Supply and AGC on pages 90 through 96 and of the AE Proxy Statement on pages 20 through 23. The executive officers of AE are also executive officers of AESC and receive their compensation from AESC as shown on page 26 of this U-5-S, and together with the directors owned beneficially 221,408 shares of common stock of AE. AESC does not file a proxy statement or Form 10-K.

(2) Allegheny Pittsburgh Coal Company, West Virginia Power and Transmission Company, West Penn West Virginia Water Power Company, Acadia Bay Energy Company, LLC, Allegheny Energy Supply Lincoln Generating Facility, LLC, Fellon-McCord Associates, Inc., Alliance Gas Services, Inc., Allegheny Energy Supply Gleason Generating Facility, LLC, Allegheny Energy Supply Wheatland Generating Facility, LLC, Energy Financing Company, L.L.C., Lake Acquisition Company, L.L.C., Allegheny Communications Connect of Ohio, LLC, Allegheny Communications Connect of West Virginia, LLC, Allegheny Energy Supply Capital, LLC, Green Valley Hydro, LLC, AFN Finance Company No. 2, LLC, Allegheny Energy Supply Development Services, LLC, West Penn Funding Corporation, Allegheny Energy Solutions, Inc., West Penn Transferring Agent, LLC, Allegheny Communications Connect, Inc., AYP Energy, Inc., Mountaineer Gas Company, Mountaineer Gas Services, Universal Coil, LLC, PE Transferring Agent, LLC, Allegh eny Energy Supply Hunlock Creek, LLC, Allegheny Energy Supply Conemaugh, LLC, Allegheny Communications Connect of Virginia, Inc., and Allegheny Communications Connect of Pennsylvania, LLC do not file proxy statements or Form 10-K's. Their directors and executive officers do not receive any compensation from these companies, but receive compensation as employees of certain of the companies as reported in (1) above. West Penn Funding, LLC files a 10-K. Its officers and directors do not receive any compensation from this company, but receive compensation as employees of certain of the companies reported in (1) above.

(3) Ohio Valley Electric Corporation and Indiana-Kentucky Electric Corporation do not file proxy statements or Form 10-K's. These companies are not wholly owned by Allegheny Energy, Inc., or its subsidiaries (see page 1 of this Form U5S) and none of their executive officers are employees of the Allegheny Energy companies. Except for two executive officers whose compensation was $256,122, directors and executive officers do not receive any compensation from these companies. The compensation and interest in system securities of directors who are employees of the Allegheny Energy companies are reported in (1) above.

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Form 10-K/A)

ITEM 11. EXECUTIVE COMPENSATION

For Monongahela, Potomac Edison, West Penn and AGC, this item is omitted pursuant to Instruction I of Form 10-K.

During 2001, and for 2000 and 1999, the annual compensation paid by AE and AE Supply directly or indirectly to the Chief Executive Officer and each of the four most highly paid executive officers of Allegheny whose cash compensation exceeded $100,000 for services in all capacities to Allegheny was as follows:

Name and Principal Position (b)	Year	Salary ($)	Annual Incentive ($) (c)	No. of Options (d)	Long-Term Performance Plan Payout ($) (d)	All Other Compensation ($) (e)
Alan J. Noia Chairman, President & Chief Executive Officer Michael P. Morrell Senior Vice President Supply Jay S. Pifer Senior Vice President Delivery Richard J. Gagliardi Vice President Administration Thomas K. Henderson Vice President & General Counsel	2001 2000 1999 2001 2000 1999 2001 2000 1999 2001 2000 1999 2001 2000 1999	700,000 600,000 575,000 300,000 270,000 260,000 285,000 270,000 255,000 255,000 225,000 210,000 245,000 225,000 210,000	562,500 600,000 312,500 170,700 304,400 156,000 191,300 185,900 146,400 138,400 166,100 113,400 123,500 140,500 104,400	- - 100,000 190,000 - - 50,000 66,000 - - 50,000 66,000 - - 30,000 52,000 - - 30,000 52,000	256,636 729,810 260,183 106,761 278,022 96,154 98,548 264,121 96,154 73,911 222,418 79,186 73,911 194,615 67,874	11,371 10,861 112,350 7,358 25,345 27,592 7,640 9,221 7,073 7,151 7,007 14,713 7,284 6,931 10,060

(a) The individuals appearing in this chart perform policy-making functions for AE and AE Supply. The compensation shown is for all services in all capacities to AE and its subsidiaries. All salaries, annual incentives and long-term payouts of these executives are paid by AESC.

(b) See Executive Officers of the Registrants for all positions held.

(c) Incentive awards (primarily Annual Incentive Plan awards) are based upon performance in the year in which the figure appears but are paid in the following year. The Annual Incentive Plan will be continued for 2002.

(d) In 1994, the Board of Directors of AE implemented a Performance Share Plan (the "Plan") for senior officers of AE and its subsidiaries, which was approved by the shareholders of AE at the annual meeting in May 1994. A fourth Plan cycle began on January 1, 1997, and ended on December 31, 1999. The figure shown for 1999 represents the dollar value paid in 2000 to each of the named executive officers who participated in Cycle IV. In 1998, the Board of Directors of AE implemented a new Long-Term Incentive Plan, which was approved by the shareholders of AE at the AE annual meeting in May 1998. A fifth cycle (the first three-year performance period of this new Plan) began on January 1, 1998, and ended on December 31, 2000. The figure shown for 2000 represents the dollar value paid in 2001 to each of the named executive officers who participated in Cycle V. A sixth cycle began on January 1, 1999, and ended on December 31, 2001. The figure shown for 2001 represents the dollar value paid in 2002 to each of the named executive officers who participated in Cycle VI. A seventh cycle began on January 1, 2000, and will end on December 31, 2002. An eighth cycle began on January 1, 2001 and will end on December 31, 2003. After completion of each cycle, AE stock may be paid if performance criteria have been met.

(e) The figures in this column include the present value of the executives' cash value at retirement attributable to the current year's premium payment for Executive Life Insurance Plan (based upon the premium, future valued to retirement, using the policy internal rate of return minus the corporation's premium payment), as well as the premium paid for the basic group life insurance program plan and the contribution for the Employee Stock Ownership and Savings Plan (ESOSP) established as a non-contributory stock ownership plan for all eligible employees effective January 1, 1976, and amended in 1984 to include a savings program.

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Form 10-K/A)

Effective January 1, 1992, the basic group life insurance provided employees was reduced from two times salary during employment, which reduced to one times salary after five years in retirement, to a new plan which provides one times salary until retirement and $25,000 thereafter. Some executive officers and other senior managers remain under the prior plan. In order to pay for this insurance for these executives, during 1992 insurance was purchased on the lives of each of them, except Mr. Morrell, who is not covered by this plan. Effective January 1, 1993, Allegheny started to provide funds to pay for the future benefits due under the supplemental retirement plan (SERP). To do this, during 1993 Allegheny purchased life insurance on the lives of some of the covered executives. The premium costs of both policies plus a factor for the use of the money are returned to Allegheny at the earlier of (a) death of the insured or (b) the later o f age 65 or 10 years from the date of the policy's inception. Under the ESOSP for 2001, all eligible employees may elect to have from 2% to 12% of their compensation contributed to the Plan as pre-tax contributions and an additional 1% to 6% as post-tax contributions. Employees direct the investment of these contributions into one or more of eleven available funds. Fifty percent of the pre-tax contributions up to 6% of compensation are matched with common stock of AE. For 2001, the maximum amount of any employee's compensation that may be used in these computations is $170,000. Employees' interests in the ESOSP vest immediately. Their pre-tax contributions may be withdrawn only upon meeting certain financial hardship requirements or upon termination of employment. For 2001 the figure shown includes amounts representing (a) the aggregate of life insurance premiums and dollar value of the benefit to the executive officer of the remainder of the premium paid on the Group Life Insurance program and the Ex ecutive Life Insurance and Plan, and (b) ESOSP contributions, respectively, as follows: Mr. Noia $6,784 and $4,587; Mr. Morrell $2,682 and $4,676; Mr. Pifer $2,540 and $5,100; Mr. Gagliardi $2,634 and $4,517 and Mr. Henderson $2,184 and $5,100.

ALLEGHENY ENERGY, INC. LONG-TERM INCENTIVE PLAN SHARES AWARDED IN LAST FISCAL YEAR (CYCLE VIII)
			Estimated Future Payout
Name	Number of Shares	Performance Period Until Payout	Threshold Number of Shares	Target Number of Shares	Maximum Number of Shares
Alan J. Noia Chief Executive Officer Michael P. Morrell Senior Vice President Jay S. Pifer Senior Vice President Richard J. Gagliardi Vice President Thomas K. Henderson Vice President & General Counsel	10,376 3,321 3,113 2,491 2,491	2001 - 2003 2001 - 2003 2001 - 2003 2001 - 2003 2001 - 2003	6,226 1,942 1,868 1,494 1,494	10,376 3,321 3,113 2,491 2,491	20,752 6,641 6,226 4,981 4,981

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Form 10-K/A)

The named executives were awarded the above number of performance shares for Cycle VIII. Such number of shares are only targets. As described below, no payouts will be made unless certain criteria are met. Each executive's 2001-2003 target long-term incentive opportunity was converted into performance shares equal to an equivalent number of shares of AE common stock based on the price of such stock on December 31, 2000. At the end of this three-year performance period, the performance shares attributed to the calculated award will be valued based on the price of AE common stock on December 31, 2003, and will reflect dividends that would have been paid on such stock during the performance period as if they were reinvested on the date paid. If an executive retires, dies or otherwise leaves the employment of Allegheny prior to the end of the three-year period, the executive may still receive an award based on the number of months worked during t he period. The final value of an executive's account, if any, will be paid to the executive in early 2004.

The actual payout of an executive's award may range from 0 to 200% of the target amount, before dividend reinvestment. The payout is based upon stockholder performance versus the peer group. The stockholder rating is then compared to a pre-established percentile-ranking chart to determine the payout percentage of target. A ranking below 30% results in a 0% payout. The minimum payout begins at the 30% ranking, which results in a payout of 60% of target, ranging up to a payout of 200% of target if there is a 90% or higher ranking.

Retirement Plan

Allegheny maintains a Retirement Plan covering substantially all employees. The Retirement Plan is a noncontributory, trusteed pension plan designed to meet the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended (the Code). Each covered employee is eligible for retirement at normal retirement date (age 65), with early retirement permitted. In addition, executive officers and other senior managers participate in a supplemental executive retirement plan (SERP).

Pursuant to the SERP, senior executives of Allegheny companies who retire at age 60 or over with 40 or more years of service are entitled to a supplemental retirement benefit in an amount that, together with the benefits under the basic plan and from other employment, will equal 60% of the executive's highest average monthly earnings for any 36 consecutive months. Beginning January 1, 1999, the earnings include 100% of the actual award paid under the Annual Incentive Plan. The supplemental benefit is reduced for less than 40 years service and for retirement age from 60 to 55. It is included in the amounts shown where applicable. To provide funds to pay such benefits, beginning January 1, 1993, Allegheny purchased insurance on the lives of some of the participants in the SERP. If the assumptions made as to mortality experience, policy dividends, and other factors are realized, Allegheny will recover all premium payments, plus a factor for the use of Allegh eny's money. The portion of the premiums required to be deemed "compensation" by the Securities and Exchange Commission for this insurance is included in the "All Other Compensation" column of the Executive Compensation chart. All executive officers are participants in the SERP. The Plan also provides for use of Average Compensation in excess of Code maximums.

The following table shows estimated maximum annual benefits payable to participants in the SERP following retirement (assuming payments on a normal life annuity basis and not including any survivor benefit) to an employee in specified remuneration and years of credited service classifications. These amounts are based on an estimated Average Compensation (defined as 12 times the highest average monthly earnings including overtime and other salary payments actually earned, whether or not payment is deferred, for any 36 consecutive calendar months), retirement at age 65 and without consideration of any effect of various options which may be elected prior to retirement. The benefits listed in the Pension Plan Table are not subject to any deduction for Social Security or any other offset amounts.

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Form 10-K/A)

PENSION PLAN TABLE
	Years of Credited Service
Average Compensation (a)	15 Years	20 Years	25 Years	30 Years	35 Years	40 Years
$200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 1,100,000 1,200,000	$60,000 90,000 120,000 150,000 180,000 210,000 240,000 270,000 300,000 330,000 360,000	$80,000 120,000 160,000 200,000 240,000 280,000 320,000 360,000 400,000 440,000 480,000	$100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000	$110,000 165,000 220,000 275,000 330,000 385,000 440,000 495,000 550,000 605,000 660,000	115,000 172,500 230,000 287,500 345,000 402,500 460,000 517,000 575,000 632,500 690,000	$120,000 180,000 240,000 300,000 360,000 420,000 480,000 540,000 600,000 660,000 720,000

(a) The earnings of Messrs. Noia, Pifer, Morrell, Gagliardi and Henderson covered by the plan correspond substantially to such amounts shown for them in the summary compensation table. As of December 31, 2001 they had accrued 32, 38, 5, 23 and 33 years of credited service, respectively, under the Retirement Plan. Pursuant to an agreement with Mr. Morrell, at the end of ten years of employment with Allegheny, Mr. Morrell will be credited with an additional eight years of service.

Change In Control Contracts

AE has entered into Change in Control contracts with the named and certain other Allegheny executive officers (Agreements). Each Agreement sets forth (i) the severance benefits that will be provided to the employee in the event the employee is terminated subsequent to a Change in Control of AE (as defined in the Agreements), and (ii) the employee's obligation to continue his or her employment after the occurrence of certain circumstances that could lead to a Change in Control. The Agreements provide generally that if there is a Change in Control, unless employment is terminated by AE for Cause, Disability or Retirement or by the employee for other than Good Reason (each as defined in the Agreements), severance benefits payable to the employee will consist of a cash payment equal to 2.99 times the employee's base annual salary and target short-term incentive together with AE maintaining existing benefits for the employee and the employee's depend ents for a period of three years. Each Agreement expires on December 31, 2001, but is automatically extended for one-year periods thereafter unless either AE or the employee gives notice otherwise. Notwithstanding the delivery of such notice, the Agreements will continue in effect for thirty-six months after a Change in Control.

Employment Contracts

AE has entered into Employment Contracts with the named and certain other executive officers. (Contracts). Each Contract provides for a two-year initial term and has a one-year renewal provision. The Contracts provide for specified levels of severance protection based on the reason for termination, irrespective of the remaining term of the Contracts. The Contracts provide that base salary will not be reduced and the officers will remain eligible for participation in Allegheny's executive compensation and benefit plans during the term of the Contracts.

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Form 10-K/A)

Compensation of Directors

Until December 6, 2001, each of the outside directors was also a director of the following subsidiaries of AE: Monongahela, Potomac Edison, West Penn, and AESC (Allegheny companies). On December 6, 2001, Mrs. Baum and Messrs. Campbell, Hoecker, Holland, Kleisner, Metz, Rice and Sarsten resigned as directors of Monongahela, Potomac Edison, and West Penn. In 2001, directors who were not officers or employees (outside directors) received for all services to AE and its subsidiaries: (a) $22,000 in retainer fees, (b) $1,000 for each committee meeting attended, and (c) $250 for attendance at each Board meeting of AE, Monongahela, Potomac Edison, and West Penn. In 2002, following the resignation on December 6, 2001 of the outside directors from the Boards of Monongahela, Potomac Edison and West Penn, the meeting fee will increase from $250 to $1000 for each meeting of the Board of Directors of AE.

The Chairperson of each committee, other than the Executive Committee, receives an additional fee of $4,000 per year. Under an unfunded deferred compensation plan, an outside director may elect to defer receipt of all or part of his or her director's fees for succeeding calendar years to be payable with accumulated interest when the director ceases to be such, in equal annual installments, or, upon authorization by the Board of Directors, in a lump sum. In addition to the foregoing compensation, the outside directors of AE receive an annual retainer of $12,000 worth of common stock. Further, a Deferred Stock Unit Plan for Outside Directors provides for a lump sum payment (payable at the director's election in one or more installments, including interest thereon equivalent to the dividend yield) to directors calculated by reference to the price of AE's common stock. Outside directors who serve at least five years on the Board and leave at or after age 65, or up on death, or disability, or as otherwise directed by the Board, will receive such payments. In 2001, AE credited each outside director's account with 350 deferred stock units; the number will increase to 375 in 2002.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below shows the number of shares of AE common stock that are beneficially owned, directly or indirectly, by each director and named executive officer of AE, Monongahela, Potomac Edison, West Penn, AGC and AE Supply and by all directors and executive officers of each such company as a group as of December 31, 2001. To the best of the knowledge of AE, there is no person who is a beneficial owner of more than 5% of the voting securities of AE.

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Form 10-K/A)

Name	Named Executive Officer or Director of		Shares of AE Common Stock		Percent of Class
Eleanor Baum (a) Lewis B. Campbell (a) Richard J. Gagliardi Thomas K. Henderson James J. Hoecker (a) Wendell F. Holland (a) Ted J. Kleisner (a) Frank A. Metz, Jr. (a) Michael P. Morrell Alan J. Noia Jay S. Pifer Steven H. Rice (a) Gunnar E. Sarsten (a) Victoria V. Schaff Bruce E. Walenczyk	AE,MP,PE,WP AE,MP,PE,WP AE, AGC, AE Supply AGC, AE Supply AE,MP,PE,WP AE,MP,PE,WP AE,MP,PE,WP AE,MP,PE,WP AE,MP,PE,WP,AGC, AE Supply AE,MP,PE,WP,AGC, AE Supply AE,MP,PE,WP, AE Supply AE,MP,PE,WP AE,MP,PE,WP MP,PE,WP,AGC, AE Supply AE,MP,PE,WP, AE Supply		4,087 2,006 22,432 17,945 0 2,606 0 5,290 23,712 71,649 31,143 5,579 8,087 8,865 1,400		.05% or less ...05% or less ...05% or less ...05% or less ...05% or less ...05% or less ...05% or less ...05% or less ...05% or less ...06% ...05% or less ...05% or less ...05% or less ...05% or less ...05% or less
(a) Mrs. Baum and Messrs. Campbell, Hoecker, Holland, Kleisner, Metz, Rice and Sarsten resigned as directors of MP, PE and WP effective December 6, 2001.
All directors and executive officers of AE as a group (19 persons) All directors and executive officers of MP as a group (19 persons) All directors and executive officers of PE as a group (19 persons) All directors and executive officers of WP as a group (19 persons) All directors and executive officers of AGC as a group (7 persons) All directors and executive officers of AE Supply as a group (7 persons)		221,408 192,264 192,264 192,264 167,907 199,049		0.18 or less 0.16 or less 0.16 or less 0.16 or less 0.14 or less 0.16 or less

*Excludes the outside directors' accounts in the Deferred Stock Unit Plan which, at March 1, 2002, were valued at the number of shares shown: Baum 5,079; Campbell 704; Hoecker 358, Holland 2,889; Kleisner 354, Metz 5,391; Rice 3,693; and Sarsten 4,726.

All of the shares of common stock of Monongahela (5,891,000), Potomac Edison (22,385,000), and West Penn (24,361,586) are owned by AE. All of the common stock of AGC is owned by Monongahela (22.97%) and Allegheny Energy Supply Company, LLC (77.03%). ML IBK Positions, Inc. owns 1.967% of the ownership interest in Allegheny Energy Supply, LLC and Allegheny Energy, Inc. owns the rest.

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Form 10-K/A)

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In 2001, the law firm Swidler Berlin Shereff Friedman, LLP performed legal services for AE and its subsidiaries. Mr. Hoecker, a Director of AE, is a partner at Swidler Berlin Shereff Friedman, LLP.

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Proxy Statement)

MANAGEMENT REVIEW AND DIRECTOR AFFAIRS COMMITTEE REPORT

GENERAL

The compensation program for executive officers of the Company and its subsidiaries is directed by the Management Review and Director Affairs Committee (the Committee) of the Company's Board of Directors. The Committee recommends the annual compensation program for each year to the Board of Directors of the Company and of each subsidiary for its approval.

The Committee continues to believe that with the advent of competition to this industry, a large portion of compensation should be included in incentive plans. For 2002, a substantial portion of total compensation will continue to be linked to corporate and business performance.

The executive compensation program is intended to meet three objectives:

- Create a strong link between executive compensation and total return to stockholders.

                -   Offer compensation opportunities that are competitive with the median level of opportunity
                     in the marketplace, at expected levels of performance, but exceed median levels for performance
                     exceeding expectations.

- Ensure internal compensation equity - maintaining a reasonable relationship between compensation and
the duties and responsibilities of each executive position.

In a further effort to tie the executive compensation program to the overall success of Allegheny, stock ownership guidelines were adopted in 1999 for the executive officers. The guidelines require the Chief Executive Officer (CEO) to own stock valued at 3.5 times base salary; the business unit Presidents and Senior Vice Presidents at 1.75 times base salary; and the Vice Presidents at one times base salary. They have five years from the date of their initial appointment to meet the guidelines.

EXECUTIVE COMPENSATION PROGRAM

The Company's executive compensation program has four components: base salary, short-term and long-term incentive awards, and stock options.

The Company's executive compensation is both market- and performance-based. The Committee believes that it is necessary to use both market- and performance-based compensation to meet the challenges of intensifying competitive, economic, and regulatory pressures.

To ensure that the Company's salary structure and total compensation continue to be competitive, they are compared each year through an annual compensation survey, prepared by a leading consulting firm, with those of comparable energy companies - 25 for 2001. The survey companies are part of an energy services industry database.

In 2001, more than 60% of these survey companies are included in the Dow Jones U.S. Electric Utilities Index, to which the Company's performance is compared on page 28 of this proxy statement. This comparison involves matching Company positions, including that of the CEO, with those in the survey companies that have comparable duties and responsibilities. For 2001, the survey again indicated that the Company's executive compensation structure was below the median. This survey data became the basis for the consulting firm's recommendations as to market prices for each position and total compensation in line with the survey average for comparable positions.

ITEM 6. PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Proxy Statement)

Base salary:

The base salaries of all executive officers, including the CEO, are reviewed annually by the Committee, which makes recommendations to the Board of Directors. In recommending base salary levels, the Committee gives most weight to the performance of each executive. The Committee receives a report from the CEO including (a) a performance assessment of each executive (other than himself) based on that executive's position-specific responsibilities and a performance evaluation by his or her supervisor and (b) a specific salary recommendation for each. In determining its recommendations to the Board, the Committee also takes into consideration operating performance, including such factors as safety, efficiency, competitive position, customer satisfaction, and financial results including total return, earnings per share, quality of earnings, dividends paid, and dividend payout ratio.

Short-term Incentive Awards:

The Allegheny Energy Annual Incentive Plan (the Annual Incentive Plan) is designed to supplement base salaries and provide cash incentive compensation opportunities to attract, retain, and motivate a senior group of managers, including executive officers, selected by the Committee. The Annual Incentive Plan provides for establishment of individual incentive awards based on corporate performance. Corporate performance measures are based on net income available to common shareholders, achieved shareholder return, overall corporate financial results (changes in earnings per share, dividends paid per share, and dividend payout ratios), and Company performance, including competitive position. In addition, individual and departmental performance goals are set on a position specific basis for participants.

Operating, management, or financial areas to be emphasized, as well as performance targets, are determined each year by the Committee with the recommendations of the CEO. The target awards under the 2001 Incentive Plan were determined by the Committee, and participants could earn from zero to 1 1/2 times the target award. For the 2001 Incentive Plan, the targets were $500,000 for Mr. Noia and from $120,000 to $180,000 for the other named officers. Targets for other participants were from $170,000 and lower, which are approximately 50% or less of 2001 base salary. Annual Incentive Plan awards earned are paid in the year after the year for which they are earned. Awards earned for performance in 1999, 2000 and 2001 are included in the Annual Compensation Table for those years under the column "Incentive Awards" for the individuals named therein.

Long-term Incentive Awards: Performance Shares and Stock Options

The Allegheny Energy, Inc. Long-term Incentive Plan (the Incentive Plan) is designed as an aid in attracting and retaining individuals of outstanding ability. Awards earned are based on performance over 3-year "cycles." Fourteen executive officers of the Company and its subsidiaries were selected by the Committee to participate in Cycle VI (1999-2001), 15 in Cycle VII (2000-2002) and 17 in Cycle VIII (2001-2003). All of these cycles provide for the establishment of corporate incentive awards based on meeting specific stockholder rankings (total stockholder return ranking in the Dow Jones U.S. Electric Utilities Index).

The Cycle VI target awards under the Performance Share Plan range from $45,000 for the named officers to $156,250 for Mr. Noia, which equate to 1,488 to 5,165 shares of stock as of January 1, 1999, the start of the performance cycle. The actual award calculated under the Plan equaled 135% of the target amount. The dollar value of such shares calculated as of December 31, 2001, including reinvested dividends, is included in the compensation table on page 24 .

ITEM 6 PART III
(1) AE, AGC, M, PE, WPP
(from 2001 Proxy Statement)

The Cycle VII target awards under the Incentive Plan range from $100,000 for the named officers to $400,000 for Mr. Noia, which equate to 3,712 to 14,849 shares of stock as of January 1, 2000, the start of the performance cycle. The Cycle VIII target awards under the Incentive Plan range from $120,000 for the named officers to $500,000 for Mr. Noia, which equate to 2,490 to 10,376 shares of stock as of January 1, 2001, the start of the performance cycle. The target opportunity and the corresponding number of equivalent performance shares allocated to each named executive officer for Cycle VIII are listed in the Long-term Incentive Plan Table on page 26.

The actual payouts will be determined in 2003 for Cycle VII and in 2004 for Cycle VIII, after completion of each cycle and determination of the actual stockholder rankings. The actual awards are paid in Company stock and can range from 0 to 200% of the targeted shares noted above.

During 1999 and 2000, as approved by stockholders during 1998, the executive officers were granted stock options, based upon surveys of competitive grant levels for similar positions. Like performance shares, the magnitude of such awards is determined by the Committee. Stock options are granted with an exercise price equal to or greater than the fair market value of Allegheny Energy, Inc. common stock on the day of the grant, become exercisable after the expiration of a period of time (typically three years), and generally continue to be exercisable until ten years from the date granted. Such stock options provide incentive for the creation of shareholder value over the long term since the full benefit of the compensation package cannot be realized unless an appreciation in the price of Allegheny Energy, Inc. common stock occurs over a specified number of years.

For Mr. Noia, the Committee developed salary and Annual Incentive Plan award recommendations for the Board's consideration. The base salary recommendation was based upon the Committee's evaluation of his performance as CEO and of his responsibilities in the context of the Company's overall financial and operating performance, including the factors described in the next sentence. The Annual Incentive Plan recommendation was based primarily on 2001 corporate financial results, including total shareholder return, changes in earnings per share, dividends paid per share, and dividend payout ratios; the overall quality of service rendered to customers; and overall Allegheny Energy performance, including competitive position. Mr. Noia's 2001 total compensation reflected the Committee's evaluation of his performance as CEO and the described overall results. .

Section 162(m) of the Internal Revenue Code generally limits to $1 million the corporate deduction for compensation paid to executive officers named in the proxy statement, unless certain requirements are met. This Committee has carefully considered the effect of this tax code provision on the current executive compensation program. At this time, Allegheny's deduction for officer compensation is not limited by the provisions of Section 162 (m). The Committee intends to take actions with respect to the executive compensation program, if necessary, to preserve the corporate tax deduction for executive compensation paid.

No current member of the Management Review and Director Affairs Committee is or ever was an employee of the Company or any of its subsidiaries.

FRANK A. METZ, JR., Chairman
ELEANOR BAUM
LEWIS B. CAMPBELL
GUNNAR E. SARSTEN

ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS

     (a)     Expenditures, disbursements, or payments during the year, in money, goods or services, directly or indirectly to or for the account of any political party, candidate for public office or holder of such office, or any committee or agent therefor (or any officer or employee acting as such).

     None.

     (b)     Expenditures, disbursements, or payments during the year, in money, goods or services, directly or indirectly to or for the account of any citizens' group, taxpayers' group, or public relations counsel (or any officer or employee acting as such).

     None

ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS

	Calendar Year 2001

	Part I.	Between System Companies				In effect
					Date of	on Dec. 31
Transaction		Serving Company	Receiving Company	Compensation	Contract	(Yes or No)

Operating, maintenance,		Monongahela Power Company	The Potomac Edison Company	$85,494	5/29/73	Yes
	accounting, supervisory,				effective
	and other administrative				05/31/74
	or other services

West Penn Power Company has an Operational Service Contract with The Potomac Edison Company (effective 12/23/77) for which the
	compensation was $116,483 in 2001

West Penn Power Company tests meters for The Potomac Edison Company. The compensation for this service was $38,754 in 2001


	Part II.	Between System Companies and others				In effect
					Date of	on Dec. 31
Transaction		Serving Company	Receiving Company	Compensation	Contract	(Yes or No)

Engineering, drafting and		American Electric Power	Ohio Valley Electric	$4,174,012	12/27/56	Yes
	other technicial and	Service Corporation	Corporation
	administrative services

Engineering, drafting and		American Electric Power	Indiana-Kentucky	$6,630,401	12/27/56	Yes
	other technicial and	Service Corporation	Electric Corporation
	administrative services

Maintenance Services		Appalachian Power	Ohio Valley Electric	$375,016	01/01/79	Yes
		Company	Corporation

Maintenance Services		Appalachian Power	Indiana-Kentucky	$24,550	01/01/79	Yes
		Company	Electric Corporation

	Part III
		None.

ITEM 9. Exempt Wholesale Generators & Foreign Utility Companies A. EXEMPT WHOLESALE GENERATORS Part I.
(1) Allegheny Energy Supply Hunlock Creek, LLC (a) Allegheny Energy Supply Hunlock Creek, LLC 4350 Northern Pike Monroeville, PA 15146-2841 During the fourth quarter of 2000, Allegheny Energy, Inc. acquired from UGI Development, a subsidiary of UGI Corporation, a 50% share of its 48 megawatt coal fired generation located near Wilkes-Barre in eastern Pennsylvania. (b) Allegheny Energy, Inc. has invested $20,519,810 in Allegheny Energy Supply Hunlock Creek, LLC as of December 31, 2001. Allegheny Energy, Inc.'s Equity in Undistributed Earnings of Allegheny Energy Supply Hunlock Creek, LLC totaled ($104,005) as of December 31, 2001. None. No assets have been transferred from other system companies to Allegheny Energy Supply Hunlock Creek, LLC. (c) Not applicable. (d) (1) A Service agreement was created, dated as of July 27, 2000, between Allegheny Energy Service Corporation, a corporation formed under the laws of the State of Maryland, (the "Service Company" or "AESC") and Allegheny Energy Supply Hunlock Creek, LLC, a limited liability company formed under the laws of the State of Delaware (the "Company"). The Service Company was created to perform certain management duties on behalf of Allegheny Energy, Inc. (the "System"), its utility subsidiary companies and its non-utility subsidiary companies (the "Subsidiaries"); and to provide a central organization to furnish to the System, the Subsidiaries and the Company certain advisory, supervisory and other services in accordance with current practices and procedures. (d) (2) This Agreement was created on the 13^th day of November 2000, by and among Allegheny Energy Supply Company, LLC ("Buyer") and Allegheny Energy Supply Hunlock Creek, LLC ("Allegheny Energy LLC") in consideration of the mutual covenants and agreements herein. Buyer and Allegheny (the "Party(ies)") hereby agree as follows: 1.1 Allegheny Energy Supply Hunlock Creek, LLC agrees, during the term of this Agreement, to sell electric energy and/or capacity to the Buyer, and Buyer agrees to pay for such sale in accordance with the Allegheny Market Rate Tariff on file with the Federal Energy Regulatory Commission ("FERC"). (2) Allegheny Energy Supply Conemaugh, LLC (a) Allegheny Energy Supply Conemaugh, LLC 4350 Northern Pike Monroeville, PA 15146-2841
As of May 1, 2001, Allegheny Energy, Inc. relinquished EWG status for Allegheny Energy Supply Conemaugh, LLC. Allegheny Energy, Inc. contributed its interest in Allegheny Energy Supply Conemaugh, LLC to Allegheny Energy Supply Company, LLC in June 2001.
(3) Allegheny Energy Supply Gleason Generating Facility, LLC (a) Allegheny Energy Supply Gleason Generating Facility, LLC 4350 Northern Pike Monroeville, PA 15146-2841 On May 3, 2001, Allegheny Energy Supply Company, LLC , Allegheny Energy, Inc.'s nonutility subsidiary, completed the acquisition of Allegheny Energy Supply Gleason Generating Facility, LLC from Enron North America representing 546 MW of natural gas-fired generating capacity in the Midwest. (b) Allegheny Energy Supply Company, LLC has invested $345,211,924 in Allegheny Energy Supply Gleason Generating Facility, LLC as of December 31, 2001. Allegheny Energy Supply Company, LLC's Equity in Undistributed Earnings of Allegheny Energy Supply Gleason Generating Facility, LLC totaled $0 as of December 31, 2001. None. No assets have been transferred from other system companies to Allegheny Energy Supply Gleason Generating Facility, LLC. (c) Not applicable. (d) (1) A Service agreement was created, dated as of May 4, 2001, between Allegheny Energy Service Corporation, a corporation formed under the laws of the State of Maryland, (the "Service Company" or "AESC") and Allegheny Energy Supply Gleason Generating Facility, LLC a limited liability company formed under the laws of the State of Delaware (the "company"). The Service Company was created to perform certain management duties on behalf of Allegheny Energy, Inc. (the "System"), its utility subsidiary companies and its non-utility subsidiary companies (the "Subsidiaries"); and to provide a central organization to furnish to the System, the Subsidiaries and the Company certain advisory, supervisory and other services in accordance with current practices and procedures. (d) (2) This Agreement was created on the 4^th day of May, 2001, by and among Allegheny Energy Supply Company, LLC ("Buyer") and Allegheny Energy Supply Gleason Generating Facility, LLC in consideration of the mutual covenants and agreements herein. Buyer and Allegheny Energy Supply Gleason Generating Facility, LLC, (the "Party(ies)") hereby agree as follows: 1.1 Allegheny Energy Supply Gleason Generating Facility, LLC agrees, during the term of this Agreement, to sell electric energy and/or capacity to the Buyer and Buyer agrees to pay for such sale in accordance with Allegheny Energy Supply Gleason Generating Facility's Market Rate Tariff on file with the Federal Energy Regulatory Commission ("FERC").
(4) Allegheny Energy Supply Lincoln Generating Facility, LLC (a) Allegheny Energy Supply Lincoln Generating Facility, LLC 4350 Northern Pike Monroeville, PA 15146-2841 On May 3, 2001, Allegheny Energy Supply Company, LLC, Allegheny Energy, Inc.'s nonutility subsidiary completed the acquisition of Allegheny Energy Supply Lincoln Generating Facility, LLC from Enron North America representing 656 MW of natural gas-fired generating capacity in the Midwest. (b) Allegheny Energy Supply Company, LLC has invested $254,957,662 in Allegheny Energy Supply Lincoln Generating Facility, LLC as of December 31, 2001. Allegheny Energy Supply Company, LLC's Equity in Undistributed Earnings of Allegheny Energy Supply Lincoln Generating Facility, LLC totaled $0 as of December 31, 2001. None. No assets have been transferred from other system companies to Allegheny Energy Supply Lincoln Generating Facility, LLC. (c) Not applicable. (d) (1) A Service agreement was created, dated as of May 4, 2001, between Allegheny Energy Service Corporation, a corporation formed under the laws of the State of Maryland, (the "Service Company" or "AESC") and Allegheny Energy Supply Lincoln Generating Facility, LLC a limited liability company formed under the laws of the State of Delaware (the "company"). The Service Company was created to perform certain management duties on behalf of Allegheny Energy, Inc. (the "System"), its utility subsidiary companies and its non-utility subsidiary companies (the "Subsidiaries"); and to provide a central organization to furnish to the System, the Subsidiaries and the Company certain advisory, supervisory and other services in accordance with current practices and procedures. (d) (2) This Agreement was created on the 4^th day of May, 2001, by and among Allegheny Energy Supply Company, LLC ("Buyer") and Allegheny Energy Supply Lincoln Generating Facility, LLC in consideration of the mutual covenants and agreements herein. Buyer and Allegheny Energy Supply Lincoln Generating Facility, LLC, (the "Party(ies)") hereby agree as follows: 1.1 Allegheny Energy Supply Lincoln Generating Facility, LLC agrees, during the term of this Agreement, to sell electric energy and/or capacity to the Buyer and Buyer agrees to pay for such sale in accordance with Allegheny Energy Supply Lincoln Generating Facility's Market Rate Tariff on file with the Federal Energy Regulatory Commission ("FERC").
(5) Allegheny Energy Supply Wheatland Generating Facility, LLC (a) Allegheny Energy Supply Wheatland Generating Facility, LLC 4350 Northern Pike Monroeville, PA 15146-2841 On May 3, 2001, Allegheny Energy Supply Company, LLC, Allegheny Energy, Inc.'s nonutility subsidiary, completed the acquisition of Allegheny Energy Supply Wheatland Generating Facility, LLC from Enron North America representing 508 MW of natural gas-fired generating capacity in the Midwest. (b) Allegheny Energy Supply Company, LLC has invested $299,324,046 in Allegheny Energy Supply Wheatland Generating Facility, LLC as of December 31, 2001. Allegheny Energy Supply Company, LLC's Equity in Undistributed Earnings of Allegheny Energy Supply Wheatland Generating Facility, LLC totaled $0 as of December 31, 2001. None. No assets have been transferred from other system companies to Allegheny Energy Supply Wheatland Generating Facility, LLC. (c) Not applicable. (d) (1) A Service agreement was created, dated as of May 4, 2001, between Allegheny Energy Service Corporation, a corporation formed under the laws of the State of Maryland, (the "Service Company" or "AESC") and Allegheny Energy Supply Wheatland Generating Facility, LLC a limited liability company formed under the laws of the State of Delaware (the "company"). The Service Company was created to perform certain management duties on behalf of Allegheny Energy, Inc. (the "System"), its utility subsidiary companies and its non-utility subsidiary companies (the "Subsidiaries"); and to provide a central organization to furnish to the System, the Subsidiaries and the Company certain advisory, supervisory and other services in accordance with current practices and procedures. (d) (2) This Agreement was created on the 4^th day of May, 2001, by and among Allegheny Energy Supply Company, LLC ("Buyer") and Allegheny Energy Supply Wheatland Generating Facility, LLC in consideration of the mutual covenants and agreements herein. Buyer and Allegheny Energy Supply Wheatland Generating Facility, LLC, (the "Party(ies)") hereby agree as follows: 1.1 Allegheny Energy Supply Wheatland Generating Facility, LLC agrees, during the term of this Agreement, to sell electric energy and/or capacity to the Buyer and Buyer agrees to pay for such sale in accordance with Allegheny Energy Supply Wheatland Generating Facility's Market Rate Tariff on file with the Federal Energy Regulatory Commission ("FERC"). Part II. See Exhibit G. See also Exhibit H for additional information on Allegheny Energy Supply Hunlock Creek, LLC. Part III The registered holding company's (Allegheny Energy, Inc.) investment in exempt wholesale generators as of 12/31/01 is as follows:
Allegheny Energy Supply Gleason Generating Facility, LLC Allegheny Energy Supply Lincoln Generating Facility, LLC Allegheny Energy Supply Wheatland Generating Facility, LLC Allegheny Energy Supply Hunlock Creek, LLC Total Investment:			($000's) $345,212 $254,958 $299,324 $20,415 $919,909
The total capital invested by Allegheny Energy, Inc. in its domestic public utility subsidiary Companies as of 12/31/01 is as follows:
Monongahela Power Company (MP). The Potomac Edison Company (PE) West Penn Power Company (WPP). Total Investment in domestic public utility subsidiary companies.		$ 646,185 384,722 436,925 $1,467,832
Ratio of investment in wholesale generators to total invested by Allegheny Energy, Inc., in domestic public utility subsidiary companies:
Allegheny Energy Supply Gleason Generating Facility, LLC 23.52% Allegheny Energy Supply Lincoln Generating Facility, LLC 17.37% Allegheny Energy Supply Wheatland Generating Facility, LLC 20.39% Allegheny Energy Supply Hunlock Creek, LLC 1.39% Total Percentage 62.67% B. FOREIGN UTILITY COMPANIES Part I. (1) LATIN AMERICA ENERGY AND ELECTRICITY FUND I, L.P. (a) Latin America Energy and Electricity Fund I, L.P. P.O.Box 309 Ugland House George Town, Grand Cayman Cayman Island, British West Indies Latin America Energy and Electricity Fund I, L.P. (LAEEP) is a limited partnership which invests in entities involved in new or existing electric power projects in Latin America and the Caribbean. Allegheny Ventures, Inc., the nonutility subsidiary of Allegheny Energy, Inc. owns a 8.25% interest in LAEEP. (b) Allegheny Ventures, Inc., has invested $3,662,153 in LAEEP as of December 31, 2001. Allegheny Ventures's Equity in Undistributed Earnings of LAEEP totaled ($499,866) as of December 31,2001. None. No assets have been transferred from other system companies to LAEEP. (c) Not applicable. (d) None. (2) FONDELEC GENERAL PARTNER, LP (a) FondElec General Partner, LP P.O.Box 309 Ugland House George Town, Grand Cayman Cayman Island, British West Indies Fondelec General Partner, LP is a limited partnership organized for the purpose of acting as the general partner of the Latin America Energy and Electricity Fund I, LP. Allegheny Ventures, Inc., the nonutility subsidiary of Allegheny Energy, Inc., owns a 4.145% interest in Fondelec. (b) Allegheny Ventures, Inc., has invested $22,667 in Fondelec as of December 31, 2001. Allegheny Ventures' Equity in Undistributed Earnings of Fondelec totaled ($2,718) as of December 31, 2001. (c) Not applicable. (d) None. Part II. Latin America Energy and Electricity Fund I, L.P. is an investment on the books of Allegheny Ventures, Inc. Fondelec is an investment on the books of Allegheny Ventures, Inc.
Part III	($ 000's)
The registered holding company's (Allegheny Energy, Inc.) investment in foreign utility companies as of 12/31/01 is as follows:
Latin America Energy and Electricity Fund I L.P. Fondelec General Partner, LP Total Investment	$3,162 $ 20 $3,182
The total capital invested by Allegheny Energy, Inc. in its domestic public utility subsidiary companies is as follows:
Monongahela Power Company (MP). The Potomac Edison Company (PE) West Penn Power Company (WPP). Total Investment in domestic public utility subsidiary companies.	$ 646,185 384,722 436,925 $1,467,832
Ratio of investment in foreign utility companies to total invested by Allegheny Energy, Inc., in domestic public utility subsidiary companies:
Latin America Energy and Electricity Fund I L.P. Fondelec General Partner, LP Total Percentage	0.22% 0.00% 0.22%

ITEM 10 - EXHIBIT B CONSTITUENT INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS OF EQUITY SECURITIES OF SYSTEM COMPANIES
	ALLEGHENY ENERGY, INC.:	INCORPORATED BY REFERENCE
3.1	Charter of the Company, as amended, September 16, 1997		Form 10-K of the Company (1-267), December 31, 1997, exh. 3.1
3.1a	Articles Supplementary dated July 15, 1999 and filed July 20, 1999		Form 8-K of the Company (1-267), July 20, 1999, exh. 3.1
3.2	By-laws of the Company, as amended February 3, 2000		Form 10-K of the Company (1-267), December 31, 1999, exh. 3.2
	ALLEGHENY ENERGY SERVICE CORPORATION
3.1	Charter, effective November 22, 1963		Form U5S, 1964, exh. B-2
3.2	By-laws, as amended November 1, 1996		Form U5S, 1983, exh. B-1Form U5S, 1990, exh. B-2
	MONONGAHELA POWER COMPANY
3.1	Charter of the Company, as amended		Form 10-Q of the Company (1-5164), September 1995, exh. (a)(3)(i)
3.2	Code of Regulations, as amended		Form 10-Q of the Company (1-5164), September 1995, exh. (a)(3)(ii)
	THE POTOMAC EDISON COMPANY
3.1	Charter of the Company, as amended		Form 8-K of the Company (1-3376-2), April 26, 200 exh. (a)(3)(i)
3.2	By-laws of the Company		Form 10-Q of the Company (1-3376-2), September 1995, exh. (a)(3)(ii)
	WEST PENN POWER COMPANY:
3.1	Charter of the Company, as amended, July 16, 1999		Form 10-Q of the Company (1-255-2), June 30, 1999, exh. (a)(3)(i)
3.2	By-laws of the Company, as amended		Form 10-Q of the Company (1-255-2), September 1995, exh. (a)(3)(ii)
	ALLEGHENY PITTSBURGH COAL COMPANY
3.1	Charter, effective October 1, 1918		Form U5B, File 30-75, exh. B-2
3.1(a)	Amendment to Charter, effective
	October 5, 1918		Form U5B, File 30-75, exh. B-2
3.1(b)	January 21 1956		Form U5S, 1964, exh. B-7
3.2	By-laws, as amended		Form U5S, 1996, exh. B-1
	ALLEGHENY GENERATING COMPANY
3.1(a)	Charter of the Company, as amended		Designated exhibit to requisition statement, Form 10, (0-14688)
3.1(b)	Certificate of Amendment to Charter, effective July 14, 1989		Form 10-Q (0-14688), June 1989, exh. (a)
3.2	By-laws of the Company, as amended, effective December 23 1996		Form 10-K of the Company (0-14688), December 31, 1996

	WEST VIRGINIA POWER & TRANSMISSION COMPANY:
3.1	Charter, effective April 3, 1912 and Amendments to March 22, 1934	Form U5B, File 30-75, ex. B-38
3.1(a)	Amendments to Charter effective
	January 28, 1956	Form U5S, 1964, exh. B-10
3.1(b)	February 7, 1961	Form U5S, 1964, exh. B-11
3.2	By-laws, as amended	Form U5S, 1996, exh. B-2
	WEST PENN WEST VIRGINIA WATER POWER COMPANY
3.1	Charter, effective January 25, 1924	Form U5B, File 30-75, exh. B-39
3.1(a)	Amendment to Charter, effective
	January 21, 1956	Form U5S, 1964, exh. B-12
3.2	By-laws, as amended	Form U5S, 1996, exh. B-3
	ALLEGHENY ENERGY UNIT No. 1 AND UNIT No. 2, LLC
3.1	Certificate of Formation dated May 12, 1999	Form U5S, 1999, exh. 3.1
3.2	Limited Liability Agreement dated May 12, 1999	Form U5S, 1999, exh. 3.2
	ALLEGHENY ENERGY SUPPLY COMPANY, LLC
3.1	Certificate of Formation dated November 12, 1999	Form U5S, 1999, exh. 3.1
3.2	Third Amended and Restated Limited Liability Company Agreement dated November 18, 1999	Form U5S, 1999, exh. 3.2
	WEST PENN FUNDING CORPORATION
3.1	Certificate of Incorporation dated October 20, 1999	Form U5S, 1999, exh. 3.1
3.2	By-laws	Form U5S, 1999, exh. 3.2
	WEST PENN FUNDING LLC
3.1	Certificate of Formation dated May 26, 1999	Form U5S, 1999, exh. 3.1
3.2	Amended and Restated Limited Liability Company Agreement dated November 3, 1999	Form U5S, 1999, exh. 3.2
	ALLEGHENY ENERGY SOLUTIONS, INC.
3.1	Certificate of Incorporation dated July 22, 1997	Form U5S, 1999, exh. 3.1
3.2	By-laws, as amended to August 5, 1997	Form U5S, 1999, exh. 3.2
	WEST PENN TRANSFERRING AGENT LLC
3.1	Certificate of Organization dated November 12, 1999	Form U5S, 1999, exh. 3.1
3.2	First Amended and Restated Limited Liability Company Agreement dated November 17, 1999	Form U5S, 1999, exh. 3.2
	ALLEGHENY COMMUNICATIONS CONNECT, INC.
3.1	Certificate of Incorporation dated April 11, 1996	Form U5S, 1999, exh. 3.1
3.2	By-laws, as amended to August 5, 1997	Form U5S, 1999, exh. 3.2

	AYP ENERGY, INC.
3.1	Amendment to Certification of Incorporation, May 14, 1996; Certification of Incorporation dated January 3, 1996	Form U5S, 1999, exh. 3.1
3.2	By-laws, as amended to August 5, 1997	Form U5S, 1999, exh. 3.2
	MOUNTAINEER GAS COMPANY
3.1	Agreement of Incorporation dated 4/18/57	Form U5S, 2000, exh. 3.1
3.1(a)	Certificate of Amendment of Certificate of Incorporation dated 8/10/70	Form U5S, 2000, exh. 3.1(a)
3.1(b)	Certificate of Amendment of Certificate of Incorporation dated 3/17/71	Form U5S, 2000, exh. 3.1(b)
3.1(c)	Articles of Amendment to Articles of Incorporation dated 6/21/84	Form U5S, 2000, exh. 3.1(c)
3.2	By-laws	Form U5S 2000, exh. 3.2
	MOUNTAINEER GAS SERVICES, INC.
3.1	Articles of Incorporation dated 11/19/92	Form U5S, 2000, exh. 3.1
3.2	Amended and Restated By-laws dated 12/9/93	Form U5S, 2000, exh. 3.2
	MAPCOM SYSTEMS, INC.
3.1	Articles of Incorporation dated 11/14/91	Form U5S, 2000, exh. 3.1
3.1(a)	Commonwealth of Virginia approval of merger dated 1/2/92	Form U5S, 2000, exh. 3.1(a)
3.1(b)	Consent of Sole Shareholder dated 11/15/91	Form U5S, 2000, exh. 3.1(b)
3.2	By-laws dated 11/15/91	Form U5S, 2000, exh. 3.2
	ALLEGHENY VENTURES, INC.
3.1	Certificate of Formation dated 8/18/94	Form U5S, 2000, exh. 3.1
3.1(a)	Certificate of Amendment dated 9/24/99	Form U5S, 2000, exh. 3.1(a)
3.2	By-laws as amended to 8/5/97	Form U5S, 2000, exh. 3.2
	ALLEGHENY COMMUNICATIONS CONNECT OF VIRGINIA, INC.
3.1	Articles of Incorporation dated 3/3/2000	Form U5S, 2000, exh. 3.1
3.2	By-laws	Form U5S, 2000, exh. 3.2
	ALLEGHENY COMMUNICATIONS CONNECT OF PENNSYLVANIA, LLC
3.1	Certificate of Organization filed 11/8/2000	Form U5S, 2000, exh. 3.1
3.2	Operating Agreement dated 12/31/2000	Form U5S, 2000, exh. 3.2
	ALLEGHENY ENERGY SUPPLY HUNLOCK CREEK, LLC
3.1	Certificate of Formation dated 7/27/2000	Form U5S, 2000, exh. 3.1
3.2	Limited Liability Company Agreement dated 7/27/2000	Form U5S, 2000, exh. 3.2
	ALLEGHENY ENERGY SUPPLY CONEMAUGH, LLC
3.1	Certificate of Formation dated 12/22/2000	Form U5S, 2000, exh. 3.1
3.2	Limited Liability Company Agreement dated 12/22/2000	Form U5S, 2000, exh. 3.2

	ACADIA BAY ENERGY COMPANY, LLC
3.1	Certificate of Formation dated May 22, 1996
3.2	First Amended and Restated LLC Agreement dated December 7, 2001
	ALLEGHENY COMMUNICATIONS CONNECT OF OHIO, LLC
3.1	Articles of Organization, filed February 6, 2001
	ALLEGHENY COMMUNICATIONS CONNECT OF WEST VIRGINIA, LLC
3.1	Articles of Organization, filed March 9, 2001
	ALLEGHENY ENERGY SUPPLY CAPITAL, LLC
3.1	Certificate of Formation dated April 11, 2001
3.2	LLC Agreement dated April 12, 2001
	ALLEGHENY ENERGY SUPPLY DEVELOPMENT SERVICES, LLC
3.1	Certificate of Formation dated October 11, 2001
3.2	LLC Agreement dated October 11,2001
	AFN FINANCE COMPANY NO. 2, LLC
3.1	Certificate of Formation dated May 31, 2001
3.2	LLC Agreement dated May 31, 2001
	ENERGY FINANCING COMPANY, L.L.C.
3.2	Second Amended and Restated LLC Agreement dated July 19, 2001
	ALLEGHENY ENERGY SUPPLY GLEASON GENERATING FACILITY, LLC
3.1	Certificate of Amendment dated May 17, 2001
3.2	Second Amended and Restated LLC Agreement dated August 7, 2001
	FELLON-MCCORD ASSOCIATES, INC.
3.1	Articles of Incorporation dated September 16, 1992
3.1(a)	Amendment to Articles of Incorporation dated September 29, 1992
3.1(b)	Amendment to Articles of Incorporation dated May 3, 1995
3.2	Bylaws
3.2(a)	Amendment to Bylaws, adopted January 26, 1993
3.2(b)	Amendment to Bylaws, adopted January 3, 1996
3.2(c)	Amendment to Bylaws, adopted September 15, 1997
	GREEN VALLEY HYDRO, LLC
3.1	Articles of Organization dated May 23, 2001
3.2	First Amended and Restated LLC Agreement dated June 1, 2001

	LAKE ACQUISITION COMPANY, L.L.C.
3.2	Third Amended and Restated LLC Agreement dated May 1, 2002
	ALLEGHENY ENERGY SUPPLY LINCOLN GENERATING FACILITY, LLC
3.1	Certificate of Amendment dated May 17, 2001
3.2	First Amended and Restated LLC Agreement dated May 4, 2001
	MABCO Steam Company, LLC
3.1	Certificate of Formation dated October 12, 2001
3.2	LLC Operating Agreement dated October 31, 2001
	ALLEGHENY ENERGY SUPPLY WHEATLAND GENERATING FACILITY, LLC
3.1	Certificate of Amendment dated May 17, 2001
3.2	Second Amended and Restated LLC Agreement dated August 7, 2001
	ODYSSEY COMMUNICATIONS
3.1	Certificate of Organization dated September 7, 1998
3.2	Amended and Restated Operating Agreement dated September 29, 2000
	UTILITY ASSOCIATES, INC.
3.1	Articles of Incorporation dated September 20, 2000
3.2	Bylaws
	ALLIANCE GAS SERVICES, INC.
3.1	Articles of Incorporation dated January 25, 1993
3.1(a)	Amendment to Articles of Incorporation dated May 3, 1995
3.2	Bylaws
3.2(a)	Amendment to Bylaws dated January 26, 1994
3.2(b)	Amendment to Bylaws dated January 3, 1996
3.2(c)	Amendment to Bylaws dated September 15, 1997
	ALLIANCE ENERGY SERVICES PARTNERSHIP
3.2	Partnership Agreement, dated November 1, 2001

ITEM 10 - EXHIBIT C
	Monongahela Power Company Documents	Incorporation by Reference
4	Indenture, dated as of August 1, 1945, and certain Supplemental Indentures of the Company defining rights of security holders.*	S 2-5819, exh. 7(f) S 2-8881, exh. 7(b) S 2-10548, exh. 4(b) S 2-14763, exh. 2(b)(i); Forms 8-K of the Company (1-268-2) dated July 15, 1992, September 1, 1992, May 23, 1995, November 14, 1997, and October 2, 2001.
* There are omitted the Supplemental Indentures which do no more than subject property to the lien of the above Indentures since they are not considered constituent instruments defining the rights of the holders of the securities. The Company agrees to furnish the Commission on its request with copies of such Supplemental Indentures.
	The Potomac Edison Company Documents	Incorporation by Reference
4	Indenture, dated as of October 1, 1944, and certain Supplemental Indentures of the Company defining rights of security holders*	S 2-5473, exh. 7(b); Form S-3, 33-51305, exh. 4(d) Forms 8-K of the Company (1-3376-2) dated December 15, 1992, February 17, 1993, June 22, 1994, May 12, 1995, May 17, 1995 and November 14, 1997
*There are omitted the Supplemental Indentures which do no more than subject property to the lien of the above Indentures since they are not considered constituent instruments defining the rights of the holders of the securities. The Company agrees to furnish the Commission on its request with copies of such Supplemental Indentures.
	Allegheny Generating Company Documents	Incorporation by Reference
4	Indentures, dated as of December 1, 1986, and Supplemental Indenture, dated as of December 145, 1988, of the Company defining rights of security holders	Incorporated by reference to the designated exhibits to Form 10-K for the year ended December 31, 1999.
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS Financial statements are filed in Appendix 1 as listed on the index on pages 43 and 44. EXHIBITS EXHIBIT A. Financial Statements incorporated herein by reference are as follows: The financial statements of Allegheny Energy, Inc. and its subsidiaries, and of Monongahela Power Company, The Potomac Edison Company, West Penn Power Company and its subsidiaries, Allegheny Energy Supply Company, LLC and Allegheny Generating Company, listed under ITEM 8 of their combined Annual Report on Form 10-K/A for the year ended December 31, 2001, together with the reports of PricewaterhouseCoopers LLP with respect thereto, Allegheny Energy, Inc. dated February 7, 2002, except for Note T which is as of February 25, 2002, Monongahela Power Company, The Potomac Edison Company, West Penn Power Company and Allegheny Generating Company dated February 19, 2002, and Allegheny Energy Supply LLC dated February 19, 2002, except for Note P which is as of February 25, 2002, are incorporated in this Annual Report by reference to such Annual Reports on Form 10-K/A.
*******************************************

CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Annual Report to the Securities and Exchange Commission on Form U5S of Allegheny Energy, Inc. for the year ended December 31, 2001 filed pursuant to the Public Utility Holding Company Act of 1935, of our report dated February 7, 2002, except for Note T which is as of February 25, 2002, relating to the consolidated financial statements of Allegheny Energy, Inc. which are included in their Annual Report on Form 10-K/A for the year ended December 31, 2001; our report dated February 19, 2002, except for Note P which is as of February 25, 2002 relating to the financial statements of Allegheny Energy Supply Company LLC, which are included in their Annual Report on Form 10-K/A for the year ended December 31, 2001; and our reports dated February 19, 2002 relating to the financial statements of Monongahela Power Company, The Potomac Edison Company, West Penn Power Company and Allegheny Generating Company which are included in their Annual Reports on Form 10-K for the year ended December 31, 2001.
	PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania April 30, 2002
EXHIBIT B. Constituent instruments defining the rights of holders of equity securities of system companies are filed herewith or are incorporated herein by reference as listed on pages 51 - 54.
EXHIBIT C. Constituent instruments defining the rights of holders of debt securities of System companies are incorporated herein by reference as listed on page 48.
EXHIBIT D. Tax Allocation Agreement (Incorporated by reference to Allegheny Energy's U-5-S for the year ended December 31, 2000)
EXHIBIT E. None
EXHIBIT F. None
EXHIBIT G. Organizational Chart
EXHIBIT H. Most recently available audited balance sheet, income statement and cash flows statement of Allegheny Energy Supply Hunlock Creek, LLC
SIGNATURE
The undersigned system company has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized pursuant to the requirements of the Public Utility Holding Company Act of 1935.
	ALLEGHENY ENERGY, INC. By /S/ TERENCE A. BURKE Terence A. Burke Deputy General Counsel for Allegheny Energy, Inc.
Dated: May 1, 2002

Appendix 1

Consolidating and other Financial Statements

(See index on pages 1 and 2)

			ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES

			Index to Appendix 1 -- Consolidating and Other Financial Statements

			Page 1 of 2
			Consolidating Statements
					Monongahela	Mountaineer	The Potomac	West Penn	West Penn
				Allegheny	Power	Gas	Edison	Power	Funding
				Energy, Inc.	Company	Company	Company	Company	Corporation
				and	and	and	and	and	and
				Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary	Subsidiary
				Companies	Companies	Companies	Company	Companies	Company
Balance Sheets
	December 31, 2001			A - 1, 2	B - 1, 2	C - 1, 2	D - 1, 2	E - 1, 2	F - 1, 2

Statements of Income
	Year ended
			December 31, 2001	A - 3	B - 3	C - 3	D - 3	E - 3	F - 3

Statements of
	Retained Earnings and
	Other Paid-in-Capital
		Year ended
			December 31, 2001	A - 4	B - 4	C - 4	D - 4	E - 4	F - 4

Statements of
	Members Equity
		Year ended
			December 31, 2001	A - 4 Continued	-	-	D - 4 Continued	E - 4 Continued	F - 4 Continued


Statements of Cash Flows
	Year ended
		December 31, 2001		A - 5	B - 5	C - 5	D - 5	E - 5	F - 5

Long-term Debt
	December 31, 2001			A - 6, 7, 8, 9

ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES Index to Appendix 1 -- Consolidating and Other Financial Statements
				Page 2 of 2
				Consolidating Statements				Other Statements
					Allegheny		Allegheny
					Energy	Allegheny	Communications
					Supply Company, LLC	Ventures, Inc.	Connect Inc.	Indiana ---	Ohio
					and	and	and	Kentucky	Valley
					Subsidiary	Subsidiary	Subsidiary	Electric	Electric
					Companies	Companies	Companies	Corporation	Corporation
Balance Sheets
	December 31, 2001				G - 1, 2	H - 1, 2	I - 1, 2	J - 1	J - 4

Statements of Income
	Year ended
			December 31, 2001		G - 3	H - 3	I - 3	J - 2	J - 5

Statements of
	Retained Earnings and
	Other Paid-in-Capital
		Year ended
			December 31, 2001		G - 4	H - 4	I - 4	-	-

Statements of
	Members Equity
		Year ended
			December 31, 2001		G - 4 Continued	-	I - 4 Continued	-	-

Statements of
	Owners Equity
		Year ended
			December 31, 2001		-	-	-	-	-

Statements of Cash Flows
	Year ended
		December 31, 2001			G - 5	H - 5	I - 7	J - 3	J - 6

			A - 1
			ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
			CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
			(000's)

					Allegheny
					Energy	Allegheny
				Allegheny	Supply	Energy	Monongahela	Subtotal
				Energy,	Hunlock	Service	Power Co.	(Carried to
			ASSETS	Inc.	Creek, LLC	Corporation	Consolidated	Pg A - 1a)
							(from pg B - 1)
Property, plant and equipment:
		At original cost		0	2,797	24,598	2,490,741	2,518,136
		Accumulated depreciation		0	0	(2,733)	(1,139,904)	(1,142,637)


Investments and other assets:
		Excess of cost over net assets acquired		15,077	0	0	195,033	210,110
		Securities of subsidiaries consolidated:
			Common stock, at equity	3,100,959	0	0	0	3,100,959
		Investment in Allegheny Pittsburgh Coal Company:
			Common stock, at equity	0	0	0	(3,416)	(3,416)
			Advances	0	0	0	3,495	3,495
		Investment in Allegheny Generating Company:
			Common stock, at equity	0	0	0	30,476	30,476
		Unregulated investments		(951)	18,047	0	0	17,096
		Benefit plans' investments		102,078	0	0	0	102,078
		Intangible Assets		0	0	0	0	0
		Other		0	0	2,120	3,302	5,422


Current Assets:
		Cash and temporary cash investments		159	0	194	4,439	4,792
		Accounts receivable:
			Electric	0	0	0	80,111	80,111
			Gas	0	0	0	35,691	35,691
			Affiliates, net	0	0	39,439	0	39,439
			Other	11,565	48	2,149	3,549	17,311
			Allowance for uncollectible accounts	0	0	0	(6,300)	(6,300)
		Notes receivable due 1 yr.		329,203	0	0	91,503	420,706
		Materials and supplies - at average cost:
			Operating and construction	0	0	0	18,322	18,322
			Fuel	0	0	0	41,149	41,149
		Deposits		0	0	0	0	0
		Deferred income taxes		0	0	0	5,374	5,374
		Prepaid taxes		0	74	2,248	37,590	39,912
		Prepaid Gas		0	0	0	9,381	9,381
		Regulatory assets		0	0	0	0	0
		Commodity Contracts		0	0	0	0	0
		Gas Retail Contracts		0	0	0	0	0
		Other		1,035	0	670	2,455	4,160


Deferred charges:
	Commodity Contracts			0	0	0	0	0
	Regulatory assets			0	0	0	100,750	100,750
	Deferred income taxes - deferred charges			13,091	0	16,610	0	29,701
	Unamortized loss on reacquired debt			0	0	0	12,442	12,442
	Other			1,555	0	48,321	9,164	59,040


		Total assets		3,573,771	20,966	133,616	2,025,347	5,753,700

		A - 1a
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				The Potomac	West Penn	Allegheny
				Edison	Power	Energy	Subtotal
			Prior Page	Company	Company	Supply	(Carried to
		ASSETS	Subtotal	Consolidated	Consolidated	Consolidated	Pg A - 1b)
			(from pg A - 1)		(from pg E - 1a)
				(from pg D - 1)		(from pg G - 1d)
Property, plant and equipment:
	At original cost		2,518,136	1,447,027	1,713,390	5,351,590	11,030,143
	Accumulated depreciation		(1,142,637)	(538,301)	(585,417)	(1,958,613)	(4,224,968)


Investments and other assets:
	Excess of cost over net assets acquired		210,110	0	0	367,287	577,397
	Securities of subsidiaries consolidated:
		Common stock, at equity	3,100,959	0	0	0	3,100,959
	Investment in Allegheny Pittsburgh Coal Company:
		Common stock, at equity	(3,416)	(3,416)	(6,832)	0	(13,664)
		Advances	3,495	3,616	7,061	0	14,172
	Investment in Allegheny Generating Company:
		Common stock, at equity	30,476	0	0	0	30,476
	Unregulated investments		17,096	0	0	7,105	24,201
	Benefit plans' investments		102,078	0	0	0	102,078
	Intangible Assets		0	0	0	0	0
	Other		5,422	103	30	0	5,555


Current Assets:
	Cash and temporary cash investments		4,792	1,608	6,257	20,909	33,566
	Accounts receivable:
		Electric	80,111	90,040	141,957	104,956	417,064
		Gas	35,691	0	0	0	35,691
		Affiliates, net	39,439	0	0	53,239	92,678
		Other	17,311	3,084	5,748	0	26,143
		Allowance for uncollectible accounts	(6,300)	(4,731)	(16,540)	(2,400)	(29,971)
	Notes receivable due 1 yr.		420,706	0	4,750	0	425,456
	Materials and supplies - at average cost:
		Operating and construction	18,322	11,407	16,346	52,757	98,832
		Fuel	41,149	0	0	41,240	82,389
	Deposits		0	0	0	16,815	16,815
	Deferred income taxes		5,374	4,791	16,792	0	26,957
	Prepaid taxes		39,912	24,614	1,862	111,987	178,375
	Prepaid Gas		9,381	0	0	0	9,381
	Regulatory assets		0	0	27,418	0	27,418
	Commodity Contracts		0	0	0	297,879	297,879
	Gas Retail Contracts		0	0	0	0	0
	Other		4,160	1,151	2,790	4,770	12,871


Deferred charges:
	Commodity Contracts		0	0	0	1,457,504	1,457,504
	Regulatory assets		100,750	54,081	429,502	9,849	594,182
	Deferred income taxes - deferred charges		29,701	0	0	0	29,701
	Unamortized loss on reacquired debt		12,442	11,756	2,723	5,968	32,889
	Other		59,040	4,958	9,249	33,300	106,547


		Total assets	5,753,700	1,111,788	1,777,086	5,976,142	14,618,716

		A - 1b
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Allegheny	Green
				Pittsburgh	Valley	Allegheny	Subtotal
			Prior Page	Coal	Hydro	Ventures	(Carried to
		ASSETS	Subtotal	Company	LLC	Consolidated	Pg A - 1c)
			(from pg A - 1a)			(from pg H - 1b)
Property, plant and equipment:
	At original cost		11,030,143	4,040	8,900	43,800	11,086,883
	Accumulated depreciation		(4,224,968)	(16)	(6,260)	(2,624)	(4,233,868)


Investments and other assets:
	Excess of cost over net assets acquired		577,397	0	0	26,218	603,615
	Securities of subsidiaries consolidated:
		Common stock, at equity	3,100,959	0	0	0	3,100,959
	Investment in Allegheny Pittsburgh Coal Company:
		Common stock, at equity	(13,664)	0	0	0	(13,664)
		Advances	14,172	0	0	0	14,172
	Investment in Allegheny Generating Company:
		Common stock, at equity	30,476	0	0	0	30,476
	Unregulated investments		24,201	0	0	40,020	64,221
	Benefit plans' investments		102,078	0	0	0	102,078
	Intangible Assets		0	0	0	41,625	41,625
	Other		5,555	0	0	0	5,555


Current Assets:
	Cash and temporary cash investments		33,566	50	0	4,364	37,980
	Accounts receivable:
		Electric	417,064	0	0	12,758	429,822
		Gas	35,691	0	0	53,808	89,499
		Affiliates, net	92,678	0	0	0	92,678
		Other	26,143	0	0	2,295	28,438
		Allowance for uncollectible accounts	(29,971)	0	0	(2,825)	(32,796)
	Notes receivable due 1 yr.		425,456	0	0	0	425,456
	Materials and supplies - at average cost:
		Operating and construction	98,832	0	0	6,133	104,965
		Fuel	82,389	0	0	0	82,389
	Deposits		16,815	0	0	0	16,815
	Deferred income taxes		26,957	0	0	0	26,957
	Prepaid taxes		178,375	0	0	2,450	180,825
	Prepaid Gas		9,381	0	0	0	9,381
	Regulatory assets		27,418	0	0	0	27,418
	Commodity Contracts		297,879	0	0	0	297,879
	Gas Retail Contracts		0	0	0	27,832	27,832
	Other		12,871	0	0	502	13,373


Deferred charges:
	Commodity Contracts		1,457,504	0	0	0	1,457,504
	Regulatory assets		594,182	0	0	0	594,182
	Deferred income taxes - deferred charges		29,701	0	0	15,533	45,234
	Unamortized loss on reacquired debt		32,889	0	0	0	32,889
	Other		106,547	0	0	7,023	113,570


		Total assets	14,618,716	4,074	2,640	278,912	14,904,342

		A - 1c
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Allegheny				Allegheny
				Energy				Energy, Inc
			Prior Page	Unit 1 and	Combined	Eliminations,		Consolidated
		ASSETS	Subtotal	Unit 2, LLC	Totals	etc.		Totals
			(from pg A - 1b)
Property, plant and equipment:
	At original cost		11,086,883	0	11,086,883	0		11,086,883
	Accumulated depreciation		(4,233,868)	0	(4,233,868)	0		(4,233,868)

Investments and other assets:
	Excess of cost over net assets acquired		603,615	0	603,615	0		603,615
	Securities of subsidiaries consolidated:
		Common stock, at equity	3,100,959	0	3,100,959	(3,100,959)	(1)	0
	Investment in Allegheny Pittsburgh Coal Company:
		Common stock, at equity	(13,664)	0	(13,664)	13,664	(1)	0
		Advances	14,172	0	14,172	(14,172)	(2)	0
	Investment in Allegheny Generating Company:
		Common stock, at equity	30,476	0	30,476	(30,476)	(21)	0
	Unregulated investments		64,221	0	64,221	2,201	(13)	66,422
	Benefit plans' investments		102,078	0	102,078	0		102,078
	Intangible Assets		41,625	0	41,625	0		41,625
	Other		5,555	0	5,555	0		5,555

Current Assets:
	Cash and temporary cash investments		37,980	0	37,980	0		37,980
	Accounts receivable:
		Electric	429,822	0	429,822	640	(17)	430,462
		Gas	89,499	0	89,499	0		89,499
		Affiliates, net	92,678	0	92,678	(92,678)	(3)	0
		Other	28,438	0	28,438	(640)	(17)	27,798
		Allowance for uncollectible accounts	(32,796)	0	(32,796)	0		(32,796)
	Notes receivable due 1 yr.		425,456	0	425,456	(425,456)	(2)	0
	Materials and supplies - at average cost:		0
		Operating and construction	104,965	0	104,965	0		104,965
		Fuel	82,389	0	82,389	1		82,390
	Deposits		16,815	0	16,815	0		16,815
	Deferred income taxes		26,957	0	26,957	(26,957)	(11)	0
	Prepaid taxes		180,825	0	180,825	0		180,825
	Prepaid Gas		9,381	0	9,381	(9,381)	(22)	0
	Regulatory assets		27,418	0	27,418	(27,418)	(22)	0
	Commodity Contracts		297,879	0	297,879	0		297,879
	Gas Retail Contracts		27,832	0	27,832	0		27,832
	Other, including current portion of regulatory assets		13,373	0	13,373	(911)	(12)	49,261
						27,418	(22)
Deferred charges:						9,381	(22)
	Commodity Contracts		1,457,504	0	1,457,504	0		1,457,504
	Regulatory assets		594,182	0	594,182	0		594,182
	Deferred income taxes - deferred charges		45,234	0	45,234	(45,234)	(11)	0
	Unamortized loss on reacquired debt		32,889	0	32,889	0		32,889
	Other		113,570	0	113,570	(15,813)	(15)	97,757


		Total assets	14,904,342	0	14,904,342	(3,736,790)		11,167,552

		A - 2
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Allegheny
				Energy	Allegheny
			Allegheny	Supply	Energy	Monongahela
			Energy,	Hunlock	Service	Power Co.	Subtotal
		Capitalization and Liabilities	Inc.	Creek, LLC	Corporation	Consolidated	(Carried to
						(from pg B - 2)	Pg A - 2a)
Capitalization:
	Common stock of Allegheny Energy, Inc.		156,596	0	0	0	156,596
	Common stock of affiliated consolidated		0	0	50	294,550	294,600
	Members equity		0	20,416	0	0	20,416
	Other paid-in capital		1,421,117	0	0	100,242	1,521,359
	Retained earnings		1,152,487	0	0	234,802	1,387,289
	Other Comprehensive Income		(20,230)	0	0	0	(20,230)

	Preferred stock of subsidiaries:
		Not subject to mandatory redemption	0	0	0	74,000	74,000

	Long-term debt and QUIDS		300,818	0	0	784,261	1,085,079
		(see pages A-6, A-7, A-8, A-9)
	Notes and advances payable to affiliates		0	0	0	0	0


Current liabilities:
	Short-term debt		514,288	0	0	14,350	528,638
	Long-term debt due 1 year		0	0	0	30,408	30,408
	Accounts payable to affiliates		102	550	0	15,718	16,370
	Accounts payable - others		2,563	0	10,265	63,587	76,415
	Deferred income taxes		0	0	0	0	0
	Customer Deposits		0	0	0	0	0
	Taxes accrued:
		Federal and state income	3,535	0	47	8,194	11,776
		Other	11	0	151	39,085	39,247
	Deferred Power costs		0	0	0	0	0
	Interest accrued		10,296	0	0	14,918	25,214
	Payroll accrued		0	0	41,955	0	41,955
	Adverse power purchase commitments		0	0	0	0	0
	Commodity Contracts		0	0	0	0	0
	Maryland Settlement		0	0	0	0	0
	Gas retail contracts		31,122	0	0	0	31,122
	Other		0	0	1,283	8,826	10,109

Minority Interest			0	0	0	0	0

Deferred credits and other liabilities:
	Commodity Contracts		0	0	0	0	0
	Unamortized investment credit		0	0	0	9,034	9,034
	Long-term accounts payable affiliates		0	0	0	15,812	15,812
	Deferred income taxes		0	0	0	238,751	238,751
	Regulatory liabilities		0	0	0	49,509	49,509
	Obligations under capital leases		0	0	2,264	11,567	13,831
	Adverse power purchase commitments		0	0	0	0	0
	Other		1,066	0	77,601	17,733	96,400


		Total capitalization and liabilities	3,573,771	20,966	133,616	2,025,347	5,753,700

		A - 2a
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				The Potomac	West Penn	Allegheny
				Edison	Power	Energy
			Prior Page	Company	Company	Supply	Subtotal
		Capitalization and Liabilities	Subtotal	Consolidated	Consolidated	Consolidated	(Carried to
			(from pg A - 2)		(from pg E - 2a)		Pg A - 2b)
				(from pg D - 2)		(from pg G - 2d)
Capitalization:
	Common stock of Allegheny Energy, Inc.		156,596	0	0	0	156,596
	Common stock of affiliated consolidated		294,600	224	65,842	0	360,666
	Members equity		20,416	0	0	1,524,686	1,545,102
	Other paid-in capital		1,521,359	222,661	244,239	0	1,988,259
	Retained earnings		1,387,289	160,372	113,232	0	1,660,893
	Other Comprehensive Income		(20,230)	0	0	0	(20,230)

	Preferred stock of subsidiaries:
		Not subject to mandatory redemption	74,000	0	0	0	74,000

	Long-term debt and QUIDS		1,085,079	415,797	574,647	1,130,041	3,205,564
		(see pages A-6, A-7, A-8, A-9)
	Notes and advances payable to affiliates		0	0	0	0	0


Current liabilities:
	Short-term debt		528,638	57,597	0	685,895	1,272,130
	Long-term debt due 1 year		30,408	0	103,845	219,108	353,361
	Accounts payable to affiliates		16,370	38,609	36,348	387,850	479,177
	Accounts payable - others		76,415	16,066	32,267	184,108	308,856
	Deferred income taxes		0	0	0	209,949	209,949
	Customer Deposits		0	0	0	4,460	4,460
	Taxes accrued:
		Federal and state income	11,776	1,345	3,872	1,465	18,458
		Other	39,247	23,768	11,340	24,120	98,475
	Deferred Power costs		0	6,687	0	0	6,687
	Interest accrued		25,214	5,011	1,705	23,055	54,985
	Payroll accrued		41,955	0	0	32,730	74,685
	Adverse power purchase commitments		0	0	24,839	0	24,839
	Commodity Contracts		0	0	0	515,183	515,183
	Maryland Settlement		0	23	0	0	23
	Gas retail contracts		31,122	0	0	0	31,122
	Other		10,109	6,512	8,601	2,387	27,609

Minority Interest			0	0	0	30,476	30,476

Deferred credits and other liabilities:
	Commodity Contracts		0	0	0	489,950	489,950
	Unamortized investment credit		9,034	9,570	19,951	64,035	102,590
	Long-term accounts payable affiliates		15,812	0	0	0	15,812
	Deferred income taxes		238,751	109,748	243,456	412,707	1,004,662
	Regulatory liabilities		49,509	20,377	15,255	22,914	108,055
	Obligations under capital leases		13,831	9,218	12,260	0	35,309
	Adverse power purchase commitments		0	0	253,499	0	253,499
	Other		96,400	8,203	11,888	11,023	127,514


		Total capitalization and liabilities	5,753,700	1,111,788	1,777,086	5,976,142	14,618,716

		A - 2b
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Allegheny	Green
				Pittsburgh	Valley	Allegheny
			Prior Page	Coal	Hydro	Ventures	Subtotal
		Capitalization and Liabilities	Subtotal	Company	LLC	Consolidated	(Carried to
			(from pg A - 2a)			(from pg H - 2b)	Pg A - 2c)
Capitalization:
	Common stock of Allegheny Energy, Inc.		156,596	0	0	0	156,596
	Common stock of affiliated consolidated		360,666	0	0	1	360,667
	Members equity		1,545,102	0	2,196	0	1,547,298
	Other paid-in capital		1,988,259	555	0	160,985	2,149,799
	Retained earnings		1,660,893	(14,220)	0	(36,231)	1,610,442
	Other Comprehensive Income		(20,230)	0	0	(20,232)	(40,462)

	Preferred stock of subsidiaries:
		Not subject to mandatory redemption	74,000	0	0	0	74,000

	Long-term debt and QUIDS		3,205,564	0	0	10,500	3,216,064
		(see pages A-6, A-7, A-8, A-9)
	Notes and advances payable to affiliates		0	14,173	0	0	14,173

Current liabilities:
	Short-term debt		1,272,130	3,506	0	700	1,276,336
	Long-term debt due 1 year		353,361	0	0	0	353,361
	Accounts payable to affiliates		479,177	0	52	984	480,213
	Accounts payable - others		308,856	0	0	65,307	374,163
	Deferred income taxes		209,949	0	0	0	209,949
	Customer Deposits		4,460	0	0	0	4,460
	Taxes accrued:
		Federal and state income	18,458	60	0	3,095	21,613
		Other	98,475	0	0	918	99,393
	Deferred Power costs		6,687	0	0	0	6,687
	Interest accrued		54,985	0	0	51	55,036
	Payroll accrued		74,685	0	0	0	74,685
	Adverse power purchase commitments		24,839	0	0	0	24,839
	Commodity Contracts		515,183	0	0	0	515,183
	Gas retail contracts		31,122	0	0	69,520	100,642
	Maryland Settlement		23	0	0	0	23
	Other		27,609	0	0	2,054	29,663

Minority Interest			30,476	0	0	0	30,476

Deferred credits and other liabilities:
	Commodity Contracts		489,950	0	0	0	489,950
	Unamortized investment credit		102,590	0	0	0	102,590
	Long-term accounts payable affiliates		15,812	0	0	0	15,812
	Deferred income taxes		1,004,662	0	392	0	1,005,054
	Regulatory liabilities		108,055	0	0	0	108,055
	Obligations under capital leases		35,309	0	0	0	35,309
	Adverse power purchase commitments		253,499	0	0	0	253,499
	Other		127,514	0	0	21,260	148,774


		Total capitalization and liabilities	14,618,716	4,074	2,640	278,912	14,904,342

		A - 2c
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Allegheny				Allegheny
				Energy				Energy, Inc
			Prior Page	Unit 1 and	Combined	Eliminations,		Consolidated
		Capitalization and Liabilities	Subtotal	Unit 2, LLC	Totals	etc.		Totals
			(From pg A - 2b)
Capitalization:
	Common stock of Allegheny Energy, Inc.		156,596	0	156,596	0		156,596
	Common stock of affiliated consolidated		360,667	0	360,667	(360,667)	(1)	0
	Members equity		1,547,298	0	1,547,298	(1,547,298)	(1)	0
	Other paid-in capital		2,149,799	0	2,149,799	(728,682)	(1)	1,421,117
	Retained earnings		1,610,442	0	1,610,442	(457,955)	(1)	1,152,487
	Other Comprehensive Income		(40,462)	0	(40,462)	20,231	(13)	(20,231)

	Preferred stock of subsidiaries:
		Not subject to mandatory redemption	74,000	0	74,000	0		74,000

	Long-term debt and QUIDS		3,216,064	0	3,216,064	(15,643)	(1)	3,200,421
		(see pages A-6, A-7, A-8, A-9)
	Notes and advances payable to affiliates		14,173	0	14,173	(14,173)	(2)	0


Current liabilities:
	Short-term debt		1,276,336	0	1,276,336	(37,608)	(2)	1,238,728
	Long-term debt due 1 year		353,361	0	353,361	(307)	(1)	353,054
	Accounts payable to affiliates		480,213	0	480,213	(387,850)	(2)	0
						(92,365)	(3)
						2
	Accounts payable - others		374,163	0	374,163	(205)		373,958
	Deferred income taxes		209,949	0	209,949	(23,016)	(11)	186,933
	Customer Deposits		4,460	0	4,460	0		4,460
	Taxes accrued:
		Federal and state income	21,613	0	21,613	0		21,613
		Other	99,393	0	99,393	0		99,393
	Deferred Power costs		6,687	0	6,687	(6,687)	(23)	0
	Interest accrued		55,036	0	55,036	(1,570)	(12)	53,466
	Payroll accrued		74,685	0	74,685	0		74,685
	Adverse power purchase commitments		24,839	0	24,839	0		24,839
	Commodity Contracts		515,183	0	515,183	(2,395)	(1)	512,788
	Gas retail contracts		100,642	0	100,642	3,938	(1)	69,520
						(17,030)	(11)
						(18,030)	(13)
	Maryland Settlement		23	0	23	(23)	(23)	0
	Other, including current portion of regulatory liabilities		29,663	0	29,663	23	(23)	36,373
						6,687	(23)
Minority Interest			30,476	0	30,476	29,991	(1)	29,991
						(30,476)	(21)
Deferred credits and other liabilities:
	Commodity Contracts		489,950	0	489,950	(7,725)	(1)	482,225
	Unamortized investment credit		102,590	0	102,590	(1)		102,589
	Long-term accounts payable affiliates		15,812	0	15,812	(15,812)	(15)	0
	Deferred income taxes		1,005,054	0	1,005,054	(32,144)	(11)	972,910
	Regulatory liabilities		108,055	0	108,055	0		108,055
	Obligations under capital leases		35,309	0	35,309	0		35,309
	Adverse power purchase commitments		253,499	0	253,499	0		253,499
	Other		148,774	0	148,774	0		148,774


		Total capitalization and liabilities	14,904,342	0	14,904,342	(3,736,790)		11,167,552

			A - 3
			ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
			CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
			(000's)
					Allegheny
					Energy	Allegheny
				Allegheny	Supply	Energy	Monongahela	Subtotal
				Energy,	Hunlock	Service	Power Co.	(Carried to
				Inc.	Creek, LLC	Corporation	Consolidated	Pg A - 3a)
Operating revenues:							(from pg B - 3)
	Residential			0	0	0	371,916	371,916
	Commercial			0	0	0	223,783	223,783
	Industrial			0	0	0	219,062	219,062
	Bulk power transactions, net			0	0	0	12,902	12,902
	Wholesale and other excluding affiliates			0	0	0	24,436	24,436
	Affiliated companies			0	0	533,014	85,624	618,638
			Total operating revenues	0	0	533,014	937,723	1,470,737

Operating expenses:
	Operation:
		Fuel		0	0	0	136,853	136,853
		Natural Gas Purchases and Production		0	0	0	129,864	129,864
		Purchased power and exchanges, net		0	0	0	131,142	131,142
		Deferred power costs, net		0	0	0	0	0
		Other		9,371	98	508,475	143,235	661,179
	Maintenance			1,473	0	4,201	83,075	88,749
	Depreciation and amortization			0	0	0	79,011	79,011
	Taxes other than income			93	80	18,695	63,815	82,683
	Federal and state income taxes			0	(74)	111	36,978	37,015
			Total operating expenses	10,937	104	531,482	803,973	1,346,496
			Operating income	(10,937)	(104)	1,532	133,750	124,241

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction		0	0	0	481	481
	Other income, net			480,431	0	(1,294)	7,743	486,880
	Total other income and deductions			480,431	0	(1,294)	8,224	487,361
	Income before interest charges, preferred dividends, cumulative
		effect of accounting change and minority interest		469,494	(104)	238	141,974	611,602

Interest charges and preferred dividends:
	Interest on long-term debt			23,251	0	0	50,846	74,097
	Other interest			26,131	0	238	3,984	30,353
	Allowance for borrowed funds used during const.
		and interest capitalized		0	0	0	(2,313)	(2,313)
		Total interest charges and preferred dividends		49,382	0	238	52,517	102,137
	Minority Interest			2,337	0	0	0	2,337

	Income (loss) before cumulative effect of
		accounting change, net		417,775	(104)	0	89,457	507,128
		Cumulative effect of accounting change, net		0	0	0	0	0
	Net Income (loss)			417,775	(104)	0	89,457	507,128

			A - 3a
			ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
			CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
			(000's)
					The Potomac	West Penn	Allegheny
					Edison	Power	Energy
				Prior Page	Company	Company	Supply	Subtotal
				Subtotal	Consolidated	Consolidated	Consolidated	(Carried to
					(from pg D - 3)			Pg A - 3b)
				(from pg A - 3)		(from pg E - 3a)	(from pg G - 3d)
Operating revenues:
	Residential			371,916	346,128	423,258	54,784	1,196,086
	Commercial			223,783	165,480	244,441	49,373	683,077
	Industrial			219,062	220,039	337,266	28,970	805,337
	Bulk power transactions, net			12,902	64,376	23,420	7,337,411	7,438,109
	Wholesale and other excluding affiliates			24,436	41,601	35,510	5,539	107,086
	Affiliated companies			618,638	26,910	50,609	1,135,478	1,831,635
			Total operating revenues	1,470,737	864,534	1,114,504	8,611,555	12,061,330

Operating expenses:
	Operation:
		Fuel		136,853	0	0	440,831	577,684
		Natural Gas Purchases and Production		129,864	0	0	7,984	137,848
		Purchased power and exchanges, net		131,142	516,203	612,150	7,142,273	8,401,768
		Deferred power costs, net		0	(11,441)	0	0	(11,441)
		Other		661,179	153,911	125,618	242,134	1,182,842
	Maintenance			88,749	29,762	39,976	133,182	291,669
	Depreciation and amortization			79,011	33,876	69,328	115,962	298,177
	Taxes other than income			82,683	30,005	55,279	66,320	234,287
	Federal and state income taxes			37,015	26,684	53,369	124,953	242,021
			Total operating expenses	1,346,496	779,000	955,720	8,273,639	11,354,855
			Operating income	124,241	85,534	158,784	337,916	706,475

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction		481	(67)	480	0	894
	Other income, net			486,880	(2,304)	1,554	5,453	491,583
	Total other income and deductions			487,361	(2,371)	2,034	5,453	492,477
	Income before interest charges, preferred dividends, cumulative
		effect of accounting change and minority interest		611,602	83,163	160,818	343,369	1,198,952

Interest charges and preferred dividends:
	Interest on long-term debt			74,097	32,996	48,990	57,717	213,800
	Other interest			30,353	2,376	2,551	53,274	88,554
	Allowance for borrowed funds used during const.
		and interest capitalized		(2,313)	(244)	(568)	(7,506)	(10,631)
		Total interest charges and preferred dividends		102,137	35,128	50,973	103,485	291,723
	Minority Interest			2,337	0	0	5,049	7,386

	Income (loss) before cumulative effect of
		accounting change, net		507,128	48,035	109,845	234,835	899,843
		Cumulative effect of accounting change, net		0	0	0	31,147	31,147
	Net Income (loss)			507,128	48,035	109,845	203,688	868,696

			A - 3b
			ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
			CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
			(000's)
					Allegheny	Green	Allegheny
				Prior Page	Pittsburgh	Valley	Ventures	Subtotal
				Subtotal	Coal	Hydro	Consolidated	(Carried to
				(from pg A - 3a)	Company	LLC	(from pg H - 3b)	Pg A - 3c)
Operating revenues:
	Residential			1,196,086	0	0	0	1,196,086
	Commercial			683,077	0	0	0	683,077
	Industrial			805,337	0	0	0	805,337
	Bulk power transactions, net			7,438,109	0	0	0	7,438,109
	Wholesale and other excluding affiliates			107,086	0	0	139,105	246,191
	Affiliated companies			1,831,635	0	300	539	1,832,474
			Total operating revenues	12,061,330	0	300	139,644	12,201,274

Operating expenses:
	Operation:
		Fuel		577,684	0	0	0	577,684
		Natural Gas Purchases and Production		137,848	0	0	81,149	218,997
		Purchased power and exchanges, net		8,401,768	0	0	0	8,401,768
		Deferred power costs, net		(11,441)	0	0	0	(11,441)
		Other		1,182,842	0	96	54,928	1,237,866
	Maintenance			291,669	0	130	222	292,021
	Depreciation and amortization			298,177	0	71	1,137	299,385
	Taxes other than income			234,287	0	3	746	235,036
	Federal and state income taxes			242,021	0	0	814	242,835
			Total operating expenses	11,354,855	0	300	138,996	11,494,151
			Operating income	706,475	0	0	648	707,123

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction		894	0	0	0	894
	Other income, net			491,583	(60)	0	(409)	491,114
	Total other income and deductions			492,477	(60)	0	(409)	492,008
	Income before interest charges, preferred dividends, cumulative
		effect of accounting change and minority interest		1,198,952	(60)	0	239	1,199,131

Interest charges and preferred dividends:
	Interest on long-term debt			213,800	0	0	0	213,800
	Other interest			88,554	141	0	441	89,136
	Allowance for borrowed funds used during const.
		and interest capitalized		(10,631)	0	0	0	(10,631)
		Total interest charges and preferred dividends		291,723	141	0	441	292,305
	Minority Interest			7,386	0	0	0	7,386

	Income (loss) before cumulative effect of
		accounting change, net		899,843	(201)	0	(202)	899,440
		Cumulative effect of accounting change, net		31,147	0	0	0	31,147
	Net Income (loss)			868,696	(201)	0	(202)	868,293

			A - 3c
			ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
			CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
			(000's)
					Allegheny	Allegheny	Combined
					Energy	Energy Supply	Totals
				Prior Page	Unit 1 and	Conemaugh	(Carried to
				Subtotal	Unit 2, LLC	LLC	Pg A - 3d)
Operating revenues:				(from pg A - 3b)
	Residential			1,196,086	0	0	1,196,086
	Commercial			683,077	0	0	683,077
	Industrial			805,337	0	0	805,337
	Bulk power transactions, net			7,438,109	0	0	7,438,109
	Wholesale and other excluding affiliates			246,191	0	11	246,202
	Affiliated companies			1,832,474	355	8,790	1,841,619
			Total operating revenues	12,201,274	355	8,801	12,210,430

Operating expenses:
	Operation:
		Fuel		577,684	599	3,641	581,924
		Natural Gas Purchases and Production		218,997	0	0	218,997
		Purchased power and exchanges, net		8,401,768	0	0	8,401,768
		Deferred power costs, net		(11,441)	0	0	(11,441)
		Other		1,237,866	248	493	1,238,607
	Maintenance			292,021	31	424	292,476
	Depreciation and amortization			299,385	591	1,362	301,338
	Taxes other than income			235,036	8	6	235,050
	Federal and state income taxes			242,835	(466)	0	242,369
			Total operating expenses	11,494,151	1,011	5,926	11,501,088
			Operating income	707,123	(656)	2,875	709,342

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction		894	0	0	894
	Other income, net			491,114	0	7	491,121
	Total other income and deductions			492,008	0	7	492,015
	Income before interest charges, preferred dividends, cumulative
		effect of accounting change and minority interest		1,199,131	(656)	2,882	1,201,357

Interest charges and preferred dividends:
	Interest on long-term debt			213,800	0	0	213,800
	Other interest			89,136	0	2,882	92,018
	Allowance for borrowed funds used during const.
		and interest capitalized		(10,631)	0	0	(10,631)
		Total interest charges and preferred dividends		292,305	0	2,882	295,187
	Minority Interest			7,386	0	0	7,386

	Income (loss) before cumulative effect of
		accounting change, net		899,440	(656)	0	898,784
		Cumulative effect of accounting change, net		31,147	0	0	31,147
	Net Income (loss)			868,293	(656)	0	867,637

			A - 3d
			ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
			CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
			(000's)
							Allegheny
							Energy, Inc
				Combined	Eliminations,		Consolidated
				Totals	etc.		Totals
Operating revenues:				(from pg A - 3c)
	Residential			1,196,086	0		1,196,086
	Commercial			683,077	0		683,077
	Industrial			805,337	0		805,337
	Bulk power transactions, net			7,438,109	10,120	(18)	7,448,229
	Wholesale and other excluding affiliates			246,202	0		246,202
	Affiliated companies			1,841,619	(1,308,605)	(4)	0
					(533,014)	(5)
			Total operating revenues	12,210,430	(1,831,499)		10,378,931

Operating expenses:
	Operation:
		Fuel		581,924	0		581,924
		Natural Gas Purchases and Production		218,997	0		218,997
		Purchased power and exchanges, net		8,401,768	(1,164,298)	(4)	7,237,470
		Deferred power costs, net		(11,441)	0		(11,441)
		Other		1,238,607	(144,012)	(4)	586,120
					(508,475)	(5)

	Maintenance			292,476	(404)	(4)	287,871
					(4,201)	(5)
	Depreciation and amortization			301,338	198	(14)	301,536

	Taxes other than income			235,050	(18,697)	(5)	216,353
	Federal and state income taxes			242,369	111	(4)	245,067
					(109)	(5)
					809	(8)
					3,940	(20)
					(2,053)	(24)
			Total operating expenses	11,501,088	(1,837,191)		9,663,897
			Operating income	709,342	5,692		715,034

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction		894	0		894
	Other income, net			491,121	1,294	(5)	13,019
					(141)	(6)
					(21,637)	(7)
					809	(8)
					(451,004)
					198	(14)
					(520)	(16)
					(5,048)	(19)
					(2,053)	(24)
	Total other income and deductions			492,015	(478,102)		13,913
	Income before interest charges, preferred dividends, cumulative
		effect of accounting change and minority interest		1,201,357	(472,410)		728,947

Interest charges and preferred dividends:
	Interest on long-term debt			213,800	(520)	(16)	213,280
	Other interest			92,018	(238)		70,002
					(141)	(6)
					(21,637)	(7)
	Allowance for borrowed funds used during const.
		and interest capitalized		(10,631)	(1)		(10,632)
	Dividends on preferred stock of subsidiaries			0	5,037	(10)	5,037
		Total interest charges and preferred dividends		295,187	(17,500)		277,687
	Minority Interest			7,386	(5,048)	(19)	2,338

	Income (loss) before cumulative effect of
		accounting change, net		898,784	(449,862)		448,922
		Cumulative effect of accounting change, net		31,147	0		31,147
	Net Income (loss)			867,637	(449,862)		417,775

		A - 4

		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny
				Energy	Allegheny
			Allegheny	Supply	Energy	Monongahela	Subtotal
		RETAINED EARNINGS	Energy,	Hunlock	Service	Power Co.	(Carried to
			Inc.	Creek, LLC	Corporation	Consolidated	Pg A - 4a)
						(from pg B - 4)
Balance at January 1, 2001			943,281	0	0	248,408	1,191,689

Add:
	Net income (loss)		417,775	0	0	89,457	507,232

		Total	1,361,056	0	0	337,865	1,698,921

Deduct:
	Dividends on common stock of Allegheny
		Energy, Inc.	208,569	0	0	0	208,569

	Dividends on capital stock of subsidiary companies:
		Preferred	0	0	0	5,037	5,037
		Common	0	0	0	98,026	98,026

		Total deductions	208,569	0	0	103,063	311,632

Balance at December 31, 2001			1,152,487	0	0	234,802	1,387,289

		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			1,044,085	0	0	164,941	1,209,026

Add (Deduct):
	Issuance of Common Stock		126,535	0	0	0	126,535
	Gain on sale of Treasury Stock		163,193	0	0	0	163,193
	Issuance of membership interest in
		Allegheny Energy Supply Company, LLC.	87,304	0	0	0	87,304

	Capital Contributions from
		Allegheny Energy, Inc.	0	0	0	0	0

	Transfer of Equity to
		Allegheny Energy Supply Company, LLC.	0	0	0	(64,699)	(64,699)


	Decrease due to transfer of assets		0	0	0	0	0

	Adjustment to recognize Allegheny Generating Company in the consolidated
		financial statements of Allegheny Energy Supply. LLC
		due to increased ownership	0	0	0	0	0

Balance at December 31, 2001			1,421,117	0	0	100,242	1,521,359

		MEMBERS EQUITY
Balance at January 1, 2001			0	18,127	0	0	18,127

Add:
	Net income (loss)		0	(104)	0	0	(104)

	Members capital contributions		0	2,393	0	0	2,393

	Issuance of membership
		Interest	0	0	0	0	0

		Total	0	20,416	0	0	20,416

Deduct:
	Decrease due to transfer of assets		0	0	0	0	0

		Total deductions	0	0	0	0	0

Balance at December 31, 2001			0	20,416	0	0	20,416

		A - 4a

		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				The Potomac	West Penn	Allegheny
				Edison	Power	Energy
			Prior Page	Company	Company	Supply	Subtotal
		RETAINED EARNINGS	Subtotal	Consolidated	Consolidated	Consolidated	(Carried to
			(from pg A - 4)		(from pg E - 4a)		Pg A - 4b)
				(from pg D - 4)
Balance at January 1, 2001			1,191,689	187,551	112,040	0	1,491,280

Add:
	Net income (loss)		507,232	48,035	109,845	0	665,112

		Total	1,698,921	235,586	221,885	0	2,156,392

Deduct:
	Dividends on common stock of Allegheny
		Energy, Inc.	208,569	0	0	0	208,569

	Dividends on capital stock of subsidiary companies:
		Preferred	5,037	0	0	0	5,037
		Common	98,026	75,214	108,653	0	281,893

		Total deductions	311,632	75,214	108,653	0	495,499

Balance at December 31, 2001			1,387,289	160,372	113,232	0	1,660,893

		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			1,209,026	224,979	244,239	0	1,678,244

Add (Deduct):
	Issuance of Common Stock		126,535	0	0	0	126,535
	Gain on sale of Treasury Stock		163,193	0	0	0	163,193
	Issuance of membership interest in
		Allegheny Energy Supply Company, LLC.	87,304	0	0	0	87,304

	Capital Contributions from
		Allegheny Energy, Inc.	0	0	0	0	0

	Transfer of Equity to
		Allegheny Energy Supply Company, LLC.	(64,699)	0	0	0	(64,699)


	Decrease due to transfer of assets		0	(2,318)	0	0	(2,318)

	Adjustment to recognize Allegheny Generating Company in the consolidated
		financial statements of Allegheny Energy Supply. LLC
		due to increased ownership	0	0	0	0	0

Balance at December 31, 2001			1,521,359	222,661	244,239	0	1,988,259

		MEMBERS EQUITY
Balance at January 1, 2001			18,127	0	0	759,643	777,770

Add:
	Net income (loss)		(104)	0	0	203,688	203,584

	Members capital contributions		2,393	0	0	446,355	448,748

	Issuance of membership
		Interest	0	0	0	115,000	115,000

		Total	20,416	0	0	1,524,686	1,545,102

Deduct:
	Decrease due to transfer of assets		0	0	0	0	0

		Total deductions	0	0	0	0	0

Balance at December 31, 2001			20,416	0	0	1,524,686	1,545,102

			A - 4b
			ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
			CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
			FOR YEAR ENDED DECEMBER 31, 2001
			(000's)
								Allegheny		Green
								Pittsburgh		Valley	Allegheny
					Prior Page			Coal		Hydro	Ventures	Subtotal
RETAINED EARNINGS					Subtotal			Company		LLC.	Consolidated	(Carried to
					(from pg A - 4a)						(from pg H - 4b)	Pg A - 4c)

Balance at January 1, 2001					1,491,280			(14,019)		0	(36,029)	1,441,232

Add:
	Net income (loss)				665,112			(201)		0	(202)	664,709

			Total		2,156,392			(14,220)		0	(36,231)	2,105,941

Deduct:
	Dividends on common stock of Allegheny
			Energy, Inc.		208,569			0		0	0	208,569

	Dividends on capital stock of subsidiary companies:
			Preferred		5,037			0		0	0	5,037
			Common		281,893			0		0	0	281,893

			Total deductions		495,499			0		0	0	495,499

Balance at December 31, 2001					1,660,893			(14,220)		0	(36,231)	1,610,442

OTHER PAID - IN CAPITAL

Balance at January 1, 2001					1,678,244			555		0	96,092	1,774,891

Add (Deduct):
	Issuance of Common Stock				126,535			0		0	0	126,535
	Gain on sale of Treasury Stock				163,193			0		0	0	163,193
	Issuance of membership interest in
Allegheny Energy Supply Company, LLC.					87,304			0		0	0	87,304

	Capital Contributions from
Allegheny Energy, Inc.					0			0		0	64,893	64,893

	Transfer of Equity to
Allegheny Energy Supply Company, LLC.					(64,699)			0		0	0	(64,699)

	Decrease due to transfer of assets				(2,318)			0		0	0	(2,318)

	Adjustment to recognize Allegheny Generating Company in the consolidated
financial statements of Allegheny Energy Supply. LLC
due to increased ownership						0		0		0	0	0

Balance at December 31, 2001						1,988,259		555		0	160,985	2,149,799
		MEMBERS EQUITY
Balance at January 1, 2001							777,770	0	0		0	777,770

Add:
		Net income (loss)					203,584	0	0		0	203,584

		Members capital contributions					448,748	0	2,196		0	450,944

		Issuance of membership
				Interest			115,000	0	0		0	115,000

				Total			1,545,102	0	2,196		0	1,547,298

Deduct:
		Decrease due to transfer of assets					0	0	0		0	0

				Total deductions			0	0	0		0	0

Balance at December 31, 2001							1,545,102	0	2,196		0	1,547,298

		A - 4c

		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

					Allegheny				Allegheny
			Prior Page	Allegheny	Energy				Energy, Inc
		RETAINED EARNINGS	Subtotal	Generating	Unit 1 and	Combined	Eliminations,		Consolidated
			(from pg A - 4b)	Company	Unit 2, LLC	Totals	etc.		Totals

Balance at January 1, 2001			1,441,232	0	0	1,441,232	(497,951)		943,281

Add:
	Net income (loss)		664,709	0	0	664,709	(246,934)		417,775


		Total	2,105,941	0	0	2,105,941	(744,885)		1,361,056

Deduct:
	Dividends on common stock of Allegheny
		Energy, Inc.	208,569	0	0	208,569	0		208,569

	Dividends on capital stock of subsidiary companies:
		Preferred	5,037	0	0	5,037	(5,037)	(10)	0
		Common	281,893	0	0	281,893	(281,893)	(9)	0

		Total deductions	495,499	0	0	495,499	(286,930)		208,569

Balance at December 31, 2001			1,610,442	0	0	1,610,442	(457,955)		1,152,487

		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			1,774,891	144,370	0	1,919,261	(875,176)		1,044,085

Add (Deduct):
	Issuance of Common Stock		126,535	0	0	126,535	0		126,535
	Gain on sale of Treasury Stock		163,193	0	0	163,193	0		163,193
	Issuance of membership interest in
		Allegheny Energy Supply Company, LLC.	87,304	0	0	87,304	0		87,304

	Capital Contributions from
		Allegheny Energy, Inc.	64,893	0	0	64,893	(64,893)		0

	Transfer of Equity to
		Allegheny Energy Supply Company, LLC.	(64,699)	0	0	(64,699)	64,699		0

	Decrease due to transfer of assets		(2,318)	0	0	(2,318)	2,318		0

	Adjustment to recognize Allegheny Generating Company in the consolidated
		financial statements of Allegheny Energy Supply. LLC
		due to increased ownership	0	(144,370)	0	(144,370)	144,370		0

Balance at December 31, 2001			2,149,799	0	0	2,149,799	(728,682)		1,421,117



		MEMBERS EQUITY
Balance at January 1, 2001			777,770	0	46,852	824,622	(824,622)		0

Add:
	Net income (loss)		203,584	0	(656)	202,928	(202,928)		0

	Members capital contributions		450,944	0	0	450,944	(450,944)		0

	Issuance of membership
		Interest	115,000	0	0	115,000	(115,000)		0

		Total	1,547,298	0	46,196	1,593,494	(1,593,494)		0

Deduct:
	Decrease due to transfer of assets		0	0	46,196	46,196	(46,196)		0

		Total deductions	0	0	46,196	46,196	(46,196)		0

Balance at December 31, 2001			1,547,298	0	0	1,547,298	(1,547,298)		0


		A - 5
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny
				Energy	Allegheny
			Allegheny	Supply	Energy	Monongahela
			Energy,	Hunlock	Service	Power Co.	Subtotal
			Inc.	Creek, LLC	Corporation	Consolidated	(Carried to
						(from pg B - 5)	Pg A - 5a)
Cash Flows from Operations:
	Net income (loss)		417,775	(104)	0	89,457	507,128
	Cumulative effect of accounting change, net of taxes		0	0	0	0	0
	Income before accounting change		417,775	(104)	0	89,457	507,128
	Depreciation and amortization		0	0	0	79,011	79,011
	Deferred Revenues		0	0	0	0	0
	Minority interest		2,337	0	0	0	2,337
	Amortization of adverse purchase power contracts		0	0	0	0	0
	Deferred investment credit and income taxes, net		0	0	0	16,678	16,678
	Deferred power costs, net		0	0	0	0	0
	Unrealized gain on commodity contracts, net		0	0	0	0	0
	Unconsolidated subsidiaries' dividends in excess of earnings		0	0	0	2,675	2,675
	Allowance for other than borrowed funds used				0
		during construction (AOFDC)	0	0	0	(481)	(481)
	Changes in certain assets and liabilities:				0
		Accounts receivable, net	(11,565)	(48)	(636)	17,498	5,249
		Accounts receivable from affiliates	0	0	39,069	0	39,069
		Affiliates accounts receivable/payable, net	0	0	0	0	0
		Materials and supplies	1	0	0	(32,216)	(32,215)
		Deposits	0	0	0	0	0
		Taxes receivable
		Gas retail contracts, net	0	0	0	0	0
		Prepaid Taxes	0	(74)	965	0	891
		Non-cash investment in subsidiary	(173,825)	0	0	0	(173,825)
		Accounts payable	(18)	0	(9,520)	(3,484)	(13,022)
		Purchased Options	0	0	0	0	0
		Accounts payable to affiliates	(250)	(2,185)	0	(1,703)	(4,138)
		Prepayments	0	0	0	19,342	19,342
		Taxes accrued	(332)	0	(675)	6,415	5,408
		Accrued Payroll	0	0	(8,491)	0	(8,491)
		Interest accrued	(2,286)	0	0	2,615	329
		Benefit plans' investment	(1,484)	0	0	0	(1,484)
		Customer deposits	0	0	0	0	0
		Other current liabilities	0	0	0	0	0
	Other, net		7,563	2,392	(20,898)	(1,740)	(12,683)
		Total Cash Flows from Operations	237,916	(19)	(186)	194,067	431,778

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance for other
		than borrowed funds used during construction)	0	0	0	(104,450)	(104,450)
	Unregulated generation construction expenditures and investments		0	(1,662)	0	0	(1,662)
	Other construction expenditures and investments		0	0	0	0	0
	Acquisitions of business and generating assets		(78,198)	0	0	0	(78,198)
	Unregulated investments		0	1,681	0	0	1,681
		Total Cash Flows used in Investing	(78,198)	19	0	(104,450)	(182,629)


Cash Flows from (used in) Financing:
	Issuance of long - term debt		0	0	0	299,724	299,724
	Retirement of long - term debt		0	0	0	(193,333)	(193,333)
	Dividends paid to minority shareholder		0	0	0	0	0
	Short - term debt, net		27,772	0	0	(22,665)	5,107
	Notes receivable from affiliates		(325,839)	0	0	(69,499)	(395,338)
	Notes payable to parents/affiliates		0	0	0	0	0
	Parent Company contribution		(337,423)	0	0	0	(337,423)
	Proceeds from issuance of common stock		670,478	0	0	0	670,478
	Dividends on capital stock:
		Preferred stock	0	0	0	(5,037)	(5,037)
		Common stock	(194,699)	0	0	(98,026)	(292,725)
		Total Cash Flows from (used in) Financing	(159,711)	0	0	(88,836)	(248,547)


Net Change in Cash and Temporary
	Cash Investments**		7	0	(186)	781	602
		Cash and Temporary Cash Investments at January 1	152	0	380	3,658	4,190
		Cash and Temporary Cash Investments at December 31	159	0	194	4,439	4,792


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	51,436	0	1	47,341	98,778
		Income taxes	333	0	5,305	29,865	35,503


	*Pursuant to service contracts, Allegheny Power Service Corporation's expenses ($533,014) have been apportioned to System companies.
	**Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
	and repurchase agreements, are considered to be the equivalent of cash.

		A - 5a
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				The Potomac	West Penn	Allegheny
				Edison	Power	Energy
			Prior Page	Company	Company	Supply	Subtotal
			Subtotal	Consolidated	Consolidated	Consolidated	(Carried to
			(from pg A - 5)	(from pg D - 5)	(from pg E - 5a)	(from pg G - 5d)	Pg A - 5b)
Cash Flows from Operations:
	Net income (loss)		507,128	48,035	109,845	203,688	868,696
	Cumulative effect of accounting change, net of taxes		0	0	0	31,147	31,147
	Income before accounting change		507,128	48,035	109,845	234,835	899,843
	Depreciation and amortization		79,011	33,876	69,328	115,962	298,177
	Deferred Revenues		0	(4,824)	0	0	(4,824)
	Minority interest		2,337	0	0	5,049	7,386
	Amortization of adverse purchase power contracts		0	0	(10,264)	0	(10,264)
	Deferred investment credit and income taxes, net		16,678	20,632	6,751	239,101	283,162
	Deferred power costs, net		0	(11,441)	0	0	(11,441)
	Unrealized gain on commodity contracts, net		0	0	0	(598,140)	(598,140)
	Unconsolidated subsidiaries' dividends in excess of earnings		2,675	0	0	0	2,675
	Allowance for other than borrowed funds used
		during construction (AOFDC)	(481)	67	(480)	0	(894)
	Changes in certain assets and liabilities:
		Accounts receivable, net	5,249	7,536	15,440	82,485	110,710
		Accounts receivable from affiliates	39,069	0	0	0	39,069
		Affiliates accounts receivable/payable, net	0	0	0	(73,036)	(73,036)
		Materials and supplies	(32,215)	725	1,317	(7,363)	(37,536)
		Deposits	0	0	0	(16,815)	(16,815)
		Taxes receivable	0	0	0	(82,766)	(82,766)
		Gas retail contracts, net	0	0	0	0	0
		Prepaid Taxes	891	(8,579)	4,964	(7,887)	(10,611)
		Non-cash investment in subsidiary	(173,825)	0	0	0	(173,825)
		Accounts payable	(13,022)	(1,238)	1,182	(62,508)	(75,586)
		Purchased Options	0	0	0	23,846	23,846
		Accounts payable to affiliates	(4,138)	14,122	23,527	0	33,511
		Prepayments	19,342	0	0	0	19,342
		Taxes accrued	5,408	16,292	(9,945)	(5,643)	6,112
		Accrued Payroll	(8,491)	0	0	32,730	24,239
		Interest accrued	329	483	159	14,048	15,019
		Benefit plans' investment	(1,484)	0	0	0	(1,484)
		Customer deposits				4,460	4,460
		Other current liabilities	0	0	0	0	0
	Other, net		(12,683)	(7,848)	(8,510)	2,650	(26,391)
		Total Cash Flows from Operations	431,778	107,838	203,314	(98,992)	643,938

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance for other
		than borrowed funds used during construction)	(104,450)	(54,895)	(70,586)	0	(229,931)
	Unregulated generation construction expenditures and investments		(1,662)	0	0	(214,045)	(215,707)
	Other construction expenditures and investments		0	0	0	0	0
	Acquisitions		(78,198)	0	0	(1,548,612)	(1,626,810)
	Unregulated investments		1,681	0	0	(6,855)	(5,174)
		Total Cash Flows used in Investing	(182,629)	(54,895)	(70,586)	(1,769,512)	(2,077,622)


Cash Flows from (used in) Financing:
	Issuance of long - term debt		299,724	99,739	0	776,594	1,176,057
	Retirement of long - term debt		(193,333)	(95,457)	(60,184)	(7,187)	(356,161)
	Dividends paid to minority shareholder		0	0	0	(7,674)	(7,674)
	Short - term debt, net		5,107	14,912	0	520,130	540,149
	Notes receivable from affiliates		(395,338)	0	36,250	0	(359,088)
	Notes payable to parents/affiliates		0	0	0	334,600	334,600
	Parent Company contribution		(337,423)	0	0	272,530	(64,893)
	Proceeds from issuance of common stock		670,478	0	0	0	670,478
	Dividends on capital stock:
		Preferred stock	(5,037)	0	0	0	(5,037)
		Common stock	(292,725)	(75,214)	(108,653)	0	(476,592)
		Total Cash Flows from (used in) Financing	(248,547)	(56,020)	(132,587)	1,888,993	1,451,839


Net Change in Cash and Temporary
	Cash Investments**		602	(3,077)	141	20,489	18,155
		Cash and Temporary Cash Investments at January 1	4,190	4,685	6,116	420	15,411
		Cash and Temporary Cash Investments at December 31	4,792	1,608	6,257	20,909	33,566


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	98,778	33,986	49,219	94,977	276,960
		Income taxes	35,503	9,365	53,122	(17,235)	80,755


	*Pursuant to service contracts, Allegheny Power Service Corporation's expenses ($533,014) have been apportioned to System companies.
	**Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
	and repurchase agreements, are considered to be the equivalent of cash.

		A - 5b
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
					Green	Allegheny
			Prior Page	Allegheny	Valley	Ventures, Inc	Subtotal
			Subtotal	Pittsburgh	Hydro	Consolidated	(Carried to
			(from pg A - 5a)	Coal	LLC	(from pg. H-5b)	Pg A - 5c)
Cash Flows from Operations:
	Net income (loss)		868,696	(202)	0	(202)	868,292
	Cumulative effect of accounting change, net of taxes		31,147	0	0	0	31,147
	Income before accounting change		899,843	(202)	0	(202)	899,439
	Depreciation and amortization		298,177	0	71	1,137	299,385
	Deferred Revenues		(4,824)	0	0	0	(4,824)
	Minority interest		7,386	0	0	0	7,386
	Amortization of adverse purchase power contracts		(10,264)	0	0	0	(10,264)
	Deferred investment credit and income taxes, net		283,162	0	0	(1,905)	281,257
	Deferred power costs, net		(11,441)	0	0	0	(11,441)
	Unrealized gain on commodity contracts, net		(598,140)	0	0	0	(598,140)
	Unconsolidated subsidiaries' dividends in excess of earnings		2,675	0	0	0	2,675
	Allowance for other than borrowed funds used
		during construction (AOFDC)	(894)	0	0	0	(894)
	Changes in certain assets and liabilities:
		Accounts receivable, net	110,710	0	0	(19,200)	91,510
		Accounts receivable from affiliates	39,069	0	0	0	39,069
		Affiliates accounts receivable/payable, net	(73,036)	0	0	0	(73,036)
		Materials and supplies	(37,536)	0	0	(5,933)	(43,469)
		Deposits	(16,815)	0	0	0	(16,815)
		Taxes receivable	(82,766)	0	0	0	(82,766)
		Gas retail contracts, net	0	0	0	0	0
		Prepaid Taxes	(10,611)	0	0	0	(10,611)
		Non-cash investment in subsidiary	(173,825)	0	0	0	(173,825)
		Accounts payable	(75,586)	0	0	15,818	(59,768)
		Purchased Options	23,846	0	0	0	23,846
		Accounts payable to affiliates	33,511	0	52	49	33,612
		Prepayments	19,342	0	0	(466)	18,876
		Taxes accrued	6,112	(78)	0	2,096	8,130
		Accrued Payroll	24,239	0	0	0	24,239
		Interest accrued	15,019	0	0	51	15,070
		Benefit plans' investment	(1,484)	0	0	0	(1,484)
		Customer deposits	4,460	0	0	0	4,460
		Other current liabilities	0	0	0	0	0
	Other, net		(26,391)	1	(123)	(6,193)	(32,706)
		Total Cash Flows from Operations	643,938	(279)	0	(14,748)	628,911

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance for other
		than borrowed funds used during construction)	(229,931)	0	0	0	(229,931)
	Unregulated generation construction expenditures and investments		(215,707)	0	0	0	(215,707)
	Other construction expenditures and investments		0	0	0	(17,612)	(17,612)
	Acquisitions		(1,626,810)	0	0	(25,797)	(1,652,607)
	Unregulated investments		(5,174)	0	0	(15,994)	(21,168)
		Total Cash Flows used in Investing	(2,077,622)	0	0	(59,403)	(2,137,025)


Cash Flows from (used in) Financing:
	Issuance of long - term debt		1,176,057	0	0	10,500	1,186,557
	Retirement of long - term debt		(356,161)	0	0	0	(356,161)
	Dividends paid to minority shareholder		(7,674)	0	0	0	(7,674)
	Short - term debt, net		540,149	141	0	700	540,990
	Notes receivable from affiliates		(359,088)	0	0	0	(359,088)
	Notes payable to parents/affiliates		334,600	0	0	0	334,600
	Parent Company contribution		(64,893)	0	0	64,893	0
	Proceeds from issuance of common stock		670,478	0	0	0	670,478
	Dividends on capital stock:
		Preferred stock	(5,037)	0	0	0	(5,037)
		Common stock	(476,592)	0	0	0	(476,592)
		Total Cash Flows from (used in) Financing	1,451,839	141	0	76,093	1,528,073


Net Change in Cash and Temporary
	Cash Investments**		18,155	(138)	0	1,942	19,959
		Cash and Temporary Cash Investments at January 1	15,411	188	0	2,422	18,021
		Cash and Temporary Cash Investments at December 31	33,566	50	0	4,364	37,980


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	276,960	0	0	395	277,355
		Income taxes	80,755	(48)	0	856	81,563


	*Pursuant to service contracts, Allegheny Power Service Corporation's expenses ($533,014) have been apportioned to System companies.
	**Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
	and repurchase agreements, are considered to be the equivalent of cash.

		A - 5c
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny
				Energy	Energy Supply	Subtotal
			Prior Page	Unit 1 and	Conemaugh	(Carried to
			Subtotal	Unit 2, LLC	LLC	Pg A - 5d)
			(from pg A - 5b)
Cash Flows from Operations:
	Net income (loss)		868,292	(656)	0	867,636
	Cumulative effect of accounting change, net of taxes		31,147	0	0	31,147
	Income before accounting change		899,439	(656)	0	898,783
	Depreciation and amortization		299,385	591	1,362	301,338
	Deferred Revenues		(4,824)	0	0	(4,824)
	Minority interest		7,386	0	0	7,386
	Amortization of adverse purchase power contracts		(10,264)	0	0	(10,264)
	Deferred investment credit and income taxes, net		281,257	321	0	281,578
	Deferred power costs, net		(11,441)	0	0	(11,441)
	Unrealized gain on commodity contracts, net		(598,140)	0	0	(598,140)
	Unconsolidated subsidiaries' dividends in excess of earnings		2,675	0	0	2,675
	Allowance for other than borrowed funds used
		during construction (AOFDC)	(894)	0	0	(894)
	Changes in certain assets and liabilities:
		Accounts receivable, net	91,510	0	0	91,510
		Accounts receivable from affiliates	39,069	635	0	39,704
		Affiliates accounts receivable/payable, net	(73,036)	0	0	(73,036)
		Materials and supplies	(43,469)	0	0	(43,469)
		Deposits	(16,815)	0	0	(16,815)
		Taxes receivable	(82,766)	0	0	(82,766)
		Gas retail contracts, net	0	0	0	0
		Prepaid Taxes	(10,611)	0	0	(10,611)
		Non-cash investment in subsidiary	(173,825)	0	0	(173,825)
		Accounts payable	(59,768)	(948)	0	(60,716)
		Purchased Options	23,846	0	0	23,846
		Accounts payable to affiliates	33,612	0	0	33,612
		Prepayments	18,876	0	0	18,876
		Taxes accrued	8,130	(145)	0	7,985
		Accrued Payroll	24,239	0	0	24,239
		Interest accrued	15,070	0	0	15,070
		Benefit plans' investment	(1,484)	0	0	(1,484)
		Customer deposits	4,460	0	0	4,460
		Other current liabilities	0	0	0	0
	Other, net		(32,706)	202	(1,362)	(33,866)
		Total Cash Flows from Operations	628,911	0	0	628,911

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance for other
		than borrowed funds used during construction)	(229,931)	0	0	(229,931)
	Unregulated generation construction expenditures and investments		(215,707)	0	0	(215,707)
	Other construction expenditures and investments		(17,612)	0	0	(17,612)
	Acquisitions		(1,652,607)	0	0	(1,652,607)
	Unregulated investments		(21,168)	0	0	(21,168)
		Total Cash Flows used in Investing	(2,137,025)	0	0	(2,137,025)

Cash Flows from (used in) Financing:
	Issuance of long - term debt		1,186,557	0	0	1,186,557
	Retirement of long - term debt		(356,161)	0	0	(356,161)
	Dividends paid to minority shareholder		(7,674)	0	0	(7,674)
	Short - term debt, net		540,990	0	0	540,990
	Notes receivable from affiliates		(359,088)	0	0	(359,088)
	Notes payable to parents/affiliates		334,600	0	0	334,600
	Parent Company contribution		0	0	0	0
	Proceeds from issuance of common stock		670,478	0	0	670,478
	Dividends on capital stock:
		Preferred stock	(5,037)	0	0	(5,037)
		Common stock	(476,592)	0	0	(476,592)
		Total Cash Flows from (used in) Financing	1,528,073	0	0	1,528,073

Net Change in Cash and Temporary
	Cash Investments**		19,959	0	0	19,959
		Cash and Temporary Cash Investments at January 1	18,021	0	0	18,021
		Cash and Temporary Cash Investments at December 31	37,980	0	0	37,980

Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	277,355	0	2,865	280,220
		Income taxes	81,563	(464)	0	81,099

	*Pursuant to service contracts, Allegheny Power Service Corporation's expenses ($533,014) have been apportioned to System companies.
	**Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
	and repurchase agreements, are considered to be the equivalent of cash.

		A - 5d
		ALLEGHENY ENERGY, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
					Allegheny
			Prior Page		Energy, Inc
			Subtotal	Eliminations,	Consolidated
			(from pg A - 5c)	etc.	Totals
Cash Flows from Operations:
	Net income (loss)		867,636	(449,861)	417,775
	Cumulative effect of accounting change, net of taxes		31,147	0	31,147
	Income before accounting change		898,783	(449,861)	448,922
	Depreciation and amortization		301,338	198	301,536
	Deferred Revenues		(4,824)	0	(4,824)
	Minority interest		7,386	(5,048)	2,338
	Amortization of adverse purchase power contracts		(10,264)	0	(10,264)
	Deferred investment credit and income taxes, net		281,578	(2,473)	278,785
				(320)
	Deferred power costs, net		(11,441)	0	(11,441)
	Unrealized gain on commodity contracts, net		(598,140)	(10,120)	(608,260)
	Unconsolidated subsidiaries' dividends in excess of earnings		2,675	(2,675)	0
	Allowance for other than borrowed funds used
		during construction (AOFDC)	(894)	0	(894)
	Changes in certain assets and liabilities:
		Accounts receivable, net	91,510	0	91,510
		Accounts receivable from affiliates	39,704	(39,704)	0
		Affiliates accounts receivable/payable, net	(73,036)	73,036	0
		Materials and supplies	(43,469)	1,627	(41,842)

		Deposits	(16,815)	0	(16,815)
		Taxes receivable	(82,766)	82,766	0
		Gas retail contracts, net	0	0	0
		Prepaid Taxes	(10,611)	8,579	0
				(4,964)
				7,887
				(965)
				74
		Non-cash investment in subsidiary	(173,825)	173,825	0
		Accounts payable	(60,716)	280	(60,436)
		Purchased Options	23,846	0	23,846
		Accounts payable to affiliates	33,612	(33,612)	0
		Prepayments	18,876	(8,579)	(74,833)
				965
				(74)
				4,964
				(82,766)
				(7,887)
				(332)
		Taxes accrued	7,985	(1,813)	6,172
		Accrued Payroll	24,239	0	24,239
		Interest accrued	15,070	(15,070)	0
		Benefit plans' investment	(1,484)	0	(1,484)
		Customer deposits	4,460	0	4,460
	Other, net		(33,866)	2,675	(16,237)
				1,813
				(1,627)
				14,768
		Total Cash Flows from Operations	628,911	(294,433)	334,478

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance for other
		than borrowed funds used during construction)	(229,931)	0	(229,931)
	Unregulated generation construction expenditures and investments		(215,707)	0	(215,707)
	Other construction expenditures and investments		(17,612)	0	(17,612)
	Acquisitions		(1,652,607)	0	(1,652,607)
	Unregulated investments		(21,168)	0	(21,168)
		Total Cash Flows used in Investing	(2,137,025)	0	(2,137,025)

Cash Flows from (used in) Financing:
	Issuance of long - term debt		1,186,557	0	1,186,557
	Retirement of long - term debt		(356,161)	0	(356,161)
	Dividends paid to minority shareholder		(7,674)	7,674	0
	Short - term debt, net		540,990	(24,659)	516,331
	Notes receivable from affiliates		(359,088)	359,088	0
	Notes payable to parents/affiliates		334,600	(334,600)	0
	Parent Company contribution		0	0	0
	Proceeds from issuance of common stock		670,478	0	670,478
	Dividends on capital stock:
		Preferred stock	(5,037)	5,037	0
		Common stock	(476,592)	281,893	(194,699)
		Total Cash Flows from (used in) Financing	1,528,073	294,433	1,822,506

Net Change in Cash and Temporary
	Cash Investments**		19,959	0	19,959
		Cash and Temporary Cash Investments at January 1	18,021	0	18,021
		Cash and Temporary Cash Investments at December 31	37,980	0	37,980

Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	280,220	(20,831)	259,389
		Income taxes	81,099	0	81,099

	*Pursuant to service contracts, Allegheny Power Service Corporation's expenses ($533,014) have been apportioned to System companies.
	**Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
	and repurchase agreements, are considered to be the equivalent of cash.

A- 6

ALLEGHENY ENERGY, INC AND SUBSIDIARY COMPANIES

Long-Term Debt at December 31, 2001
(000's)

	Date of	Due within
First mortgage bonds:	Issue	One Year	Long-Term
Monongahela Power Company:
7-3/8% Series Due 2002	1992	25,000
7-1/4% Series Due 2007	1992		25,000
8-3/8% Series Due 2022	1992		40,000
7-5/8% Series Due 2025	1995		70,000
5% Series Due 2006	2001		300,000
Total		25,000	435,000



The Potomac Edison Company:
8% Series Due 2022	1992		55,000
7-3/4% Series Due 2023	1993		45,000
8% Series Due 2024	1994		75,000
7-5/8% Series Due 2025	1995		80,000
7-3/4% Series Due 2025	1995		65,000
Total			320,000



Total first mortgage bonds		25,000	755,000

A- 7

ALLEGHENY ENERGY, INC AND SUBSIDIARY COMPANIES

Long-Term Debt at December 31, 2001 (Cont'd)
(000's)

				Liability
	Date of	Date of	Interest	Due within
	Issue	Maturity	Rate	One Year	Long-Term
Secured notes:
Pleasants pollution control facilities:
Monongahela Power Company	02-01-98	11-01-07	4.700%		14,500
	02-01-98	11-01-12	5.050%		3,000
	05-15-95	05-01-15	6.150%		25,000
	04-01-99	04-01-29	5.500%		7,700
					50,200

Allegheny Energy Supply Company, LLC	02-01-98	11-01-07	4.700%		77,163
	05-15-95	05-01-15	6.150%		56,230
	04-01-99	04-01-29	5.500%		24,279
	02-01-98	11-01-12	5.050%		447
					158,119
Mitchell pollution control facilities:
Allegheny Energy Supply Company, LLC	03-01-93	03-01-03	4.950%		61,500
	05-15-95	04-01-14	6.050%		15,400
					76,900
Fort Martin pollution control facilities:
Monongahela Power Company	04-01-93	04-01-13	5.950%		7,050
					7,050

Allegheny Energy Supply Company, LLC	04-01-93	04-01-13	5.950%		17,402
					17,402

Harrison pollution control facilities:
Monongahela Power Company	04-15-92	04-15-22	6.875%		5,000
	05-01-93	05-01-23	6.250%		10,675
	07-15-94	08-01-24	6.750%		8,825
					24,500

Allegheny Energy Supply Company, LLC	04-15-92	04-15-22	6.875%		15,746
	05-01-93	05-01-23	6.300%		18,040
	07-15-94	08-01-24	6.750%		27,787
	05-01-93	05-01-23	6.250%		15,583
					77,156

Mortgage Property:
Mountaineer Gas Company	06-30-99	04-01-09	7.000%	15	94
				15	94

Elimination					(12,197)

Total secured notes				15	399,224

A- 8

ALLEGHENY ENERGY, INC AND SUBSIDIARY COMPANIES

Long-Term Debt at December 31, 2001 (Cont'd)
(000's)

				Liability
	Date of	Date of	Interest	Due Within
	Issue	Maturity	Rate	One Year	Long-Term

Debentures:
Allegheny Generating Company	09-01-93	09-01-23	6.875%		100,000
	09-01-93	09-01-03	5.625%		50,000
Total Debentures					150,000

Quarterly Income Debt Securities:
West Penn Power Company	06-12-95	06-30-25	8.000%		70,000
Total Quarterly Income Debt Securities					70,000



Installment purchase obligations:
Monongahela Power Company
Pleasants County pollution cntl facilities	03-01-98	03-01-03	4.500%		10,145
Preston County pollution cntl facilities	03-01-98	03-01-03	4.500%		5,900
Marion County pollution cntl facilities	03-01-98	03-01-03	4.500%		3,055
					19,100


Allegheny Energy Supply Company, LLC
Pleasants County pollution cntl facilities	03-01-98	03-01-03	4.500%		1,514
Preston County pollution cntl facilities	03-01-98	03-01-03	4.500%		880
Marion County pollution cntl facilities	03-01-98	03-01-03	4.500%		456
					2,850
Elimination					(2,850)
Total installment purchase obligations					19,100

A- 9

ALLEGHENY ENERGY, INC AND SUBSIDIARY COMPANIES

Long-Term Debt at December 31, 2001 (Cont'd)
(000's)

						Liability
	Date of		Date of	Interest		Due Within
	Issue		Maturity	Rate		One Year	Long-Term
Unsecured notes:
Hatfield's Ferry pollution control
facilities:
Monongahela Power Company	03-01-98		02-01-02	4.350%		2,060
	03-01-98		02-01-07	4.750%			1,000
	03-01-98		02-01-12	5.100%			3,000
						2,060	4,000

Allegheny Energy Supply Company, LLC	03-01-98		02-01-07	4.750%			14,435
	03-01-98		02-01-02	4.350%		3,200
	03-01-98		02-01-02	4.350%		307
	03-01-98		02-01-07	4.750%			149
	03-01-98		02-01-12	5.100%			448
						3,507	15,032
Insurance Companies
Mountaineer Gas Company
	10-12-95		10-01-10	7.590%		3,333	53,334
	10-15-99		10-31-09	7.830%			10,000
	10-15-99		10-31-19	8.090%			23,000
	10-15-99		10-31-19	8.090%			4,000
	10-15-99		10-31-19	8.090%			2,000
	10-15-99		10-31-19	8.090%			1,000
						3,333	93,334
Elimination						(307)	(597)
Total unsecured notes						8,593	111,769

Medium-term notes:
Allegheny Energy, Inc	08-18-00		08-01-05	7.750%			165,000
	11-07-00		08-01-05	7.750%			135,000
							300,000

Monongahela Power Company	09-24-98		09-24-03	5.660%			5,000
	09-25-98		09-25-03	5.710%			1,975
	09-29-98		09-29-03	5.570%			1,000
	09-29-98		09-29-03	5.630%			20,500
	09-30-98		09-30-03	5.560%			15,000
	12-10-99		01-15-10	7.360%			110,000
							153,475

The Potomac Edison Company	11-01-01		01-01-06	5.000%			100,000

West Penn Power Company	09-21-98		09-23-02	5.660%		32,050
	09-22-98		09-23-02	5.560%		1,500
	06-01-99		06-01-04	6.375%			84,000
						33,550	84,000

Allegheny Energy Supply Company, LLC	08-01-00		05-01-02	3.030%	*	80,000
	03-15-01		03-15-11	7.800%			400,000
	11-28-01		11-01-07	8.130%	**	135,601	237,213
						215,601	637,213

AFN Finance Company No. 2, LLC	06-07-01		06-30-06	3.809%	***		10,500

Total medium-term notes						249,151	1,285,188

Transition bonds:		Expected Final
West Penn Funding LLC		Payment Date
Transition Class A-2	11-16-99		12-26-03	6.630%		70,295	68,687
Transition Class A-3	11-16-99		09-25-06	6.810%			198,000
Transition Class A-4	11-16-99		06-25-08	6.980%			156,000
Total transition bonds						70,295	422,687

Unamortized debt discount and premium, net:
Allegheny Energy, Inc.							819
Monongahela Power Company							(2,492)
The Potomac Edison Company							(4,203)
West Penn Power Company							(1,982)
West Penn Funding LLC							(59)
Allegheny Energy Supply Company, LLC							(3,789)
Allegheny Generating Company							(841)
Total unamortized debt discount and premium, net							(12,547)


* Interest rate at 12-31-01 based on floating rate (three-month London Interbank Offer Rate (LIBOR) plus .80 percent).
** Estimated prepayments will reduce the loan balance to Zero in 2004
*** Interest rate at 12-31-01 based on floating rate (six-month London Interbank Offer Rate (LIBOR) plus 1.81 percent).

		B - 1
		MONONGAHELA POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)

			Monongahela	Mountaineer				Monongahela
			Power	Gas Co.	Combined	Eliminations,		Power Co.
		ASSETS	Company	Consolidated	Totals	etc.		Consolidated
				(from pg C - 1)				(Carried to
								Pg A - 1)
Property, plant and equipment:
	At original cost		2,172,930	317,811	2,490,741	0		2,490,741
	Accumulated depreciation		(976,734)	(163,170)	(1,139,904)	0		(1,139,904)

Investments and other assets:
	Excess of cost over net assets acquired		25,009	170,024	195,033	0		195,033
	Securities of subsidiaries consolidated		241,535	0	241,535	(241,535)	(1)	0
	Investment in Allegheny Pittsburgh Coal Company:
		Common stock, at equity	(3,416)	0	(3,416)	0		(3,416)
		Advances	3,495	0	3,495	0		3,495
	Investment in Allegheny Generating Company:
		Common stock, at equity	30,476	0	30,476	0		30,476
	Other		29	3,273	3,302	0		3,302

Current assets:
	Cash		2,406	2,033	4,439	0		4,439
	Accounts receivable:
		Electric	80,111	0	80,111	0		80,111
		Gas	4,503	31,188	35,691	0		35,691
		Other	3,223	326	3,549	0		3,549
		Allowance for uncollectible accounts	(3,841)	(2,459)	(6,300)	0		(6,300)
	Notes receivable due 1 yr.		91,500	3	91,503	0		91,503
	Materials and supplies - at average cost:
		Operating and construction	17,256	1,067	18,323	(1)		18,322
		Fuel	12,825	28,324	41,149	0		41,149
	Deferred income taxes		4,238	1,136	5,374	0		5,374
	Prepaid taxes		20,203	17,387	37,590	0		37,590
	Prepaid Gas		9,381	0	9,381	0		9,381
	Other		1,830	1,583	3,413	(958)	(2)	2,455

Deferred charges:
	Regulatory assets		100,750	0	100,750	0		100,750
	Unamortized loss on reacquired debt		10,987	1,455	12,442	0		12,442
	Other		7,149	2,015	9,164	0		9,164


		Total assets	1,855,845	411,996	2,267,841	(242,494)		2,025,347

		B - 2
		MONONGAHELA POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)

			Monongahela	Mountaineer				Monongahela
			Power	Gas Co.	Combined	Eliminations,		Power Co.
		CAPITALIZATION AND LIABILITIES	Company	Consolidated	Totals	etc.		Consolidated
				(from pg C - 2)				(Carried to
								Pg A - 2)
Capitalization:
	Common stock of Monongahela Power Company		294,550	0	294,550	0		294,550
	Common stock of subsidiaries consolidated		0	45,793	45,793	(45,793)	(1)	0
	Other paid - in capital		100,242	183,711	283,953	(183,711)	(1)	100,242
	Retained earnings		234,802	9,718	244,520	(9,718)	(1)	234,802

	Preferred stock
		Not subject to mandatory redemption	74,000	0	74,000	0		74,000

	Long-term debt		690,833	93,428	784,261	0		784,261
		(see pages A-6, A-7, A-8, A-9)

Current liabilities:
	Short - term debt		0	14,350	14,350	0		14,350
	Long-term debt due 1 year		27,060	3,348	30,408	0		30,408
	Accounts payable to affiliates		13,207	2,511	15,718	0		15,718
	Accounts payable - others		50,028	13,658	63,686	(99)	(1)	63,587
	Taxes accrued:
		Federal and state income	7,939	255	8,194	0		8,194
		Other	33,515	5,570	39,085	0		39,085
	Interest accrued		13,244	1,674	14,918	0		14,918
	Other		9,111	674	9,785	(959)	(2)	8,826


Deferred credits and other liabilities:
	Unamoritized investment credit		9,034	0	9,034	0		9,034
	Long-term accounts payable affiliates		0	15,812	15,812	0		15,812
	Deferred income taxes		223,263	17,702	240,965	(2,214)	(4)	238,751
	Obligations under capital leases		11,567	0	11,567	0		11,567
	Regulatory liabilities		49,509	0	49,509	0		49,509
	Other		13,941	3,792	17,733	0		17,733

		Total capitalization and liabilities	1,855,845	411,996	2,267,841	(242,494)		2,025,347

		B - 3
		MONONGAHELA POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

			Monongahela	Mountaineer				Monongahela
			Power	Gas Co.	Combined	Eliminations,		Power Co.
			Company	Consolidated	Totals	etc.		Consolidated
				(from pg C - 3)				(Carried to
								Pg A - 3)
Electric operating revenues:
	Residential		251,385	120,530	371,915	1	(3)	371,916
	Commercial		151,487	71,027	222,514	1,269	(3)	223,783
	Industrial		216,284	2,088	218,372	690	(3)	219,062
	Bulk power transactions, net		12,902	0	12,902	0		12,902
	Wholesale and other excluding affiliates		13,259	10,849	24,108	328	(3)	24,436
	Affiliated companies		85,732	0	85,732	(108)	(5)	85,624

		Total operating revenues	731,049	204,494	935,543	2,180		937,723

Operating expenses:
	Operation:
		Fuel	136,853	0	136,853	0		136,853
		Purchased power and exchanges, net	131,142	0	131,142	0		131,142
		Gas Purchases and Production	17,212	111,607	128,819	1,045	(3)	129,864
		Other	102,634	40,215	142,849	494	(3)	143,235
						(108)	(5)
	Maintenance		78,536	4,539	83,075	0		83,075
	Depreciation		63,724	15,260	78,984	27	(3)	79,011
	Taxes other than income taxes		50,252	13,563	63,815	0		63,815
	Federal and state income taxes		34,560	4,335	38,895	296	(3)	36,978
						(2,213)	(4)
		Total operating expenses	614,913	189,519	804,432	(459)		803,973
		Operating income	116,136	14,975	131,111	2,639		133,750

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction	481	0	481	0		481
	Other, net		16,724	115	16,839	(9,087)	(1)	7,743
						(9)	(6)
	Total other income and deductions		17,205	115	17,320	(9,096)		8,224
	Income before interest charges		133,341	15,090	148,431	(6,457)		141,974

Interest charges:
	Interest on other long-term debt		43,082	7,764	50,846	0		50,846
	Other interest		3,100	893	3,993	(9)	(6)	3,984
	Allowance for borrowed funds used during
		construction	(2,298)	(15)	(2,313)	0		(2,313)
	Total interest charges		43,884	8,642	52,526	(9)		52,517
	Net income (loss)		89,457	6,448	95,905	(6,448)		89,457

			B - 4
			MONONGAHELA POWER COMPANY AND SUBSIDIARY COMPANIES
			CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID - IN CAPITAL
			FOR YEAR ENDED DECEMBER 31, 2001
			(000's)

				Monongahela	Mountaineer				Monongahela
				Power	Gas Co.	Combined	Eliminations,		Power Co.
			RETAINED EARNINGS	Company	Consolidated	Totals	etc.		Consolidated
					(from pg C - 4)				(Carried to
									Pg A - 4)
Balance at January 1, 2001 as reflected in the U-5-S				248,408	2,843	251,251	(2,843)		248,408
	Adjustment to year 2000 income
		subsequent to the U-5-S filing		0	427	427	(427)		0

				248,408	3,270	251,678	(3,270)		248,408
Add:
	Net income (loss)			89,457	6,448	95,905	(6,448)		89,457

			Total	337,865	9,718	347,583	(9,718)	(1)	337,865

Deduct:
	Dividends on capital stock of Monongahela Power Company
		Preferred stock:
			4.4%	396	0	396	0		396
			4.8% Series B	192	0	192	0		192
			4.5% Series C	270	0	270	0		270
			6.28% Series D	314	0	314	0		314
			7.73% Series L	3,865	0	3,865	0		3,865
		Common Stock		98,026	0	98,026	0		98,026

			Total deductions	103,063	0	103,063	0		103,063

Balance at December 31, 2001				234,802	9,718	244,520	(9,718)		234,802




			OTHER PAID - IN CAPITAL

Balance at January 1, 2001				164,941	197,886	362,827	(197,886)		164,941
	Adjustment to year 2000 other Paid-in Capital
		subsequent to the U-5-S filing		0	(14,175)	(14,175)	14,175		0
				164,941	183,711	348,652	(183,711)		164,941
Add (Deduct):

	Transfer of Equity to
		Allegheny Energy Supply		(64,699)	0	(64,699)	0		(64,699)

Balance at December 31, 2001				100,242	183,711	283,953	(183,711)		100,242

		B - 5
		MONONGAHELA POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

			Monongahela	Mountaineer				Monongahela
			Power	Gas Co.	Combined	Eliminations,		Power Co.
			Company	Consolidated	Totals	etc.		Consolidated
				(from pg C - 5)				(Carried to
								Pg A - 5)
Cash Flows from Operations:
	Net income (loss)		89,457	6,448	95,905	(6,448)	(1)	89,457
	Cumulative effect of accounting change, net of taxes		0	0	0	0		0
	Income before accounting change		89,457	6,448	95,905	(6,448)		89,457
	Depreciation and amortization		63,724	15,260	78,984	27		79,011
	Deferred investment credit and income taxes, net		3,339	15,553	18,892	(2,214)		16,678
	Unconsolidated subsidiaries' dividends in excess of earnings		2,675	0	2,675	0		2,675
	Investment in consolidated subsidiary		(9,187)	0	(9,187)	9,187		0
	Allowance for other than borrowed funds used
		during construction (AOFDC)	(481)	0	(481)	0		(481)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	6,480	13,308	19,788	(2,290)		17,498
		Materials and supplies	(3,719)	(173)	(3,892)	(28,324)		(32,216)
		Fuel	0	(28,324)	(28,324)	28,324		0
		Accounts payable	571	(4,055)	(3,484)	0		(3,484)
		Accounts payable to affiliates	(4,214)	2,511	(1,703)	0		(1,703)
		Prepayments	3,297	16,045	19,342	0		19,342
		Taxes accrued	6,234	181	6,415	0		6,415
		Interest accrued	2,654	(39)	2,615	0		2,615
	Other, net		(7,452)	3,974	(3,478)	1,738		(1,740)
		Total Cash Flows from Operations	153,378	40,689	194,067	0		194,067

Cash Flows used in Investing:
	Regulated operation's construction expenditures (less allowance for other
		than borrowed funds used during construction)	(90,703)	(13,747)	(104,450)	0		(104,450)
		Total Cash Flows used in Investing	(90,703)	(13,747)	(104,450)	0		(104,450)


Cash Flows from (used in) Financing:
	Issuance of long - term debt		299,724	0	299,724	0		299,724
	Repayment of long - term debt		(190,000)	(3,333)	(193,333)	0		(193,333)
	Short - term debt, net		0	(22,665)	(22,665)	0		(22,665)
	Notes receivable from affiliates		(69,500)	1	(69,499)	0		(69,499)
	Dividends on capital stock:
		Preferred stock	(5,037)	0	(5,037)	0		(5,037)
		Common stock	(98,026)	0	(98,026)	0		(98,026)
		Total Cash Flows from (used in) Financing	(62,839)	(25,997)	(88,836)	0		(88,836)


Net Change in Cash and Temporary
	Cash Investments*		(164)	945	781	0		781
		Cash and Temporary Cash Investments at January 1	2,570	1,088	3,658	0		3,658
		Cash and Temporary Cash Investments at December 31	2,406	2,033	4,439	0		4,439


Supplemental cash flow information:
		Cash paid during the year for:
		Interest (net of amount capitalized)	40,532	6,809	47,341	0		47,341
		Income taxes	32,657	(2,792)	29,865	0		29,865


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		C - 1
		MOUNTAINEER GAS COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Mountaineer					Mountaineer
				Gas	Mapcom				Gas Co.
			Mountaineer	Services,	Systems,	Combined	Eliminations,		Consolidated
		ASSETS	Gas Co.	Inc	Inc	Totals	etc.		(Carried to
									Pg B - 1)
Property, plant and equipment:
	At original cost		303,397	14,414	0	317,811	0		317,811
	Accumulated depreciation		(157,367)	(5,803)	0	(163,170)	0		(163,170)

Investments and other assets:
	Excess of cost over net assets acquired		170,024	0	0	170,024	0		170,024
	Securities of subsidiaries consolidated		9,722	0	0	9,722	(9,722)	(1)	0
	Other assets		3,273	0	0	3,273	0		3,273

Current assets:
	Cash		1,323	710	0	2,033	0		2,033
	Accounts receivable:
		Electric	0	0	0	0	0		0
		Gas	31,067	121	0	31,188	0		31,188
		Affiliates	0	848	0	848	(848)	(2)	0
		Other	268	58	0	326	0		326
		Allowance for uncollectible accounts	(2,452)	(7)	0	(2,459)	0		(2,459)
	Notes receivable due 1 yr.		3	0	0	3	0		3
	Materials and supplies - at average cost:
		Operating and construction	1,067	0	0	1,067	0		1,067
		Fuel	28,324	0	0	28,324	0		28,324
	Deferred income taxes		1,133	3	0	1,136	0		1,136
	Prepaid taxes		17,128	167	92	17,387	0		17,387
	Prepaid Gas		0	0	0	0	0		0
	Other		1,554	29	0	1,583	0		1,583

Deferred charges:
	Deferred Income Taxes		0	0	18	18	(18)	(3)	0
	Unamortized loss on reacquired debt		1,455	0	0	1,455	0		1,455
	Other		2,015	0	0	2,015	0		2,015


		Total assets	411,934	10,540	110	422,584	(10,588)		411,996

		C - 2
		MOUNTAINEER GAS COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Mountaineer					Mountaineer
				Gas	Mapcom				Gas Co.
			Mountaineer	Services,	Systems,	Combined	Eliminations,		Consolidated
		CAPITALIZATION AND LIABILITIES	Gas Co.	Inc	Inc	Totals	etc.		(Carried to
									Pg B - 2)
Capitalization:
	Common stock of Mountaineer Gas Company		45,793	0	0	45,793	0		45,793
	Common stock of subsidiaries consolidated		0	0	120	120	(120)	(1)	0
	Other paid - in capital		183,711	10,225	205	194,141	(10,430)	(1)	183,711
	Retained earnings		9,718	(613)	(215)	8,890	828	(1)	9,718

	Long-term debt		93,428	0	0	93,428	0		93,428
		(see pages A-6, A-7, A-8, A-9)

Current liabilities:
	Short - term debt		14,350	0	0	14,350	0		14,350
	Long-term debt due 1 year		3,348	0	0	3,348	0		3,348
	Accounts payable to affiliates		3,359	0	0	3,359	(848)	(2)	2,511
	Accounts payable - others		13,193	465	0	13,658	0		13,658
	Taxes accrued:
		Federal and state income	28	227	0	255	0		255
		Other	5,553	17	0	5,570	0		5,570
	Interest accrued		1,674	0	0	1,674	0		1,674
	Other		661	13	0	674	0		674


Deferred credits and other liabilities:
	Long-term accounts payable affiliates		15,812	0	0	15,812	0		15,812
	Deferred income taxes		17,518	202	0	17,720	(18)	(3)	17,702
	Other		3,788	4	0	3,792	0		3,792

		Total capitalization and liabilities	411,934	10,540	110	422,584	(10,588)		411,996

		C - 3
		MOUNTAINEER GAS COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

				Mountaineer					Mountaineer
				Gas	Mapcom				Gas Co.
			Mountaineer	Services,	Systems,	Combined	Eliminations,		Consolidated
			Gas Co.	Inc	Inc	Totals	etc.		(Carried to
Electric operating revenues:									Pg B - 3)
	Residential		120,530	0	0	120,530	0		120,530
	Commercial		71,006	21	0	71,027	0		71,027
	Industrial		2,088	0	0	2,088	0		2,088
	Bulk power transactions, net		0	0	0	0	0		0
	Wholesale and other excluding affiliates		10,172	677	0	10,849	0		10,849
	Affiliated companies		0	8,728	0	8,728	(8,728)	(4)	0

		Total operating revenues	203,796	9,426	0	213,222	(8,728)		204,494

Operating expenses:
	Operation:
		Gas Purchases and Production	116,404	3,931	0	120,335	(8,728)	(4)	111,607
		Other	39,572	643	0	40,215	0		40,215
	Maintenance		4,503	36	0	4,539	0		4,539
	Depreciation		14,691	569	0	15,260	0		15,260
	Taxes other than income taxes		13,250	313	0	13,563	0		13,563
	Federal and state income taxes		2,844	1,491	0	4,335	0		4,335
		Total operating expenses	191,264	6,983	0	198,247	(8,728)		189,519
		Operating income	12,532	2,443	0	14,975	0		14,975

Other income and deductions:
	Other, net		2,558	53	(128)	2,483	(2,368)	(1)	115
		Total other income and deductions	2,558	53	(128)	2,483	(2,368)		115
		Income before interest charges	15,090	2,496	(128)	17,458	(2,368)		15,090


Interest charges:
	Interest on long - term debt		7,764	0	0	7,764	0		7,764
	Other interest		893	0	0	893	0		893
	Allowance for borrowed funds used during
		construction	(15)	0	0	(15)	0		(15)
		Total interest charges	8,642	0	0	8,642	0		8,642


	Net income (loss)		6,448	2,496	(128)	8,816	(2,368)		6,448

		C - 4
		MOUNTAINEER GAS COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID - IN CAPITAL
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

				Mountaineer					Mountaineer
				Gas	Mapcom				Gas Co.
			Mountaineer	Services,	Systems,	Combined	Eliminations,		Consolidated
		RETAINED EARNINGS	Gas Co.	Inc	Inc	Totals	etc.		(Carried to
									Pg B - 4)
Balance at January 1, 2001 as reflected in the U-5-S			2,843	(109)	(87)	2,647	196		2,843
	Adjustment to year 2000 income
		subsequent to the U-5-S filing	427	0	0	427	0		427
			3,270	(109)	(87)	3,074	196		3,270
Add:

	Net income (loss)		6,448	2,496	(128)	8,816	(2,368)	(1)	6,448

		Total	9,718	2,387	(215)	11,890	(2,172)		9,718

Deduct:
	Dividends on Common Stock		0	3,000	0	3,000	(3,000)	(1)	0

		Total deductions	0	3,000	0	3,000	(3,000)		0

Balance at December 31, 2001			9,718	(613)	(215)	8,890	828		9,718




		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			197,886	10,225	182	208,293	(10,407)		197,886
	Adjustment to year 2000 other Paid-in Capital
		subsequent to the U-5-S filing	(14,175)	0	0	(14,175)	0		(14,175)

			183,711	10,225	182	194,118	(10,407)		183,711
Add (Deduct):
	Adjustment to other paid-in capital
		from Mountaineer Gas Company	0	0	23	23	(23)	(1)	0


Balance at December 31, 2001			183,711	10,225	205	194,141	(10,430)		183,711

		C - 5
		MOUNTAINEER GAS COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Mountaineer
				Gas	Mapcom				Mountaineer
			Mountaineer	Services,	Systems,	Combined	Eliminations,		Gas Co.
			Gas Co.	Inc	Inc	Totals	etc.		Consolidated
									(Carried to
									Pg B - 5)
Cash Flows from Operations:
	Net income (loss)		6,448	2,496	(128)	8,816	(2,368)	(1)	6,448
	Cumulative effect of accounting change, net of taxes		0	0	0	0	0		0
	Income before accounting change		6,448	2,496	(128)	8,816	(2,368)		6,448
	Depreciation, depletion, and amortization		14,691	569	0	15,260	0		15,260
	Deferred income taxes, net		15,682	(129)	0	15,553	0		15,553
	Changes in certain current assets and liabilities:
		Accounts receivable, net	13,262	12	34	13,308	0		13,308
		Materials and supplies	(173)	0	0	(173)	0		(173)
		Fuel	(28,324)	0	0	(28,324)	0		(28,324)
		Accounts payable	(3,980)	(59)	(16)	(4,055)	0		(4,055)
		Accounts payable to affiliates	2,431	80	0	2,511	0		2,511
		Prepayment	16,217	(158)	(14)	16,045	0		16,045
		Taxes accrued	609	(427)	(1)	181	0		181
		Interest accrued	(39)	0	0	(39)	0		(39)
	Other, net		4,589	(3,108)	125	1,606	2,368		3,974
		Total Cash Flows from Operations	41,413	(724)	0	40,689	0		40,689

Cash Flows used in Investing:
	Regulated operation's construction expenditures (less allowance for other
		than borrowed funds used during construction)	(14,093)	346	0	(13,747)	0		(13,747)
		Total Cash Flows used in Investing	(14,093)	346	0	(13,747)	0		(13,747)


Cash Flows from (used in) Financing:
	Short - term debt, net		(22,665)	0	0	(22,665)	0		(22,665)
	Repayment of long - term debt		(3,333)	0	0	(3,333)	0		(3,333)
	Notes receivable due within one year		1	0	0	1	0		1
		Total Cash Flows from (used in) Financing	(25,997)	0	0	(25,997)	0		(25,997)


Net Change in Cash and Temporary
	Cash Investments*		1,323	(378)	0	945	0		945
		Cash and Temporary Cash Investments at January 1	0	1,088	0	1,088	0		1,088
		Cash and Temporary Cash Investments at December 31	1,323	710	0	2,033	0		2,033


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	6,818	0	0	6,818	(9)		6,809
		Income taxes	(4,653)	1,910	(49)	(2,792)	0		(2,792)


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		D - 1
		THE POTOMAC EDISON COMPANY AND SUBSIDIARY COMPANY
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
								The
			The	P E				Potomac Edison
			Potomac Edison	Transfering	Combined	Eliminations,		Company
		ASSETS	Company	Agent, LLC	Totals	etc.		Consolidated
								(Carried to
								Pg A - 1a)
Property, plant and equipment:
	At original cost		1,447,027	0	1,447,027	0		1,447,027
	Accumulated depreciation		(538,301)	0	(538,301)	0		(538,301)

Investments and other assets:
	Securities of subsidiaries consolidated		3,140	0	3,140	(3,140)	(1)	0
	Investment in Allegheny Pittsburgh Coal Company:
		Common stock, at equity	(3,416)	0	(3,416)	0		(3,416)
		Advances	3,616	0	3,616	0		3,616
	Other		103	0	103	0		103

Current assets:
	Cash and temporary cash investments		1,508	100	1,608	0		1,608
	Accounts receivable:
		Electric	90,040	0	90,040	0		90,040
		Affiliates	0	3	3	(3)	(2)	0
		Other	3,084	0	3,084	0		3,084
		Allowance for uncollectible accounts	(4,731)	0	(4,731)	0		(4,731)
	Materials and supplies - at average cost:
		Operating and construction	11,407	0	11,407	0		11,407
	Deferred income taxes		4,791	0	4,791	0		4,791
	Prepaid taxes		21,577	3,037	24,614	0		24,614
	Other		1,151	0	1,151	0		1,151

Deferred charges:
	Regulatory assets		54,081	0	54,081	0		54,081
	Unamortized loss on reacquired debt		11,756	0	11,756	0		11,756
	Other		4,958	0	4,958	0		4,958


		Total assets	1,111,791	3,140	1,114,931	(3,143)		1,111,788

		D - 2
		THE POTOMAC EDISON COMPANY AND SUBSIDIARY COMPANY
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
								The
			The	P E				Potomac Edison
			Potomac Edison	Transfering	Combined	Eliminations,		Company
		CAPITALIZATION AND LIABILITIES	Company	Agent, LLC	Totals	etc.		Consolidated
								(Carried to
								Pg A - 2a)
Capitalization:
	Common stock of The Potomac Edison Company		224	0	224	0		224
	Members equity		0	3,140	3,140	(3,140)	(1)	0
	Other paid - in capital		222,661	0	222,661	0		222,661
	Retained earnings		160,372	0	160,372	0		160,372

	Long-term debt		415,797	0	415,797	0		415,797
		(see pages A-6, A-7, A-8, A-9)

Current liabilities:
	Short - term debt		57,597	0	57,597	0		57,597
	Accounts payable to affiliates		38,612	0	38,612	(3)	(2)	38,609
	Accounts payable - others		16,066	0	16,066	0		16,066
	Taxes accrued:
		Federal and state income	1,345	0	1,345	0		1,345
		Other	23,768	0	23,768	0		23,768
	Deferred power costs		6,687	0	6,687	0		6,687
	Interest accrued		5,011	0	5,011	0		5,011
	Maryland Settlement		23	0	23	0		23
	Other		6,512	0	6,512	0		6,512


Deferred credits and other liabilities:
	Unamoritized investment credit		9,570	0	9,570	0		9,570
	Deferred income taxes		109,748	0	109,748	0		109,748
	Obligations under capital leases		9,218	0	9,218	0		9,218
	Regulatory liabilities		20,377	0	20,377	0		20,377
	Other		8,203	0	8,203	0		8,203

		Total capitalization and liabilities	1,111,791	3,140	1,114,931	(3,143)		1,111,788

		D - 3
		THE POTOMAC EDISON COMPANY AND SUBSIDIARY COMPANY
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
							The
			The	P E			Potomac Edison
			Potomac Edison	Transfering	Combined	Eliminations,	Company
			Company	Agent, LLC	Totals	etc.	Consolidated
							(Carried to
							Pg A - 3a)
Electric operating revenues:
	Residential		346,128	0	346,128	0	346,128
	Commercial		165,480	0	165,480	0	165,480
	Industrial		220,039	0	220,039	0	220,039
	Bulk power transactions, net		64,376	0	64,376	0	64,376
	Wholesale and other, excluding affiliates		41,601	0	41,601	0	41,601
	Affiliated companies		26,910	0	26,910	0	26,910

		Total operating revenues	864,534	0	864,534	0	864,534

Operating expenses:
	Operation:
		Purchased power and exchanges, net	516,203	0	516,203	0	516,203
		Deferred power costs, net	(11,441)	0	(11,441)	0	(11,441)
		Other	153,911	0	153,911	0	153,911
	Maintenance		29,762	0	29,762	0	29,762
	Depreciation and Amortization		33,876	0	33,876	0	33,876
	Taxes other than income taxes		30,005	0	30,005	0	30,005
	Federal and state income taxes		26,684	0	26,684	0	26,684
		Total operating expenses	779,000	0	779,000	0	779,000
		Operating income	85,534	0	85,534	0	85,534

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction	(67)	0	(67)	0	(67)
	Other, net		(2,304)	0	(2,304)	0	(2,304)
		Total other income and deductions	(2,371)	0	(2,371)	0	(2,371)
		Income before interest charges	83,163	0	83,163	0	83,163

Interest charges:
	Interest on long-term debt		32,996	0	32,996	0	32,996
	Other interest		2,376	0	2,376	0	2,376
	Allowance for borrowed funds used during
		construction	(244)	0	(244)	0	(244)
	Total interest charges		35,128	0	35,128	0	35,128
	Net income (loss)		48,035	0	48,035	0	48,035

		D - 4
		THE POTOMAC EDISON COMPANY AND SUBSIDIARY COMPANY
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
								The
			The	P E				Potomac Edison
			Potomac Edison	Transfering	Combined	Eliminations,		Company
		RETAINED EARNINGS	Company	Agent, LLC	Totals	etc.		Consolidated
								(Carried to
								Pg A - 4a)
Balance at January 1, 2001			187,551	0	187,551	0		187,551

Add:
	Net income (loss)		48,035	0	48,035	0		48,035

		Total	235,586	0	235,586	0		235,586

Deduct:
	Dividends on capital stock of The Potomac Edison Company:
		Common	75,214	0	75,214	0		75,214

		Total deductions	75,214	0	75,214	0		75,214

Balance at December 31, 2001			160,372	0	160,372	0		160,372




		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			224,979	0	224,979	0		224,979


Add (Deduct):

	Decrease due to transfer of assets		(2,318)	0	(2,318)	0		(2,318)

Balance at December 31, 2001			222,661	0	222,661	0		222,661

								The
								Potomac Edison
			The	P E				Company
			Potomac Edison	Transfering	Combined	Eliminations,		Consolidated
		MEMBERS EQUITY	Company	Agent, LLC	Totals	etc.		(Carried to
								Pg A - 4a)
Balance at January 1, 2001			0	3,140	3,140	(3,140)	(1)	0

Add:
	Net income (loss)		0	0	0	0		0


		Total	0	3,140	3,140	(3,140)		0

Deduct:
	Return of cash investment
		from capital contribution	0	0	0	0		0


		Total deductions	0	0	0	0		0

Balance at December 31, 2001			0	3,140	3,140	(3,140)		0

		D - 5
		THE POTOMAC EDISON COMPANY AND SUBSIDIARY COMPANY
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
							The
			The	P E			Potomac Edison
			Potomac Edison	Transfering	Combined	Eliminations,	Company
			Company	Agent, LLC	Totals	etc.	Consolidated
							(Carried to
							Pg A - 5a)
Cash Flows from Operations:
	Net income (loss)		48,035	0	48,035	0	48,035
	Cumulative effect of accounting change, net of taxes		0	0	0	0	0
	Income before accounting change		48,035	0	48,035	0	48,035
	Depreciation and amortization		33,876	0	33,876	0	33,876
	Deferred Revenues		(4,824)	0	(4,824)	0	(4,824)
	Deferred investment credit and income taxes, net		20,632	0	20,632	0	20,632
	Deferred power costs, net		(11,441)	0	(11,441)	0	(11,441)
	Allowance for other than borrowed funds used
		during construction (AOFDC)	67	0	67	0	67
	Changes in certain current assets and liabilities:
		Accounts receivable, net	7,536	(3)	7,533	3	7,536
		Materials and supplies	725	0	725	0	725
		Prepaid Taxes	(8,582)	3	(8,579)	0	(8,579)
		Accounts payable	(1,238)	0	(1,238)	0	(1,238)
		Accounts payable to affiliates	14,125	0	14,125	(3)	14,122
		Taxes accrued	16,292	0	16,292	0	16,292
		Interest accrued	483	0	483	0	483
	Other, net		(7,848)	0	(7,848)	0	(7,848)
		Total Cash Flows from Operations	107,838	0	107,838	0	107,838

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance
		for other than borrowed funds used during construction)	(54,895)	0	(54,895)	0	(54,895)
		Total Cash Flows used in Investing	(54,895)	0	(54,895)	0	(54,895)

Cash Flows from (used in) Financing:
	Issuance of long - term debt		99,739	0	99,739	0	99,739
	Retirement of long - term debt		(95,457)	0	(95,457)	0	(95,457)
	Short - term debt, net		14,912	0	14,912	0	14,912
	Dividends on capital stock:
		Common stock	(75,214)	0	(75,214)	0	(75,214)
		Total Cash Flows from (used in) Financing	(56,020)	0	(56,020)	0	(56,020)

Net Change in Cash and Temporary
	Cash Investments*		(3,077)	0	(3,077)	0	(3,077)
		Cash and Temporary Cash Investments at January 1	4,585	100	4,685	0	4,685
		Cash and Temporary Cash Investments at December 31	1,508	100	1,608	0	1,608

Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	33,986	0	33,986	0	33,986
		Income taxes	9,365	0	9,365	0	9,365


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		E - 1
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				West Virginia Power
				and Transmission
				Company and Subsidiary
				West Virginia	West Penn
			West Penn	Power and	West Virginia	Subtotal
			Power	Transmission	Water Power	(Carried to
		ASSETS	Company	Company	Company	Pg E - 1a)

Property, plant and equipment:
	At original cost		1,711,067	2,314	9	1,713,390
	Accumulated depreciation		(585,417)	0	0	(585,417)


Investments and other assets:
	Securities of subsidiaries consolidated		242,571	1	0	242,572
	Indebtedness of subsidiary consolidated - not current		0	7	0	7
	Investment in Allegheny Pittsburgh Coal Company:
		Common stock, at equity	(6,832)	0	0	(6,832)
		Advances	7,061	0	0	7,061
	Other		30	0	0	30


Current assets:
	Cash and temporary cash investments		5,672	239	0	5,911

	Accounts receivable:
		Electric	141,957	0	0	141,957
		Other	5,743	5	0	5,748
		Allowance for uncollectible accounts	(16,540)	0	0	(16,540)
	Notes receivable due 1 yr.		4,750	0	0	4,750
	Materials and supplies - at average cost:
		Operating and construction	16,346	0	0	16,346
	Deferred income taxes		24,833	0	0	24,833
	Prepaid taxes		1,861	0	1	1,862
	Regulatory assets		1,737	0	0	1,737
	Other		1,183	0	0	1,183


Deferred charges:
	Regulatory assets		252,123	0	0	252,123
	Unamortized loss on reacquired debt		2,723	0	0	2,723
	Other		5,587	1	0	5,588


		Total assets	1,816,455	2,567	10	1,819,032

		E - 1a
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)

				West Penn					West Penn
				Funding	West Penn				Power
			Prior Page	Corporation	Transfering	Combined	Eliminations,		Company
		ASSETS	Subtotal	Consolidated	Agent LLC	Totals	etc.		Consolidated
			(from pg E - 1)	(from pg F - 1)					(carried to
									pg A - 1a)

Property, plant and equipment:
	At original cost		1,713,390	0	0	1,713,390	0		1,713,390
	Accumulated depreciation		(585,417)	0	0	(585,417)	0		(585,417)


Investments and other assets:
	Securities of subsidiaries consolidated		242,572	0	0	242,572	(242,572)	(1)	0
	Indebtedness of subsidiary consolidated - not current		7	0	0	7	(7)	(2)	0
	Investment in Allegheny Pittsburgh Coal Company:
		Common stock, at equity	(6,832)	0	0	(6,832)	0		(6,832)
		Advances	7,061	0	0	7,061	0		7,061
	Long-term notes receivable - affiliated		0	594,941	0	594,941	(594,941)	(2)	0
	Other		30	0	0	30	0		30


Current assets:
	Cash and temporary cash investments		5,911	245	101	6,257	0		6,257
	Accounts receivable:
		Electric	141,957	0	0	141,957	0		141,957
		Affiliates	0	14,793	0	14,793	(14,793)	(3)	0
		Other	5,748	0	0	5,748	0		5,748
		Allowance for uncollectible accounts	(16,540)	0	0	(16,540)	0		(16,540)
	Notes receivable due 1 yr.		4,750	0	0	4,750	0		4,750
	Materials and supplies - at average cost:
		Operating and construction	16,346	0	0	16,346	0		16,346
	Deferred income taxes		24,833	0	0	24,833	(8,041)	(11)	16,792
	Prepaid taxes		1,862	0	0	1,862	0		1,862
	Intangible transition property		0	69,667	0	69,667	(69,667)	(9)	0
	Regulatory assets		1,737	0	0	1,737	25,681	(9)	27,418
	Other		1,183	3,464	0	4,647	(1,857)	(10)	2,790


Deferred charges:
	Regulatory assets		252,123	0	0	252,123	177,379	(9)	429,502
	Unamortized loss on reacquired debt		2,723	0	0	2,723	0		2,723
	Intangible transition property		0	408,439	0	408,439	(408,439)	(9)	0
	Other		5,588	3,661	0	9,249	0		9,249


		Total assets	1,819,032	1,095,210	101	2,914,343	(1,137,257)		1,777,086

		E - 2
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				West Virginia Power
				and Transmission
				Company and Subsidiary
				West Virginia	West Penn
			West Penn	Power and	West Virginia	Subtotal
			Power	Transmission	Water Power	(Carried to
		CAPITALIZATION AND LIABILITIES	Company	Company	Company	Pg E - 2a)

Capitalization:
	Common stock of West Penn Power Company		65,842	0	0	65,842
	Common stock of subsidiaries consolidated		0	3,000	1	3,001
	Other paid - in capital		244,239	(555)	0	243,684
	Retained earnings		113,232	(354)	1	112,879

	Long - term debt and QUIDs		152,019	0	0	152,019
		(see pages A-6, A-7, A-8, A-9)
	Note & advances payable - affiliated		594,941	0	7	594,948

Current liabilities:
	Long-term debt due 1 year		33,550	0	0	33,550
	Accounts payable to affiliates		50,970	160	0	51,130
	Accounts payable - others		32,270	0	0	32,270
	Taxes accrued:
		Federal and state income	3,393	253	1	3,647
		Other	11,277	63	0	11,340
	Interest accrued		3,002	0	0	3,002
	Adverse power purchase commitments		24,839	0	0	24,839
	Other		8,601	0	0	8,601


Deferred credits and other liabilities:
	Unamoritized investment credit		19,951	0	0	19,951
	Deferred income taxes		165,427	0	0	165,427
	Obligations under capital leases		12,260	0	0	12,260
	Regulatory liabilities		15,255	0	0	15,255
	Adverse power purchase commitments		253,499	0	0	253,499
	Other		11,888	0	0	11,888


		Total capitalization and liabilities	1,816,455	2,567	10	1,819,032

		E - 2a
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)


				West Penn					West Penn
				Funding	West Penn				Power
			Prior Page	Corporation	Transfering	Combined	Eliminations,		Company
		CAPITALIZATION AND LIABILITIES	Subtotal	Consolidated	Agent LLC	Totals	etc.		Consolidated
			(from pg E - 2)	(from pg F - 2)					(carried to
									pg A - 2a)
Capitalization:
	Common stock of West Penn Power Company		65,842	0	0	65,842	0		65,842
	Common stock of subsidiaries consolidated		3,001	25	0	3,026	(3,026)	(1)	0
	Members equity		0	0	100	100	(100)	(1)	0
	Other paid - in capital		243,684	152,641	0	396,325	(152,086)	(1)	244,239
	Retained earnings		112,879	87,710	0	200,589	(87,357)	(1)	113,232

	Long - term debt and QUIDs		152,019	422,628	0	574,647	0		574,647
		(see pages A-6, A-7, A-8, A-9)
	Note & advances payable - affiliated		594,948	0	0	594,948	(594,948)	(2)	0

Current liabilities:
	Long-term debt due 1 year		33,550	70,295	0	103,845	0		103,845
	Accounts payable to affiliates		51,130	10	1	51,141	(14,793)	(3)	36,348
	Accounts payable - others		32,270	0	0	32,270	(3)		32,267
	Deferred income taxes		0	8,041	0	8,041	(8,041)	(11)	0
	Taxes accrued:
		Federal and state income	3,647	225	0	3,872	0		3,872
		Other	11,340	0	0	11,340	0		11,340
	Interest accrued		3,002	560	0	3,562	(1,857)	(10)	1,705
	Adverse power purchase commitments		24,839	0	0	24,839	0		24,839
	Deferred Gain on Sale of ITP		0	40,078	0	40,078	(40,078)	(9)	0
	Other		8,601	0	0	8,601	0		8,601

Deferred credits and other liabilities:
	Unamoritized investment credit		19,951	0	0	19,951	0		19,951
	Deferred income taxes		165,427	78,029	0	243,456	0		243,456
	Obligations under capital leases		12,260	0	0	12,260	0		12,260
	Regulatory liabilities		15,255	0	0	15,255	0		15,255
	Adverse power purchase commitments		253,499	0	0	253,499	0		253,499
	Deferred Gain on Sale of ITP		0	234,968	0	234,968	(234,968)	(9)	0
	Other		11,888	0	0	11,888	0		11,888


		Total capitalization and liabilities	1,819,032	1,095,210	101	2,914,343	(1,137,257)		1,777,086

		E - 3
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				West Virginia Power
				and Transmission
				Company and Subsidiary
				West Virginia	West Penn
			West Penn	Power and	West Virginia	Subtotal
			Power	Transmission	Water Power	(Carried to
			Company	Company	Company	Pg E - 3a)
Electric operating revenues:
	Residential		386,312	0	0	386,312
	Commercial		220,589	0	0	220,589
	Industrial		299,636	0	0	299,636
	Bulk power transactions, net		23,420	0	0	23,420
	Wholesale and other, excluding affiliates		35,354	0	0	35,354
	Affiliated companies		51,859	0	0	51,859

		Total operating revenues	1,017,170	0	0	1,017,170

Operating expenses:
	Operation:
		Purchased power and exchanges, net	598,759	0	0	598,759
		Other	125,089	390	0	125,479
	Maintenance		39,976	0	0	39,976
	Depreciation and Amortization		56,017	0	0	56,017
	Taxes other than income taxes		55,270	2	0	55,272
	Federal and state income taxes		30,073	0	0	30,073
		Total operating expenses	905,184	392	0	905,576
		Operating income	111,986	(392)	0	111,594

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction	480	0	0	480
	Other, net		55,384	524	10	55,918
		Total other income and deductions	55,864	524	10	56,398
		Income before interest charges	167,850	132	10	167,992

Interest charges:
	Interest on long - term debt		57,413	0	0	57,413
	Other interest		1,160	0	0	1,160
	Allowance for borrowed funds used during
		construction	(568)	0	0	(568)
		Total interest charges	58,005	0	0	58,005


	Net income (loss)		109,845	132	10	109,987

		E - 3a
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

				West Penn					West Penn
				Funding	West Penn				Power
			Prior Page	Corporation	Transfering	Combined	Eliminations,		Company
			Subtotal	Consolidated	Agent LLC	Totals	etc.		Consolidated
			(from pg E - 3)	(from pg F - 3)					(carried to
									pg A - 3a)
Electric operating revenues:
	Residential		386,312	36,946	0	423,258	0		423,258
	Commercial		220,589	23,852	0	244,441	0		244,441
	Industrial		299,636	37,630	0	337,266	0		337,266
	Bulk power transactions, net		23,420	0	0	23,420	0		23,420
	Wholesale and other, excluding affiliates		35,354	156	0	35,510	0		35,510
	Affiliated companies		51,859	0	0	51,859	(1,250)	(5)	50,609

		Total operating revenues	1,017,170	98,584	0	1,115,754	(1,250)		1,114,504

Operating expenses:
	Operation:
		Purchased power and exchanges, net	598,759	0	0	598,759	13,391	(4)	612,150
		Other	125,479	1,389	0	126,868	(1,250)	(5)	125,618
	Maintenance		39,976	0	0	39,976	0		39,976
	Depreciation and Amortization		56,017	60,213	0	116,230	(46,902)	(4)	69,328
	Taxes other than income taxes		55,272	0	7	55,279	0		55,279
	Federal and state income taxes		30,073	(88)	0	29,985	(1,073)	(4)	53,369
							24,457	(7)
		Total operating expenses	905,576	61,514	7	967,097	(11,377)		955,720
		Operating income	111,594	37,070	(7)	148,657	10,127		158,784

Other income and deductions:
	Allowance for other than borrowed funds used
		during construction	480	0	0	480	0		480
	Other, net		55,918	54,829	0	110,747	(41,078)	(1)	1,554
							(34,323)	(4)
							(44,561)	(6)
							24,457	(7)
							(13,688)	(8)
		Total other income and deductions	56,398	54,829	0	111,227	(109,193)		2,034
		Income before interest charges	167,992	91,899	(7)	259,884	(99,066)		160,818

Interest charges:
	Interest on long - term debt		57,413	36,138	0	93,551	(44,561)	(6)	48,990
	Other interest		1,160	1,130	0	2,290	261	(4)	2,551
	Allowance for borrowed funds used during
		construction	(568)	0	0	(568)	0		(568)
		Total interest charges	58,005	37,268	0	95,273	(44,300)		50,973


	Net income (loss)		109,987	54,631	(7)	164,611	(54,766)		109,845

		E - 4
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				West Virginia Power
				and Transmission
				Company and Subsidiary
				West Virginia	West Penn
			West Penn	Power and	West Virginia	Subtotal
			Power	Transmission	Water Power	(Carried to
		RETAINED EARNINGS	Company	Company	Company	Pg E - 4a)

Balance at January 1, 2001			112,040	2,017	(6)	114,051

Add:
	Net Income (loss)		109,845	132	10	109,987

		Total	221,885	2,149	4	224,038

Deduct:
	Dividends on capital stock		108,653	2,503	3	111,159


Balance at December 31, 2001			113,232	(354)	1	112,879



		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			244,239	(555)	0	243,684

Add (Deduct):

	Other paid - in capital from
		West Penn Power company	0	0	0	0


Balance at December 31, 2001			244,239	(555)	0	243,684

		MEMBERS EQUITY

Balance at January 1, 2001			0	0	0	0

Add:
	Net income (loss)		0	0	0	0

	Investment from member		0	0	0	0


Balance at December 31, 2001			0	0	0	0

		E - 4a
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND PAID - IN CAPITAL
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

				West Penn					West Penn
				Funding	West Penn				Power
			Prior Page	Corporation	Transfering	Combined	Eliminations,		Company
		RETAINED EARNINGS	Subtotal	Consolidated	Agent LLC	Totals	etc.		Consolidated
			(from pg E - 4)	(from pg F - 4)					(carried to
									pg A - 4a)

Balance at January 1, 2001			114,051	44,263	0	158,314	(46,274)	(1)	112,040

Add:
	Net Income (loss)		109,987	54,631	0	164,618	(54,773)		109,845


		Total	224,038	98,894	0	322,932	(101,047)		221,885

Deduct:
	Dividends on capital stock:
		Common stock	111,159	11,184	0	122,343	(13,690)	(8)	108,653

		Total deductions	111,159	11,184	0	122,343	(13,690)		108,653

Balance at December 31, 2001			112,879	87,710	0	200,589	(87,357)		113,232




		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			243,684	143,750	0	387,434	(143,195)	(1)	244,239

Add (Deduct):

	Other paid - in capital from
		West Penn Power company	0	8,891	0	8,891	(8,891)	(1)	0


Balance at December 31, 2001			243,684	152,641	0	396,325	(152,086)		244,239

		MEMBERS EQUITY


Balance at January 1, 2001			0	0	100	100	(100)		0

Add:
	Net income (loss)		0	0	(7)	(7)	7		0

	Investment from member		0	0	7	7	(7)		0

Balance at December 31, 2001			0	0	100	100	(100)		0

		E - 5
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				West Virginia Power
				and Transmission
				Company and Subsidiary
				West Virginia	West Penn
			West Penn	Power and	West Virginia	Subtotal
			Power	Transmission	Water Power	(Carried to
			Company	Company	Company	Pg E - 5a)
Cash Flows from Operations:
	Net Income (loss)		109,845	132	10	109,987
	Cumulative effect of accounting change, net of taxes		0	0	0	0
	Income before accounting change		109,845	132	10	109,987
	Depreciation and amortization		56,017	0	0	56,017
	Amortization of adverse purchase power contract		(10,264)	0	0	(10,264)
	Deferred investment credit and income taxes, net		(7,387)	0	0	(7,387)
	Unconsolidated subsidiaries' dividends in excess of earnings		(49,793)	0	0	(49,793)
	Allowance for other than borrowed funds used
		during construction (AOFDC)	(480)	0	0	(480)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	15,440	0	0	15,440
		Materials and supplies	1,317	0	0	1,317
		Prepaid Taxes	4,965	0	(1)	4,964
		Accounts payable	1,233	(47)	0	1,186
		Accounts payable to affiliates	23,266	49	0	23,315
		Taxes accrued	(8,866)	(471)	1	(9,336)
		Interest accrued	0	0	0	0
		Deferred gain on sale of ITP, net	0	0	0	0
	Other, net		10,674	14	1	10,689
		Total Cash Flows from Operations	145,967	(323)	11	145,655

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance for other
		than borrowed funds used during construction)	(70,586)	0	0	(70,586)
		Total Cash Flows used in Investing	(70,586)	0	0	(70,586)

Cash Flows from (used in) Financing:
	Retirement of Transition bonds		0	0	0	0
	Notes payable to affiliate		0	0	(8)	(8)
	Notes receivable from affiliate		36,250	0	0	36,250
	Equity Contribution from member		0	0	0	0
	Dividends on capital stock:
		Common stock	(108,653)	(2,503)	(3)	(111,159)
		Total Cash Flows from (used in) Financing	(72,403)	(2,503)	(11)	(74,917)

Net Change in Cash and
	Temporary Cash Investments*		2,978	(2,826)	0	152
		Cash and Temporary Cash Investments at January 1	2,694	3,065	0	5,759
		Cash and Temporary Cash Investments at December 31	5,672	239	0	5,911


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	57,802	0	0	57,802
		Income taxes	19,287	520	7	19,814

*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		E - 5a
		WEST PENN POWER COMPANY AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

				West Penn					West Penn
				Funding	West Penn				Power
			Prior Page	Corporation	Transfering	Combined	Eliminations,		Company
			Subtotal	Consolidated	Agent LLC	Totals	etc.		Consolidated
				(from pg F - 5)					(carried to
			(from pg E - 5)						pg A - 5a)
Cash Flows from Operations:
	Net Income (loss)		109,987	54,631	(7)	164,611	(54,766)		109,845
	Cumulative effect of accounting change, net of taxes		0	0	0	0	0		0
	Income before accounting change		109,987	54,631	(7)	164,611	(54,766)		109,845
	Depreciation and amortization		56,017	60,213	0	116,230	(46,902)	(4)	69,328
	Amortization of adverse purchase power contracts		(10,264)	0	0	(10,264)	0		(10,264)
	Deferred investment credit and income taxes, net		(7,387)	14,138	0	6,751	0		6,751
	Unconsolidated subsidiaries' dividends in excess of earnings		(49,793)	0	0	(49,793)	49,793		0
	Allowance for other than borrowed funds used
		during construction (AOFDC)	(480)	0	0	(480)	0		(480)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	15,440	0	0	15,440	0		15,440
		Materials and supplies	1,317	0	0	1,317	0		1,317
		Prepaid Taxes	4,964	0	0	4,964	0		4,964
		Accounts payable	1,186	0	(1)	1,185	(3)		1,182
		Accounts payable to affiliates	23,315	211	1	23,527	0		23,527
		Taxes accrued	(9,336)	(609)	0	(9,945)	0		(9,945)
		Interest accrued	0	159	0	159	0		159
		Deferred gain on sale of ITP, net	0	(34,534)	0	(34,534)	34,534		0
	Other, net		10,689	(31,742)	7	(21,046)	12,536		(8,510)
		Total Cash Flows from Operations	145,655	62,467	0	208,122	(4,808)		203,314

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance for other
		than borrowed funds used during construction)	(70,586)	0	0	(70,586)	0		(70,586)
		Total Cash Flows used in Investing	(70,586)	0	0	(70,586)	0		(70,586)

Cash Flows from (used in) Financing:
	Retirement of Transition bonds		0	(60,185)	0	(60,185)	1		(60,184)
	Notes payable to affiliate		(8)	0		(8)	8		0
	Notes receivable from affiliate		36,250	0	0	36,250	0		36,250
	Equity Contribution from member		0	8,891	0	8,891	(8,891)		0
	Dividends on capital stock:
		Common stock	(111,159)	(11,184)	0	(122,343)	13,690	(8)	(108,653)
		Total Cash Flows from (used in) Financing	(74,917)	(62,478)	0	(137,395)	4,808		(132,587)

Net Change in Cash and
	Temporary Cash Investments*		152	(11)	0	141	0		141
		Cash and Temporary Cash Investments at January 1	5,759	256	101	6,116	0		6,116
		Cash and Temporary Cash Investments at December 31	5,911	245	101	6,257	0		6,257


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	57,802	35,978	0	93,780	(44,561)	(6)	49,219
		Income taxes	19,814	33,308	0	53,122	0		53,122

*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		F - 1
		WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
								West Penn
			West Penn					Funding
			Funding	West Penn	Combined	Eliminations,		Corporation
		ASSETS	Corporation	Funding LLC	Totals	etc.		Consolidated
								(carried to
								pg E - 1a)
Investments and other assets:
	Securities of subsidiaries consolidated		4,818	0	4,818	(4,818)	(1)	0
	Long-term notes receivable - affiliated		594,941	0	594,941	0		594,941


Current assets:
	Cash		22	223	245	0		245
	Accounts receivable:
		Affiliates	0	14,793	14,793	0		14,793
	Intangible transition property		0	69,667	69,667	0		69,667
	Other		1,856	1,608	3,464	0		3,464

Deferred charges:
	Intangible transition property		0	408,439	408,439	0		408,439
	Other		0	3,661	3,661	0		3,661


		Total assets	601,637	498,391	1,100,028	(4,818)		1,095,210

		F - 2
		WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
								West Penn
			West Penn					Funding
			Funding	West Penn	Combined	Eliminations,		Corporation
		CAPITALIZATION AND LIABILITIES	Corporation	Funding LLC	Totals	etc.		Consolidated
								(carried to
Capitalization:								pg E - 2a)
	Members equity		0	4,818	4,818	(4,818)	(1)	0
	Common stock of subsidiaries consolidated		25	0	25	0		25
	Other paid - in capital		152,641	0	152,641	0		152,641
	Retained earnings		87,710	0	87,710	0		87,710

	Long - term debt		0	422,628	422,628	0		422,628
		(see pages A-6, A-7, A-8, A-9)

Current liabilities:
	Long-term debt due 1 year		0	70,295	70,295	0		70,295
	Accounts payable to affiliates		0	10	10	0		10
	Deferred income taxes		8,041	0	8,041	0		8,041
	Taxes accrued:
		Federal and state income	145	80	225	0		225
	Interest accrued		0	560	560	0		560
	Deferred Gain on Sale of ITP		40,078	0	40,078	0		40,078

Deferred credits and other liabilities:
	Deferred income taxes		78,029	0	78,029	0		78,029
	Deferred Gain on Sale of ITP		234,968	0	234,968	0		234,968


		Total capitalization and liabilities	601,637	498,391	1,100,028	(4,818)		1,095,210

		F - 3
		WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
								West Penn
			West Penn					Funding
			Funding	West Penn	Combined	Eliminations,		Corporation
			Corporation	Funding LLC	Totals	etc.		Consolidated
								(carried to
								pg E - 3a)
Intangible transition charge revenues:
	Residential		0	36,946	36,946	0		36,946
	Commercial		0	23,852	23,852	0		23,852
	Industrial		0	37,630	37,630	0		37,630
	Wholesale and other, excluding affiliates		0	156	156	0		156

		Total operating revenues	0	98,584	98,584	0		98,584

Operating expenses:
	Administrative and General		37	1,352	1,389	0		1,389
	Amortization of intangible transition property		0	60,213	60,213	0		60,213
	Federal and state income taxes		0	15	15	(103)	(2)	(88)
		Total operating expenses	37	61,580	61,617	(103)		61,514
		Operating income	(37)	37,004	36,967	103		37,070

Other income and deductions:
	Other income, net		54,668	295	54,963	(134)	(2)	54,829
		Total other income and deductions	54,668	295	54,963	(134)		54,829
		Income before interest charges	54,631	37,299	91,930	(31)		91,899

Interest charges:
	Interest on other long - term obligations		0	36,138	36,138	0		36,138
	Amortization of debt issuance costs		0	1,130	1,130	0		1,130
		Total interest charges	0	37,268	37,268	0		37,268


	Net income (loss)		54,631	31	54,662	(31)		54,631

		F - 4
		WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
								West Penn
			West Penn					Funding
			Funding	West Penn	Combined	Eliminations,		Corporation
		RETAINED EARNINGS	Corporation	Funding LLC	Totals	etc.		Consolidated
								(carried to
								pg E - 4a)

Balance at January 1, 2001			44,263	0	44,263	0		44,263

Add:
	Net Income (loss)		54,631	0	54,631	0		54,631

		Total	98,894	0	98,894	0		98,894

Deduct:
	Dividends on capital stock of West Penn
		Funding Corporation Common stock	11,184	0	11,184			11,184

		Total deductions	11,184	0	11,184	0		11,184

Balance at December 31, 2001			87,710	0	87,710	0		87,710




		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			143,750	0	143,750	0		143,750

Add:
	Other paid-in capital from West Penn
		Power Company	8,891	0	8,891	0		8,891


Balance at December 31, 2001			152,641	0	152,641	0		152,641


		MEMBERS EQUITY


Balance at January 1, 2001			0	4,769	4,769	(4,769)	(1)	0

Add:
	Net income (loss)		0	31	31	(31)	(1)	0

	Investment from member		0	18	18	(18)	(1)	0


Balance at December 31, 2001			0	4,818	4,818	(4,818)		0

		F - 5
		WEST PENN FUNDING CORPORATION AND SUBSIDIARY COMPANY
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
								West Penn
			West Penn					Funding
			Funding	West Penn	Combined	Eliminations,		Corporation
			Corporation	Funding LLC	Totals	etc.		Consolidated
								(carried to
								pg E - 5a)
Cash Flows from Operations:
	Net Income (loss)		54,631	31	54,662	(31)	(1)	54,631
	Cumulative effect of accounting change, net of taxes		0	0	0	0		0
	Income before accounting change		54,631	31	54,662	(31)		54,631
	Amortization of intangible transition property		0	60,213	60,213	0		60,213
	Deferred investment credit and income taxes, net		14,138	0	14,138	0		14,138
	Changes in certain current assets and liabilities:
		Accounts receivable from affilates	0	201	201	(201)		0
		Accounts payable to affiliates	0	10	10	201		211
		Taxes accrued	(624)	15	(609)	0		(609)
		Interest accrued	0	159	159	0		159
		Deferred gain on sale of ITP, net	(34,534)	0	(34,534)	0		(34,534)
	Unamortized debt issuance expense, net		0	1,120	1,120	(1,120)		0
	Other, net		(31,303)	0	(31,303)	(439)		(31,742)
		Total Cash Flows from Operations	2,308	61,749	64,057	(1,590)		62,467

Cash Flows used in Investing:
	Regulated operations' construction expenditures (less allowance for other
		than borrowed funds used during construction)	0	0	0	0		0
		Total Cash Flows used in Investing	0	0	0	0		0

Cash Flows from (used in) Financing:
	Retirement of Transition bonds		0	(60,185)	(60,185)	0		(60,185)
	Change in restricted funds		0	(1,608)	(1,608)	1,608		0
	Equity Contribution from member		8,891	18	8,909	(18)		8,891
	Dividends on capital stock:
		Common stock	(11,184)	0	(11,184)	0		(11,184)
		Total Cash Flows from (used in) Financing	(2,293)	(61,775)	(64,068)	1,590		(62,478)

Net Change in Cash and
	Temporary Cash Investments*		15	(26)	(11)	0		(11)
		Cash and Temporary Cash Investments at January 1	7	249	256	0		256
		Cash and Temporary Cash Investments at December 31	22	223	245	0		245

Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	0	35,978	35,978	0		35,978
		Income taxes	33,308	0	33,308	0		33,308


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		G - 1
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
			Allegheny
			Energy	Allegheny
			Supply	Generating	Subtotal
		ASSETS	Company, LLC	Company	(Carried to
					Pg G - 1a)
Property, plant and equipment:
	At original cost		3,558,011	832,077	4,390,088
	Accumulated depreciation		(1,674,638)	(261,111)	(1,935,749)


Investments and other assets:
	Excess of cost over net assets acquired		367,287	0	367,287
	Securities of subsidiaries consolidated:
		Common stock, at equity	2,121,040	0	2,121,040
	Investment in Allegheny Generating Company:
		Common stock, at equity	102,194	0	102,194
	Unregulated investments		250	0	250


Current Assets:
	Cash and temporary cash investments		4,291	11	4,302
	Accounts receivable:
		Electric	104,956	0	104,956
		Affiliates, net	45,074	2,160	47,234
		Allowance for uncollectible accounts	(2,400)	0	(2,400)
	Notes receivable due 1 yr.		81,473	0	81,473
	Materials and supplies - at average cost:
		Operating and construction	48,142	2,214	50,356
		Fuel	40,172	0	40,172
	Deposit		16,815	0	16,815
	Prepaid taxes		102,649	0	102,649
	Commodity Contracts		297,879	0	297,879
	Other		3,697	328	4,025


Deferred charges:
	Commodity Contracts		1,457,504	0	1,457,504
	Regulatory assets		0	9,849	9,849
	Unamortized loss on reacquired debt		0	5,968	5,968
	Other		7,361	136	7,497

		Total assets	6,681,757	591,632	7,273,389

		G - 1a
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)


				Energy	Lake
			Prior Page	Financing	Acquisition	Subtotal
ASSETS			Subtotal	Company, LLC	Company, LLC	(Carried to
			(from pg G - 1)			Pg G - 1b)
Property, plant and equipment:
	At original cost		4,390,088	0	669	4,390,757
	Accumulated depreciation		(1,935,749)	0	(4)	(1,935,753)


Investments and other assets:
	Excess of cost over net assets acquired		367,287	0	0	367,287
	Securities of subsidiaries consolidated:
		Common stock, at equity	2,121,040	0	0	2,121,040
	Investment in Allegheny Generating Company:
		Common stock, at equity	102,194	0	0	102,194
	Long-term notes receivable		0	156,932	0	156,932
	Unregulated investments		250	0	0	250


Current Assets:
	Cash and temporary cash investments		4,302	1,666	0	5,968
	Accounts receivable:
		Electric	104,956	0	0	104,956
		Affiliates, net	47,234	42	0	47,276
		Allowance for uncollectible accounts	(2,400)	0	0	(2,400)
	Notes receivable due 1 yr.		81,473	0	0	81,473
	Materials and supplies - at average cost:
		Operating and construction	50,356	0	0	50,356
		Fuel	40,172	0	0	40,172
	Deposit		16,815	0	0	16,815
	Prepaid taxes		102,649	1,033	1	103,683
	Commodity Contracts		297,879	0	0	297,879
	Other		4,025	0	0	4,025


Deferred charges:
	Commodity Contracts		1,457,504	0	0	1,457,504
	Regulatory assets		9,849	0	0	9,849
	Unamortized loss on reacquired debt		5,968	0	0	5,968
	Other		7,497	8,948	0	16,445

		Total assets	7,273,389	168,621	666	7,442,676

		G - 1b
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny	Allegheny
				Energy Supply	Energy Supply	Energy Supply
				Gleason	Wheatland	Lincoln
			Prior Page	Generating	Generating	Generating	Subtotal
ASSETS			Subtotal	Facility, LLC	Facility, LLC	Facility, LLC	(Carried to
			(from pg G - 1a)				Pg G - 1c)
Property, plant and equipment:
	At original cost		4,390,757	320,861	298,840	420,792	5,431,250
	Accumulated depreciation		(1,935,753)	(6,299)	(5,860)	(8,225)	(1,956,137)


Investments and other assets:
	Excess of cost over net assets acquired		367,287	0	0	0	367,287
	Securities of subsidiaries consolidated:
		Common stock, at equity	2,121,040	0	0	0	2,121,040
	Investment in Allegheny Generating Company:
		Common stock, at equity	102,194	0	0	0	102,194
	Long-term notes receivable		156,932	0	0	0	156,932
	Unregulated investments		250	0	0	0	250


Current Assets:
	Cash and temporary cash investments		5,968	4,689	5,649	3,709	20,015
	Accounts receivable:
		Electric	104,956	0	0	0	104,956
		Affiliates, net	47,276	424	558	4,373	52,631
		Allowance for uncollectible accounts	(2,400)	0	0	0	(2,400)
	Notes receivable due 1 yr.		81,473	0	0	0	81,473
	Materials and supplies - at average cost:
		Operating and construction	50,356	374	525	563	51,818
		Fuel	40,172	0	0	0	40,172
	Deposit		16,815	0	0	0	16,815
	Prepaid taxes		103,683	2,370	2,198	3,042	111,293
	Commodity Contracts		297,879	0	0	0	297,879
	Other		4,025	618	24	47	4,714


Deferred charges:
	Commodity Contracts		1,457,504	0	0	0	1,457,504
	Regulatory assets		9,849	0	0	0	9,849
	Unamortized loss on reacquired debt		5,968	0	0	0	5,968
	Other		16,445	25,798	0	0	42,243

		Total assets	7,442,676	348,835	301,934	424,301	8,517,746

		G - 1c
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
					Allegheny
				Allegheny	Energy Supply	Acadia Bay
			Prior Page	Energy Supply	Conemaugh,	Energy	Subtotal
ASSETS			Subtotal	Capital, LLC	LLC	Company, LLC	(Carried to
			(from pg G - 1b)				Pg G - 1d)
Property, plant and equipment:
	At original cost		5,431,250	0	79,373	2,478	5,513,101
	Accumulated depreciation		(1,956,137)	0	(2,476)	0	(1,958,613)


Investments and other assets:
	Excess of cost over net assets acquired		367,287	0	0	0	367,287
	Securities of subsidiaries consolidated:
		Common stock, at equity	2,121,040	0	0	0	2,121,040
	Investment in Allegheny Generating Company:
		Common stock, at equity	102,194	0	0	0	102,194
	Long-term notes receivable		156,932	1,050,000	0	0	1,206,932
	Unregulated investments		250	0	0	0	250


Current Assets:
	Cash and temporary cash investments		20,015	211	683	0	20,909
	Accounts receivable:
		Electric	104,956	0	0	0	104,956
		Affiliates, net	52,631	0	634	0	53,265
		Allowance for uncollectible accounts	(2,400)	0	0	0	(2,400)
	Notes receivable due 1 yr.		81,473	0	0	0	81,473
	Materials and supplies - at average cost:
		Operating and construction	51,818	0	939	0	52,757
		Fuel	40,172	0	1,068	0	41,240
	Deposit		16,815	0	0	0	16,815
	Prepaid taxes		111,293	694	0	0	111,987
	Commodity Contracts		297,879	0	0	0	297,879
	Other		4,714	3,452	0	0	8,166


Deferred charges:
	Commodity Contracts		1,457,504	0	0	0	1,457,504
	Regulatory assets		9,849	0	0	0	9,849
	Unamortized loss on reacquired debt		5,968	0	0	0	5,968
	Other		42,243	0	5	0	42,248

		Total assets	8,517,746	1,054,357	80,226	2,478	9,654,807

		G - 1d
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

				Allegheny				Allegheny
				Energy Supply				Energy Supply
				Development				Company, LLC
			Prior Page	Services	Combined	Eliminations,		Consolidated
ASSETS			Subtotal	LLC	Totals	etc.		(carried to
			(from pg G - 1c)					pg A - 1a)
Property, plant and equipment:
	At original cost		5,513,101	0	5,513,101	(161,511)	(2)	5,351,590
	Accumulated depreciation		(1,958,613)	0	(1,958,613)	0		(1,958,613)


Investments and other assets:
	Excess of cost over net assets acquired		367,287	0	367,287	0		367,287
	Securities of subsidiaries consolidated:
		Common stock, at equity	2,121,040	0	2,121,040	(2,121,040)	(1)	0
	Investment in Allegheny Generating Company:
		Common stock, at equity	102,194	0	102,194	(102,194)	(1)	0
	Long-term notes receivable		1,206,932	0	1,206,932	(1,050,000)	(6)	0
						(156,932)	(7)
	Unregulated investments		250	6,855	7,105	0		7,105


Current Assets:
	Cash and temporary cash investments		20,909	0	20,909	0		20,909
	Accounts receivable:
		Electric	104,956	0	104,956	0		104,956
		Affiliates, net	53,265	0	53,265	(26)	(9)	53,239
		Allowance for uncollectible accounts	(2,400)	0	(2,400)	0		(2,400)
	Notes receivable due 1 yr.		81,473	0	81,473	(81,473)	(6)	0
	Materials and supplies - at average cost:
		Operating and construction	52,757	0	52,757	0		52,757
		Fuel	41,240	0	41,240	0		41,240
	Deposit		16,815	0	16,815	0		16,815
	Prepaid taxes		111,987	0	111,987	0		111,987
	Commodity Contracts		297,879	0	297,879	0		297,879
	Other		8,166	56	8,222	(3,452)	(8)	4,770


Deferred charges:
	Commodity Contracts		1,457,504	0	1,457,504	0		1,457,504
	Regulatory assets		9,849	0	9,849	0		9,849
	Unamortized loss on reacquired debt		5,968	0	5,968	0		5,968
	Other		42,248	0	42,248	(8,948)	(7)	33,300

		Total assets	9,654,807	6,911	9,661,718	(3,685,576)		5,976,142

		G - 2
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
			Allegheny
			Energy	Allegheny
			Supply	Generating	Subtotal
			Company, LLC	Company	(Carried to
CAPITALIZATION AND LIABILITIES					Pg G - 2a)
Capitalization:
	Members Equity		1,524,686	0	1,524,686
	Common stock of subidiaries consolidated		0	1	1
	Other paid - in capital		0	132,669	132,669

	Long-term debt		980,882	149,159	1,130,041
		(see pages A-6, A-7, A-8, A-9)
	Note & advance payable - affiliated		1,050,000	0	1,050,000

Current liabilities:
	Short - term debt		685,895	0	685,895
	Long-term debt due 1 year		219,108	0	219,108
	Note payable to parent and affiliates		325,000	62,850	387,850
	Accounts payable - others		181,134	7	181,141
	Deferred income taxes		209,949	0	209,949
	Customer Deposits		4,460	0	4,460
	Taxes accrued:
		Federal and state income	461	982	1,443
		Other	23,896	0	23,896
	Interest accrued		23,278	3,229	26,507
	Payroll accrued		32,690	0	32,690
	Commodity Contracts		515,183	0	515,183
	Adverse power purchase commitments		24,790	0	24,790
	Other		2,345	0	2,345

Deferred credits and other liabilities:
	Commodity Contracts		489,950	0	489,950
	Unamortized investment credit		21,482	42,553	64,035
	Deferred income taxes		227,829	177,268	405,097
	Regulatory liabilities		0	22,914	22,914
	Adverse power purchase commitments		136,722	0	136,722
	Other		2,017	0	2,017

		Total capitalization and liabilities	6,681,757	591,632	7,273,389

		G - 2a
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)


				Energy	Lake
			Prior Page	Financing	Acquisition	Subtotal
CAPITALIZATION AND LIABILITIES			Subtotal	Company, LLC	Company, LLC	(Carried to
			(from pg G - 2)			Pg G - 2b)
Capitalization:
	Members Equity		1,524,686	159,627	666	1,684,979
	Common stock of subidiaries consolidated		1	0	0	1
	Other paid - in capital		132,669	0	0	132,669

	Long-term debt		1,130,041	0	0	1,130,041
		(see pages A-6, A-7, A-8, A-9)
	Note & advance payable - affiliated		1,050,000	0	0	1,050,000

Current liabilities:
	Short - term debt		685,895	0	0	685,895
	Long-term debt due 1 year		219,108	0	0	219,108
	Note payable to parent and affiliates		387,850	0	0	387,850
	Accounts payable - others		181,141	4	0	181,145
	Deferred income taxes		209,949	0	0	209,949
	Customer Deposits		4,460	0	0	4,460
	Taxes accrued:
		Federal and state income	1,443	0	0	1,443
		Other	23,896	0	0	23,896
	Interest accrued		26,507	0	0	26,507
	Payroll accrued		32,690	0	0	32,690
	Commodity Contracts		515,183	0	0	515,183
	Adverse power purchase commitments		24,790	0	0	24,790
	Other		2,345	42	0	2,387

Deferred credits and other liabilities:
	Commodity Contracts		489,950	0	0	489,950
	Unamortized investment credit		64,035	0	0	64,035
	Deferred income taxes		405,097	0	0	405,097
	Regulatory liabilities		22,914	0	0	22,914
	Adverse power purchase commitments		136,722	0	0	136,722
	Other		2,017	8,948	0	10,965

		Total capitalization and liabilities	7,273,389	168,621	666	7,442,676

		G - 2b
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny	Allegheny
				Energy Supply	Energy Supply	Energy Supply
				Gleason	Wheatland	Lincoln
			Prior Page	Generating	Generating	Generating	Subtotal
CAPITALIZATION AND LIABILITIES			Subtotal	Facility, LLC	Facility, LLC	Facility, LLC	(Carried to
			(from pg G - 2a)				Pg G - 2c)
Capitalization:
	Members Equity		1,684,979	345,212	299,324	254,958	2,584,473
	Common stock of subidiaries consolidated		1	0	0	0	1
	Other paid - in capital		132,669	0	0	0	132,669

	Long-term debt		1,130,041	0	0	0	1,130,041
		(see pages A-6, A-7, A-8, A-9)
	Note & advance payable - affiliated		1,050,000	0	0	156,208	1,206,208

Current liabilities:
	Short - term debt		685,895	0	0	0	685,895
	Long-term debt due 1 year		219,108	0	0	723	219,831
	Note payable to parent and affiliates		387,850	0	0	0	387,850
	Accounts payable - others		181,145	1,252	245	323	182,965
	Deferred income taxes		209,949	0	0	0	209,949
	Customer Deposits		4,460	0	0	0	4,460
	Taxes accrued:
		Federal and state income	1,443	0	0	0	1,443
		Other	23,896	1	167	56	24,120
	Interest accrued		26,507	0	0	0	26,507
	Payroll accrued		32,690	0	0	40	32,730
	Commodity Contracts		515,183	0	0	0	515,183
	Adverse power purchase commitments		24,790	0	0	0	24,790
	Other		2,387	0	0	0	2,387

Deferred credits and other liabilities:
	Commodity Contracts		489,950	0	0	0	489,950
	Unamortized investment credit		64,035	0	0	0	64,035
	Long-term accounts payable affiliates		0	0	0	8,951	8,951
	Deferred income taxes		405,097	2,370	2,198	3,042	412,707
	Regulatory liabilities		22,914	0	0	0	22,914
	Adverse power purchase commitments		136,722	0	0	0	136,722
	Other		10,965	0	0	0	10,965

		Total capitalization and liabilities	7,442,676	348,835	301,934	424,301	8,517,746

		G - 2c
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
					Allegheny
				Allegheny	Energy Supply	Acadia Bay
			Prior Page	Energy Supply	Conemaugh,	Energy	Subtotal
CAPITALIZATION AND LIABILITIES			Subtotal	Capital, LLC	LLC	Company, LLC	(Carried to
			(from pg G - 2b)				Pg G - 2d)
Capitalization:
	Members Equity		2,584,473	1,054,357	1	5	3,638,836
	Common stock of subidiaries consolidated		1	0	0	0	1
	Other paid - in capital		132,669	0	0	0	132,669

	Long-term debt		1,130,041	0	0	0	1,130,041
		(see pages A-6, A-7, A-8, A-9)
	Note & advance payable - affiliated		1,206,208	0	79,000	2,473	1,287,681

Current liabilities:
	Short - term debt		685,895	0	0	0	685,895
	Long-term debt due 1 year		219,831	0	0	0	219,831
	Note payable to parent and affiliates		387,850	0	0	0	387,850
	Accounts payable - others		182,965	0	1,167	0	184,132
	Deferred income taxes		209,949	0	0	0	209,949
	Customer Deposits		4,460	0	0	0	4,460
	Taxes accrued:
		Federal and state income	1,443	0	0	0	1,443
		Other	24,120	0	0	0	24,120
	Interest accrued		26,507	0	0	0	26,507
	Payroll accrued		32,730	0	0	0	32,730
	Commodity Contracts		515,183	0	0	0	515,183
	Adverse power purchase commitments		24,790	0	0	0	24,790
	Other		2,387	0	0	0	2,387

Deferred credits and other liabilities:
	Commodity Contracts		489,950	0	0	0	489,950
	Unamortized investment credit		64,035	0	0	0	64,035
	Long-term accounts payable affiliates		8,951	0	0	0	8,951
	Deferred income taxes		412,707	0	0	0	412,707
	Regulatory liabilities		22,914	0	0	0	22,914
	Adverse power purchase commitments		136,722	0	0	0	136,722
	Other		10,965	0	58	0	11,023

		Total capitalization and liabilities	8,517,746	1,054,357	80,226	2,478	9,654,807

		G - 2d
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny				Allegheny
				Energy Supply				Energy Supply
				Development				Company, LLC
			Prior Page	Services	Combined	Eliminations,		Consolidated
CAPITALIZATION AND LIABILITIES			Subtotal	LLC	Totals	etc.		(carried to
			(from pg G - 2c)					pg A - 2a)
Capitalization:
	Members Equity		3,638,836	6,889	3,645,725	(2,121,039)	(1)	1,524,686
	Common stock of subidiaries consolidated		1	0	1	(1)	(1)	0
	Other paid - in capital		132,669	0	132,669	(132,669)	(1)	0

	Long-term debt		1,130,041	0	1,130,041	0		1,130,041
		(see pages A-6, A-7, A-8, A-9)
	Note & advance payable - affiliated		1,287,681	0	1,287,681	(1,131,473)	(6)	0
						(156,208)	(7)
Current liabilities:
	Short - term debt		685,895	0	685,895	0		685,895
	Long-term debt due 1 year		219,831	0	219,831	(723)	(7)	219,108
	Note payable to parent and affiliates		387,850	0	387,850	0		387,850
	Accounts payable - others		184,132	0	184,132	(24)	(9)	184,108
	Deferred income taxes		209,949	0	209,949	0		209,949
	Customer Deposits		4,460	0	4,460	0		4,460
	Taxes accrued:
		Federal and state income	1,443	22	1,465	0		1,465
		Other	24,120	0	24,120	0		24,120
	Interest accrued		26,507	0	26,507	(3,452)	(8)	23,055
	Payroll accrued		32,730	0	32,730	0		32,730
	Commodity Contracts		515,183	0	515,183	0		515,183
	Adverse power purchase commitments		24,790	0	24,790	(24,790)	(2)	0
	Other		2,387	0	2,387	0		2,387

Minority Interest			0	0	0	30,476	(1)	30,476

Deferred credits and other liabilities:
	Commodity Contracts		489,950	0	489,950	0		489,950
	Unamortized investment credit		64,035	0	64,035	0		64,035
	Long-term accounts payable affiliates		8,951	0	8,951	(8,951)	(7)	0
	Deferred income taxes		412,707	0	412,707	0		412,707
	Regulatory liabilities		22,914	0	22,914	0		22,914
	Adverse power purchase commitments		136,722	0	136,722	(136,722)	(2)	0
	Other		11,023	0	11,023	0		11,023

		Total capitalization and liabilities	9,654,807	6,911	9,661,718	(3,685,576)		5,976,142

		G - 3
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

			Allegheny
			Energy	Allegheny
			Supply	Generating	Subtotal
			Company, LLC	Company	(Carried to
					Pg G - 3a)
Operating revenues:
	Residential		54,784	0	54,784
	Commercial		49,373	0	49,373
	Industrial		28,970	0	28,970
	Bulk power transactions, net		7,337,411	0	7,337,411
	Wholesale and other excluding affiliates		5,539	0	5,539
	Affiliated companies		1,118,577	68,524	1,187,101

		Total operating revenues	8,594,654	68,524	8,663,178

Operating expenses:
	Operation:
		Fuel	419,309	0	419,309
		Purchased power and exchanges, net	7,233,077	0	7,233,077
		Gas Purchases	7,984	0	7,984
		Other	231,912	4,636	236,548
	Maintenance		130,828	503	131,331
	Depreciation and amortization		101,441	16,973	118,414
	Taxes other than income		62,240	3,437	65,677
	Federal and state income taxes		93,952	10,202	104,154
		Total operating expenses	8,280,743	35,751	8,316,494
		Operating income	313,911	32,773	346,684

Other income and deductions:
	Other, net		66,729	6	66,735
		Total other income and deductions	66,729	6	66,735
		Income before interest charges, Minority Interest
		and cumulative effect of accounting change	380,640	32,779	413,419

Interest charges:
	Interest on other long - term debt		48,014	9,703	57,717
	Other interest		105,297	2,776	108,073
	Interest capitalized		(7,506)	0	(7,506)
		Total interest charges	145,805	12,479	158,284
	Income (loss) before
		Cumulative effect of accounting change, net	234,835	20,300	255,135

Cumulative effect of accounting change, net			31,147	0	31,147
	Net income (loss)		203,688	20,300	223,988

		G - 3a
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)


				Energy	Lake
			Prior Page	Financing	Acquisition	Subtotal
			Subtotal	Company, LLC	Company, LLC	(Carried to
			(from pg G - 3)			Pg G - 3b)
Operating revenues:
	Residential		54,784	0	0	54,784
	Commercial		49,373	0	0	49,373
	Industrial		28,970	0	0	28,970
	Bulk power transactions, net		7,337,411	0	0	7,337,411
	Wholesale and other excluding affiliates		5,539	0	0	5,539
	Affiliated companies		1,187,101	0	0	1,187,101

		Total operating revenues	8,663,178	0	0	8,663,178

Operating expenses:
	Operation:
		Fuel	419,309	0	0	419,309
		Purchased power and exchanges, net	7,233,077	0	0	7,233,077
		Gas Purchases	7,984	0	0	7,984
		Other	236,548	4	0	236,552
	Maintenance		131,331	0	0	131,331
	Depreciation and amortization		118,414	0	4	118,418
	Taxes other than income		65,677	0	0	65,677
	Federal and state income taxes		104,154	3,208	0	107,362
		Total operating expenses	8,316,494	3,212	4	8,319,710
		Operating income	346,684	(3,212)	(4)	343,468

Other income and deductions:
	Other, net		66,735	9,170	1	75,906
		Total other income and deductions	66,735	9,170	1	75,906
		Income before interest charges, Minority Interest
		and cumulative effect of accounting change	413,419	5,958	(3)	419,374

Interest charges:
	Interest on long - term debt		57,717	0	0	57,717
	Other interest		108,073	0	0	108,073
	Interest capitalized		(7,506)	0	0	(7,506)
		Total interest charges	158,284	0	0	158,284
	Income (loss) before
		Cumulative effect of accounting change, net	255,135	5,958	(3)	261,090

Cumulative effect of accounting change, net			31,147	0	0	31,147
	Net income (loss)		223,988	5,958	(3)	229,943

		G - 3b
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny	Allegheny
				Energy Supply	Energy Supply	Energy Supply
				Gleason	Wheatland	Lincoln
			Prior Page	Generating	Generating	Generating	Subtotal
			Subtotal	Facility, LLC	Facility, LLC	Facility, LLC	(Carried to
			(from pg G - 3a)				Pg G - 3c)
Operating revenues:
	Residential		54,784	0	0	0	54,784
	Commercial		49,373	0	0	0	49,373
	Industrial		28,970	0	0	0	28,970
	Bulk power transactions, net		7,337,411	0	0	0	7,337,411
	Wholesale and other excluding affiliates		5,539	0	0	0	5,539
	Affiliated companies		1,187,101	14,235	14,022	25,779	1,241,137

		Total operating revenues	8,663,178	14,235	14,022	25,779	8,717,214

Operating expenses:
	Operation:
		Fuel	419,309	5,636	5,968	6,450	437,363
		Purchased power and exchanges, net	7,233,077	0	0	0	7,233,077
		Gas Purchases	7,984	0	0	0	7,984
		Other	236,552	1,392	1,951	1,698	241,593
	Maintenance		131,331	574	103	177	132,185
	Depreciation and amortization		118,418	6,299	5,860	8,225	138,802
	Taxes other than income		65,677	357	175	94	66,303
	Federal and state income taxes		107,362	0	0	0	107,362
		Total operating expenses	8,319,710	14,258	14,057	16,644	8,364,669
		Operating income	343,468	(23)	(35)	9,135	352,545

Other income and deductions:
	Other, net		75,906	23	35	35	75,999
		Total other income and deductions	75,906	23	35	35	75,999
		Income before interest charges, Minority Interest
		and cumulative effect of accounting change	419,374	0	0	9,170	428,544

Interest charges:
	Interest on long - term debt		57,717	0	0	0	57,717
	Other interest		108,073	0	0	9,170	117,243
	Interest capitalized		(7,506)	0	0	0	(7,506)
		Total interest charges	158,284	0	0	9,170	167,454
	Income (loss) before
		Cumulative effect of accounting change, net	261,090	0	0	0	261,090

Cumulative effect of accounting change, net			31,147	0	0	0	31,147
	Net income (loss)		229,943	0	0	0	229,943

		G - 3c
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

					Allegheny
				Allegheny	Energy Supply
			Prior Page	Energy Supply	Conemaugh,	Subtotal
			Subtotal	Capital, LLC	LLC	(Carried to
			(from pg G - 3b)			Pg G - 3d)
Operating revenues:
	Residential		54,784	0	0	54,784
	Commercial		49,373	0	0	49,373
	Industrial		28,970	0	0	28,970
	Bulk power transactions, net		7,337,411	0	0	7,337,411
	Wholesale and other excluding affiliates		5,539	0	0	5,539
	Affiliated companies		1,241,137	0	9,347	1,250,484

		Total operating revenues	8,717,214	0	9,347	8,726,561

Operating expenses:
	Operation:
		Fuel	437,363	0	3,468	440,831
		Purchased power and exchanges, net	7,233,077	0	0	7,233,077
		Gas Purchases	7,984	0	0	7,984
		Other	241,593	17	524	242,134
	Maintenance		132,185	0	997	133,182
	Depreciation and amortization		138,802	0	1,362	140,164
	Taxes other than income		66,303	0	17	66,320
	Federal and state income taxes		107,362	17,569	0	124,931
		Total operating expenses	8,364,669	17,586	6,368	8,388,623
		Operating income	352,545	(17,586)	2,979	337,938

Other income and deductions:
	Other, net		75,999	54,893	3	130,895
		Total other income and deductions	75,999	54,893	3	130,895
		Income before interest charges, Minority Interest
		and cumulative effect of accounting change	428,544	37,307	2,982	468,833

Interest charges:
	Interest on long - term debt		57,717	0	0	57,717
	Other interest		117,243	0	2,982	120,225
	Interest capitalized		(7,506)	0	0	(7,506)
		Total interest charges	167,454	0	2,982	170,436
	Income (loss) before
		Cumulative effect of accounting change, net	261,090	37,307	0	298,397

Cumulative effect of accounting change, net			31,147	0	0	31,147
	Net income (loss)		229,943	37,307	0	267,250

		G - 3d
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny				Allegheny
				Energy Supply				Energy Supply
				Development				Company, LLC
			Prior Page	Services	Combined	Eliminations,		Consolidated
			Subtotal	LLC	Totals	etc.		(carried to
			(from pg G - 3c)					pg A - 3a)
Operating revenues:
	Residential		54,784	0	54,784	0		54,784
	Commercial		49,373	0	49,373	0		49,373
	Industrial		28,970	0	28,970	0		28,970
	Bulk power transactions, net		7,337,411	0	7,337,411	0		7,337,411
	Wholesale and other excluding affiliates		5,539	0	5,539	0		5,539
	Affiliated companies		1,250,484	0	1,250,484	(115,006)	(3)	1,135,478

		Total operating revenues	8,726,561	0	8,726,561	(115,006)		8,611,555

Operating expenses:
	Operation:
		Fuel	440,831	0	440,831	0		440,831
		Purchased power and exchanges, net	7,233,077	0	7,233,077	(115,006)	(3)	7,142,273
						24,202	(10)
		Gas Purchases	7,984	0	7,984	0		7,984
		Other	242,134	0	242,134	0		242,134
	Maintenance		133,182	0	133,182	0		133,182
	Depreciation and amortization		140,164	0	140,164	(24,202)	(10)	115,962
	Taxes other than income		66,320	0	66,320	0		66,320
	Federal and state income taxes		124,931	22	124,953	0		124,953
		Total operating expenses	8,388,623	22	8,388,645	(115,006)		8,273,639
		Operating income	337,938	(22)	337,916	0		337,916

Other income and deductions:
	Other, net		130,895	56	130,951	(66,951)	(4)	5,453
						5,049	(5)
						(63,596)	(11)
		Total other income and deductions	130,895	56	130,951	(125,498)		5,453
		Income before interest charges, Minority Interest
		and cumulative effect of accounting change	468,833	34	468,867	(125,498)		343,369

Interest charges:
	Interest on long - term debt		57,717	0	57,717	0		57,717
	Other interest		120,225	0	120,225	(66,951)	(4)	53,274
	Interest capitalized		(7,506)	0	(7,506)	0		(7,506)
		Total interest charges	170,436	0	170,436	(66,951)		103,485
Minority Interest			0	0	0	5,049	(5)	5,049
	Income (loss) before
		Cumulative effect of accounting change, net	298,397	34	298,431	(63,596)		234,835
Cumulative effect of accounting change, net			31,147	0	31,147	0		31,147

		Net income (loss)	267,250	34	267,284	(63,596)		203,688

		G - 4
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

			Allegheny
			Energy	Allegheny
			Supply	Generating	Subtotal
RETAINED EARNINGS			Company, LLC	Company	(Carried to
					pg G - 4a)

Balance at January 1, 2001			0	0	0

Add:
	Net income (loss)		0	20,300	20,300

		Total	0	20,300	20,300

Deduct:
	Dividends on capital stock:
		Common	0	20,300	20,300

		Total deductions	0	20,300	20,300

Balance at December 31, 2001			0	0	0



OTHER PAID - IN CAPITAL

Balance at January 1, 2001			0	144,369	144,369


Add (Deduct):
	Dividends on Capital Stock:
		Common	0	(11,700)	(11,700)
Balance at December 31, 2001			0	132,669	132,669

		MEMBERS EQUITY


Balance at January 1, 2001			759,643	0	759,643

Add:
	Net income (loss)		203,688	0	203,688

	Members capital contributions		446,355	0	446,355

	Issuance of Membership
		Interest	115,000	0	115,000

		Total	1,524,686	0	1,524,686

Deduct:
	Dividends paid to parent		0	0	0

		Total deductions	0	0	0

Balance at December 31, 2001			1,524,686	0	1,524,686

		G - 4a
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)


				Energy	Lake
			Prior Page	Financing	Acquisition	Subtotal
RETAINED EARNINGS			Subtotal	Company, LLC	Company, LLC	(Carried to
			(from pg G - 4)			Pg G - 4b)

Balance at January 1, 2001			0	0	0	0

Add:
	Net income (loss)		20,300	0	0	20,300

		Total	20,300	0	0	20,300

Deduct:
	Dividends on capital stock:
		Common	20,300	0	0	20,300

		Total deductions	20,300	0	0	20,300

Balance at December 31, 2001			0	0	0	0



OTHER PAID - IN CAPITAL

Balance at January 1, 2001			144,369	0	0	144,369


Add (Deduct):
	Dividends on Capital Stock:
		Common	(11,700)	0	0	(11,700)
Balance at December 31, 2001			132,669	0	0	132,669

		MEMBERS EQUITY


Balance at January 1, 2001			759,643	0	0	759,643

Add:
	Net income (loss)		203,688	5,958	(3)	209,643

	Members capital contributions		446,355	157,464	669	604,488

	Issuance of Membership
		Interest	115,000	0	0	115,000

		Total	1,524,686	163,422	666	1,688,774

Deduct:
	Dividends paid to parent		0	3,795	0	3,795

		Total deductions	0	3,795	0	3,795

Balance at December 31, 2001			1,524,686	159,627	666	1,684,979

		G - 4b
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny	Allegheny
				Energy Supply	Energy Supply	Energy Supply
				Gleason	Wheatland	Lincoln
			Prior Page	Generating	Generating	Generating	Subtotal
RETAINED EARNINGS			Subtotal	Facility, LLC	Facility, LLC	Facility, LLC	(Carried to
			(from pg G - 4a)				Pg G - 4c)

Balance at January 1, 2001			0	0	0	0	0

Add:
	Net income (loss)		20,300	0	0	0	20,300

		Total	20,300	0	0	0	20,300

Deduct:
	Dividends on capital stock:
		Common	20,300	0	0	0	20,300

		Total deductions	20,300	0	0	0	20,300

Balance at December 31, 2001			0	0	0	0	0



OTHER PAID - IN CAPITAL

Balance at January 1, 2001			144,369	0	0	0	144,369


Add (Deduct):
	Dividends on Capital Stock:
		Common	(11,700)	0	0	0	(11,700)
Balance at December 31, 2001			132,669	0	0	0	132,669


		MEMBERS EQUITY


Balance at January 1, 2001			759,643	0	0	0	759,643

Add:
	Net income (loss)		209,643	0	0	0	209,643

	Members capital contributions		604,488	345,212	299,324	254,958	1,503,982

	Issuance of Membership
		Interest	115,000	0	0	0	115,000

		Total	1,688,774	345,212	299,324	254,958	2,588,268

Deduct:
	Dividends paid to parent		3,795	0	0	0	3,795

		Total deductions	3,795	0	0	0	3,795

Balance at December 31, 2001			1,684,979	345,212	299,324	254,958	2,584,473

		G - 4c
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

					Allegheny
				Allegheny	Energy Supply	Acadia Bay
			Prior Page	Energy Supply	Conemaugh,	Energy	Subtotal
RETAINED EARNINGS			Subtotal	Capital, LLC	LLC	Company, LLC	(Carried to
			(from pg G - 4b)				Pg G - 4d)

Balance at January 1, 2001			0	0	0	0	0

Add:
	Net income (loss)		20,300	0	0	0	20,300

		Total	20,300	0	0	0	20,300

Deduct:
	Dividends on capital stock:
		Common	20,300	0	0	0	20,300

		Total deductions	20,300	0	0	0	20,300

Balance at December 31, 2001			0	0	0	0	0



OTHER PAID - IN CAPITAL

Balance at January 1, 2001			144,369	0	0	0	144,369


Add (Deduct):
	Dividends on Capital Stock:
		Common	(11,700)	0	0	0	(11,700)
Balance at December 31, 2001			132,669	0	0	0	132,669


		MEMBERS EQUITY


Balance at January 1, 2001			759,643	0	0	0	759,643

Add:
	Net income (loss)		209,643	37,307	0	0	246,950

	Members capital contributions		1,503,982	1,050,105	1	5	2,554,093

	Issuance of Membership
		Interest	115,000	0	0	0	115,000

		Total	2,588,268	1,087,412	1	5	3,675,686

Deduct:
	Dividends paid to parent		3,795	33,055	0	0	36,850

		Total deductions	3,795	33,055	0	0	36,850

Balance at December 31, 2001			2,584,473	1,054,357	1	5	3,638,836

		G - 4d
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny				Allegheny
				Energy Supply				Energy Supply
				Development				Company, LLC
			Prior Page	Services	Combined	Eliminations,		Consolidated
RETAINED EARNINGS			Subtotal	LLC	Totals	etc.		(carried to
			(from pg G - 4c)					pg A - 4a)

Balance at January 1, 2001			0	0	0	0		0

Add:
	Net income (loss)		20,300	0	20,300	(20,300)		0

		Total	20,300	0	20,300	(20,300)		0

Deduct:
	Dividends on capital stock:
		Common	20,300	0	20,300	(20,300)	(11)	0

		Total deductions	20,300	0	20,300	(20,300)		0

Balance at December 31, 2001			0	0	0	0		0



OTHER PAID - IN CAPITAL

Balance at January 1, 2001			144,369	0	144,369	(144,369)		0


Add (Deduct):
	Dividends on Capital Stock:
		Common	(11,700)	0	(11,700)	11,700	(11)	0
Balance at December 31, 2001			132,669	0	132,669	(132,669)		0

		MEMBERS EQUITY


Balance at January 1, 2001			759,643	0	759,643	0		759,643

Add:
	Net income (loss)		246,950	34	246,984	(43,296)		203,688

	Members capital contributions		2,554,093	6,855	2,560,948	(2,114,593)		446,355

	Issuance of Membership
		Interest	115,000	0	115,000	0		115,000

		Total	3,675,686	6,889	3,682,575	(2,157,889)		1,524,686

Deduct:
	Dividends paid to parent		36,850	0	36,850	(36,850)	(11)	0

		Total deductions	36,850	0	36,850	(36,850)		0

Balance at December 31, 2001			3,638,836	6,889	3,645,725	(2,121,039)		1,524,686

		G - 5
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

			Allegheny
			Energy	Allegheny
			Supply	Generating	Subtotal
			Company, LLC	Company	(Carried to
					pg G - 5a)
Cash Flows from Operations:
	Net income (loss)		203,688	20,300	223,988
	Cumulative effect of accounting change, net of taxes		31,147	0	31,147
	Income before accounting change		234,835	20,300	255,135
	Depreciation and amortization		102,803	16,973	119,776
	Deferred investment credit and income taxes, net		244,851	(5,750)	239,101
	Unamortized loss on reacquired debt		0	600	600
	Minority interest in Allegheny Generating Company		5,049	0	5,049
	Unrealized gains on commodity contracts		(598,140)	0	(598,140)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	82,485	0	82,485
		Materials and supplies	(7,303)	(60)	(7,363)
		Deposits	(16,815)	0	(16,815)
		Prepaid Taxes	1,451	0	1,451
		Taxes Recievable	(82,766)	0	(82,766)
		Affiliates accounts receivable/payable, net	(64,294)	(3,371)	(67,665)
		Accounts payable	(63,919)	(385)	(64,304)
		Purchased Options	23,846	0	23,846
		Taxes accrued	(3,084)	(2,805)	(5,889)
		Interest accrued	17,485	15	17,500
		Payroll accrued	32,690	0	32,690
		Customer deposits	4,460	0	4,460
	Other, net		(31,458)	(951)	(32,409)
		Total Cash Flows from Operations	(117,824)	24,566	(93,258)

Cash Flows used in Investing:
	Acquisitions of business and generating assets		(1,548,612)	0	(1,548,612)
	Construction expenditures		(209,036)	(2,205)	(211,241)
	Other investments		0	0	0
		Total Cash Flows used in Investing	(1,757,648)	(2,205)	(1,759,853)


Cash Flows from (used in) Financing:
	Repayment of long - term debt		(7,187)	0	(7,187)
	Issuance of long - term debt		776,594	0	776,594
	Short-term debt, net		520,130	0	520,130
	Notes payable to parent and affiliate		325,000	9,600	334,600
	Dividends paid to minority shareholder		(7,674)	0	(7,674)
	Parent Company contribution		272,530	0	272,530
	Dividends on capital stock:
		Common stock	0	(32,000)	(32,000)
		Total Cash Flows from (used in) Financing	1,879,393	(22,400)	1,856,993


Net Change in Cash and Temporary
	Cash Investments*		3,921	(39)	3,882
		Cash and Temporary Cash Investments at January 1	370	50	420
		Cash and Temporary Cash Investments at December 31	4,291	11	4,302


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	134,561	11,734	146,295
		Income taxes	(46,125)	18,707	(27,418)



*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper,
certificates of deposit, and repurchase agreements, are considered to be the equivalent of cash.

		G - 5a
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

				Energy	Lake
			Prior Page	Financing	Acquisition	Subtotal
			Subtotal	Company, LLC	Company, LLC	(Carried to
			(from pg G - 5)			Pg G - 5b)

Cash Flows from Operations:
	Net income (loss)		223,988	5,958	(3)	229,943
	Cumulative effect of accounting change, net of taxes		31,147	0	0	31,147
	Income before accounting change		255,135	5,958	(3)	261,090
	Depreciation and amortization		119,776	0	4	119,780
	Deferred investment credit and income taxes, net		239,101	0	0	239,101
	Unamortized loss on reacquired debt		600	0	0	600
	Minority interest in Allegheny Generating Company		5,049	0	0	5,049
	Unrealized gains on commodity contracts		(598,140)	0	0	(598,140)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	82,485	0	0	82,485
		Materials and supplies	(7,363)	0	0	(7,363)
		Deposits	(16,815)	0	0	(16,815)
		Prepaid Taxes	1,451	(1,033)	(1)	417
		Taxes Recievable	(82,766)	0	0	(82,766)
		Affiliates accounts receivable/payable, net	(67,665)	(42)	0	(67,707)
		Accounts payable	(64,304)	0	0	(64,304)
		Purchased Options	23,846	0	0	23,846
		Taxes accrued	(5,889)	0	0	(5,889)
		Interest accrued	17,500	0	0	17,500
		Payroll accrued	32,690	0	0	32,690
		Customer deposits	4,460	0	0	4,460
	Other, net		(32,409)	578	0	(31,831)
		Total Cash Flows from Operations	(93,258)	5,461	0	(87,797)

Cash Flows used in Investing:
	Acquisitions of business and generating assets		(1,548,612)	0	0	(1,548,612)
	Construction expenditures		(211,241)	0	0	(211,241)
	Other investments		0	0	0	0
		Total Cash Flows used in Investing	(1,759,853)	0	0	(1,759,853)


Cash Flows from (used in) Financing:
	Repayment of long - term debt		(7,187)	0	0	(7,187)
	Issuance of long - term debt		776,594	0	0	776,594
	Short-term debt, net		520,130	0	0	520,130
	Notes payable to parent and affiliate		334,600	0	0	334,600
	Dividends paid to minority shareholder		(7,674)	0	0	(7,674)
	Parent Company contribution		272,530	0	0	272,530
	Dividends on capital stock:		0
		Common stock	(32,000)	(3,795)	0	(35,795)
		Total Cash Flows from (used in) Financing	1,856,993	(3,795)	0	1,853,198


Net Change in Cash and Temporary
	Cash Investments*		3,882	1,666	0	5,548
		Cash and Temporary Cash Investments at January 1	420	0	0	420
		Cash and Temporary Cash Investments at December 31	4,302	1,666	0	5,968


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	146,295	0	0	146,295
		Income taxes	(27,418)	2,635	0	(24,783)



*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		G - 5b
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny	Allegheny
				Energy Supply	Energy Supply	Energy Supply
				Gleason	Wheatland	Lincoln
			Prior Page	Generating	Generating	Generating	Subtotal
			Subtotal	Facility, LLC	Facility, LLC	Facility, LLC	(Carried to
			(from pg G - 5a)				Pg G - 5c)
Cash Flows from Operations:
	Net income (loss)		229,943	0	0	0	229,943
	Cumulative effect of accounting change, net of taxes		31,147	0	0	0	31,147
	Income before accounting change		261,090	0	0	0	261,090
	Depreciation and amortization		119,780	6,299	5,860	8,225	140,164
	Deferred investment credit and income taxes, net		239,101	0	0	0	239,101
	Unamortized loss on reacquired debt		600	0	0	0	600
	Minority interest in Allegheny Generating Company		5,049	0	0	0	5,049
	Unrealized gains on commodity contracts		(598,140)	0	0	0	(598,140)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	82,485	0	0	0	82,485
		Materials and supplies	(7,363)	0	0	0	(7,363)
		Deposits	(16,815)	0	0	0	(16,815)
		Prepaid Taxes	417	(2,370)	(2,198)	(3,042)	(7,193)
		Taxes Recievable	(82,766)	0	0	0	(82,766)
		Affiliates accounts receivable/payable, net	(67,707)	(424)	(558)	(4,373)	(73,062)
		Accounts payable	(64,304)	1,252	245	323	(62,484)
		Purchased Options	23,846	0	0	0	23,846
		Taxes accrued	(5,889)	1	167	56	(5,665)
		Interest accrued	17,500	0	0	0	17,500
		Payroll accrued	32,690	0	0	40	32,730
		Customer deposits	4,460	0	0	0	4,460
	Other, net		(31,831)	179	2,174	2,517	(26,961)
		Total Cash Flows from Operations	(87,797)	4,937	5,690	3,746	(73,424)

Cash Flows used in Investing:
	Acquisitions of business and generating assets		(1,548,612)	0	0	0	(1,548,612)
	Construction expenditures		(211,241)	(248)	(41)	(37)	(211,567)
	Other investments		0	0	0	0	0
		Total Cash Flows used in Investing	(1,759,853)	(248)	(41)	(37)	(1,760,179)


Cash Flows from (used in) Financing:
	Repayment of long - term debt		(7,187)	0	0	0	(7,187)
	Issuance of long - term debt		776,594	0	0	0	776,594
	Short-term debt, net		520,130	0	0	0	520,130
	Notes payable to parent and affiliate		334,600	0	0	0	334,600
	Dividends paid to minority shareholder		(7,674)	0	0	0	(7,674)
	Parent Company contribution		272,530	0	0	0	272,530
	Dividends on capital stock:
		Common stock	(35,795)	0	0	0	(35,795)
		Total Cash Flows from (used in) Financing	1,853,198	0	0	0	1,853,198


Net Change in Cash and Temporary
	Cash Investments*		5,548	4,689	5,649	3,709	19,595
		Cash and Temporary Cash Investments at January 1	420	0	0	0	420
		Cash and Temporary Cash Investments at December 31	5,968	4,689	5,649	3,709	20,015


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	146,295	0	0	9,170	155,465
		Income taxes	(24,783)	0	0	0	(24,783)



*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		G - 5c
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

					Allegheny
				Allegheny	Energy Supply
			Prior Page	Energy Supply	Conemaugh,	Subtotal
			Subtotal	Capital, LLC	LLC	(Carried to
			(from pg G - 5b)			Pg G - 5d)
Cash Flows from Operations:
	Net income (loss)		229,943	37,307	0	267,250
	Cumulative effect of accounting change, net of taxes		31,147	0	0	31,147
	Income before accounting change		261,090	37,307	0	298,397
	Depreciation and amortization		140,164	0	0	140,164
	Deferred investment credit and income taxes, net		239,101	0	0	239,101
	Unamortized loss on reacquired debt		600	0	0	600
	Minority interest in Allegheny Generating Company		5,049	0	0	5,049
	Unrealized gains on commodity contracts		(598,140)	0	0	(598,140)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	82,485	0	0	82,485
		Materials and supplies	(7,363)	0	0	(7,363)
		Deposits	(16,815)	0	0	(16,815)
		Prepaid Taxes	(7,193)	(694)	0	(7,887)
		Taxes Recievable	(82,766)	0	0	(82,766)
		Affiliates accounts receivable/payable, net	(73,062)	0	0	(73,062)
		Accounts payable	(62,484)	0	0	(62,484)
		Purchased Options	23,846	0	0	23,846
		Taxes accrued	(5,665)	0	0	(5,665)
		Interest accrued	17,500	0	0	17,500
		Payroll accrued	32,730	0	0	32,730
		Customer deposits	4,460	0	0	4,460
	Other, net		(26,961)	(3,347)	683	(29,625)
		Total Cash Flows from Operations	(73,424)	33,266	683	(39,475)

Cash Flows used in Investing:
	Acquisitions of business and generating assets		(1,548,612)	0	0	(1,548,612)
	Construction expenditures		(211,567)	0	0	(211,567)
	Other investments		0	0	0	0
		Total Cash Flows used in Investing	(1,760,179)	0	0	(1,760,179)


Cash Flows from (used in) Financing:
	Repayment of long - term debt		(7,187)	0	0	(7,187)
	Issuance of long - term debt		776,594	0	0	776,594
	Short-term debt, net		520,130	0	0	520,130
	Notes payable to parent and affiliate		334,600	0	0	334,600
	Dividends paid to minority shareholder		(7,674)	0	0	(7,674)
	Parent Company contribution		272,530	0	0	272,530
	Dividends on capital stock:
		Common stock	(35,795)	(33,055)	0	(68,850)
		Total Cash Flows from (used in) Financing	1,853,198	(33,055)	0	1,820,143


Net Change in Cash and Temporary
	Cash Investments*		19,595	211	683	20,489
		Cash and Temporary Cash Investments at January 1	420	0	0	420
		Cash and Temporary Cash Investments at December 31	20,015	211	683	20,909


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	155,465	0	2,998	158,463
		Income taxes	(24,783)	7,548	0	(17,235)



*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		G - 5d
		ALLEGHENY ENERGY SUPPLY COMPANY, LLC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
					Allegheny			Allegheny
					Energy Supply			Energy Supply
				Acadia Bay	Development			Company, LLC
			Prior Page	Energy	Services	Combined	Eliminations,	Consolidated
			Subtotal	Company, LLC	LLC	Totals	etc.	(carried to
			(from pg G - 5c)					pg A - 5a)
Cash Flows from Operations:
	Net income (loss)		267,250	0	34	267,284	(63,596)	203,688
	Cumulative effect of accounting change, net of taxes		31,147	0	0	31,147	0	31,147
	Income before accounting change		298,397	0	34	298,431	(63,596)	234,835
	Depreciation and amortization		140,164	0	0	140,164	(24,202)	115,962
	Deferred investment credit and income taxes, net		239,101	0	0	239,101	0	239,101
	Unamortized loss on reacquired debt		600	0	0	600	(600)	0
	Minority interest in Allegheny Generating Company		5,049	0	0	5,049	0	5,049
	Unrealized gains on commodity contracts		(598,140)	0	0	(598,140)	0	(598,140)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	82,485	0	0	82,485	0	82,485
		Materials and supplies	(7,363)	0	0	(7,363)	0	(7,363)
		Deposits	(16,815)	0	0	(16,815)	0	(16,815)
		Prepaid Taxes	(7,887)	0	0	(7,887)	0	(7,887)
		Taxes Recievable	(82,766)	0	0	(82,766)	0	(82,766)
		Affiliates accounts receivable/payable, net	(73,062)	0	0	(73,062)	26	(73,036)
		Accounts payable	(62,484)	0	0	(62,484)	(24)	(62,508)
		Purchased Options	23,846	0	0	23,846	0	23,846
		Taxes accrued	(5,665)	0	22	(5,643)	0	(5,643)
		Interest accrued	17,500	0	0	17,500	(3,452)	14,048
		Payroll accrued	32,730	0	0	32,730	0	32,730
		Customer deposits	4,460	0	0	4,460	0	4,460
	Other, net		(29,625)	2,478	6,799	(20,348)	22,398	2,650
							600
		Total Cash Flows from Operations	(39,475)	2,478	6,855	(30,142)	(68,850)	(98,992)

Cash Flows used in Investing:
	Acquisitions of business and generating assets		(1,548,612)	0	0	(1,548,612)	0	(1,548,612)
	Construction expenditures		(211,567)	(2,478)	0	(214,045)	0	(214,045)
	Other investments		0	0	(6,855)	(6,855)	0	(6,855)
		Total Cash Flows used in Investing	(1,760,179)	(2,478)	(6,855)	(1,769,512)	0	(1,769,512)


Cash Flows from (used in) Financing:
	Retirement of long - term debt		(7,187)	0	0	(7,187)	0	(7,187)
	Issuance of long - term debt		776,594	0	0	776,594	0	776,594
	Short-term debt, net		520,130	0	0	520,130	0	520,130
	Notes payable to parent and affiliate		334,600	0	0	334,600	0	334,600
	Dividends paid to minority shareholder		(7,674)	0	0	(7,674)	0	(7,674)
	Parent Company contribution		272,530	0	0	272,530	0	272,530
	Dividends on capital stock:
		Common stock	(68,850)	0	0	(68,850)	68,850	0
		Total Cash Flows from (used in) Financing	1,820,143	0	0	1,820,143	68,850	1,888,993


Net Change in Cash and Temporary
	Cash Investments*		20,489	0	0	20,489	0	20,489
		Cash and Temporary Cash Investments at January 1	420	0	0	420	0	420
		Cash and Temporary Cash Investments at December 31	20,909	0	0	20,909	0	20,909


Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)	158,463	0	0	158,463	(63,486)	94,977
		Income taxes	(17,235)	0	0	(17,235)	0	(17,235)



*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		H - 1
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
					Allegheny
				Allegheny	Communications
			Allegheny	Energy	Connect,
			Ventures,	Solutions,	Inc	Subtotal
		ASSETS	Inc	Inc	Consolidated	(Carried to
					(from pg I - 1a)	Pg H - 1a)
Property, plant and equipment:
	At original cost		1,096	869	40,820	42,785
	Accumulated depreciation		(189)	(43)	(1,902)	(2,134)

Investments and other assets:
	Excess of cost over net assets acquired		1,122	0	0	1,122
	Securities of subsidiaries consolidated		111,966	0	0	111,966
	Unregulated investments		10,052	5,548	24,281	39,881
	Intangible assets		0	0	0	0

Current assets:
	Cash and Temporary Cash Investments		2,863	10	88	2,961
	Accounts receivable:
		Electric service	282	1,633	10,729	12,644
		Affiliated	0	0	5,892	5,892
		Other	109	2,094	92	2,295
		Gas accounts receivable	0	0	0	0
		Allowance for uncollectible electric accounts	(47)	(2,261)	(60)	(2,368)
	Materials and supplies - at average cost:
		Operating and construction	172	30	4,675	4,877
	Prepaid taxes		485	0	404	889
	Gas retail contracts		0	0	0	0
	Other		58	67	344	469

Deferred charges:
	Deferred income taxes		14,435	631	0	15,066
	Other		0	579	0	579

		Total assets	142,404	9,157	85,363	236,924

		H - 1a
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)

						Alliance
					Alliance Gas	Energy
				Fellon-McCord	Services	Services	Subtotal
		ASSETS	Subtotal	Associates Inc.	Inc.	Partnership	(Carried to
			(from pg H - 1)				Pg H - 1b)
Property, plant and equipment:
	At original cost		42,785	940	0	75	43,800
	Accumulated depreciation		(2,134)	(445)	0	(45)	(2,624)

Investments and other assets:
	Excess of cost over net assets acquired		1,122	8,276	(5,400)	22,220	26,218
	Securities of subsidiaries consolidated		111,966	0	14,640	0	126,606
	Unregulated investments		39,881	0	0	0	39,881
	Intangible assets		0	0	0	41,625	41,625

Current assets:
	Cash and Temporary Cash Investments		2,961	326	5	972	4,264
	Accounts receivable:
		Electric service	12,644	114	0	0	12,758
		Affiliated	5,892	0	0	70	5,962
		Other	2,295	0	0	0	2,295
		Gas accounts receivable	0	0	0	53,808	53,808
		Allowance for uncollectible electric accounts	(2,368)	0	0	(457)	(2,825)
	Materials and supplies - at average cost:
		Operating and construction	4,877	0	0	1,256	6,133
	Prepaid taxes		889	0	0	0	889
	Gas retail contracts		0	0	0	27,832	27,832
	Other		469	31	0	401	901

Deferred charges:
	Deferred income taxes		15,066	0	7,141	0	22,207
	Other		579	0	0	6,444	7,023

		Total assets	236,924	9,242	16,386	154,201	416,753

		H - 1b
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)

								Allegheny
				AYP				Ventures, Inc
				Energy,	Combined	Eliminations,		Consolidated
ASSETS			Subtotal	Inc	Totals	etc.		(Carried to
			(from pg H - 1a)					Pg A - 1b)
Property, plant and equipment:
	At original cost		43,800	0	43,800	0		43,800
	Accumulated depreciation		(2,624)	0	(2,624)	0		(2,624)

Investments and other assets:
	Excess of cost over net assets acquired		26,218	0	26,218	0		26,218
	Securities of subsidiaries consolidated		126,606	0	126,606	(126,606)	(1)	0
	Unregulated investments		39,881	0	39,881	139	(2)	40,020
	Intangible assets		41,625	0	41,625	0		41,625

Current assets:
	Cash and Temporary Cash Investments		4,264	100	4,364	0		4,364
	Accounts receivable:
		Electric service	12,758	0	12,758	0		12,758
		Affiliated	5,962	1	5,963	(5,963)	(3)	0
		Other	2,295	0	2,295	0		2,295
		Gas accounts receivable	53,808	0	53,808	0		53,808
		Allowance for uncollectible accounts	(2,825)	0	(2,825)	0		(2,825)
	Materials and supplies - at average cost:
		Operating and construction	6,133	0	6,133	0		6,133
	Prepaid taxes		889	1,561	2,450	0		2,450
	Gas retail contracts		27,832	0	27,832	0		27,832
	Other		901	0	901	(399)	(5)	502

Deferred charges:
	Deferred income taxes		22,207	0	22,207	(6,189)	(2)	15,533
						(485)	(4)
	Other		7,023	0	7,023	0		7,023

		Total assets	416,753	1,662	418,415	(139,503)		278,912

		H - 2
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
					Allegheny
				Allegheny	Communications
			Allegheny	Energy	Connect,
			Ventures,	Solutions,	Inc	Subtotal
CAPITALIZATION AND LIABILITIES			Inc	Inc	Consolidated	(Carried to
					(from pg I - 2a)	Pg H - 2a)
Capitalization:
	Common stock of Allegheny Ventures Inc.		1	0	0	1
	Common stock of subsidiaries consolidated		0	1	1	2
	Other paid - in capital		160,985	10,483	67,039	238,507
	Retained earnings		(36,231)	(5,337)	5,882	(35,686)
	Owners Equity		0	0	0	0
	Other Comprehensive Income		(20,232)	0	(82)	(20,314)

	Long-term debt		0	0	10,500	10,500

Current liabilities:
	Short-term debt		0	0	0	0
	Accounts payable to affiliates		6,386	476	0	6,862
	Acounts payable - others		267	239	980	1,486
	Taxes accrued:
		Federal and state income	32	1,327	251	1,610
		Other	1	36	241	278
	Interest accrued		0	0	50	50
	Gas retail contracts		31,122	0	0	31,122
	Other		62	1,927	0	1,989

Deferred credits and other liabilities:
	Deferred income taxes		0	0	485	485
	Other		11	5	16	32

		Total capitalization and liabilities	142,404	9,157	85,363	236,924

		H - 2a
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)

						Alliance
					Alliance Gas	Energy
				Fellon-McCord	Services	Services	Subtotal
CAPITALIZATION AND LIABILITIES			Subtotal	Associates Inc.	Inc.	Partnership	(Carried to
			(from pg H - 1)				Pg H - 2b)
Capitalization:
	Common stock of Allegheny Ventures Inc.		1	0	0	0	1
	Common stock of subsidiaries consolidated		2	6	2	0	10
	Other paid - in capital		238,507	8,269	8,273	0	255,049
	Retained earnings		(35,686)	144	588	0	(34,954)
	Owners Equity		0	0	0	29,593	29,593
	Other Comprehensive Income		(20,314)	0	(9,429)	(31,122)	(60,865)

	Long-term debt		10,500	0	0	0	10,500

Current liabilities:
	Short-term debt		0	0	0	700	700
	Accounts payable to affiliates		6,862	97	0	0	6,959
	Acounts payable - others		1,486	232	0	63,577	65,295
	Taxes accrued:
		Federal and state income	1,610	94	1,391	0	3,095
		Other	278	0	0	640	918
	Interest accrued		50	0	0	1	51
	Gas retail contracts		31,122	0	15,561	69,520	116,203
	Other		1,989	0	0	65	2,054

Deferred credits and other liabilities:
	Deferred income taxes		485	0	0	0	485
	Other		32	400	0	21,227	21,659

		Total capitalization and liabilities	236,924	9,242	16,386	154,201	416,753

		H - 2b
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)

								Allegheny
				AYP				Ventures, Inc
				Energy,	Combined	Eliminations,		Consolidated
CAPITALIZATION AND LIABILITIES			Subtotal	Inc	Totals	etc.		(Carried to
			(from pg H - 2a)					Pg A - 2b)
Capitalization:
	Common stock of Allegheny Ventures Inc.		1	0	1	0		1
	Common stock of subsidiaries consolidated		10	1	11	(11)	(1)	0
	Other paid - in capital		255,049	31,590	286,639	(125,654)	(1)	160,985
	Retained earnings		(34,954)	(29,929)	(64,883)	28,652	(1)	(36,231)
	Owners Equity		29,593	0	29,593	(29,593)		0
	Other Comprehensive Income		(60,865)	0	(60,865)	40,633	(2)	(20,232)

	Long-term debt		10,500	0	10,500	0		10,500

Current liabilities:
	Short-term debt		700	0	700	0		700
	Accounts payable to affiliates		6,959	0	6,959	(5,975)	(3)	984
	Acounts payable - others		65,295	0	65,295	12	(3)	65,307
	Taxes accrued:
		Federal and state income	3,095	0	3,095	0		3,095
		Other	918	0	918	0		918
	Interest accrued		51	0	51	0		51
	Gas retail contracts		116,203	0	116,203	(46,683)	(2)	69,520
	Other		2,054	0	2,054	0		2,054

Deferred credits and other liabilities:
	Deferred income taxes		485	0	485	(485)	(4)	0
	Other		21,659	0	21,659	(399)	(5)	21,260

		Total capitalization and liabilities	416,753	1,662	418,415	(139,503)		278,912

		H - 3
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
					Allegheny
				Allegheny	Communications
			Allegheny	Energy	Connect,
			Ventures,	Solutions,	Inc	Subtotal
			Inc	Inc	Consolidated	(Carried to
					(from pg I - 3)	Pg H - 3a)
Operating revenues:
	Wholesale and other excluding affiliates		0	41,647	13,941	55,588
	Affiliated companies		0	0	539	539
		Total operating revenues	0	41,647	14,480	56,127

Operating expenses:
	Operation:
		Gas Purchases	0	0	0	0
		Other	2,743	41,926	8,811	53,480
	Maintenance		181	31	10	222
	Depreciation		5	41	1,053	1,099
	Taxes other than income taxes		290	133	288	711
	Federal and state income taxes		(1,182)	(228)	2,141	731
		Total operating expenses	2,037	41,903	12,303	56,243
		Operating income	(2,037)	(256)	2,177	(116)

Other income and deductions:
	Other income, net		1,836	368	720	2,924
		Total other income and deductions	1,836	368	720	2,924
		Income before interest charges	(201)	112	2,897	2,808

Interest charges:
	Other interest		1	97	342	440
		Total interest charges	1	97	342	440

	Net income (loss)		(202)	15	2,555	2,368

		H - 3a
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

						Alliance
					Alliance Gas	Energy
				Fellon-McCord	Services	Services	Subtotal
			Subtotal	Associates Inc.	Inc.	Partnership	(Carried to
			(from pg H - 3)				Pg H - 3b)
Operating revenues:
	Wholesale and other excluding affiliates		55,588	974	0	82,543	139,105
	Affiliated companies		539	314	0	0	853
		Total operating revenues	56,127	1,288	0	82,543	139,958

Operating expenses:
	Operation:
		Gas Purchases	0	0	0	81,149	81,149
		Other	53,480	971	0	788	55,239
	Maintenance		222	0	0	0	222
	Depreciation		1,099	38	0	0	1,137
	Taxes other than income taxes		711	43	0	5	759
	Federal and state income taxes		731	93	(14)	0	810
		Total operating expenses	56,243	1,145	(14)	81,942	139,316
		Operating income	(116)	143	14	601	642

Other income and deductions:
	Other income, net		2,924	1	574	1,340	4,839
		Total other income and deductions	2,924	1	574	1,340	4,839
		Income before interest charges	2,808	144	588	1,941	5,481

Interest charges:
	Other interest		440	0	0	1	441
		Total interest charges	440	0	0	1	441

	Net income (loss)		2,368	144	588	1,940	5,040

		H - 3b
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
								Allegheny
				AYP				Ventures, Inc
				Energy,	Combined	Eliminations,		Consolidated
			Subtotal	Inc	Totals	etc.		(Carried to
			(from pg H - 3a)					Pg A - 3b)
Operating revenues:
	Wholesale and other excluding affiliates		139,105	0	139,105	0		139,105
	Affiliated companies		853	0	853	(314)	(6)	539
		Total operating revenues	139,958	0	139,958	(314)		139,644

Operating expenses:
	Operation:
		Gas Purchases	81,149	0	81,149	0		81,149
		Other	55,239	3	55,242	(314)	(6)	54,928
	Maintenance		222	0	222	0		222
	Depreciation		1,137	0	1,137	0		1,137
	Taxes other than income taxes		759	(13)	746	0		746
	Federal and state income taxes		810	4	814	0		814
		Total operating expenses	139,316	(6)	139,310	(314)		138,996
		Operating income	642	6	648	0		648

Other income and deductions:
	Other income, net		4,839	0	4,839	(5,248)	(1)	(409)
		Total other income and deductions	4,839	0	4,839	(5,248)		(409)
		Income before interest charges	5,481	6	5,487	(5,248)		239

Interest charges:
	Other interest		441	0	441	0		441
		Total interest charges	441	0	441	0		441

	Net income (loss)		5,040	6	5,046	(5,248)		(202)

		H - 4
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND OWNERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
					Allegheny
				Allegheny	Communications
			Allegheny	Energy	Connect,	Subtotal
			Ventures,	Solutions,	Inc	(Carried to
		RETAINED EARNINGS	Inc	Inc	Consolidated	Pg H - 4a)
					(from pg I - 4a)

Balance at January 1, 2001			(36,029)	(5,352)	3,327	(38,054)

Add:
	Net income (loss)		(202)	15	2,555	2,368

Balance at December 31, 2001			(36,231)	(5,337)	5,882	(35,686)


		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			96,092	6,552	39,211	141,855

Add (Deduct):
	Capital Contributions from Parent		64,893	3,931	27,828	96,652


Balance at December 31, 2001			160,985	10,483	67,039	238,507


		OWNERS EQUITY

Balance at January 1, 2001			0	0	0	0
Add:
	Net income (loss)		0	0	0	0

	Contributed Capital from
		Allegheny Ventures, Inc.	0	0	0	0

	Contributed Capital from
		Alliance Gas Services Inc.	0	0	0	0
		Total Balance at December 31, 2001	0	0	0	0

		H - 4a
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND OWNERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

						Alliance
					Alliance Gas	Energy
				Fellon-McCord	Services	Services	Subtotal
		RETAINED EARNINGS	Subtotal	Associates Inc.	Inc.	Partnership	(Carried to
			(from pg H - 4)				Pg H - 4b)

Balance at January 1, 2001			(38,054)	0	0	0	(38,054)

Add:
	Net income (loss)		2,368	144	588	0	3,100


Balance at December 31, 2001			(35,686)	144	588	0	(34,954)


		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			141,855	0	0	0	141,855

Add (Deduct):
	Capital Contributions from Parent		96,652	8,269	8,273	0	113,194



Balance at December 31, 2001			238,507	8,269	8,273	0	255,049


		OWNERS EQUITY

Balance at January 1, 2001			0	0	0	0	0
Add:
	Net income (loss)		0	0	0	1,940	1,940

	Contributed Capital from
		Allegheny Ventures, Inc.	0	0	0	13,983	13,983

	Contributed Capital from
		Alliance Gas Services Inc.	0	0	0	13,670	13,670
		Total Balance at December 31, 2001	0	0	0	29,593	29,593

		H - 4b
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND OWNERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)

								Allegheny
				AYP				Ventures, Inc
				Energy,	Combined	Eliminations,		Consolidated
		RETAINED EARNINGS	Subtotal	Inc	Totals	etc.		(Carried to
			(from pg H - 4a)					Pg A - 4b)

Balance at January 1, 2001			(38,054)	(29,935)	(67,989)	31,960		(36,029)

Add:
	Net income (loss)		3,100	6	3,106	(3,308)	(1)	(202)


Balance at December 31, 2001			(34,954)	(29,929)	(64,883)	28,652		(36,231)


		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			141,855	31,172	173,027	(76,935)		96,092

Add:
	Capital Contributions from Parent		113,194	418	113,612	(48,719)		64,893

Balance at December 31, 2001			255,049	31,590	286,639	(125,654)		160,985


		OWNERS EQUITY

Balance at January 1, 2001			0	0	0	0		0
Add:
	Net income (loss)		1,940	0	1,940	(1,940)	(1)	0

	Contributed Capital from
		Allegheny Ventures, Inc.	13,983	0	13,983	(13,983)		0

	Contributed Capital from
		Alliance Gas Services Inc.	13,670	0	13,670	(13,670)		0
		Total Balance at December 31, 2001	29,593	0	29,593	(29,593)		0

		H - 5
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
					Allegheny
				Allegheny	Communications
			Allegheny	Energy	Connect,	Subtotal
			Ventures,	Solutions,	Inc	(Carried to
			Inc	Inc	Consolidated	Pg H - 4a)
					(from pg I - 5a)
Cash Flows from Operations:
	Net income (loss)		(202)	15	2,555	2,368
	Cumulative effect of accounting change, net of taxes		0	0	0	0
	Income before accounting change		(202)	15	2,555	2,368
	Depreciation and amortization		5	41	1,053	1,099
	Deferred investment credit and income taxes, net		0	(1,005)	108	(897)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	237	(699)	(3,699)	(4,161)
		Account receivable from affiliates	0	0	(2,931)	(2,931)
		Gas retail contracts, net	0	0	0	0
		Materials and supplies	(2)	0	(4,675)	(4,677)
		Accounts payable	(140)	136	251	247
		Accounts payable to affiliates	2,835	131	0	2,966
		Prepayment	(485)	765	(342)	(62)
		Taxes accrued	(744)	1,310	(575)	(9)
		Interest accrued	0	0	50	50
	Other, net		(39,479)	(2,960)	1,231	(41,208)
		Total Cash Flows from Operations	(37,975)	(2,266)	(6,974)	(47,215)


Cash Flows used in Investing:
	Other construction expenditures and investments		0	(828)	(16,678)	(17,506)
	Acquisitions of business and generating assets		(25,797)	0	0	(25,797)
	Unregulated investments		866	(1,100)	(15,760)	(15,994)
		Total Cash Flows used in Investing	(24,931)	(1,928)	(32,438)	(59,297)

Cash Flows from (used in) Financing:
	Short - term debt, net		0	0	0	0
	Issuance of long - term debt		0	0	10,500	10,500
	Parent company contribution		64,893	3,931	27,827	96,651
		Total Cash Flows from (used in) Financing	64,893	3,931	38,327	107,151

Net Change in Cash
	Cash Investments*		1,987	(263)	(1,085)	639
		Cash at January 1	876	273	1,173	2,322
		Cash at December 31	2,863	10	88	2,961

Supplemental cash flow information:
	Cash paid during the year for:
		Interest	0	88	307	395
		Income taxes	(1,884)	(445)	2,776	447


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		H - 5a
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
						Alliance
					Alliance Gas	Energy
				Fellon-McCord	Services	Services	Subtotal
			Subtotal	Associates Inc.	Holdings, LLC	Partnership	(Carried to
			(from pg H - 5)				Pg H - 5b)
Cash Flows from Operations:
	Net income (loss)		2,368	144	588	1,940	5,040
	Cumulative effect of accounting change, net of taxes		0	0	0	0	0
	Income before accounting change		2,368	144	588	1,940	5,040
	Depreciation and amortization		1,099	38	0	0	1,137
	Deferred investment credit and income taxes, net		(897)	0	(1,008)	0	(1,905)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	(4,161)	(114)	0	(15,069)	(19,344)
		Account receivable from affiliates	(2,931)	0	0	(70)	(3,001)
		Gas retail contracts, net	0	0	0	0	0
		Materials and supplies	(4,677)	0	0	(1,256)	(5,933)
		Accounts payable	247	232	0	21,691	22,170
		Accounts payable to affiliates	2,966	97	0	0	3,063
		Prepayment	(62)	0	0	0	(62)
		Taxes accrued	(9)	94	1,391	640	2,116
		Interest accrued	50	0	0	1	51
	Other, net		(41,208)	(165)	(966)	(7,605)	(49,944)
		Total Cash Flows from Operations	(47,215)	326	5	272	(46,612)


Cash Flows used in Investing:
	Other construction expenditures and investments		(17,506)	0	0	0	(17,506)
	Acquisitions of business and generating assets		(25,797)	0	0	0	(25,797)
	Unregulated investments		(15,994)	0	0	0	(15,994)
		Total Cash Flows used in Investing	(59,297)	0	0	0	(59,297)

Cash Flows from (used in) Financing:
	Short - term debt, net		0	0	0	700	700
	Issuance of long - term debt		10,500	0	0	0	10,500
	Parent company contribution		96,651	0	0	0	96,651
		Total Cash Flows from (used in) Financing	107,151	0	0	700	107,851

Net Change in Cash
	Cash Investments*		639	326	5	972	1,942
		Cash at January 1	2,322	0	0	0	2,322
		Cash at December 31	2,961	326	5	972	4,264

Supplemental cash flow information:
	Cash paid during the year for:
		Interest	395	0	0	0	395
		Income taxes	447	0	0	0	447


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		H - 5b
		ALLEGHENY VENTURES, INC. AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
							Allegheny
				AYP			Ventures, Inc
				Energy,	Combined	Eliminations,	Consolidated
			Subtotal	Inc	Totals	etc.	(Carried to
			(from pg H - 5a)				Pg A - 5b)
Cash Flows from Operations:
	Net income (loss)		5,040	6	5,046	(5,248)	(202)
	Cumulative effect of accounting change, net of taxes		0	0	0	0	0
	Income before accounting change		5,040	6	5,046	(5,248)	(202)
	Depreciation and amortization		1,137	0	1,137	0	1,137
	Deferred investment credit and income taxes, net		(1,905)	0	(1,905)	0	(1,905)
	Changes in certain current assets and liabilities:
		Accounts receivable, net	(19,344)	0	(19,344)	144	(19,200)
		Account receivable from affiliates	(3,001)	(1)	(3,002)	3,002	0
		Gas retail contracts, net	0	0	0	0	0
		Materials and supplies	(5,933)	0	(5,933)	0	(5,933)
		Accounts payable	22,170	0	22,170	(6,352)	15,818
		Accounts payable to affiliates	3,063	0	3,063	(3,014)	49
		Prepayment	(62)	0	(62)	(404)	(466)
		Taxes accrued	2,116	(20)	2,096	0	2,096
		Interest accrued	51	0	51	0	51
	Other, net		(49,944)	(297)	(50,241)	44,048	(6,193)
		Total Cash Flows from Operations	(46,612)	(312)	(46,924)	32,176	(14,748)


Cash Flows used in Investing:
	Other construction expenditures and investments		(17,506)	(106)	(17,612)	0	(17,612)
	Acquisitions of business and generating assets		(25,797)	0	(25,797)	0	(25,797)
	Unregulated investments		(15,994)	0	(15,994)	0	(15,994)
		Total Cash Flows used in Investing	(59,297)	(106)	(59,403)	0	(59,403)

Cash Flows from (used in) Financing:
	Short - term debt, net		700	0	700	0	700
	Issuance of long - term debt		10,500	0	10,500	0	10,500
	Parent company contribution		96,651	418	97,069	(32,176)	64,893
		Total Cash Flows from (used in) Financing	107,851	418	108,269	(32,176)	76,093

Net Change in Cash
	Cash Investments*		1,942	0	1,942	0	1,942
		Cash at January 1	2,322	100	2,422	0	2,422
		Cash at December 31	4,264	100	4,364	0	4,364

Supplemental cash flow information:
	Cash paid during the year for:
		Interest	395	0	395	0	395
		Income taxes	447	409	856	0	856


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		I - 1
		ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny
				Comunications	Comunications
			Allegheny	Connect	Connect
			Comunications	of Virginia	of Pennsylvania,	Subtotal
		ASSETS	Connect, Inc.	Inc.	LLC	(Carried to
						Pg I - 1a)
Property, plant and equipment:
	At original cost		40,820	0	0	40,820
	Accumulated depreciation		(1,902)	0	0	(1,902)

Investments and other assets:
	Securities of subsidiaries consolidated		569	0	0	569
	Unregulated investments		13,781	0	0	13,781

Current assets:
	Cash and Temporary Cash Investments		87	1	0	88
	Accounts receivable:
		Electric service	10,729	0	0	10,729
		Affiliated	9,999	0	0	9,999
		Other	91	0	0	91
		Allowance for uncollectible accounts	(60)	0	0	(60)
	Materials and supplies - at average cost:
		Operating and construction	0	0	4,675	4,675
	Prepaid taxes		404	0	0	404
	Other		294	0	0	294

Deferred charges:
	Other		0	0	0	0

		Total assets	74,812	1	4,675	79,488

		I - 1a
		ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
								Allegheny
								Communications
				AFN Finance				Connect,
				Company No. 2	Combined	Eliminations,		Inc. Consolidated
		ASSETS	Subtotal	LLC	Totals	etc.		(Carried to
			(from pg I - 1)					Pg H - 1)
Property, plant and equipment:
	At original cost		40,820	0	40,820	0		40,820
	Accumulated depreciation		(1,902)	0	(1,902)	0		(1,902)

Investments and other assets:
	Securities of subsidiaries consolidated		569	0	569	(569)	(1)	0
	Unregulated investments		13,781	10,500	24,281	0		24,281

Current assets:
	Cash and Temporary Cash Investments		88	0	88	0		88
	Accounts receivable:
		Electric service	10,729	0	10,729	0		10,729
		Affiliated	9,999	0	9,999	(4,107)	(2)	5,892
		Other	91	1	92	0		92
		Allowance for uncollectible accounts	(60)	0	(60)	0		(60)
	Materials and supplies - at average cost:
		Operating and construction	4,675	0	4,675	0		4,675
	Prepaid taxes		404	0	404	0		404
	Other		294	50	344	0		344

Deferred charges:
	Other		0	0	0	0		0

		Total assets	79,488	10,551	90,039	(4,676)		85,363

		I - 2
		ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny
				Comunications	Comunications
			Allegheny	Connect	Connect
			Comunications	of Virginia	of Pennsylvania,	Subtotal
		CAPITALIZATION AND LIABILITIES	Connect, Inc.	Inc.	LLC	(Carried to
						Pg I - 2a)
Capitalization:
	Common stock of Allegheny Communications Connect, Inc.		1	0	0	1
	Members Equity		0	0	568	568
	Common stock of subsidiaries consolidated		0	1	0	1
	Other paid - in capital		67,039	0	0	67,039
	Retained earnings		5,882	0	0	5,882
	Other Comprehensive Income		(82)	0	0	(82)

Current liabilities:
	Accounts payable to affiliates		0	0	4,107	4,107
	Acounts payable - others		979	0	0	979
	Taxes accrued:
		Federal and state income	251	0	0	251
		Other	241	0	0	241

Deferred credits and other liabilities:
	Deferred income taxes		485	0	0	485
	Other		16	0	0	16

		Total capitalization and liabilities	74,812	1	4,675	79,488

		I - 2a
		ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
		CONSOLIDATING BALANCE SHEET - DECEMBER 31, 2001
		(000's)

								Allegheny
				AFN Finance				Communications
				Company No. 2	Combined	Eliminations,		Connect,
		CAPITALIZATION AND LIABILITIES	Subtotal	LLC	Totals	etc.		Inc. Consolidated
			(from pg I - 2)					(Carried to
Capitalization:								Pg H - 2)
	Common stock of Allegheny Communications Connect, Inc.		1	0	1	0		1
	Members Equity		568	0	568	(568)	(1)	0
	Common stock of subsidiaries consolidated		1	1	2	(2)	(1)	0
	Other paid - in capital		67,039	0	67,039	0		67,039
	Retained earnings		5,882	0	5,882	0		5,882
	Other Comprehensive Income		(82)	0	(82)	0		(82)

	Long-term debt		0	10,500	10,500	0		10,500

Current liabilities:
	Accounts payable to affiliates		4,107	0	4,107	(4,107)	(2)	0
	Acounts payable - others		979	0	979	1	(1)	980
	Taxes accrued:
		Federal and state income	251	0	251	0		251
		Other	241	0	241	0		241
	Interest accrued		0	50	50	0		50

Deferred credits and other liabilities:
	Deferred income taxes		485	0	485	0		485
	Other		16	0	16	0		16

		Total capitalization and liabilities	79,488	10,551	90,039	(4,676)		85,363

	I - 3
	ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
	CONSOLIDATING STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
	(000's)
						Allegheny
						Communications
						Connect,
		Allegheny	AFN Finance	Combined	Eliminations,	Inc. Consolidated
		Comunications	Company No. 2	Totals	etc.	(Carried to
		Connect, Inc.	LLC			Pg H - 3)
Operating Revenue:
Wholesale and other excluding affiliates		13,941	0	13,941	0	13,941
Affiliated companies		539	0	539	0	539
	Total operating revenues	14,480	0	14,480	0	14,480


Operation:
	Other	7,868	943	8,811	0	8,811
Maintenance		10	0	10	0	10
Depreciation		1,053	0	1,053	0	1,053
Taxes other than income taxes		288	0	288	0	288
Federal and state income taxes		2,141	0	2,141	0	2,141
	Total operating expenses	11,360	943	12,303	0	12,303
	Operating income	3,120	(943)	2,177	0	2,177


Other income, net		(556)	1,276	720	0	720
	Total other income and deductions	(556)	1,276	720	0	720
	Income before interest charges	2,564	333	2,897	0	2,897


Other interest		9	333	342	0	342
	Total interest charges	9	333	342	0	342

Net income (loss)		2,555	0	2,555	0	2,555

		I - 4
		ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny
				Comunications	Comunications
			Allegheny	Connect	Connect
			Comunications	of Virginia	of Pennsylvania,	Subtotal
		RETAINED EARNINGS	Connect, Inc.	Inc.	LLC	(Carried to
						Pg I - 4a)

Balance at January 1, 2001			3,327	0	0	3,327

Add:
	Net income (loss)		2,555	0	0	2,555


Balance at December 31, 2001			5,882	0	0	5,882




		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			39,211	0	0	39,211

Add:
	Capital Contributions from Parent		27,828	0	0	27,828

Balance at December 31, 2001			67,039	0	0	67,039

		MEMBERS EQUITY

Balance at January 1, 2001			0	0	0	0

Add:
	Capital Contributions from Parent		0	0	568	568

Balance at December 31, 2001			0	0	568	568

		I - 4a
		ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF RETAINED EARNINGS, OTHER PAID - IN CAPITAL AND MEMBERS EQUITY
		FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
								Allegheny
				AFN Finance				Communications
				Company No. 2	Combined	Eliminations,		Connect,
		RETAINED EARNINGS	Subtotal	LLC	Totals	etc.		Inc. Consolidated
			(from pg I - 4)					(Carried to
								Pg H - 4)

Balance at January 1, 2001			3,327	0	3,327	0		3,327

Add:
	Net income (loss)		2,555	0	2,555	0		2,555


Balance at December 31, 2001			5,882	0	5,882	0		5,882




		OTHER PAID - IN CAPITAL

Balance at January 1, 2001			39,211	0	39,211	0		39,211

Add:
	Capital Contributions from Parent		27,828	0	27,828	0		27,828

Balance at December 31, 2001			67,039	0	67,039	0		67,039




		MEMBERS EQUITY


Balance at January 1, 2001			0	0	0	0		0

Add:
	Capital Contributions from Parent		568	0	568	(568)	(1)	0

Balance at December 31, 2001			568	0	568	(568)		0

		I - 5
		ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny	Allegheny
				Comunications	Comunications
			Allegheny	Connect	Connect
			Comunications	of Virginia	of Pennsylvania,	Subtotal
			Connect, Inc.	Inc.	LLC	(Carried to
						Pg I - 5a)
Cash Flows from Operations:
	Net income (loss)		2,555	0	0	2,555
	Cumulative effect of accounting change, net of taxes		0	0	0	0
	Income before accounting change		2,555	0	0	2,555
	Depreciation and amortization		1,053	0	0	1,053
	Deferred investment credit and income taxes, net		108	0	0	108
	Changes in certain current assets and liabilities:
		Accounts receivable, net	(3,698)	0	0	(3,698)
		Account receivable from affiliates	(7,038)	0	0	(7,038)
		Materials and supplies	0	0	(4,675)	(4,675)
		Accounts payable	251	0	0	251
		Accounts payable to affiliates	0	0	4,107	4,107
		Prepayment	(342)	0	0	(342)
		Taxes accrued	(575)	0	0	(575)
		Interest accrued	0	0	0	0
	Other, net		711	1	0	712
		Total Cash Flows from Operations	(6,975)	1	(568)	(7,542)


Cash Flows used in Investing:
	Other construction expenditures and investments		(16,678)	0	0	(16,678)
	Unregulated investments		(5,260)	0	0	(5,260)
		Total Cash Flows used in Investing	(21,938)	0	0	(21,938)

Cash Flows from (used in) Financing:
	Issuance of long-term debt		0	0	0	0
	Parent company contribution		27,827	0	568	28,395
		Total Cash Flows from (used in) Financing	27,827	0	568	28,395

Net Change in Cash
	Cash Investments*		(1,086)	1	0	(1,085)
		Cash at January 1	1,173	0	0	1,173
		Cash at December 31	87	1	0	88

Supplemental cash flow information:
	Cash paid during the year for:
		Interest	0	0	0	0
		Income taxes	2,776	0	0	2,776


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

		I - 5a
		ALLEGHENY COMMUNICATION CONNECT, INC AND SUBSIDIARY COMPANIES
		CONSOLIDATING STATEMENTS OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
							Allegheny
				AFN Finance			Communications
				Company No. 2	Combined	Eliminations,	Connect,
			Subtotal	LLC	Totals	etc.	Inc. Consolidated
			(from pg I - 5)				(Carried to
							Pg H - 5)
Cash Flows from Operations:
	Net income (loss)		2,555	0	2,555	0	2,555
	Cumulative effect of accounting change, net of taxes		0	0	0	0	0
	Income before accounting change		2,555	0	2,555	0	2,555
	Depreciation and amortization		1,053	0	1,053	0	1,053
	Deferred investment credit and income taxes, net		108	0	108	0	108
	Changes in certain current assets and liabilities:
		Accounts receivable, net	(3,698)	(1)	(3,699)	0	(3,699)
		Account receivable from affiliates	(7,038)	0	(7,038)	4,107	(2,931)
		Materials and supplies	(4,675)	0	(4,675)	0	(4,675)
		Accounts payable	251	0	251	0	251
		Accounts payable to affiliates	4,107	0	4,107	(4,107)	0
		Prepayment	(342)	0	(342)	0	(342)
		Taxes accrued	(575)	0	(575)	0	(575)
		Interest accrued	0	50	50	0	50
	Other, net		712	(49)	663	568	1,231
		Total Cash Flows from Operations	(7,542)	0	(7,542)	568	(6,974)


Cash Flows used in Investing:
	Other construction expenditures and investments		(16,678)	0	(16,678)	0	(16,678)
	Unregulated investments		(5,260)	(10,500)	(15,760)	0	(15,760)
		Total Cash Flows used in Investing	(21,938)	(10,500)	(32,438)	0	(32,438)

Cash Flows from (used in) Financing:
	Issuance of long-term debt		0	10,500	10,500	0	10,500
	Parent company contribution		28,395	0	28,395	(568)	27,827
		Total Cash Flows from (used in) Financing	28,395	10,500	38,895	(568)	38,327

Net Change in Cash
	Cash Investments*		(1,085)	0	(1,085)	0	(1,085)
		Cash at January 1	1,173	0	1,173	0	1,173
		Cash at December 31	88	0	88	0	88

Supplemental cash flow information:
	Cash paid during the year for:
		Interest	0	307	307	0	307
		Income taxes	2,776	0	2,776	0	2,776


*Temporary cash investments with original maturities of three months or less, generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of cash.

			J - 1
			INDIANA - KENTUCKY ELECTRIC CORPORATION
			BALANCE SHEET -- DECEMBER 31, 2001
			UNAUDITED
			(000's)

			Assets

Electric plant - at original cost, including $43,629
	construction work in progress			462,871
		Less - Accumulated provisions for depreciation and amortization		388,217
				74,654


Current assets:
	Cash and cash equivalents			11
	Accounts receivable			126
	Coal in storage, at average cost			18,273
	Materials and supplies, at average cost			7,594
	Prepaid expenses and other			533
				26,537

Deferred charges and other:
	Future federal income tax benefits			54,046
	Unrecognized pension expense			3,285
	Unrecognized postretirement benefits			23,409
	Unrecognized post employment benefits			1,128
	Deferred termination charges			4,374
	Deferred depreciation			3,477
	Other			9
				89,728

			TOTAL ASSETS	190,919


			J - 1a
			INDIANA - KENTUCKY ELECTRIC CORPORATION
			BALANCE SHEET -- DECEMBER 31, 2001
			UNAUDITED
			(000's)

			Capitalization and Liabilities

Capitalization:
	Common stock, without par value, stated at $200
		per share -
			Authorized - 100,000 shares
			Outstanding - 17,000 shares	3,400


Current liabilities:
	Accounts payable			18,951
	Intercompany payable			8,147
	Sponsor advances for construction			3,012
	Accrued taxes			3,094
	Accrued interest and other			2,970
				36,174

Deferred credits:
	Accrued pension liability			3,285
	Subsidiary advances for construction			66,673
	Net antitrust settlement			2,594
	Deferred liability - tax benefits			54,046
	Postretirement benefits obligation			23,409
	Postemployment benefits obligation			1,128
	Deferred credit - other			210
				151,345

			TOTAL CAPITALIZATION AND LIABILITIES	190,919

		J - 2
		INDIANA - KENTUCKY ELECTRIC CORPORATION
		STATEMENT OF INCOME
		FOR THE YEAR ENDED DECEMBER 31, 2001
		UNAUDITED
		(000's)


Operating revenues:
	Sale of electric energy		164,331
	Other operating revenues		67

		Total operating revenues	164,398

Operating expenses:
	Fuel consumed in operation		102,312
	Other operation		18,042
	Maintenance		18,705
	Depreciation		20,763
	Taxes, other than federal income taxes		4,571

		Total operating expenses	164,393

		Operating income (Loss)	5

Other income			(5)

		Income before interest charges	0

Interest charges
	Interest expense, net		0

		Total interest charges	0

		Net income	0

		J - 3
		INDIANA - KENTUCKY ELECTRIC CORPORATION
		STATEMENT OF CASH FLOWS
		FOR THE YEAR ENDED DECEMBER 31, 2001
		UNAUDITED
		(000's)


Cash From Operations:
	Net Income		0
	Adjustments to reconcile net income to net
		cash provided by (used in) operating activities:
		Depreciation	20,763
	Changes in assets and liabilities:
		Accounts receivable	(117)
		Coal in storage	(1,651)
		Materials and supplies	855
		Prepaid expenses and other	15
		Accounts payable	12,093
		Accrued taxes	(102)
		Accrued interest and other	117
		Change in intercompany receivable / payable	(14,025)
		Other	1,347

		Net cash provided by operations	19,295

Investing Activities:
	Net electric plant additions		(45,209)
	Advances from sponsoring companies		3,012
	Advances from parent		22,903

		Net cash provided by (used in) investing activities	(19,294)


Financing Activities			0

Net increase in cash and cash equivalents			1

Cash and cash equivalents, beginning of year			10

Cash and cash equivalents, end of year			11


Supplemental Disclosures
	Interest paid during the year		0
	Federal income taxes paid during the year		0



For purposes of this statement, the company considers temporary cash investments
to be cash equivalents since they are readily convertible into cash and have
maturities of less than three months.

			J - 4
			OHIO VALLEY ELECTRIC CORPORATION
			BALANCE SHEET -- DECEMBER 31, 2001
			UNAUDITED
			(000's)

			Assets


Electric plant - at original cost, including $34,084
	construction work in progress			347,062
		Less - Accumulated provisions for depreciation and amortization		302,400
				44,662
Investments and other:
	Investment in subsidiary company			3,400
	Advances to subsidiary - construction			66,673
				70,073
Current assets:
	Cash and cash equivalents			13,794
	Investments held by trustee			194,735
	Accounts receivable			17,492
	Intercompany receivable			8,148
	Coal in storage, at average cost			8,269
	Materials and supplies, at average cost			9,473
	Property taxes applicable to subsequent years			1,332
	SO2 Allowances			1,455
	Prepaid expenses and other			417
				255,115
Deferred charges and Other:
	Unamortized debt expense			10,952
	Future federal income tax benefits			27,127
	Unrecognized postemployment benefits expense			1,093
	Unrecognized pension expense			3,639
	Unrecognized postretirement benefits expense			25,030
	SO2 Allowances			819
	Deferred termination charges			3,367
	Other deferred expenses			503
				72,530

			TOTAL ASSETS	442,380


			J - 4a
			OHIO VALLEY ELECTRIC CORPORATION
			BALANCE SHEET -- DECEMBER 31, 2001
			UNAUDITED
			(000's)

			Capitalization and Liabilities

Capitalization:
	Common stock, $100 par value -
		Authorized - 300,000 shares
		Outstanding - 100,000 shares		10,000
	Senior secured notes			332,734
	Retained earnings			1,920
				344,654
Currents liabilities:
	Current portion - long term debt			8,369
	Accounts payable			20,526
	Sponsor advances for construction			198
	Accrued taxes			2,960
	Accrued Federal income taxes			3,308
	Accrued interest and other			3,051
				38,412
Deferred credits:
	Investment tax credits			10,610
	Accrued pension liability			3,639
	Net antitrust settlement			1,517
	Deferred liability - tax benefits			17,263
	Postretirement benefits obligation			25,030
	Postemployment benefits obligation			1,093
	Deferred credit - other			162
				59,314

			TOTAL CAPITALIZATION AND LIABILITIES	442,380

		J - 5
		OHIO VALLEY ELECTRIC CORPORATION
		STATEMENT OF INCOME AND RETAINED EARNINGS
		FOR YEAR ENDED DECEMBER 31, 2001
		UNAUDITED
		(000's)


Operating revenues:
	Sale of electric energy		317,244
	Other operating revenues		887

		Total operating revenues	318,131

Operating expenses:
	Fuel consumed in operation		81,311
	Purchased power		170,344
	Other operation		24,498
	Maintenance		20,527
	Depreciation		11,034
	Taxes, other than federal income taxes		2,857
	Federal income taxes		657

		Total operating expenses	311,228

		Operating income (loss)	6,903

Other income			308

		Income before interest charges	7,211

Interest charges
	Amortization of debt expense		137
	Interest expense, net		4,887

		Total interest charges	5,024

		Net Income	2,187

Retained earnings, beginning of year			1,933

Cash dividends on common stock			2,200

Retained earnings, end of year			1,920

		J - 6
		OHIO VALLEY ELECTRIC CORPORATION
		STATEMENT OF CASH FLOWS
		FOR YEAR ENDED DECEMBER 31, 2001
		UNAUDITED
		(000's)


Cash From Operations:
	Net Income		2,187
	Adjustments to reconcile net income to net
		cash provided by (used in) operating activities:
		Depreciation	11,034
		Debt expense Amortization	137
		Future income tax benefits	(5,273)
Changes in assets and liabilities:
		Accounts receivable	181
		Coal in storage	(4,063)
		Materials and supplies	819
		Property taxes applicable to subsequent years	2,628
		SO2 allowances	1609
		Prepaid expenses and other	22
		Accounts payable	11,238
		Accrued taxes	(4,858)
		Accrued interest and other	14
		Change in intercompany receivable / payable	14,025
		Other	(3901)

		Net cash provided by (used in) operations	25,799

Investing Activities:
	Net electric plant additions		(36,272)
	Purchase of investments		(194,735)
	Advances from sponsoring companies		197
	Advances in subsidiary		(22,903)

		Net cash provided by investing activities	(253,713)

Financing Activities:
	Notes payable maturing in one year, repayments		(6,100)
	Senior secured notes		(7,846)
	Senior secured note borrowings		305,000
	Unamortized debt expense		(10,893)
	Lines-of-Credit repayments		(40,000)
	Dividends-common stock		(2,200)

		Net cash provided by financing activities	237,961

Net increase in cash and cash equivalents			10,047

Cash and cash equivalents, beginning of year			3,747

Cash and cash equivalents, end of year			13,794


Supplemental Disclosures
		Interest paid during the year	6,522
		Federal income taxes paid during the year	5,672

For purposes of this statement, the company considers temporary cash investments
to be cash equivalents since they are readily convertible into cash and have
maturities of less than three months.

EX-3 3 acadiabayex31.htm FIRST AMENDED AND RESTATED LLC AGREEMENT, DATED DECEMBER 7, 2001 CERTIFICATE OF FORMATION EXHIBIT 3.1

CERTIFICATE OF FORMATION

OF

ACADIA BAY ENERGY COMPANY, LLC.

1.          The name of the limited liability company is Acadia Bay Energy Company, LLC.

2.          The address of its registered office in the state of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

3.          IN WITNESS WHEREOF, the undersigned have executed this Certificate of Formation of Acadia Bay Energy Company, LLC this 22^nd day of May, 1996.

                                                         /s/Julia R. Richardson

                                                         __________________

                                                         ___________________

EX-3 4 acadiabayex32.htm CERTIFICATE OF FORMATION, DATED MAY 22, 1996 acadiabay1stamendedandrestatedllcagreement EXHIBIT 3.2

FIRST AMENDED AND RESTATED

LIMITED LIABILITY COMPANY

AGREEMENT

OF

ACADIA BAY ENERGY COMPANY, LLC

This FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Acadia Bay Energy Company, LLC (the "Company") is made and entered into as of December 7, 2001 by Allegheny Energy Supply Company, LLC, ("AE Supply"), a Delaware limited liability company as the sole member (the "Parent" or "Member"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a Member of the Company in accordance with this Agreement and the Delaware Limited Liability Company Act (6 Del.C. Section 18-101 et seq.), as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

The Member, by execution of this Agreement, hereby establishes the Company as a limited liability company pursuant to and in accordance with the Act.

1. Formation. A Certificate of Formation (the "Certificate") was filed May 22, 1996 in the office of the Delaware Secretary of State pursuant to the Act. Each Member is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file any amendments and restatements to the Certificate of Formation required pursuant to the Act and any other documents as may be required or appropriate under the laws of the State of Delaware.

2 Name. The name of the limited liability company is Acadia Bay Energy Company, LLC.

3. Purpose. The Company was formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Registered Office. The address of the registered office of the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

5. Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

6. Principal Business Office. The principal business office of the Company shall be located at 4350 Northern Pike, Monroeville, Pennsylvania, 15146 or at such other location as may hereafter be determined by the Sole Member.

7. Members. The name of the Member is Allegheny Energy Supply Company, LLC. No other person or entity shall be admitted as a member of the Company without the prior written approval of the Member.

8. Powers. The business and affairs of the Company shall be managed by the Members. The Members shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purpose described herein, including all powers, statutory or otherwise, possessed by the managing member under the laws of the State of Delaware. The Members may, by resolution adopted by the Members, designate one or more committees, each to have such lawfully delegable powers and duties as the Members may confer. Except as provided by law, any such committee may have and may exercise the powers and authority of the Members of the Company. Unless otherwise prescribed by the Members, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members of the committee present at a meeting of the committee at which there is a quor um shall be the act of such committee. In addition, the Members may, by resolution adopted by the Members, elect such officers of the Company, as the Members believe to be in the best interests of the Company. The officers of the Company shall have such authority and shall perform such duties as are customarily incident to their respective offices or as may be specified from time to time by resolution of the Members regardless of whether such authority and duties are customarily incident to such office. AE Supply is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file on behalf of the Company any amendments and/or restatements thereof, and any other certificates necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

9. Restriction on Powers. Notwithstanding any other provision of this Agreement and any provision of law, the Company shall not, without the consent of the Members (a) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) consent to the institution of bankruptcy or insolvency proceedings against it or to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (c) file a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a part of its property, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any corporate action in furtherance of the actions set forth in clauses (a) through (f) of this Section 9.

10. Dissolution. The Company shall dissolve, and its affairs shall be wound up upon the first to occur of the following: (a) the written consent of the Members, (b) the expulsion, bankruptcy or dissolution of a Member or the occurrence of any other event which terminates the continued membership of a Member in the Company, unless, within ninety days after the occurrence of such an event, the remaining Members agree in writing to continue the business of the Company, or (c) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

11. Capital Contributions. Without creating any rights in favor of any third party, initial capital contributions shall be made by the Members at the times and in the amounts determined by the Members, and may be made in cash or other property as determined by the Members. The Members have contributed amounts in cash, and no other property, to the Company according to the percentage interests set forth on Annex I hereto.

12. Additional Contributions. The Members are not required to make any additional capital contributions to the Company. However, the Members may make additional capital contributions to the Company.

13. Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the ownership percentage of the Members.

14. Distributions. The Company shall make distributions (including, without limitation, interim distributions) of cash or other property to the Members in the same proportion as their then capital contributions, at such times and in such amounts as the Members may determine.

15. Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

16. Liability of Members. The Members shall not have any liability for the obligations or liabilities of the Company except to the extent provided in the Act.

17. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this First Amended and Restated Limited Liability Company Agreement as of the date first written above.

Member:

ALLEGHENY ENERGY SUPPLY

COMPANY, LLC,

a Delaware limited liability company

By: /s/ Patricia J. Clark

Name: Patricia J. Clark

Title: Assistant Secretary

U:\CorpSec\CorporateFilings\St Joseph Development Services, LLC\Acadia Bay 1st Amended and Restated LLC Agreement.doc

ANNEX I

Percentage Interests of the Sole Member

Allegheny Energy Supply Company, LLC 100%

EX-3 5 accofohioex31.htm ARTICLES OF ORGANIZATION Prescribed by J

EXHIBIT 3.1

Prescribed by J. Kenneth Blackwell
Please obtain fee amount and mailing instructions from the Forms Inventory List (using the 3 digit form # located at the bottom of this Form). To obtain the Forms Inventory List or for assistance, please call Customer S Central Ohio: (614)-466-3910 Toll Free: 1-877-SOS-FILE (1-877-767-3453)	Expedite this form ____ Yes

ARTICLES OF ORGANIZATION

(Under Section 1705.04 of the Ohio Revised Code)

Limited Liability Company

The undersigned, desiring to form a limited liability Company, under Chapter 1705 of the Ohio revised Code, do hereby state the following:

FIRST:          The name of said limited liability company shall be:

                       Allegheny Communications Connect of Ohio, LLC

SECOND:      This limited liability company shall exist for a period of:     perpetual

THIRD:          The address to which interested persons may direct requests for copies of any operating agreement and any bylaws of this limited liability company is:

                    Gary A. Jack, 1310 Fairmont Avenue

                               (street address or post office box)
                                        Fairmont                                        WV                                        26554
                            (city, village, or township)                           (state)                                     (zip code)

[ ] Please check this box if additional provisions are attached hereto

provisions attached hereto are incorporated herein and made a part of these articles of organization.

115-LCA Page 1 of 4 Version 7/15/99

J. Kenneth Blackwell
Secretary of State

FOURTH: Purpose (optional)

Applicant will be engaged in the business of providing telecommunications service, information services, and like services and products and/or services and products related or incidental thereto.

IN WITNESS WHEREOF, we have hereunto subscribed our names on _____________
(date)

Signed /s/ Gary A. Jack Name: Gary A. Jack	Signed ____________________________ Name: ____________________________
Signed ____________________________ Name: ____________________________	Signed ____________________________ Name: ____________________________
Signed ____________________________ Name: ____________________________	Signed ____________________________ Name: ____________________________
Signed ____________________________ Name: ____________________________	Signed ____________________________ Name: ____________________________
Signed ____________________________ Name: ____________________________	Signed ____________________________ Name: ____________________________

(If insufficient space for all signatures, please attach a separate sheet containing additional signatures)

115-LCA Page 2 of 4 Version 7/15/99

J. Kenneth Blackwell
Secretary of State

	Prescirbed by: J. Kenneth Blackwell Secretary of State 30 East Broad St. 14^th Floor Columbus, OH 43266-0418

ORIGINAL APPOINTMENT OF AGENT
(for limited liability company)

The undersigned being at least a majority of the members of Allegheny Communication Connect of Ohio, LLC, hereby appoint Daniel R. Friend to be the agent upon whom any process, notice or demand required (name of agent)

or permitted by statute to be served upon the limited liability company may be served. The complete address of the agent is:

101 Greene Street

(street address P.O. Boxes are not acceptable)

Marietta, Ohio 45750
(city, village, township) (zip)

By: /s/ Gary A. Jack Name: Gary A. Jack	By: ______________________________ (authorized member, manager, or representative) Name: ____________________________
By: ______________________________ (authorized member, manager, or representative) Name: ____________________________	By: ______________________________ (authorized member, manager, or representative) Name: ____________________________
By: ______________________________ (authorized member, manager, or representative) Name: ____________________________	By: ______________________________ (authorized member, manager, or representative) Name: ____________________________

ACCEPTANCE OF APPOINTMENT

The undersigned, named herein as the statutory agent for Allegheny Communications Connect of Ohio, LLC hereby acknowledges and accepts the appointment of agent for said limited liability Company.

/s/ Daniel R. Friend

115-LCA Page 3 of 4 Version 7/15/99

EX-3 6 accofwvex31.htm ARTICLES OF ORGANIZATION JOE MANCHIN, III

				EXHIBIT 3.1
JOE MANCHIN, III Secretary of State State Capitol, W-139 1900 Kanawha Blvd. East Charleston, WV 25305-0770				Penny Barker, Supervisor CORPORATIONS DIVISION Tel: (304) 558-8000 Fax: (304) 558-0900
		WEST VIRGINIA ARTICLES OF ORGANIZATION OF LIMITED LIABILITY COMPANY		CTRL # _ _ _ _ _
We, acting as organizers according to West Virginia Code Section 31B-2-202, adopt the following Articles of Organization for a West Virginia Limited Liability Company:
1.	The name of the West Virginia limited liability company shall be: [The name must contain one of the required terms such as limited liability company" or abbreviations such as "LLC" or "PLLC"see instructions for list of acceptable terms.]		Allegheny Communications Connect of West Virginia, LLC
2.	The company will be an: [X] LLC		[ ] professional LLC for the profession of _________
3.	The physical address (not a PO box) in West Virginia of the initial designated office of the company will be: [need not be a place of the company's business]		Street: 1310 Fairmont Avenue City/State/Zip: Fairmont, WV 26554
4.	The mailing address of the principal office will be:		Street/Box: 100 Brush Run Road City/State/Zip: Greensburg, PA 15601
5.	The name and street address of the person to whom notice of process may be sent is:		Name: Gary A. Jack, Esq. Street: 1310 Fairmont Avenue City/State/Zip: Fairmont, WV 26554
	The mailing address of the above agent of process, if different, is:		Street/Box: __________________ City/State/Zip: __________________
6.	The name and address of each organizer and of each member with signature authority (attach additional page).

Name	No. & Street	City, State, Zip
Gary A. Jack (organizer)	1310 Fairmont Avenue	Fairmont, WV 26554
Allegheny Communications Connect, Inc. (member)	100 Brush Run Road	Greensburg, PA 15601

7.	The company will be:	[ X ] an at-will company, for an indefinite period. [ ] a term company, for the term of __________ years.
FORM LLD-1 Issued by the Secretary of State, State Capitol, Charleston, WV 25305-0770 Revised 1/01

WEST VIRGINIA ARTICLES OF ORGANIZATION OF LIMITED LIABILITY COMPANY Page 2
8.	The company will be:	[ X ]	member-managed. [Professional LLCs, please list all members on attached sheet to assure compliance with licensing requirements.]
		[ ]	manager-managed, and the name and address of each initial manager is listed below, [Attach extra sheet if needed.]
9.	All or specified members of a limited liability company are liable in their capacity as members for all or specified debts, obligations or liabilities of the company.	[ ] [ ]	NO All debts, obligations and liabilities are those of the company. YES Thos persons who are liable in their capacity as members for all debts, obligations or liability of the company have consented in writing to the adoption of the provision or to be bound by the provision.
10.	The purposes for which this limited liability company is formed are as follows: (Describe the type(s) of business activity which will be conducted, for example, "real estate," "construction of residential and commercial buildings," "commercial printing," "professional practice of architecture.") Applicant will be engaged in the business of providing telecommunications services, information services, other like services or products and/or services or products that are related or incidental thereto.
11.	Other provisions which may be set forth in the operating agreement or matters not inconsistent with law: [See instructions for further information; use extra pages if necessary.] NONE
12.	The number of pages attached and included in these Articles is ___________.
13.	The requested effective date is: [Requested date may not be earlier than filing nor later than 90 days after filing.]	[ X ] [ ]	The date & time of filing The following date _______________ and time _________
14.	ACKNOWLEDGEMENT: [Articles must be signed in the name of the company by a: (1) manager of a manger-managed company; (2) member of a member-managed company; (3) person organizing the company, if the company has not been formed; or (4) attorney-in-fact for any of the above. Documents with photocopied signature cannot be accepted.] I, the undersigned, for the purpose of forming a limited liability company under the laws of the State of West Virginia, do make and file this "Articles of Organization" in the name of and on behalf of the company. Gary A. Jack Attorney /s/ Gary A. Jack Name [print or type] Title/Capacity Signature
[Signer must acknowledge the signature before a notary, and notary must apply seal for document to be recorded.] STATE OF West Virginia, COUNTY OF Marion; I, Twila M. West, a Notary Public, hereby certify that Gary A. Jack, whose name is signed to the foregoing Articles of Organization, this day personally appeared before me and acknowledged his/her signature. My commission expires June 9, 2008 /s/ Twila M. West, Notary Public ___________Articles prepared by Gary A. Jack, (address) 1310 Fairmont Avenue, Fairmont, WV 26554 SEAL

EX-3 7 aesupplycapitalex31.htm CERTIFICATE OF FORMATION, DATED APRIL 11, 2001 CERTIFICATE OF FORMATION EXHIBIT 3.1

CERTIFICATE OF FORMATION

OF

ALLEGHENY ENERGY SUPPLY CAPITAL, LLC

1. The name of the limited liability company is ALLEGHENY ENERGY SUPPLY CAPITAL, LLC

2. The address of its registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of ALLEGHENY ENERGY SUPPLY CAPITAL, LLC this 11th day of
April, 2001.

Member:

ALLEGHENY ENERGY SUPPLY COMPANY, LLC, a

Delaware Limited Liability Company

By: /s/ Michael P. Morrell___

Name: Michael P. Morrell

Title: President

EX-3 8 aesupplycapitalex32.htm LLC AGREEMENT, DATED APRIL 12, 2001 LIMITED LIABILITY COMPANY AGREEMENT LIMITED LIABILITY COMPANY AGREEMENT

OF

ALLEGHENY ENERGY SUPPLY CAPITAL, LLC

This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Allegheny Energy Supply Capital, LLC (the "Company") is made and entered into as of April 12, 2001 by Allegheny Energy Supply Company, LLC, a Delaware limited liability company ("Parent"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a member of the Company in accordance with this Agreement and the Delaware Limited Liability Company Act, as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

WHEREAS, Parent desires to form a limited liability company under the Act in accordance with the terms of this Agreement.

NOW, THEREFORE, Parent hereby adopts the following as the Company's "limited liability company agreement" (as that term is used in the Act):

Formation. Parent will form the Company as a limited liability company pursuant to the Act, become the sole member of the Company upon its formation and be shown as such on the books and records of the Company. Promptly after execution of this Agreement by Parent, Parent will execute, file and record a Certificate of Formation of the Company (the "Certificate") in the office of the Secretary of State of Delaware pursuant to the Act. Each of the Members is authorized and one of the Members shall also file and record any other amendments to the Certificate required pursuant to the Act and any other documents as may be required or appropriate under the laws of the State of Delaware.

Name. The name of the limited liability company formed hereby is Allegheny Energy Supply Capital, LLC

Purpose. The purpose of the Company is to engage in all lawful business for which limited liability companies may be formed under the Act and the laws of the State of Delaware.

Registered Office. The address of the registered office of the Company in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

Members. The name of the sole initial Member is Allegheny Energy Supply Company, LLC. No other person or entity shall be admitted as a member of the Company without the prior written approval of Parent.

Powers. The Company shall have the power and authority to do any and all acts necessary or convenient to or in furtherance of the purposes described in Section 8 hereof, including all power and authority, statutory or otherwise, possessed by, or which may be conferred upon, limited liability companies under the laws of the State of Delaware.

Management.

Directors. Subject to the provisions of the Act and any limitations in this Agreement as to action required to be authorized or approved by the Members, the business and affairs of the Company shall be managed and all its powers shall be exercised by or under the direction of a Board of Directors ("Board of Directors"). Without prejudice to such general powers, but subject to the same limitations, the Board of Directors shall be empowered to conduct, manage and control the business and affairs of the Company and to make such rules and regulations therefor not inconsistent with law or this Agreement, as the Board of Directors shall deem to be in the best interest of the Company.

Number, Classes and Qualifications of Directors.

The authorized number of Directors which shall constitute the Board of Directors shall be three (3). The Members shall designate all Directors.

A Director must be a natural person who is at least eighteen (18) years of age.

The Members shall be entitled to designate any Director as chairman of the Board of Directors.

Removal of Directors. Any Director or the entire Board of Directors may be removed at any time, with or without cause, by the Members.

Majority Consent. A majority vote or, in the circumstances referred to in subsection (l) of this section, unanimous written consent of the Board of Directors shall be required to authorize or approve any actions of the Board of Directors.

Vacancies; Resignations.

A vacancy shall be deemed to exist in case of the death, resignation or removal, declaration of bankruptcy under the laws of any jurisdiction, mental incompetence adjudged by a court of competent jurisdiction in any state or country (including, without limitation, any territory, dependency or possession of the United States of America), or conviction by any court in any state or country (including, without limitation, any territory, dependency or possession of the United States of America) of any felony or any misdemeanor involving moral turpitude of any Director; or if the authorized number of Directors be increased.

Any Director may resign effective upon giving thirty (30) days written notice to the Members, unless the notice specifies a later time for the effectiveness of such resignation.

The Members shall appoint or elect a successor thereto, to take office effective upon the departure of the vacating Director or at such later time as shall be designated by the Members.

Initial Directors. The initial Directors to hold office from and after the date of this Agreement until their removal pursuant to this Agreement or until their respective successors are appointed and qualified pursuant to this Agreement, are as follows:

Bruce Sedlock

Terry Burke

Robert Grier

Compensation of Directors. Directors of the Company shall be entitled to such compensation as shall be approved by the Members.

Meetings of Directors. Meetings of the Board of Directors for any purpose or purposes may be called at any time by any Director. Notice of the time and place of meetings shall be delivered personally or by telephone to each Director, or sent by first-class mail, courier service, or by facsimile transmission, charges prepaid, addressed to such Director at his or her address as it appears upon the records of the Company or, if it is not so shown on the records and is not readily ascertainable, at his or her last known address. In case such notice is mailed, it shall be deposited in the United States mail at least seven days prior to the time of the holding of the meeting. In case such notice is delivered personally or by telephone as above provided, it shall be so delivered at least forty-eight (48) hours prior to the time of the holding of the meeting. Any notice given personally or by telephone may be communicated to either the Directors or to a person at the office of the Directors whom the person giving the notice has reason to believe will promptly communicate it to the Directors. Such deposit in the mail, delivery to a courier service, transmission by electronic means or delivery, personally or by telephone, as above provided, shall be due, legal and personal notice to such Directors. The notice need not specify the purpose of the meeting.

Quorum: Alternates; Participation in Meetings By Conference Telephone Permitted; Vote Required for Action.

Except as hereinafter provided, presence of fifty percent (50%) or more of the authorized number of Directors at a meeting of the Board of Directors constitutes a quorum for the transaction of business.

Each Director shall have one (1) vote. Each Director may, by written notice given to the chairman of the Board of Directors, appoint an alternate to attend and vote at meetings, or at any particular meeting, if the Director is unable to attend. The presence of an alternate at any meeting shall be deemed to be presence of the Director at such meeting for all purposes, and the vote of such alternate shall be deemed to be the vote of the relevant Director. No Director may retract the vote of any duly appointed alternate on behalf of such Director, or other Director voting on his or her behalf, after the close of the meeting at which such vote is made. In the event that the Director who appointed an alternate attends a meeting, the appointment of such alternate shall be ineffective for such meeting, and the alternate shall have no right to be present or to participate in that meeting.

Every act or decision done or made by a vote required hereunder shall be regarded as the act of the Board of Directors.

Place of Meetings. Meetings of the Board of Directors shall be held at any place within the State of Nevada that has been designated from time to time by the Board of Directors. In the absence of such designation, meetings of the Board of Directors shall be held at the principal executive office of the Company.

Waiver of Notice; Consent to Meeting. Notice of a meeting need not be given to any Director who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such Director. All such waivers, consents and approvals shall be filed with the Company's records and made a part of the minutes of the meeting.

Action by Board of Directors Without a Meeting. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all the Directors authorized to vote shall individually or collectively consent in writing to such action. Such written consent or consents may be in counterparts and transmitted by facsimile or electronic mail and shall be filed with the minutes of the proceedings of the Board of Directors. Such actions by written consent shall have the same force and effect as a vote of the Board of Directors.

Officers.

Appointment and Tenure.

The Directors may, from time to time, designate officers of the Company to carry out the day-to-day business of the Company.

The officers of the Company shall be comprised of one or more individuals designated from time to time by the Directors. Each officer shall hold his offices for such terms and shall have such authority and exercise such powers and perform such duties as shall be determined from time to time by the Directors. Any number of offices may be held by the same individual. The salaries or other compensation, if any, of the officers and agents of the Company shall be fixed from time to time by the Directors.

The officers of the Company may consist of a president/chief executive officer, a secretary and a treasurer. The Directors may also designate one or more vice presidents, assistant secretaries, and assistant treasurers. The Directors may designate such other officers and assistant officers and agents as the Directors shall deem necessary.

Removal. Any officer may be removed as such at any time by the Directors, either with or without cause, in the discretion of the Directors.

President/Chief Executive Officer. The president/chief executive officer, if one is designated, shall be the chief executive officer of the Company, shall have general and active management of the day-to-day business and affairs of the Company as authorized from time to time by the Directors and shall be authorized and directed to implement all orders, resolutions and business plans adopted by the Directors.

Vice Presidents. The vice presidents, if any are designated, in the order of their seniority, unless otherwise determined by the Directors, shall, in the absence or disability of the president/chief executive officer, perform the duties and have the authority and exercise the powers of the president/chief executive officer. They shall perform such other duties and have such other authority and powers as the Directors may from time to time prescribe.

Secretary; Assistant Secretaries. The secretary, if one is designated, shall perform such duties and have such powers as the Directors may from time to time prescribe. The assistant secretaries, if any are designated, in the order of their seniority, unless otherwise determined by the Directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the Directors may from time to time prescribe.

Treasurer; Assistant Treasurers. The treasurer, if one is designated, shall have custody of the Company's funds and securities and shall keep full and accurate accounts and records of receipts, disbursements and other transactions in books belonging to the Company, and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated from time to time by the Directors. The treasurer shall disburse the funds of the Company as may be ordered by the Directors, taking proper vouchers for such disbursements, and shall render the president/chief executive officer and the Directors, when so directed, an account of all his transactions as treasurer and of the financial condition of the Company. The treasurer shall perform such other duties and have such other powers as the Directors may from time to time prescribe. If required by the Directors, the treasurer shall give the Company a bond of such type, character and amount as the Directors may require. The assistant treasurers, if any are designated, in the order of their seniority, unless otherwise determined by the Directors, shall, in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. They shall perform such other duties and have such other powers as the Directors may from time to time prescribe.

Dissolution. The Company shall dissolve, and its affairs shall be wound up, upon the first to occur of the following: (a) the written consent of all of the Members, (b) the death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member or the occurrence of any other event which terminates the continued membership of a Member in the Company, unless, within ninety days after the occurrence of such an event, the remaining Members agree in writing to continue the business of the Company, or (c) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

Capital Contributions. Without creating any rights in favor of any third party, initial capital contributions shall be made by the Member at the time and in the amount determined by the Member, and may be made in cash or other property as determined by the Member.

Additional Contributions. No Member is required to make any additional capital contribution to the Company.

Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the capital contributions of the Members.

Distributions. The Company shall make distributions (including, without limitation, interim distributions) of cash or other property to the Members in the same proportion as their then capital contributions, at such times and in such amounts as the Members may determine.

Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

Exculpation. Neither the Board of Directors, the Members, nor any owner, officer, director or employee of the Company or the Members, shall be liable, responsible or accountable in damages or otherwise to the Company or the Members for any action taken or failure to act (even if such action or failure to act constituted the negligence of a person) on behalf of the Company within the scope of the authority conferred on the person described in this Agreement or by Law unless such act or omission was performed or omitted fraudulently or constituted gross negligence or willful misconduct. To the extent that, at law or in equity, the Board of Directors, the Members, or any owner, officer, director or employee of the Company or the Members have duties (including fiduciary duties) and liabilities relating to the Company, the Board of Directors, the Members or any owner, officer, director or employee of the Company or the Members acting under this Agreement shall not be liable to the Company or the Members for their reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of the Board of Directors, the Members or any owner, officer, director or employee of the Company or the Members otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of the Board of Directors, the Members or any owner, officer, director or employee of the Company or the Members.

Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware applicable to agreements made and to be performed wholly within that State, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the date first written above.

Member:

ALLEGHENY ENERGY SUPPLY COMPANY, LLC,

a Delaware limited liability company

By: /s/ Thomas K. Henderson
Name: Thomas K. Henderson
Title: Vice President

EX-3 9 aesupplydevelopex31.htm CERTIFICATE OF FORMATION, DATED OCTOBER 11, 2001

EXHIBIT 3.1

CERTIFICATE OF FORMATION CERTIFICATE OF FORMATION
OF
ALLEGHENY ENERGY SUPPLY DEVELOPMENT SERVICES, LLC

1. The name of the limited liability company is ALLEGHENY ENERGY SUPPLY DEVELOPMENT SERVICES, LLC.

2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of ALLEGHENY ENERGY SUPPLY DEVELOPMENT SERVICES, LLC this 11^th day of October , 2001.

Member:

ALLEGHENY ENERGY SUPPLY COMPANY, LLC

a Delaware limited liability company

By: /s/ Michael P.Morrell

Name: Michael P. Morrell

Title: President

EX-3 10 aesupplydevelopex32.htm LLC AGREEMENT, DATED OCTOBER 11, 2001

EXHIBIT 3.2

LIMITED LIABILITY COMPANY AGREEMENT LIMITED LIABILITY COMPANY AGREEMENT

OF

ALLEGHENY ENERGY SUPPLY DEVELOPMENT SERVICES, LLC

This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Allegheny Energy Supply Development Services, LLC (the "Company") is made and entered into as of this 11th day of October, 2001 by Allegheny Energy Supply Company, LLC, a Delaware limited liability company ("Parent"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a member of the Company in accordance with this Agreement and the Delaware Limited Liability Company Act, as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

WHEREAS, Parent desires to form a limited liability company under the Act in accordance with the terms of this Agreement.

NOW, THEREFORE, Parent hereby adopts the following as the Company's "limited liability company agreement" (as that term is used in the Act):

1. Formation. Parent will form the Company as a limited liability company pursuant to the Act, become the sole member of the Company upon its formation and be shown as such on the books and records of the Company. Promptly after execution of this Agreement by Parent, Parent will execute, file and record a Certificate of Formation of the Company (the "Certificate") in the office of the Secretary of State of Delaware pursuant to the Act. Each of the Members is authorized and one of the Members shall also file and record any other amendments to the Certificate required pursuant to the Act and any other documents as may be required or appropriate under the laws of the State of Delaware.

2. Name. The name of the limited liability company formed hereby is Allegheny Energy Supply Development Services, LLC.

3. Purpose. The purpose of the Company is to engage in all lawful business for which limited liability companies may be formed under the Act and the laws of the State of Delaware.

4. Registered Office. The address of the registered office of the Company in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

5. Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

6. Members. The name of the sole initial Member is Allegheny Energy Supply Company, LLC. No other person or entity shall be admitted as a member of the Company without the prior written approval of Parent.

7. Powers. The business and affairs of the Company shall be managed by the Members. Each of the Members shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purpose described herein, including all powers, statutory or otherwise, possessed by managing members under the laws of the State of Delaware. The Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, designate one or more committees, each to have such lawfully delegable powers and duties as the Members may confer. Except as provided by law, any such committee may have and may exercise the powers and authority of the Members of the Company. Unless otherwise prescribed by the Members, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members of the committee present at a meeting of the committee at which there is a quorum shall be the act of such committee. In addition, the Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, elect such officers of the Company as the Members believe to be in the best interests of the Company. The officers of the Company shall have such authority and shall perform such duties as are customarily incident to their respective offices or as may be specified from time to time by resolution of the Members regardless of whether such authority and duties are customarily incident to such office.

8. Restriction on Powers. Notwithstanding any other provision of this Agreement and any provision of law, the Company shall not, without the consent of all of the Members (a) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) consent to the institution of bankruptcy or insolvency proceedings against it or to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (c) file a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a part of its property, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any corporate action in furtherance of the actions set forth in clauses (a) through (f) of this Section 8.

9. Dissolution. The Company shall dissolve, and its affairs shall be wound up, upon the first to occur of the following: (a) the written consent of all of the Members, (b) the death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member or the occurrence of any other event which terminates the continued membership of a Member in the Company, unless, within ninety days after the occurrence of such an event, the remaining Members agree in writing to continue the business of the Company, or (c) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

10. Capital Contributions. Without creating any rights in favor of any third party, initial capital contributions shall be made by the Members at the times and in the amounts determined by the Members, and may be made in cash or other property as determined by the Members.

11. Additional Contributions. No Member is required to make any additional capital contribution to the Company.

12. Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the capital contributions of the Members.

13. Distributions. The Company shall make distributions (including, without limitation, interim distributions) of cash or other property to the Members in the same proportion as their then capital contributions, at such times and in such amounts as the Members may determine.

14. Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

15. Liability of Members. The Members shall not have any liability for the obligations or liabilities of the Company except to the extent provided in the Act.

16. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware applicable to agreements made and to be performed wholly within that State, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the date first written above.

Member:

ALLEGHENY ENERGY SUPPLY COMPANY, LLC
a Delaware limited liability company
By: /s/ Michael P. Morrell
Name: Michael P. Morrell
Title: President

ANNEX I

Percentage Interests of the Members

Allegheny Energy Supply Company, LLC 100%

EX-3 11 afnfinanceex31.htm CERTIFICATE OF FORMATION, DATED MAY 31,2001

EXHIBIT 3.1

CERTIFICATE OF FORMATION CERTIFICATE OF FORMATION

OF

AFN FINANCE COMPANY NO. 2, LLC

          This Certificate of Formation of AFN Finance Company No. 2, LLC is being duly executed and filed by the undersigned, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act.

          1.   The name of the limited liability company formed hereby is AFN Finance Company No. 2, LLC (the "Company").

          2.   The address of the registered office of the Company in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name and address of the registered agent of the Company is
The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

3. The nature of the businesses and purposes to be conducted and promoted by the Company is to engage exclusively in the following activities: (a) to borrow money from one or more financial institutions and to loan such money to AFN, LLC, a Delaware limited liability company and an exempt telecommunications company under the Public Utility Holding Company Act of 1935, and/or its wholly owned subsidiaries ("AFN"), (b) to obtain letters of credit for the benefit of AFN, and (c) to engage in any lawful act or activity and to exercise any power permitted to limited liability companies organized under the Delaware Limited Liability Company Act that are incidental to and necessary, suitable or convenient for the accomplishment of the businesses and purposes specified in clauses (a) and (b) above.

          IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of AFN Finance Company No. 2, LLC this 31^st day of May, 2001.

                                                         Member
                                                         Allegheny Communications Connect, Inc.
                                                         a Delaware corporation

                                                         By:     /s/ Denise F. Henderson
                                                         Name:     Denise F. Henderson
                                                         Title:      Assistant Secretary

EX-3 12 afnfinance32.htm LLC AGREEMENT, DATED MAY 31, 2001

EXHIBIT 3.2

ST&B DRAFT 8/24/00

______________________________

LIMITED LIABILITY COMPANY AGREEMENT

OF

AFN FINANCE COMPANY NO. 2, LLC

Dated as of May 31, 2001

______________________________

LIMITED LIABILITY COMPANY AGREEMENT
OF
AFN FINANCE COMPANY NO. 2, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT OF AFN FINANCE COMPANY NO. 2, LLC, a Delaware limited liability company (the "Company"), dated as of May 31, 2001, is made by Allegheny Communications Connect, Inc., a Delaware corporation (the "Member"), as the sole member of the Company.

Recitals

WHEREAS, the Certificate of Formation of the Company was filed with the office of the Secretary of State of the State of Delaware on May 31, 2001, by Lawrence A. Hall as an authorized person (the "Certificate of Formation"); and

WHEREAS, as provided in the Certificate of Formation, the nature of the businesses and purposes to be conducted and promoted by the Company is to engage exclusively in the following activities: (a) to borrow money from one or more financial institutions and to loan such money to AFN, LLC ("AFN"), a Delaware limited liability company and an exempt telecommunications company under the Public Utility Holding Company Act of 1935 ("ETC"), and/or its wholly owned subsidiaries, (b) to obtain letters of credit for the benefit of AFN, and (c) to engage in any lawful act or activity and to exercise any powers permitted to limited liability companies organized under the Delaware Limited Liability Company Act that are incidental to and necessary, suitable or convenient for the accomplishment of the businesses and purposes specified in clauses (a) and (b) above (collectively, the "Purpose"); and

WHEREAS, the Member is an ETC or a wholly owned subsidiary of an ETC;

NOW, THEREFORE, the Member hereby adopts this Agreement as the limited liability company agreement of the Company:

1. Formation. The Member hereby confirms and ratifies the formation of the Company pursuant to the filing of the Certificate of Formation with the Secretary of State of the State of Delaware. The Interest (as hereinafter defined) of the Member, and the rights and obligations of the Member with respect thereto, are subject to this Agreement and to all of the terms and conditions of the Delaware Limited Liability Company Act. As used herein, the term "Interest" shall mean a limited liability company interest in the Company as provided in this Agreement and under the Delaware Limited Liability Company Act and includes any and all rights and benefits to which the holder of such Interest may be provided under this Agreement, together with all obligations of such holder to comply with the terms and provisions of this Agreement.

2. Purpose. The Company exists only for the Purpose and may not conduct any other business. The authority granted to the Member hereunder to bind the Company shall be limited to actions which are necessary, proper, or advisable to effectuate and carry out the Purpose.

3. Management. The business and affairs of the Company shall be managed and governed in all respects by the Member. The Member shall execute all agreements, contracts and other instruments on behalf of the Company.

4. Authorization. The Member is hereby authorized to execute and deliver on behalf of the Company: (a) (i) a Senior Term Loan Credit Agreement among the Company, as borrower, and banks party thereto, and Fleet National Bank, as administrative agent (as amended, restated or modified from time to time, the "Fleet Credit Agreement"), pursuant to which the Company will borrow up to $31.5 million from said bank, and (ii) all notes, agreements, instruments and certificates required to be executed and delivered by the Company pursuant thereto, and (b) (i) a Credit Agreement among AFN, as borrower, and the Company and three other entities, as lenders (as amended, restated or modified from time to time, the "Member Credit Agreement"), pursuant to which the Company will loan up to $31.5 million to AFN, and (ii) all agreements, instruments and certificates required to be executed and delivered by the Company pursuant thereto. The Member is further hereby authorized and directed to do and perform, or cause to be done and performed, all such acts, deeds and things and to make, execute and deliver, or cause to be made, executed and delivered, all such other agreements, instruments and certificates in the name and on behalf of the Company or otherwise as the Member may deem necessary or appropriate to effectuate or carry out fully the purpose and intent of this Section 4 and any of the transactions contemplated by this Section 4.

5. Liability of Member. Except as otherwise provided in the Delaware Limited Liability Company Act, the Member shall not be personally liable for any debt, obligation or liability of the Company, whether arising in contract or otherwise, by reason of being a Member. Failure to observe formalities or requirements of this Agreement, the Certificate of Formation, or the Delaware Limited Liability Company Act shall not be grounds for imposing personal liability on the Member for the liabilities of the Company.

6. Interest; Initial Capital Contribution. The Member shall hold all of the Interest. Contemporaneously with its execution of this Agreement, the Member shall contribute $500 to the capital of the Company in exchange for the Interest. The Company may not issue any additional Interest.

7. Restrictions on Transfer and Withdrawal. The Member shall not Transfer (as hereinafter defined) all or any part of the Interest. The term "Transfer" includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange, merger or any other disposition. The Member shall not be entitled to withdraw or retire from the Company at any time prior to its dissolution in accordance with Section 9 hereof.

8. Distributions. Distributions shall be made by the Company to the Member in such amounts and at such times as the Member may determine from time to time; provided, however, that no distributions shall be made pursuant to this Section 8 (a) until such time as the Company has no further obligations under the Fleet Credit Agreement and the Member Credit Agreement or (b) to the extent that, after the distribution is made, the liabilities of the Company (other than liabilities for which recourse of creditors is limited to specific assets of the Company) would exceed the Member's good faith determination of the fair market value of the Company's assets (net of any liabilities to which those assets may be subject). Notwithstanding the foregoing, distributions in liquidation of the Company shall be made in the manner set forth in Section&nbs p;9 hereof.

9. Dissolution of the Company. Upon the approval of the Member to dissolve the Company, the Company shall be dissolved and liquidated in accordance with the provisions of this Section 9 and applicable law; provided, however, that the Company may not be dissolved until such time as the Company has no further obligations under both the Fleet Credit Agreement and the Member Credit Agreement. At the time the Company is dissolved and liquidated, the business and affairs of the Company shall be wound up and liquidated by a liquidating trustee to be appointed by the Member (the "Liquidator") as expeditiously as business circumstances will permit in an orderly and business-like manner and in accordance with applicable law. Unless instructed by the Member to distribute assets owned by the Company in kind to the Member after the sat isfaction of the items set forth in clauses (a)-(c) below, to the extent feasible, the assets of the Company shall be sold or otherwise reduced to cash, and distributed, except as otherwise provided by law, in the following manner and order: (a) to the payment of the expenses of the winding-up, liquidation and dissolution of the Company; (b) to pay all creditors of the Company, other than the Member, either by the payment thereof or the making of reasonable provision therefor; and (c) to establish reserves, in amounts established by the Liquidator, to meet other liabilities of the Company. The remaining assets of the Company shall be distributed to the Member.

10. Separateness Covenants. The Company shall: (a) maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates (as hereinafter defined), (b) maintain its books, records, resolutions and agreements as official records, (c) hold itself out to the public, at all times, as a legal entity separate and distinct from any other entity (including any Affiliate of the Company, any constituent party of the Company or any Affiliate of any constituent party), correct any known misunderstanding regarding its status as a separate entity, conduct business in its own name, not identity itself or any of its Affiliates as a division or part of the other, maintain and (if applicable) utilize a separate telephone number, if any, and separate stationery, invoices and checks, (d) not commingle the funds and other assets of the Company with those of any Affiliate of the Company or constituent party, or any Affiliate of a constituent party, or any other Person (as hereinafter defined), (e) maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, or any Affiliate of a constituent party, or any other Person, (f) not hold itself out to be responsible for the debts or obligations of any other Person, and (g) prepare and maintain separate financial statements.

11. Entire Agreement; Amendments. This Agreement sets forth the entire limited liability company agreement of the Company. This Agreement may be modified or amended by written instrument referring to this Agreement and executed by the Member.

12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

13. Person. As used herein, the term "Person" means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, firm or other entity, or a government or any political subdivision or agency, department or instrumentality thereof.

14. Affiliate. As used herein, the term "Affiliate" means as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

IN WITNESS WHEREOF, the Member has executed this Agreement as of the day first written above.

                                         ALLEGHENY COMMUNICATIONS CONNECT, INC.

                                         By  /s/ Paul M. Barbas
                                         Name: Paul M. Barbas
                                        Title:     President

EX-3 13 energyfinancingex32.htm SECOND AMENDED AND RESTATED LLC AGREEMENT, DATED JULY 19, 2001

EXHIBIT 3.2LIMITED LIABILITY COMPANY

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY
AGREEMENT
OF
ENERGY FINANCING COMPANY, L.L.C.

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Energy Financing Company, L.L.C. (the "Company") is made and entered into as of July 19, 2001 by Allegheny Energy Supply Company, LLC, ("AE Supply"), a Delaware limited liability company as the sole member (the "Parent" or "Member"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a Member of the Company in accordance with this Agreement and the Delaware Limited Liability Company Act (6 Del.C. Section 18-101 et seq.), as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

The Member, by execution of this Agreement, hereby establishes the Company as a limited liability company pursuant to and in accordance with the Act.

1. Articles. Articles of Organization of the Company (the "Articles") have been filed in the office of the Delaware Secretary of State pursuant to the Act. Each of the Members is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file any amendments and restatements to the Articles required pursuant to the Act and any other documents as may be required or appropriate under the laws of the State of Delaware.

2. Name. The name of the limited liability company formed hereby is Energy Financing Company, L.L.C.

3. Purpose. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act.

4. Registered Office. The address of the registered office of the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

6. Principal Business Office. The principal business office of the Company shall be located at 2325-B Renaissance Drive, Suite 10, Las Vegas, Nevada 89119 or at such other location within the State of Nevada as may hereafter be determined by the Board of Directors. The Company shall maintain its principal business office and commercial domicile at such place within the State of Nevada as the Board of Directors may from time to time determine or the business of the Company may require and the Company shall not establish a presence or conduct any activities in any State other than the State of Nevada.

7. Members. The name of the Member is Allegheny Energy Supply Company, LLC. No other person or entity shall be admitted as a member of the Company without the prior written approval of the Members.

8. Powers. The Company shall have the power and authority to do any and all acts necessary or convenient to or in furtherance of the purposes described in Section 9 hereof, including all power and authority, statutory or otherwise, possessed by, or which may be conferred upon, limited liability companies under the laws of the State of Delaware.

9. Management:

(a) Directors. Subject to the provisions of the Act and any limitations in this Agreement as to action required to be authorized or approved by the Members, the business and affairs of the Company shall be managed and all its powers shall be exercised by or under the direction of a Board of Directors ("Board of Directors"). Without prejudice to such general powers, but subject to the same limitations, the Board of Directors shall be empowered to conduct, manage and control the business and affairs of the Company and to make such rules and regulations therefor not inconsistent with law or this Agreement, as the Board of Directors shall deem to be in the best interest of the Company.

(b) Number, Classes and Qualifications of Directors.

(i) The authorized number of Directors which shall constitute the Board of Directors shall be three (3). The Members shall designate all Directors.

(ii) A Director must be a natural person who is at least eighteen (18) years of age.

(iii) The Members shall be entitled to designate any Director as chairman of the Board of Directors.

(c) Removal of Directors. Any Director or the entire Board of Directors may be removed at any time, with or without cause, by the Members.

(d) Majority Consent. A majority vote or, in the circumstances referred to in subsection (l) of this section, unanimous written consent of the Board of Directors shall be required to authorize or approve any actions of the Board of Directors.

(e) Vacancies; Resignations.

(i) A vacancy shall be deemed to exist in case of the death, resignation or removal, declaration of bankruptcy under the laws of any jurisdiction, mental incompetence adjudged by a court of competent jurisdiction in any state or country (including, without limitation, any territory, dependency or possession of the United States of America), or conviction by any court in any state or country (including, without limitation, any territory, dependency or possession of the United States of America) of any felony or any misdemeanor involving moral turpitude of any Director; or if the authorized number of Directors be increased.

(ii) Any Director may resign effective upon giving thirty (30) days written notice to the Members, unless the notice specifies a later time for the effectiveness of such resignation.

(iii) The Members shall appoint or elect a successor thereto, to take office effective upon the departure of the vacating Director or at such later time as shall be designated by the Members.

(f) Initial Directors. The initial Directors to hold office from and after the date of this Agreement until their removal pursuant to this Agreement or until their respective successors are appointed and qualified pursuant to this Agreement, are as follows:

Terence A. Burke

Robert W. Grier

Bruce M. Sedlock

(g) Compensation of Directors. Directors of the Company shall be entitled to such compensation as shall be approved by the Members.

(h) Meetings of Directors. Meetings of the Board of Directors for any purpose or purposes may be called at any time by any Director. All meetings of the Board shall be held at such place within the State of Nevada as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Notice of the time and place of meetings shall be delivered personally or by telephone to each Director, or sent by first-class mail, courier service, or by facsimile transmission, charges prepaid, addressed to such Director at his or her address as it appears upon the records of the Company or, if it is not so shown on the records and is not readily ascertainable, at his or her last known address. In case such notice is mailed, it shall be deposited in the United States mail at least seven days prior to the time of the holding of the meeting. In case such notice is delivered personally or by telephone as above provided, it shall be so delivered at least forty-eight (48) hours prior to the time of the holding of the meeting. Any notice given personally or by telephone may be communicated to either the Directors or to a person at the office of the Directors whom the person giving the notice has reason to believe will promptly communicate it to the

Directors. Such deposit in the mail, delivery to a courier service, transmission by electronic means or delivery, personally or by telephone, as above provided, shall be due, legal and personal notice to such Directors. The notice need not specify the purpose of the meeting.

(i) Quorum: Alternates; Participation in Meetings By Conference Telephone Permitted; Vote Required for Action.

(i) Except as hereinafter provided, presence of fifty percent (50%) or more of the authorized number of Directors at a meeting of the Board of Directors constitutes a quorum for the transaction of business.

(ii) Each Director shall have one (1) vote. Each Director may, by written notice given to the chairman of the Board of Directors, appoint an alternate to attend and vote at meetings, or at any particular meeting, if the Director is unable to attend. The presence of an alternate at any meeting shall be deemed to be presence of the Director at such meeting for all purposes, and the vote of such alternate shall be deemed to be the vote of the relevant Director. No Director may retract the vote of any duly appointed alternate on behalf of such Director, or other Director voting on his or her behalf, after the close of the meeting at which such vote is made. In the event that the Director who appointed an alternate attends a meeting, the appointment of such alternate shall be ineffective for such meeting, and the alternate shall have no right to be present or to participate in that meeting.< /P>

(iii) Every act or decision done or made by a vote required hereunder shall be regarded as the act of the Board of Directors.

(iv) Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the

meeting can hear each other, but a Board member may not vote if participating in this manner.

(j) Place of Meetings. Meetings of the Board of Directors shall be held at any place within the State of Nevada that has been designated from time to time by the Board of Directors

(k) Waiver of Notice; Consent to Meeting. Notice of a meeting need not be given to any Director who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such Director. All such waivers, consents and approvals shall be filed with the Company's records and made a part of the minutes of the meeting.

(l) Action by Board of Directors Without a Meeting. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all the Directors authorized to vote shall individually or collectively consent in writing to such action. Such written consent or consents may be in counterparts and transmitted by facsimile or electronic mail and shall be filed with the minutes of the proceedings of the Board of Directors. Such actions by written consent shall have the same force and effect as a vote of the Board of Directors.

10. Officers.

(a) Appointment and Tenure.

(i) The Directors may, from time to time, designate officers of the Company to carry out the day-to-day business of the Company in Nevada.

(ii) The officers of the Company shall be comprised of one or more individuals designated from time to time by the Directors. Each officer shall hold his offices for such terms and shall have such authority and exercise such powers and perform such duties as shall be determined from time to time by the Directors. Any number of offices may be held by the

same individual. The salaries or other compensation, if any, of the officers and agents of the Company shall be fixed from time to time by the Directors.

The officers of the Company may consist of a president/chief executive officer, a secretary and a treasurer. The Directors may also designate one or more vice presidents, assistant secretaries, and assistant treasurers. The Directors may designate such other officers and assistant officers and agents as the Directors shall deem necessary.

(b) Removal. Any officer may be removed as such at any time by the Directors, either with or without cause, in the discretion of the Directors.

(c) President/Chief Executive Officer. The president/chief executive officer, if one is designated, shall be the chief executive officer of the Company, shall have general and active management of the day-to-day business and affairs of the Company as authorized from time to time by the Directors and shall be authorized and directed to implement all orders, resolutions and business plans adopted by the Directors.

(d) Vice Presidents. The vice presidents, if any are designated, in the order of their seniority, unless otherwise determined by the Directors, shall, in the absence or disability of the president/chief executive officer, perform the duties and have the authority and exercise the powers of the president/chief executive officer. They shall perform such other duties and have such other authority and powers as the Directors may from time to time prescribe.

(e) Secretary; Assistant Secretaries. The secretary, if one is designated, shall perform such duties and have such powers as the Directors may from time to time prescribe. The assistant secretaries, if any are designated, in the order of their seniority, unless otherwise determined by the Directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the Directors may from time to time prescribe.

(f) Treasurer; Assistant Treasurers. The treasurer, if one is designated, shall have custody of the Company's funds and securities and shall ensure that the Company keep full and accurate accounts and records of receipts, disbursements and other transactions in books belonging to the Company. The assistant treasurers, if any are designated, in the order of their seniority, unless otherwise determined by the Directors, shall, in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. They shall perform such other duties and have such other powers as the Directors may from time to time prescribe.

(g) Controller; Assistant Secretary. The controller shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated from time to time by the Directors. The controller shall disburse the funds of the Company as may be ordered by the Directors, taking proper vouchers for such disbursements, and shall render the president/chief executive officer and the Directors, when so directed, an account of all his transactions as treasurer and of the financial condition of the Company. The controller shall perform such other duties and have such other powers as the Directors may from time to time prescribe. If required by the Directors, the controller shall give the Company a bond of such type, character and amount as the Directors may require. The assistant secretary located in Nevada, unless otherwise determined by the Directors, shall, in the absence or disability of the controller, perform the duties and exercise the powers of the controller.

11. Restriction on Powers. Notwithstanding any other provision of this Agreement and any provision of law, the Company shall not, without the consent of all of the Members (a) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) consent to the institution of bankruptcy or insolvency proceedings against it or to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (c) file a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a part of its property, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g ) take any corporate action in furtherance of the actions set forth in clauses (a) through (f) of this Section 11.

12. Dissolution. The Company shall dissolve, and its affairs shall be wound up upon the first to occur of the following: (a) the written consent of all of the Members, (b) the death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member or the occurrence of any other event which terminates the continued membership of the Member in the Company, unless, within ninety days after the occurrence of such an event, the remaining Members agree in writing to continue the business of the Company, or (c) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

13. Capital Contributions. Without creating any rights in favor of any third party, initial capital contributions shall be made by the Members at the times and in the amounts determined by the Members, and may be made in cash or other property as determined by the Members. Members have contributed amounts in cash, and no other property, to the Company according to the percentage interests set forth on Annex I hereto.

14. Additional Contributions. No member is required to make any additional capital contributions to the Company. However, a Member may make additional capital contributions to the Company.

15. Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the ownership percentages of the Members.

16. Distributions. The Company shall make distributions (including, without limitation, interim distributions) of cash or other property to the Members in the same proportion as their then capital contributions, at such times and in such amounts as the Members may determine.

17. Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

18. Exculpation. Neither the Board of Directors, the Members, nor any owner, officer, director or employee of the Company or the Members, shall be liable, responsible or accountable in damages or otherwise to the Company or the Members for any action taken or failure to act (even if such action or failure to act constituted the negligence of a person) on behalf of the Company within the scope of the authority conferred on the person described in this Agreement or by Law unless such act or omission was performed or omitted fraudulently or constituted gross negligence or willful misconduct. To the extent that, at law or in equity, the Board of Directors, the Members, or any owner, officer, director or employee of the Company or the Members have duties

(including fiduciary duties) and liabilities relating to the Company, the Board of Directors, the Members or any owner, officer, direc tor or employee of the Company or the Members acting under this Agreement shall not be liable to the Company or the Members for their reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of the Board of Directors, the Members or any owner, officer, director or employee of the Company or the Members otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of the Board of Directors, the Members or any owner, officer, director or employee of the Company or the Members.

19. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Second Amended and Restated Limited Liability Company Agreement as of the date first written above.

Member:

ALLEGHENY ENERGY SUPPLY COMPANY, LLC,

a Delaware limited liability company

                                        By:  /s/ David C. Benson
                                        Name:  David C. Benson
                                        Title:   Vice President

ANNEX I

Percentage Interests of the Members

Allegheny Energy Supply Company, LLC 100%

EX-3 14 gleasonex31.htm CERTIFICATE OF AMENDMENT, DATED MAY 17, 2001 CERTIFICATE OF FORMATION

EXHIBIT 3.1
STATE OF DELAWARE CERTIFICATE OF AMENDMENT OF ALLEGHENY ENERGY SUPPLY GLEASON GENERATING FACILITY, LLC
1. The name of the limited liability company is Allegheny Energy Supply Gleason Generating Facility, LLC. 2. The Certificate of Amendment of the limited liability company is hereby amended as follows: a). The address of its registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. 3. The foregoing amendment is to become effective immediately upon the filing of this Certificate of Amendment. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Allegheny Energy Supply Gleason Generating Facility, LLC this 17th day of May, 2001.
	Member: ALLEGHENY ENERGY SUPPLY COMPANY, LLC a Delaware limited liability company By: /s/Patricia J. Clark Name: Patricia J. Clark Title: Assistant Secretary

EX-3 15 gleasonex32.htm SECOND AMENDED AND RESTATED LLC AGREEMENT, DATED AUGUST 7, 2001 LIMITED LIABILITY COMPANY

EXHIBIT 3.2

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY
AGREEMENT
OF
ALLEGHENY ENERGY SUPPLY
GLEASON GENERATING FACILITY, LLC

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Allegheny Energy Supply Gleason Generating Facility, LLC (the "Company") is made and entered into as of August 7, 2001 by Allegheny Energy Supply Company, LLC, ("AE Supply"), a Delaware limited liability company as the sole member (the "Parent" or "Member"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a Member of the Company in accordance with this Agreement and the Delaware Limited Liability Company Act (6 Del.C. Section 18-101 et seq.), as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

The Member, by execution of this Agreement, hereby establishes the Company as a limited liability company pursuant to and in accordance with the Act.

2. Name. The name of the limited liability company formed hereby is Allegheny Energy Supply Gleason Generating Facility, LLC.

4. Registered Office. The address of the registered office of the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

6. Principal Business Office. The principal business office of the Company shall be located at P.O. Box 512, 1166 James Mill Road, Gleason, Tennessee 38229 or at such other location as may hereafter be determined by the Members.

7. Members. The name of the Member is Allegheny Energy Supply Company, LLC. The percentage ownership interest of the Member is set forth in Annex I. No other person or entity shall be admitted as a member of the Company without the prior written approval of the Members.

8. Powers. The business and affairs of the Company shall be managed by the Members. Each of the Members shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purpose described herein, including all powers, statutory or otherwise, possessed by managing members under the laws of the State of Delaware. The Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, designate one or more committees, each to have such lawfully delegable powers and duties as the Members may confer. Except as provided by law, any such committee may have and may exercise the powers and authority of the Members of the Company. Unless otherwise prescribed by the Members, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members of the committee present at a meeting of the committee at which there is a quorum shall be the act of such committee. In addition, the Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, elect such officers of the Company as the Members believe to be in the best interests of the Company. The officers of the Company shall have such authority and shall perform such duties as are customarily incident to their respective offices or as may be specified from time to time by resolution of the Members regardless of whether such authority and duties are customarily incident to such office. Parent is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file the Certificate of Formation of the Company (and any other certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

9. Restriction on Powers. Notwithstanding any other provision of this Agreement and any provision of law, the Company shall not, without the consent of all of the Members (a) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) consent to the institution of bankruptcy or insolvency proceedings against it or to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (c) file a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a part of its property, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability to pay its debts genera lly as they become due, or (g) take any corporate action in furtherance of the actions set forth in clauses (a) through (f) of this Section 9.

10. Dissolution. The Company shall dissolve, and its affairs shall be wound up upon the first to occur of the following: (a) the written consent of all of the Members, (b) the death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member or the occurrence of any other event which terminates the continued membership of the Member in the Company, unless, within ninety days after the occurrence of such an event, the remaining Members agree in writing to continue the business of the Company, or (c) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

11. Capital Contributions. Without creating any rights in favor of any third party, initial capital contributions shall be made by the Members at the times and in the amounts determined by the Members, and may be made in cash or other property as determined by the Members. Members have contributed amounts in cash, and no other property, to the Company according to the percentage interests set forth on Annex I hereto.

12. Additional Contributions. No member is required to make any additional capital contributions to the Company. However, a Member may make additional capital contributions to the Company.

13. Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the ownership percentages of the Members.

15. Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

16. Exculpation. Neither the Members, nor any owner, officer, or employee of the Company or the Members, shall be liable, responsible or accountable in damages or otherwise to the Company or the Members for any action taken or failure to act (even if such action or failure to act constituted the negligence of a person) on behalf of the Company within the scope of the authority conferred on the person described in this Agreement or by Law unless such act or omission was performed or omitted fraudulently or constituted gross negligence or willful misconduct. To the extent that, at law or in equity, the Members, or any owner, officer, or employee of the Company or the Members have duties (including fiduciary duties) and liabilities relating to the Company, the Members or any owner, officer, or employee of the Company or the Members acting under this Agreement shall not be liable to the Company or the Members for their reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of the Members or any owner, officer, or employee of the Company or the Members otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of the Members or any owner, officer, or employee of the Company or the Members.

17. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Second Amended and Restated Limited Liability Company Agreement as of the date first written above.

Member:
ALLEGHENY ENERGY SUPPLY COMPANY, LLC,
a Delaware limited liability company
By:  /s/ David C. Benson
Name:  David C. Benson
Title:    Vice President

ANNEX I

Percentage Interests of the Members

Allegheny Energy Supply Company, LLC 100%

EX-3 16 fmccordex31.htm ARTICLES OF INCORPORATION, DATED SEPTEMBER 16, 1992 ARTICLES OF INCORPORATION EXHIBIT 3.1

ARTICLES OF INCORPORATION

OF

FELLON-MCCORD ASSOCIATES, INC.

The undersigned, acting as incorporator of a corporation under the Kentucky Business Corporation Act, hereby adopts the following Articles of Incorporation for such corporation:

ARTICLE 1

The name of the corporation is: FELLON-MCCORD ASSOCIATES, INC.

ARTICLE 2

The aggregate number of shares which the corporation shall have authority to issue is seven thousand (7,000), divided into four (4) classes as follows: (i) one thousand (1,000) shares designated as Class A Convertible Preferred Shares, par value $2,000 per share; (ii) one thousand (1,000) shares designated as Class B Convertible Preferred Shares, par value $2,000 per share; (iii) one thousand (1,000) Class C Convertible Preferred Shares, par value $2,000 per share; and (iv) four thousand (4,000) Common Shares, no par value per share. The classes of the corporation's shares shall have the following preferences, limitations and relative rights and priorities.

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PREFERRED SHARES

           The corporation's Class A Convertible Preferred Shares, Class B Convertible Preferred Shares and Class C Convertible Preferred Shares (sometimes collectively called the "Preferred Shares") shall have the following preferences, limitations and relative rights and priorities:
          (a)     Voting:   Each outstanding share of the Preferred Shares shall be entitled to one vote on each matter submitted to a vote of shareholders except that in the election of directors, holders of Class A Convertible Preferred Shares, voting as a separate group, shall be entitled to elect one (1) of the corporation's directors, and holders of Class C Convertible Preferred Shares, voting as a separate group, shall be entitled to elect one (1) of the corporation's directors. Holders of Preferred Shares shall not be entitled to vote in the election of any directors except as provided in this Article 2(a).
          (b)     Dividends: The corporation's Board of Directors may, in its discretion, declare out of funds legally available therefor, dividends payable in cash, shares or otherwise on each outstanding share of the Preferred Shares. Such dividends shall: (i) not be cumulative; (ii) be paid before any dividends on Common Shares are paid; and (iii) be paid pro rata on all outstanding shares of the Preferred Shares.
          (c)     Distribution of Assets: Upon the dissolution, liquidation or winding-up of the corporation, each outstanding share of the Preferred Shares shall be entitled to receive,

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except as hereinafter provided, assets available for distribution to shareholders of the corporation equal to the share's par value plus any dividends declared but not paid on the share. Such distribution shall: (i) be made prior to any distributions of assets to Common Shares upon dissolution, liquidation or winding-up of the corporation; (ii) shall be paid pro rata with distributions on all outstanding shares of the Preferred Shares; and (iii) be the only distributions to which Preferred Shares shall be entitled upon dissolution, liquidation or winding-up of the corporation.
If the assets available for distribution to shareholders upon the dissolution, liquidation or winding-up of the corporation are insufficient to distribute in full the amounts to which the Preferred Shares are entitled, the assets available for distribution shall be distributed pro rata among the Preferred Shares. If there has been satisfaction in full of the amounts payable to the Preferred Shares, Common Shares thereafter shall be entitled, to the exclusion of the Preferred Shares, to distribution of the remaining assets. A share exchange, merger or consolidation of the corporation with or into any other corporation or a sale of all or substantially all of the assets of the corporation, if such transaction has been submitted to the corporation's shareholders for a vote, shall not be deemed to constitute a liquidation, dissolution or winding-up of the corporation within the meaning of this Article 2 ( c ).

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Conversion: If and when the cumulative net after tax profits of the corporation equal or exceed six million dollars ($6,000,000), each outstanding share of the Preferred Shares may, at the election of the holder thereof, be converted into one (1) share of the corporation's Common Shares upon satisfaction of each of the following conditions: (i) the holder shall give the corporation's Board of Directors at least ninety (90) days' advance written notice of the election to convert; (ii) such notice shall be given within one (1) year after the end of the fiscal year in which the corporation's cumulative net after tax profits first equal or exceed six million dollars ($6,000,000); and (iii) the holder shall pay to the corporation consideration equal to the "fair value" (defined below) of each share of the Common Shares to be issued to such holder as a result of the conversion, provided, however, that the par value of each share of the Preferred Shares to be converted plus the amount of any dividends declared but unpaid on such share shall be credited against the amount of consideration payable for the Common Shares. For purposes of this Article 2, "fair value" means the fair market value of each outstanding share of the corporation's Common Shares on the date of the notice of election to convert described above as determined by the corporation's Board of Directors. The Board of Directors' determination of fair value shall be conclusive unless at least two (2) directors dissent, in which case the dissenting directors shall name one reputable appraiser and the remaining directors (by majority vote

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thereof) shall name one reputable appraiser. The appraisers shall each appraise fair value within sixty (60) days of their selection and the two appraisals shall be averaged to arrive at the fair value payable by the holder of the shares being converted. All fees, costs and expenses of the appraisals shall be paid by the corporation.

COMMON SHARES

          The Common Shares shall have the following preferences, limitations and relative rights and priorities:
          (a)     Subject to the preferences, right and priorities of the Preferred Shares, the corporation's Board of Directors may, in its discretion, declare out of funds legally available therefor, dividends payable in cash, stock or otherwise on each outstanding share of the Common Shares.
          (b)     Each outstanding share of the Common Shares shall be entitled to one (1) vote on each matter submitted to a vote of shareholders except the election of directors. Holders of Common Shares shall be entitled to elect all directors of the corporation except three (3), who shall be elected by holders of the Preferred Shares as set forth above. Cumulative voting shall apply in the election of directors such that each outstanding share of the Common Shares shall have the number of votes equal to the number of directors to be elected by holders of Common Shares. The cumulative votes may be cast for any one nominee for director to be elected by holders of Common Shares or distributed in any proportion among as many such nominees as the shareholder chooses.

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( c ) Each outstanding share of the Common Shares shall be entitled to share equally in the distribution of the corporation's assets available for distribution to shareholders upon dissolution, liquidation or winding-up of the corporation, subject to the rights, preferences and priorities of the Preferred Shares described in this Article 2.

ARTICLE 3

The address of the corporation's initial registered office is Starks Building, Suite #627, 455 South 4^th Street, Louisville, Kentucky 40202, and the name of the initial registered agent is John McCord, whose address is Starks Building, Suite #627, 455 South 4^th Street, Louisville, Kentucky 40202.

ARTICLE 4

The mailing address of the Corporation's principal office is Starks Building, Suite #627, 455 South 4^th Street, Louisville, Kentucky 40202.

ARTICLE 5

The name and address of the Incorporator is:

Victor L. Baltzell, Jr.

730 West Main Street, Suite 500

Louisville, KY 40202

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ARTICLE 6

          Section 1.     No director of the corporation shall be personally liable to the corporation or its shareholders for monetary damages for any breach of his duties as a director, except for liability (i) for any transaction in which the director's personal financial interest is in conflict with the financial interests of the corporation or its shareholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or are known to the director to be a violation of law: (iii) for any vote for or assent to an unlawful distribution to shareholders as prohibited under applicable Kentucky law; (iv) for any transaction from which the director derived an improper personal benefit.
          Section 2.     If the Kentucky Business Corporation Act is amended after the date of the filing of these Articles of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Kentucky Business Corporation Act, as so amended, and without the necessity for further shareholder action in respect thereof.
          Section 3.     Any repeal or modification of this Article by the shareholders of the corporation shall not adversely affect any right or protection of a director of the corporation hereunder in respect of any act of omission occurring prior to the time of such repeal or modification.

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ARTICLE 7

The corporation shall, to the fullest extent permitted by Kentucky law, indemnify any director, officer, employee or agent of the corporation from and against any and all reasonable costs and expenses (including, but not limited to, attorneys' fees) and any liabilities (including, but not limited to, judgments, fines, penalties and reasonable settlements) paid by or on behalf of, or imposed against, such person in connection with any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative, investigative or other (including any appeal relating thereto), whether formal or informal, and whether made or brought by or in the right of the corporation or otherwise, in which such person is, was or at any time becomes a party or witness, or is threatened to be made a party or witness, or otherwise, by reason of the fact that such person is, was or at any time becomes a director, officer, employee or agent of the corporation or, at the corporation's request, a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.
The indemnification authorized by this Article 8 shall not be exclusive of any other right of indemnification which any such person may have or hereafter acquire under any provision of these Articles or the Bylaws of the corporation, agreement, vote of shareholders or disinterested directors or otherwise. The

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corporation may take such steps as may be deemed appropriate by the Board of Directors to provide and secure indemnification to any such person, including, without limitation, the execution of agreements for indemnification between the corporation and individual directors, officers, employees or agents which may provide rights to indemnification which are broader or otherwise different than the rights authorized by this Article.
IN TESTIMONY WHEREOF, witness the signature of the Incorporator this the 16^th day of September, 1992.

/s/ Victor L. Baltzell, Jr.

VICTOR L. BALTZELL, JR.

COMMONWEALTH OF KENTUCKY )

) SS

COUNTY OF JEFFERSON )

Subscribed, sworn to and acknowledged before me by VICTOR L. BATZELL, JR., this 16^th day of September, 1992.

My commission expires: 7-24-94.

/s/ Teresa R. Tuck

NOTARY PUBLIC

State at Large, Kentucky

THIS INSTRUMENT PREPARED BY:

/s/ Victor L. Baltzell, Jr.                                                         Document No. 1992117545
VICTOR L. BALTZELL, JR.                                                Lodged By: Clare
MILLER, MOSLEY, CLARE AND TOWNES             Recorded On: Sept. 25, 1992 1:40:38 p.m.
Fifth Floor, Hart Block Building                                           Total Fees: $14.50
730 West Main Street                                                            County Clerk:
Louisville, Kentucky                                                                     Rebecca Jackson
Phone: (502) 583-7400                                                         Deputy Clerk: Cheryl

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EX-3 17 fmccordex31a.htm AMENDMENT TO ARTICLES OF INCORPORATION, DATED SEPTEMBER 29, 1992 AMENDMENT TO EXHIBIT 3.1a

AMENDMENT TO

ARTICLES OF INCORPORATION

OF

FELLON-MCCORD ASSOCIATES, INC.

Andrew R. Fellon, President, and John McCord, Secretary of FELLON-MCCORD ASSOCIATES, INC., a Kentucky corporation, with its principal office located in Louisville, Kentucky, do hereby certify that at a duly called meeting of the Board of Directors, a resolution setting forth the proposed amendment to the Articles of Incorporation as set forth herein, was unanimously passed, directing that said amendment be submitted to a vote of a meeting of the Shareholders and that subsequent thereto, a meeting of the holders of all of the shares of the Corporation entitled to vote on the proposed amendment to the Articles of Incorporation, as contained in the following resolution, was duly called upon the specific purpose and held on September 29, 1992, at which time all Shareholders were present in person, and that by unanimous vote of the holders of the shares entitled to exercise the majority of the voting power of the Corporation on such proposal, name ly, all of such shares, the following resolution was adopted to amend the Articles of Incorporation:

Article 2. of the Articles of Incorporation of FELLON-MCCORD

ASSOCIATES, INC., hereinafter referred to as "the Corporation"

is amended to read as follows:

The aggregate number of shares which the Corporation shall have

authority to issue is ten thousand (10,000) shares, all of which are

common stock without par value, and having voting power to the

extent of one (1) vote for each share of stock.

-1-

IN WITNESS WHEREOF, said Andrew F. Fellon, President, and John McCord, Secretary of FELLON-MCCORD ASSOCIATES, INC., acting for and on behalf of said Corporation, have hereunto subscribed their names this 29^th day of September, 1992.

FELLON-MCCORD ASSOCIATES, INC.

BY: /s/ Andrew R. Fellon

Andrew R. Fellon,

President

BY: /s/ John McCord

John McCord,

Secretary

COMMONWEALTH OF KENTUCKY )

) SS

COUNTY OF JEFFERSON )

I, VICTOR L. BALTZELL, JR., Notary Public, do hereby certify that on this the 29^th day of September, 1992, personally appeared before me ANDREW R. FELLON and JOHN MCCORD, who being by me first duly sworn, declare that they are the President and Secretary, respectively, of FELLON-MCCORD ASSOCIATES, INC., they signed the foregoing document as President and Secretary of the Corporation, and that the statements contained therein are true.
My commission expires: June 11, 1995.

/s/ Victor L. Baltzell, Jr.

NOTARY PUBLIC STATE AT LARGE

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THIS INSTRUMENT PREPARED BY:

/s/ Victor L. Baltzell, Jr.

VICTOR L. BALTZELL, JR.

MOSLEY, CLARE AND TOWNES

Fifth Floor, Hart Block Building

730 West Main Street

Louisville, KY 40202

Phone: 502-583-7400

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EX-3 18 fmccordex31b.htm AMENDMENT TO ARTICLES OF INCORPORATION, DATED MAY 3, 1995 AMENDMENT TO EXHIBIT 3.1(b)

AMENDMENT TO

ARTICLES OF INCORPORATION

OF

FELLON-MCCORD ASSOCIATES, INC.

ANDREW R. FELLON, President, and JOHN C. MCCORD, Secretary of FELLON-MCCORD ASSOCIATES, INC., a Kentucky corporation (herein the "Corporation"), with its principal office located in Louisville, Kentucky, do hereby certify that pursuant to unanimous action in writing by the Board of Directors a resolution setting forth the proposed amendment to the Articles of Incorporation as set forth herein was approved by the Directors, and that said amendment and resolution was submitted to all of the Shareholders of the Corporation who, by unanimous action in writing, adopted the following resolution to amend the Articles of Incorporation:

Article 2 of the Articles of Incorporation of FELLON-MCCORD ASSOCIATES, INC., hereinafter referred to as "the Corporation" is amended to read as follows:

The capital stock of this corporation shall be divided into two (2)

classes of common stock, no par value, nine thousand five hundred

(9,500) shares thereof being known as Class A common stock and

five hundred (500) shares thereof being known as Class B common

stock. The Class B common stock shall be distinguished from the

Class A common stock in that it shall have no voting privileges or

power. In all other instances and respects, Class B common stock

shall have full rights, privileges and power with Class A common

stock. Class A common stock shall have voting power to the extent

of one (1) vote for each share of such stock.
IN WITNESS WHEREOF, ANDREW R. FELLON, President, and JOHN C. MCCORD, Secretary, acting for and on behalf of the Corporation, have hereunto subscribed their names this 3rd day of May, 1995.

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FELLON-MCCORD ASSOCIATES, INC.

By:/s/ Andrew R. Fellon

Andrew R. Fellon, President

By:/s/ John C. McCord

John C. McCord, Secretary

COMMONWEALTH OF KENTUCKY )

) SS

COUNTY OF JEFFERSON )

          I, Victor L. Baltzell, a Notary Public, do hereby certify that on this 3^rd day of May, 1995, personally appeared before me ANDREW R. FELLON and JOHN C. MCCORD, who being by me first duly sworn, declared that they are the President and Secretary, respectively, of FELLON-MCCORD ASSOCIATES, INC., that they signed the foregoing document as President and Secretary of the corporation, and the statements therein contained are true.

          My commission expires:      June 11, 1999

                                                                     /s/ Victor L. Baltzell
                                                                     NOTARY PUBLIC, State-at-Large, Kentucky

THIS INSTRUMENT PREPARED BY:

/s/ Victor L. Baltzell

VICTOR L. BALTZELL, JR.

MOSLEY, CLARE AND TOWNES

Fifth Floor, Hart Block Building

730 West Main Street

Louisville, KY 40202

Phone: 502-583-7400

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EX-4 19 fmccordex32.htm BYAWS BYLAWS EXHIBIT 3.2

BYLAWS

OF

FELLON-MCCORD ASSOCIATES, INC.

ADOPTED OCTOBER 1, 1992

ARTICLE I

OFFICES

1. Registered Office and Registered Agent. The registered office of the Corporation in the Commonwealth of Kentucky is at Starks Building, Suite 627, 455 South 4^th Street, Louisville, Kentucky 40202 and the registered agent of the Corporation at such address is John McCord.

2. Other Places of Business. Branch or subordinate offices or places of business may be established at any time by the Board of Directors at any place where the Corporation is qualified to do business.

ARTICLE II

SHAREHOLDERS

1. Annual Meeting. The annual meeting of shareholders shall be held at 9:00 o'clock a.m. on the first Monday of April of each year at the principal office of the Corporation or at such other time and place as shall be specified in the notice of meeting, in order to elect directors and transact such business as shall come before the meeting. If that date is a legal holiday, the meeting shall be held at the same hour on the next succeeding business day.

2. Special Meeting. A special meeting of shareholders may be called for any purpose by the president or Board of Directors or as permitted by law. Holders of at least twenty-five percent (25 percent) of all votes entitled to be cast on any issue proposed to be considered at a proposed special meeting may also call such a meeting by signing, dating, and delivering to the Corporation's secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be

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held. Only business within the purpose or purposes described in the meeting notice shall be conducted at a special shareholders' meeting.

          3.     Action Without Meeting.  The shareholders may act without a meeting if, prior or subsequent to such action, each shareholder who would have been entitled to vote upon such action shall consent in writing to such action. Such written consent or consents shall be filed in the minute book.

          4.      Quorum.  The presence at a meeting in person or by proxy of the holders of shares entitled to case a majority of all shares issued and outstanding shall constitute a quorum.

          5.     Record Date.  The record date for all meetings of shareholders shall be as fixed by the Board of Directors or as provided by Statute.

          6.     Notice of Meetings.  The corporation shall notify all shareholders entitled to vote at the meeting of the date, time, place, and purpose of each annual and special shareholders'meeting no fewer than ten (10) nor more than sixty (60) days before the meeting date.

          7.     Voting for Directors.  At each election for directors each shareholder entitled to vote at such election shall have the right to cast, in person or by proxy, as many votes in the aggregate as he shall be entitled to vote under the corporation's articles of incorporation, multiplied by the number of directors to be elected at such election; and each shareholder may cast the whole number of votes for one (1) candidate, or distribute such votes among two (2) or more candidates. Such directors shall not be elected in any other manner.

ARTICLE III

BOARD OF DIRECTORS

1. Management. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of its board of directors.

2. Number and Term of Office. The Board of Directors shall consist of not less than one (1) nor more than five (5) members. Each director shall be elected by the shareholders at each annual meeting and shall hold office until the next annual meeting of the shareholders and until that director's successor shall have been elected and qualified.

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          3.     Regular Meetings.  A regular meeting of the Board shall be held without notice immediately following and at the same place as the annual shareholders' meeting for the purposes of electing officers and conducting such other business as may come before the meeting. The Board, by resolution, may provide for additional regular meetings which may be held without notice, except to members not present at the time of the adoption of the resolution.

          4.     Special Meetings.  A special meeting of the Board may be called at any time by the president or by any two (2) directors for any purpose. Such meeting shall be held upon not less than five (5) days notice if given orally (either by telephone or in person), or by telecopier, or upon not less than ten (10) days notice if given by depositing the notice in the United States mails, postage prepaid. Such notice shall specify the time, place, and purposes of the meeting.

          5.     Action Without Meeting.  The Board may act without a meeting if each member of the board shall consent in writing thereto. Such consent or consents shall be filed in the minute book.

          6.     Quorum.  A majority of the prescribed number of directors shall constitute a quorum for the transaction of business.

          7.     Vacancies in Board of Directors.

                   (a)     If a vacancy occurs on the board of directors, including a vacancy resulting from an increase in the number of directors; the board of directors may fill the vacancy; or if the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

                   (b)     If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders.

                   (c)     A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

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          8.     Removal of Directors by Shareholders.

                  (a)     The shareholders may remove one (1) or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

                  (b)     If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him.

                  (c)     A director may not be removed if the number of votes sufficient to elect him under cumulative voting is voted against his removal.

                  (d)     A director shall be removed by the shareholders only at a meeting called for the purpose of removing him and the meeting notice shall state that the purpose, or one (1) of the purposes, of the meeting is removal of the director.

          9.     Compensation of Directors.  Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

        10.     Attendance at Meetings.  The board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during this meeting. A director participating in a meeting by this means shall be deemed to be present in person at the meeting.

ARTICLE IV

WAIVERS OF NOTICE

Any notice required by these Bylaws, the articles of incorporation or the law of the Commonwealth of Kentucky may be waived in writing by any person entitled to notice. The waiver or waivers may be executed either before, at or after the event with respect to which notice is waived. Each director or shareholder attending a meeting without protesting the lack of proper notice, at thee beginning of the meeting, or promptly upon his arrival, shall be deemed conclusively to have waived such notice.

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ARTICLE V

OFFICERS

          1.     Election.  At its regular meeting following the annual meeting of shareholders, the Board shall elect a president, a treasurer and a secretary. It may elect such other officers, including one or more vice presidents, as it shall deem necessary. One person may hold two (2) or more offices, but no person shall hold the offices of president and secretary at the same time.

          2.     Duties and Authority of President.  The president shall be chief executive officer of the Corporation. Subject only to the authority of the Board, the president shall have general charge and supervision over, and responsibility for, the business and affairs of the Corporation. Unless otherwise directed by the Board, all other officers shall be subject to the authority and supervision of the president. The president may enter into and execute in the name of the Corporation contracts or other instruments in the regular course of business which are authorized, either generally or specifically, by the Board. The president shall have the general powers and duties of management usually vested in the office of president of a corporation.

          3.     Duties and Authority of Vice President.  The vice president shall perform such duties and have such authority as from time to time may be delegated to the vice president by the president or by the Board. In the event of the absence, death, inability or refusal to act by the president, the vice president shall perform the duties and be vested with the authority of the president.

          4.     Duties and Authority of Treasurer.  The treasurer shall have the custody of the funds and securities of the Corporation and shall keep or cause to be kept regular books of account for the Corporation. The treasurer shall perform such other duties and possess such other powers as re incident to that office or as shall be assigned by the president to the Board.

          5.     Duties and Authority of Secretary.  The secretary shall cause notices of all meetings to be served as prescribed in these Bylaws and shall keep or cause to be kept the minutes of all meetings of the shareholders and the Board. The secretary shall have charge of the seal of the Corporation. The secretary shall perform such other duties and possess such other powers as are incident to that office or as are assigned by the president or the Board.

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6. Removal of Officers. The Board may remove any officer or agent of the Corporation if such action, in the judgment of the Board, is in the best interest of the Corporation. Appointment or election to a corporate office shall not, of itself, establish or create contract rights.

7. Vacancies in Offices. The Board, in its absolute discretion, may fill all vacancies in offices, regardless of the cause of such vacancies, for the remainder of the terms of the offices.

ARTICLE VI

CORPORATE RECORDS

          1.     Corporate Records.

                  (a)     The corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

                  (b)     The corporation shall maintain appropriate accounting records.

                  (c)     The corporation or its agent shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, by class of shares showing the number and class of shares held by each.

                  (d)     The corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.

                  (e)     The corporation shall keep a copy of the following records at its principal office:

                           (1)  Its articles or restated articles of incorporation and all amendments                                   to them currently in effect;

                           (2)  Its bylaws or restated bylaws and all amendments to them currently                                   in effect;

                           (3)  Resolutions adopted by its board of directors creating one (1) or                                   more

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classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding;

(4) The minutes of all shareholders' meetings, and records of all action taken by shareholders without a meeting, for the past

                                      three (3) years;

                            (5)     All written communications to shareholders generally within the                                       past three (3) years, including the financial statements furnished                                       for the past three (3) years under Article VII(1);

                            (6)     A list of the names and business addresses of its current directors                                       and officers; and

                            (7)     Its most recent annual report delivered to the secretary of state.

          2.     Inspection of Records of Shareholders.

                  (a)     Any shareholder of the corporation shall be entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in Section 1, above, if he gives the corporation written notice of his demand at least five (5) business days before the date on which he wishes to inspect and copy.

                  (b)     Any shareholder of the corporation shall be entitled to inspect and copy during regular business hours at a reasonable location specified by the corporation any of the following records of the corporation if the shareholder meets the requirements of subsection (c) of this section and gives the corporation written notice of his demand at least five (5) business days before the date on which he wishes to inspect and copy:

                            (1)     Excerpts from minutes of any meeting of the board of directors,                                       records of any action of a committee of the board of directors                                       while acting in place of the board of directors on behalf of the                                        corporation, minutes of any meeting of the shareholders, and                                       records of action taken by the shareholders or board of directors                                       without a meeting, to the

-7-

                                      extent not subject to inspection under subsection (a) of this                                       section;

                            (2)     Accounting records of the corporation; and

                            (3)     The record of shareholders.

                     (c)  A shareholder may inspect and copy the records described above only if:

                            (1)     His demand is made in good faith and for a proper                                       purpose;

                            (2)     He describes with reasonable particularity his purpose and the                                       records he desires to inspect; and

                            (3)     The records are directly connected with his purpose.

                     (d)  The right of inspection granted by this section shall not be abolished or limited by the corporation's articles of incorporation or bylaws.

                     (e)  This section shall not affect:

                             (1)     The right of a shareholder to inspect records under KRS 271B.7-                                        200 or, if the shareholder is in litigation with the corporation, to                                        the same extent as any other litigant;

                             (2)     The power of a court, independently of this chapter, to compel                                        the production of corporate records for examination.

                     (f)    For purposes of this section, "shareholder" includes a beneficial owner whose shares are held in a voting trust or by a nominee on his behalf.

          3.     Scope of Inspection of Right.

                  (a)     A shareholder's agent or attorney shall have the same inspection and copying rights as the shareholder he represents.

                  (b)     The right to copy under Article VI (2) shall include, if reasonable, the right to receive copies made by photographic xerographic, or other means.

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( c ) The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the shareholder. The charge shall not exceed the estimated cost of production or reproduction of the records.

( d ) The corporation may comply with a shareholder's demand to inspect the record of shareholders under Article VI (2) (b) (3) by providing him with a list of its shareholders that was compiled no earlier than the date of the shareholder's demand.

ARTICLE VII

REPORTS

          1.     Financial Statements for Shareholders.  Upon the written request of any shareholder or holder of voting trust certificates for shares of a corporation the corporation shall mail to such shareholder or holder of voting trust certificates its most recent financial statements showing in reasonable detail its assets and liabilities and the results of its operations.

          2.     Other Reports to Shareholders.  If the corporation indemnifies or advances expenses to a director under KRS 271B.8510 to 271B.8-540 in connection with a proceeding by or in the right of the corporation, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders' meeting.

          3.     Annual Report for Secretary of State.

                  (a)     The corporation shall deliver to the secretary of state for filing an annual report that sets forth:

                           (1)     The name of the corporation and the state under whose law it is                                      incorporated;

                           (2)     The address of its registered office and the name of its registered                                      agent at that office in this state;

                           (3)     The address of its principal office; and

                           (4)     The names and addresses of its directors and principal officers.

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(b) Information in the annual report shall be current as of the date the annual report is executed on behalf of the corporation.

(c) The first annual report shall be delivered to the secretary of state between January 1 and June 30 of the year following the calendar year in which the corporation was incorporated. Subsequent annual reports shall be delivered to the secretary of state between January 1 and June 30 of the following calendar years.

ARTICLE VIII

AMENDMENT OF ARTICLES OF INCORPORATION

          1.     Authority to Amend.

                  (a)     The corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation or to delete a provision not required in the articles of incorporation. Whether a provision is required or permitted in the articles of incorporation shall be determined as of the effective date of the amendment.

                  (b)     A shareholder of the corporation shall not have a vested property right resulting from any provision in the articles of incorporation, including provisions relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation.

          2.     Amendment by Board of Directors.  Unless the articles of incorporation provide otherwise, a corporation's board of directors may adopt one (1) or more amendments to the corporation's articles of incorporation without shareholder action:

                  (a)     To extend the duration of the corporation if it was incorporated at a time                             when limited duration was required by law;

                  (b)     To delete the names and addresses of the initial directors;

                  (c)     To delete the names and addresses of the initial registered agent or                             registered office, if a statement of change is on file with the secretary of                             state;

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                 (d)     To change each issued and unissued authorized share of an outstanding                            class into a greater number of whole shares if the corporation has only                            shares of that class outstanding;

                 (e)     To change the corporate name by substituting the word "corporation,"                            "incorporated," "company," "limited," or the abbreviation "corp.,"                            "inc.," "co.," or "ltd.," for a similar word or abbreviation in the name, or                            by adding, deleting, or changing a geographical attribution for the name;                   &n bsp;        or

                 (f)     To make any other change expressly permitted by law to be made                            without shareholder action.

          3.     Amendment by Board of Directors and Shareholders.

                  (a)     The corporation's board of directors may propose one (1) or more amendments to the articles of incorporation for submission to the shareholders.

                  (b)     For the amendment to be adopted:

                           (1)     The board of directors shall recommend the amendment to the                                      shareholders unless the board of directors determines that because                                      of conflict of interest or other special circumstances it should                                       make no recommendation and communicates the basis for its                                      determination to the shareholders with the amendment; and

                           (2)     The shareholders entitled to vote on the amendment shall approve                                      the amendment as provided in subsection (e) below.

                  (c)     The board of directors may condition its submission of the proposed amendment on any basis.

                  (d)     The corporation shall notify each other shareholder, whether or not entitled to vote, of the proposed shareholder's meeting in accordance with Article II(6). The notice of meeting shall also state that the purpose, or one (1) of the purposes, of the meetings is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment.

                  (e)     Unless the law, the articles of incorporation, or the board of directors (acting pursuant to subsection ( c ) of this section) requires a greater vote or a vote

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by voting groups, the amendments to be adopted shall be approved by:

(1) A majority of the votes entitled to be cast on the amendment by any voting group with respect to which the amendment would create dissenters' rights; and

                            (2)     The votes entitled by KRS 271B.7-250 and 271B.7-260 by every                                       other voting group entitled to vote on the amendment.

          4.     Articles of Amendment.  A corporation amending its articles of incorporation shall deliver to the secretary of state for filing articles of amendment as required by KRS 271B.10-060.

          5.     Restated Articles of Incorporation.  The corporation's board of directors may restate its articles of incorporation at any time with or without shareholder action in accordance with KRS 271B.10-070.

ARTICLE IX

AMENDMENT OF BYLAWS

          1.     Amendment by Board of Directors of Shareholders.

                  (a)     The corporation's board of directors may amend or repeal the corporation's bylaws unless:

                            (1)     The articles of incorporation or the law reserves this power                                       exclusively to the shareholders in whole or part; or

                            (2)      The shareholders in amending or repealing a particular bylaws                                        provide expressly that the board of directors may not amend or                                        repeal that bylaw.

                   (b)    The corporation's shareholders may amend or repeal the corporation's bylaws even though the bylaws may also be amended or repealed by its board of directors.

          2.     Bylaw Increasing Quorum or Voting Requirements for Directors.

                  (a)     A bylaw that fixes a greater quorum or voting requirement for the board of directors may be amended or repealed:

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                           (1)     If originally adopted by the shareholders, only by the shareholders,                                     or

                           (2)     If originally adopted by the board of directors, either by the                                      shareholders or by the board of directors.

                 (b)     A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the board of directors may provide that it may be amended or repealed only by a specified vote of either the shareholders or the board of directors.

                 (c)     Action by the board of directors under subsection (2) above to adopt or amend a bylaw that changes the quorum or voting requirement for the board of directors shall meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.

ARTICLE X

FISCAL YEAR

          1.     Fiscal Year.     The fiscal year of the Corporation shall begin on the first day of January of each year.

          IT IS HEREBY certified that the above By-Laws for the regulation of the affairs of FELLON-MCCORD ASSOCIATES, INC., were adopted by the Directors of said corporation on the 1^st day of October, 1992.

                                                                               /s/ John C. McCord
                                                                               Secretary

EX-3 20 fmcord32a.htm AMENDMENT TO BYLAWS, ADOPTED JANUARY 26, 1993 EXHIBIT 3 EXHIBIT 3.2(a)

AMENDMENT TO BYLAWS

          The undersigned Secretary of Fellon-McCord Associates, Inc. hereby certifies that the following amendments were adopted by the Board of Directors of said corporation by unanimous written consent as of January 26, 1993:

          Section 1 of Article V of the Bylaws has been amended in its entirety to read as follows:

               1.     General.     The officers of the Corporation shall be chosen by the Board of           Directors and shall be a President (who shall be the Chief Executive Officer of the           Corporation unless the Board of Directors shall expressly designate the Chairman           of the Board, if any, as such), a Secretary and a Treasurer. Further, the Board of           Directors may elect or appoint a Chairman of the Board, one or more Vice           Presidents, Assistant Secretaries, Assistant Treasurers and such other officers and           assistants to offices as i t from time to time deems necessary. Any two or more           offices may be held by the same person. The Chairman of the Board, if one is           elected or appointed, shall preside at all meetings of the shareholders and the Board           of Directors.

          The first sentence of Section 2 of Article V of the Bylaws (following such Section's caption) has been amended in its entirety to read as follows:

               The President shall be the Chief Executive Officer of the Corporation unless the           Board of Directors shall have expressly designated the Chairman of the Board, if           any, as such, pursuant to Section 1 of this Article V.

                                                                                      /s/ John C. McCord
                                                                                      John C. McCord, Secretary

EX-3 21 fmccord32b.htm AMENDMENT TO BYLAWS, ADOPTED JANUARY 3, 1996 EXHIBIT 3

EXHIBIT 3.2(b)

SECRETARY'S CERTIFICATE

RE: AMENDMENT TO BYLAWS

EX-3 22 fmccord32c.htm AMENDMENT TO BYLAWS, ADOPTED SEPTEMBER 15, 1997 EXHIBIT 3 EXHIBIT 3.2(c)

SECRETARY's CERTIFICATE

RE: AMENDMENT TO BYLAWS

          The undersigned Secretary of Fellon-McCord Associates, Inc., hereby certifies that the following amendments were adopted by the Board of Directors of said corporation by unanimous written consent, effective as of September 15, 1997:

          Section 1 of Article I of the Bylaws has been amended in its entirety to read as follows:

                       1.     Registered Office.     The registered office of the Corporation shall be at 9300 Shelbyville Road, Suite 810, Louisville, Kentucky 40222. The address of the registered office may be changed from time to time by the Board of Directors.

                                                                                          /s/ John C. McCord
                                                                                          John C. McCord, Secretary

EX-3 23 grvalleyex31.htm FIRST AMENDED AND RESTATED LLC AGREEMENT, DATED JUNE 1, 2001 COMMONWEALTH OF VIRGINIA EXHIBIT 3.1

COMMONWEALTH OF VIRGINIA

STATE CORPORATION COMMISSION

ARTICLES OF ORGANIZATION OF A

DOMESTIC LIMIITED LIABILITY COMPANY

Pursuant to Chapter 12 of Title 13.1 of the Code of Virginia the undersigned states as follows:

1.     The name of the limited liability company is:

       Green Valley Hydro, LLC

(The name must contain the words "limited company" or "limited liability company" or their abbreviations "L.C.", "LC", "L.L.C." or "LLC")

2.      A.      The registered agent's name is Commonwealth Legal Services whose business office is identical with the registered office.

        B.      The registered agent is (mark appropriate box)
               (1)      an INDIVIDUAL who is a resident of Virginia and
                        [  ] a member/manager of the limited liability company
                        [  ] an officer/director of a corporate member/manager of the limited liability
                            company
                        [  ] a general partner of a general or limited partnership member/manager of the limited
                            liability company
                        [  ] a trustee of a trust that is a member of the limited liability company
                        [  ] a member of the Virginia State Bar
                                                OR
               (2)       [X] a professional corporation, professional limited liability company or
                             registered limited liability partnership registered with the Virginia State
                             Bar under Section 54.1-3902 of the Code of Virginia.

3.       The address of the initial registered office in Virginia is
        4701 Cox Road Suite 301
        (number/street)

        Glen Allen                 VA                23060
        (city or town)              (state)                 (zip)

        located in the [  ] city or [ X ] county of Henrico

4.      The post office address of the principal office is

        10435 Downsville Pike
        (number/street)

        Hagerstown                 MD                21740
        (city or town)              (state)                 (zip)
5.      Signature:

        /s/ Patricia J. Clark May 23, 2001
        (organizer)         (date)

        Patricia J. Clark
         (printed name)

EX-3 24 grvalleyex32.htm ARTICLES OF ORGANIZATION, DATED MAY 23, 2001 LIMITED LIABILITY COMPANY AGREEMENT

EXHIBIT 3.2

FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
GREEN VALLEY HYDRO, LLC

This FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Green Valley Hydro, LLC (the "Company") is made and entered into as of June 1, 2001 by Allegheny Energy, Inc., a Maryland corporation, as the sole member (the "Parent" or "Member"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a member of the Company in accordance with this Agreement and the Virginia Limited Liability Company Act, as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

The Member, by execution of this Agreement, hereby establishes the Company as a limited liability company pursuant to and in accordance with the Act.

1. Articles. Articles of Organization of the Company (the "Articles") have been filed in the Clerk's Office of the Virginia State Corporation Commission pursuant to the Act. Each of the Members is authorized and one of the Members shall also file and record any amendments to the Articles required pursuant to the Act, and any other documents as may be required or appropriate under the laws of the Commonwealth of Virginia.

2. Name. The name of the limited liability company formed hereby is Green Valley Hydro, LLC.

3. Purpose. The purpose of the Company is to engage in all lawful business for which limited liability companies may be formed under the Act and the laws of the Commonwealth of Virginia.

4. Registered Office. The address of the registered office of the Company in the Commonwealth of Virginia is 4701 Cox Road, Suite 301, Glen Allen, Henrico County, VA 23060.

5. Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the Commonwealth of Virginia is Commonwealth Legal Services, 4701 Cox Road, Suite 301, Glen Allen, Henrico County, VA 23060.

6. Members. The name of the Member is Allegheny Energy, Inc. No other person or entity shall be admitted as a member of the Company without the prior written approval of Parent.

7. Powers. The business and affairs of the Company shall be managed by the Members. Each of the Members shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purpose described herein, including all powers, statutory or otherwise, possessed by managing members under the laws of the Commonwealth of Virginia. The Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, designate one or more committees, each to have such lawfully delegable powers and duties as the Members may confer. Except as provided by law, any such committee may have and may exercise the powers and authority of the Members of the Company. Unless otherwise prescribed by the Members, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members of the committee present at a meeting of the committee at which there is a quorum shall be the act of such committee. In addition, the Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, elect such officers of the Company as the Members believe to be in the best interests of the Company. The officers of the Company shall have such authority and shall perform such duties as are customarily incident to their respective offices or as may be specified from time to time by resolution of the Members regardless of whether such authority and duties are customarily incident to such office.

8. Restriction on Powers. Notwithstanding any other provision of this Agreement and any provision of law, the Company shall not, without the consent of all of the Members (a) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) consent to the institution of bankruptcy or insolvency proceedings against it or to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (c) file a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a part of its property, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any corporate action in fur therance of the actions set forth in clauses (a) through (f) of this Section 8.

11. Additional Contributions. No Member is required to make any additional capital contribution to the Company.

12. Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the capital contributions of the Members.

14. Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

15. Liability of Members. The Members shall not have any liability for the obligations or liabilities of the Company except to the extent provided in the Act.

16. Governing Law. This Agreement shall be governed by, and construed under, the laws of the Commonwealth of Virginia applicable to agreements made and to be performed wholly within that Commonwealth, all rights and remedies being governed by said laws.

          IN WITNESS WHEREOF, the undersigned has duly executed this First Amended and Restated Limited Liability Company Agreement as of the date first written above.

                                                        ALLEGHENY ENERGY, INC.

                                                        By:  /s/ Jay S. Pifer
                                                        Name:  Jay S. Pifer
                                                        Title:    Senior Vice President

EX-3 25 lakeacquisitionex32.htm THIRD AMENDED AND RESTATED LLC AGREEMENT, DATED MAY 1, 2002 LIMITED LIABILITY COMPANY EXHIBIT 3.2

THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY
AGREEMENT
OF
LAKE ACQUISITION COMPANY, L.L.C.

This THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Lake Acquisition Company, L.L.C. (the "Company") is made and entered into as of May 1, 2002 by Allegheny Energy Supply Company, LLC, ("AE Supply"), a Delaware limited liability company as the sole member (the "Parent" or "Member"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a Member of the Company in accordance with this Agreement and the Delaware Limited Liability Company Act (6 Del.C. Section 18-101 et seq.), as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

The Member, by execution of this Agreement, hereby establishes the Company as a limited liability company pursuant to and in accordance with the Act.

2. Name. The name of the limited liability company formed hereby is Lake Acquisition Company, L.L.C.

4. Registered Office. The address of the registered office of the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

6. Principal Business Office. The principal business office of the Company shall be located at 480 N. Hall Road, Wheatland, Indiana 47597 or at such other location as may hereafter be determined by the Members.

8. Powers. The business and affairs of the Company shall be managed by the Members. Each of the Members shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purpose described herein, including all powers, statutory or otherwise, possessed by managing members under the laws of the State of Delaware. The Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, designate one or more committees, each to have such lawfully delegable powers and duties as the Members may confer. Except as provided by law, any such committee may have and may exercise the powers and authority of the Members of the Company. Unless otherwise prescribed by the Members, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members of the committee present at a me eting of the committee at which there is a quorum shall be the act of such committee. In addition, the Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, elect such officers of the Company as the Members believe to be in the best interests of the Company. The officers of the Company shall have such authority and shall perform such duties as are customarily incident to their respective offices or as may be specified from time to time by resolution of the Members regardless of whether such authority and duties are customarily incident to such office. Parent is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file the Certificate of Formation of the Company (and any other certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

9. Restriction on Powers. Notwithstanding any other provision of this Agreement and any provision of law, the Company shall not, without the consent of all of the Members (a) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) consent to the institution of bankruptcy or insolvency proceedings against it or to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (c) file a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a part of its property, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any corporate action in furtherance of the actions set forth in clauses (a) through (f) of this Section 9.

11. Capital Contributions. Without creating any rights in favor of any third party, initial capital contributions shall be made by the Members at the times and in the amounts determined by the Members, and may be made in cash or other property as determined by the Members. Members have contributed amounts in cash, and no other property, to the Company according to the percentage interests set forth on Annex I hereto.

12. Additional Contributions. No member is required to make any additional capital contributions to the Company. However, a Member may make additional capital contributions to the Company.

13. Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the ownership percentages of the Members.

15. Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

17. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware, all rights and remedies being governed by said laws.

          IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Third Amended and Restated Limited Liability Company Agreement as of the date first written above.

                                                  Member:

                                                  ALLEGHENY ENERGY SUPPLY COMPANY, LLC,
                                                  a Delaware limited liability company

                                                  By:  /s/ D. C. Benson
                                                  Name:  David C. Benson
                                                  Title:   Vice President

ANNEX I

Percentage Interests of the Members

Allegheny Energy Supply Company, LLC 100%

EX-3 26 lincolnex31.htm CERTIFICATE OF AMENDMENT, DATED MAY 17, 2001 CERTIFICATE OF FORMATION EXHIBIT 3.1

STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF
ALLEGHENY ENERGY SUPPLY LINCOLN GENERATING FACILITY, LLC

1. The name of the limited liability company is Allegheny Energy Supply Lincoln Generating Facility, LLC.

2. The Certificate of Amendment of the limited liability company is hereby amended as follows:

          a).     The address of its registered office in the State of Delaware is 1209 Orange
                  Street, in the City of Wilmington, County of New Castle, Delaware 19801.
                  The name of its registered agent at such address is The Corporation Trust Company.

3. The foregoing amendment is to become effective immediately upon the filing of this Certificate of Amendment.

          IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Allegheny Energy Supply Lincoln Generating Facility, LLC this 17th day of May, 2001.

                                                  Member:
                                                  ALLEGHENY ENERGY SUPPLY COMPANY, LLC
                                                  a Delaware limited liability company

                                                  By:  /s/ Patricia J. Clark
                                                  Name: Patricia J. Clark
                                                  Title: Assistant Secretary

EX-3 27 lincolnex32.htm FIRST AMENDED AND RESTATED LLC AGREEMENT, DATED MAY 4, 2001 LIMITED LIABILITY COMPANY AGREEMENT EXHIBIT 3.2

FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ALLEGHENY ENERGY SUPPLY
LINCOLN GENERATING FACILITY, LLC

This FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Allegheny Energy Supply Lincoln Generating Facility, LLC (the "Company") is made and entered into as of May 4, 2001 by Allegheny Energy Supply Company, LLC (AE Supply"), a Delaware limited liability company as the sole member (the "Parent" or "Member"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a Member of the Company in accordance with this Agreement and the Delaware Limited Liability Company Act, (6 Del.C. Section 18-101 et seq.), as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

WHEREAS, Parent has purchased the member interest in the Company which was formed as a limited liability company pursuant to the Act;

NOW, THEREFORE, Parent hereby adopts the following as the Company's "limited liability company agreement" (as that term is used in the Act):

1. Formation. Parent has purchased the member interest in the Company which was formed as a limited liability company pursuant to the Act and shall be the sole member of the Company upon the closing and be shown as such on the books and records of the Company. The Parent, by execution of this Agreement, hereby establishes the Company as a limited liability company pursuant to the Act. Each of the Members is hereby designated as an authorized person within the meaning of the Act to execute, deliver and file any amendments and restatements to the Certificate of Formation required pursuant to the Act and any other documents as may be required or appropriate under the laws of the State of Delaware. Promptly after execution of this Agreement by Parent, Parent will execute, file and record a Certificate of Amendment of the Company (the "Certificate") in the office of the Secretary of State of Delaware pursua nt to the Act.

2. Name. The name of the limited liability company acquired hereby is amended to be Allegheny Energy Supply Lincoln Generating Facility, LLC.

4. Registered Office. The address of the registered office of the Company in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

6. Principal Business Office. The principal office of the Company shall be located at Lincoln Energy Center, 27150 South Kankakee Road, Manhattan, Illinois 60442 or such other location as may hereafter be determined by the Members.

8. Powers. The business and affairs of the Company shall be managed by the Members. Each of the Members shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purpose described herein, including all powers, statutory or otherwise, possessed by managing members under the laws of the State of Delaware. The Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, designate one or more committees, each to have such lawfully delegable powers and duties as the Members may confer. Except as provided by law, any such committee may have and may exercise the powers and authority of the Members of the Company. Unless otherwise prescribed by the Members, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members of the committee present at a meeting of the committee at which there is a quorum shall be the act of such committee. In addition, the Members may, by resolution adopted by the sole Member or, if more than one, a majority in interest of the Members, elect such officers of the Company as the Members believe to be in the best interests of the Company. The officers of the Company shall have such authority and shall perform such duties as are customarily incident to their respective offices or as may be specified from time to time by resolution of the Members regardless of whether such authority and duties are customarily incident to such office. Parent is hereby designated as authorized person, within the meaning of the Act, to execute, deliver and file the Certificate of Formation of the Company and any other certificates, and any amendments and/or restatements thereof, necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a part of its property, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability to pay its debts generall y as they become due, or (g) take any corporate action in furtherance of the actions set forth in clauses (a) through (f) of this Section 9.

10. Dissolution. The Company shall dissolve, and its affairs shall be wound up, upon the first to occur of the following: (a) the written consent of all of the Members, (b) the death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member or the occurrence of any other event which terminates the continued membership of the Member in the Company, unless, within ninety days after the occurrence of such an event, the remaining Members agree in writing to continue the business of the Company, or (c) the entry of a decree of judicial dissolution under Section 18-802 of the Act.

11. Capital Contributions. Without creating any rights in favor of any third party, initial capital contributions shall be made by the Members at the times and in the amounts determined by the Members, and may be made in cash or other property as determined by the Members. Members have contributed amounts in cash, and no other property, to the Company according to the percentage interests set forth on Annex I hereto.

12. Additional Contributions. No member is required to make any additional capital contributions to the Company. However, a Member may make additional capital contributions to the Company.

13. Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the ownership percentages of the Members.

15. Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

16. Exculpation. Neither the Members, nor any owner, officer,

or employee of the Company or the Members, shall be liable, responsible or accountable in damages or otherwise to the Company or the Members for any action taken or failure to act (even if such action or failure to act constituted the negligence of a person) on behalf of the Company within the scope of the authority conferred on the person described in this Agreement or by Law unless such act or omission was performed or omitted fraudulently or constituted gross negligence or willful misconduct. To the extent that, at law or equity, the Members, or any owner, officer, or employee of the Company or the Members have duties (including fiduciary duties) and liabilities relating to the Company, the Members or any owner, officer, or employee of the Company or the Members acting under this Agreement shall not be liable to the C ompany or the Members for their reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of the Members or any owner, officer, or employee of the Company or the Members otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of the Members or any owner, officer, or employee of the Company or the Members.

17. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned intending to be legally bound hereby, has duly executed this First Amended and Restated Limited Liability Company Agreement as of the date first written above.

                                                  Member:
                                                  ALLEGHENY ENERGY SUPPLY COMPANY, LLC
                                                  a Delaware limited liability company

                                                  By:   /s/ Michael P. Morrell
                                                  Name: Michael P. Morrell
                                                  Title: President and COO

ANNEX I

Percentage Interests of the Members

Allegheny Energy Supply Company, LLC 100%

EX-3 28 mabcoex31.htm CERTIFICATE OF FORMATION, DATED OCTOBER 12, 2001 CERTIFICATE OF FORMATION EXHIBIT 3.1

CERTIFICATE OF FORMATION

OF

MABCO STEAM COMPANY, LLC

          1.     The name of the limited liability company (the "Company") is MABCO Steam Company, LLC.

          2.     The street address and county of the Company's initial registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. Its initial registered agent at such address is Corporation Trust Company.

          IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of MABCO Steam Company, LLC this 12^th day of October, 2001.

                                                      /s/ Don J. Gallagher
                                                      Name: Don J. Gallagher
                                                      Authorized Person

EX-3 29 mabcoex32.htm LLC OPERATING AGREEMENT, DATED OCTOBE 31, 2001 <<<CLCORP01 Doc: 200072_3 NOTES EXHIBIT 3.2

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

MABCO STEAM COMPANY, LLC.

THIS is the LIMITED LIABILITY COMPANY OPERATING AGREEMENT (the "Agreement") dated as of October 31, 2001 by and among the Members. Unless the context otherwise requires, terms that are capitalized and not otherwise defined in context have the meanings set forth or cross-referenced in Appendix A of this Agreement.

In consideration of their mutual covenants and subject to the terms and conditions of this Agreement, the Company and the Members do hereby agree:

ORGANIZATIONAL MATTERS

Formation of the Company; Term. The Company is a limited liability company under the Act governed by this Agreement and formed by the execution and filing with the Secretary of State of Delaware of the Certificate of Formation of the Company. The Company is to continue until dissolved pursuant to Section 8.1.
Name. The name of the Company is: MABCO Steam Company, LLC.
Purpose of the Company; Business. The purpose of the Company is to: (a) execute and deliver the Lease Agreement, the Purchase Agreement and certain other Operative Documents, (b) to exercise all of the Company's rights and privileges under, and to discharge all of the Company's duties and obligations under, the Operative Documents, and (c) perform all things necessary or incidental to or connected with or growing out of those activities in accordance with this Agreement (collectively, the "Business").
Principal Place of Business, Office and Agent. The principal place of business and mailing address of the Company and office where the records described in Section 5.3(b) and (c) are kept is c/o The Cleveland-Cliffs Iron Company, 1100 Superior Avenue, Cleveland, Ohio 44114-2585, or at such other location as is specified from time to time by the Manager. The registered office of the Company in the State of Delaware is at the offices of the statutory agent of the Company in Delaware. The statutory agent of the Company in Delaware is CT Corporation System, Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801. The Manag er, from time to time, may change the statutory agent in Delaware or the principal place of business of the Company. The Company also may establish additional places of business or offices for maintenance of records as the Manager determines are necessary or appropriate. This Section 1.4 is to be amended by the Manager (without the need for any action by any Member) to reflect each change in the identity or address of the registered agent in Delaware.
Fictitious Business Name Statement; Other Certificates. The Manager will, from time to time, register the Company as a foreign limited liability company and file fictitious or trade name statements or certificates in those jurisdictions and offices as the Manager considers necessary or appropriate. The Company may do business under any fictitious business names selected by the Manager. The Manager will, from time to time, file or cause to be filed certificates of amendment, certificates of cancellation, or other certificates as the Manager reasonably considers necessary or appropria te under the Act or under the laws of any jurisdiction in which the Company is doing business to establish and continue the Company as a limited liability company or to protect the limited liability of the Members.

CAPITALIZATION

Capital Contributions; Initial Interests. (a) Each Member agrees to make an Initial Capital Contribution having the Agreed Value specified next to such Member's name on Exhibit I and in the form, manner, within the time period, and subject to any contingencies or conditions precedent described in such Member's Subscription Agreement . Anything to the contrary in this Agreement notwithstanding, in the event an Installment Member fails to contribute any portion of its Initial Capital Contribution in accordance with the terms and conditions set forth in such Member's Subscription Agreement, and such Installment Member fails to contribute such portion within three (3) B usiness Days of the date the Manager provides notice of such failure to such Installment Member, then such Installment Member shall be considered a "Limited Rights Member" for all purposes under this Agreement. The Manager shall notify all Members of the occurrence of such status change with respect to such Member. Any Member that is not a "Limited Rights Member" shall be considered a "Full Rights Member" for all purposes under this Agreement.

(b) Each of the Members agrees to contribute to the Company such Member's Class B Interest Share of one or more additional Capital Contributions ("Additional Capital Contribution") called in the manner specified in Section 2.3 (a Member's "Commitment"); provided, however, that no Member will be obligated to make Additional Capital Contributions that exceed, in the aggregate, ten percent (10%) of the Agreed Value of its Initial Capital Contribution.

(c) In consideration of its Initial Capital Contribution and its Commitment, each Member has received a Class B Interest having the Share set forth next to its name on Exhibit I. Furthermore, in addition to the Initial Capital Contributions, certain founding Members have, in consideration of their contributions to the formation of the Company, acquired a Class A Interest in an amount set forth next to each such Member's name on Exhibit I.

Additional Members; Additional Interests. Prior to December 31, 2001, the Manager may from time to time issue additional Class A or Class B Interests as provided in this Section 2.2 and admit the Purchasers thereof as Members. Any Class A or B Interest issued pursuant to this Section 2.2 must be approved by Majority Vote or must satisfy all of the following conditions applicable to the Class of Interest being issued:

the purchaser must execute and deliver a subscription agreement substantially in the form of Exhibit II (the "Subscription Agreement");
the purchaser of a Class B Interest must make an Initial Capital Contribution such that the ratio of the Agreed Value of such Initial Capital Contribution to its Share of Class B Interest is the same as such ratio for all of the Members, taking into account the dilution caused by such issuance;
the purchaser of any Class B Interest must make a Commitment as provided in Section 2.1(b); and
the purchaser of any Class A Interest must pay such consideration required by the Manager.

Call for Capital Contributions. The unpaid Additional Capital Contributions of the Members may be called for payment, from time to time, for any purpose related to the Business of the Company. Such purposes may include, without limitation, (a) reimbursing the Manager for its expenses incurred in the performance of its duties; (b) bearing the costs of the Company, including without limitation the costs of accountants and attorneys; and (c) if necessary, taking such action as may be necessary or desirable to preserve the value of the Company's property. To make a call for payment, the Manager must (i) obtain the approval by Majo rity Vote; and (ii) deliver written notice to each Member, specifying (A) the amount and purpose of the contribution to be made by the Member and all other Members, (B) the date by which the contribution must be paid to the Company (which must not be less than three (3) Business Days after the date of the notice), and (C) specifying payment instructions. Each Member will pay its properly called contribution by certified or bank check or by bank wire transfer of immediately available funds in accordance with the instructions in the notice. Any call for Additional Capital Contributions may be for all or any portion of the uncalled Commitment therefore, and must be called from among the Members in proportion to their Shares of Class B Interest.
Capital Contributions Unconditional. The obligation of each Member to make its Initial Capital Contribution and Additional Capital Contribution is absolute and unconditional, regardless of any subsequent event, including, without limitation, any breach of this Agreement by the Manager or another Member, or the Bankruptcy of the Company. The provisions of this Article 2 are for the express benefit of the Company and each other Member, and can only be compromised by amendment of this Agreement.
Default in Payment.

If any Member fails to pay all of an Additional Capital Contribution required by this Article 2 on or before the date specified in the notice delivered by the Manager under Section 2.3, the Manager will deliver a second written notice to the Member specifying the amount of the contribution owed by the Member to the Company. If the Member fails to pay all of an Additional Capital Contribution required by this Article 2 within three (3) Business Days of the date of the second notice such Member will be in default, and the Manager will notify every Member.
If any Member is in default pursuant to Section 2.5 hereof, then such Member shall thereafter be considered a Limited Rights Member for all purposes under this Agreement. This shall be the exclusive remedy for a failure of a Member to pay all of an Additional Capital Contribution pursuant to this Article 2.

Additional Contributions. No Member is obligated to or may make any additional capital contribution to the Company other than its Additional Capital Contribution.
Interest. Each Member shall earn interest from time to time on the balance of such Member's Capital Account, as follows: (i) from the date hereof through and including December 31, 2007, at the rate of twelve percent (12%) per annum; and (ii) from January 1, 2008 through and including December 31, 2012, at the rate of sixteen percent (16%) per annum. Any such interest shall be distributed from time to time at the discretion of the Manager and in accordance with Article 4 hereof.
Withdrawal. No Member is entitled to withdraw any portion of its paid-in capital contribution and no Member has any right to a return of capital except through distributions as provided in Article 4 and Article 8.

CAPITAL ACCOUNTS AND ALLOCATIONS

Capital Accounts. Each Member will have a Capital Account maintained as set forth in Article 2 of Appendix B.
Allocations of Book Income and Loss. Except as stated in Article 3 of Appendix B:

Book Income: The Company's Book Income for any Fiscal Year is to be allocated to the Members as follows:

First, to the Full Rights Members, until the cumulative amount of Book income allocated to each Full Rights Member pursuant to this Section 3.2(a)(i) equals the cumulative amount of Book loss, if any, previously allocated to such Full Rights Member pursuant to Section 3.2(b)(ii), pro rata in proportion to the respective amounts required to achieve such result;
Second, to the Limited Rights Members, until the cumulative amount of Book income allocated to each Limited Rights Member pursuant to this Section 3.2(a)(ii) equals the cumulative amount of Book loss, if any, previously allocated to such Limited Rights Member pursuant to Section 3.2(b)(i), pro rata in proportion to the respective amounts required to achieve such result;
Third, to the Full Rights Members until the cumulative amount of Book income allocated to each Full Rights Member pursuant to this Section 3.2(a)(iii) (net of offsetting losses, if any, under Section 3.2(b)(ii)) equals the cumulative amount of interest to which such Full Rights Member is entitled pursuant to Section 2.7, pro rata in proportion to the respective amounts required to achieve such result;
Fourth, to the Limited Rights Members until the cumulative amount of Book income allocated to each Limited Rights Member pursuant to this Section 3.2(a)(iv) (net of offsetting losses, if any, under Section 3.2(b)(i)) equals the cumulative amount of interest to which such Limited Rights Member is entitled pursuant to Section 2.7, pro rata in proportion to the respective amounts required to achieve such result; and
Fifth, to the Members in proportion to their Class B Interest Shares.

Book Loss: The Company's Book Loss for any Fiscal Year is to be allocated to the Members as follows:

First, to the Limited Rights Members in proportion to their respective Capital Account balances, until the Capital Account balances of all Limited Rights Members have been reduced to zero;
Second, to the Full Rights Members in proportion to their respective Capital Account balances, until the Capital Account balances of all Full Rights Members have been reduced to zero; and
Third, to the Members in proportion to their Class B Interest Shares.

Tax Allocations. Except as stated in Article 4 of Appendix B, each item of income, gain, loss, and deduction is to be allocated for federal income tax purposes in the same manner as the corresponding allocation for Book purposes.

DISTRIBUTIONS AND REDEMPTIONS

Limitations on Distributions and Redemption. The Company will not make any distribution of cash or redeem any Interests of the Members, except to the extent that the Company then has cash available in excess of the sum of (a) amounts required to pay or make provision for all Company expenses, plus (b) all reserves that are considered necessary or appropriate by the Manager. To the extent that the Manager reasonably foresees that the Company will receive cash or other consideration to satisfy liabilities not yet due and payable, the Company is not required to establish reserves or make other provision to satisfy such liabilities prior to making distributions under this Article 4. Distributions of cash or redemptions of Interest are only to be made to the extent cash is available to the Company without requiring (i) the sale of Company assets or the pledge of Company assets at a time or on terms that the Manager reasonably believes are not in the best interests of the Company or (ii) a reduction in reserves that the Manager reasonably believes are necessary or desirable for working capital or other Company purposes.
Operative Documents Limitations. Anything in this Agreement to the contrary notwithstanding, the Company is not to make any distribution of cash or other property to any Member or redeem any Member's Interest if the distribution or redemption would violate any of the Operative Documents, or any other loan or credit agreement to which the Company is a party or by which it is bound.
Distributions; Mandatory Redemptions. Subject to Sections 4.1 and 4.2, the Manager shall from time to time distribute to the Members cash held by the Company, and shall use any cash held by the Company to redeem each Member's Interest, as follows:

Prior to the occurrence of a Full Right ROC Completion, cash held by the Company and available for distribution shall be used (i) first to distribute the interest described in Section 2.7 hereof to Full Rights Members on a pro-rata basis amongst all Full Rights Members, and (ii) second, if any such cash remains available after all distributions described in subsection (i) of this Section 4.3(a) have been paid to all Full Rights Members, then such cash shall be used to redeem the Class B Interest of each Full Rights Member, as reflected by the balance of each such Member's Capital Account, with each Full Rights Member's Capital Account to be redeemed on a pro-rata basis in accordance with the ratio each such Full Rights Member's Class B Interest Share bears to the sum of the Class B Interest Shares of all Full Rights Members at the time of such redemption.
Following the occurrence of a Full Right ROC Completion and until the occurrence of a Limited Right ROC Completion, cash held by the Company and available for distribution shall be used (i) first to distribute the interest described in Section 2.7 hereof to Limited Rights Members on a pro-rata basis amongst all Limited Rights Members, and (ii) second, if any such cash remains available after all distributions described in subsection (i) of this Section 4.3(b) have been paid to all Limited Rights Members, then such cash shall be used to redeem the Class B Interest of each Limited Rights Member, as reflected by the balance of each such Member's Capital Account, with each Limited Rights Member's Capital Account to be redeemed on a pro-rata basis in accordance with the ratio each such Limited Rights Member's Class B Interest Share bears to the sum of the Class B Interest Shares of all Limited Rights Members at the time of such redemption.
Following the occurrence of a Limited Right ROC Completion, distributions shall be paid to all Members in accordance with each such Member's Class B Interest Share as of the date and time immediately preceding the first redemption of any Interests by the Company.

MANAGEMENT

The Manager.

The Company has a single Manager elected from time to time by Majority Vote. The initial Manager is The Cleveland-Cliffs Iron Company.
The Manager is to serve until the earlier of his, her or its death, resignation, or removal. The Manager may be removed at any time by a Majority Vote. Any Manager may resign at any time by delivering his or her written resignation to each of the Members.
The Manager is to be reimbursed by the Company for all reasonable expenses incurred by the Manager in connection with its services as such. The Manager shall from time to time submit a record of such expenses for the Members' approval by Majority Vote, which approval shall not be unreasonably withheld.

Authority of the Manager; Limitations.

Except as specifically reserved to the Members in this Agreement, the Manager has all power and authority to manage, and direct the management of, the Business both ordinary and extraordinary. Approval by or action taken by the Manager in accordance with this Agreement is the approval or action of the Company and is binding on each Member.
Without the approval by Class A Members holding no less than sixty-six and two-thirds percent (66 2/3%) of the Shares of Class A Interest (a "Majority Vote"), the Manager will not, and has no power or authority to:

do any of the acts listed in the Agreement as requiring a Majority Vote;
amend, modify or terminate any Operative Document, or waive or permit to lapse or expire, any material right arising under any Operative Document;
cause or permit the Company to enter into any contract or other agreement with any Member or any affiliate of any Member, amend, modify or terminate any such contract or agreement, or waive or release any of its rights under any such contract or agreement;
call for any Additional Capital Contribution;
after December 31, 2001, issue any new Interest, or any security convertible into or exchangeable for any Interest in the Company;
cause or permit the Company to incur any indebtedness for borrowed money, guaranty any obligation of any Person, grant any Person any security interest in, or permit any Person to place any lien or other encumbrance on, any of the Property;
cause any person to become an "employee" (as defined under any applicable law) of the Company;
purchase or otherwise acquire any interest in real property or any other property with a value in excess of $100,000 (except as contemplated by the Operative Documents); or
enter into any agreement to do any of the foregoing (other than the Operative Documents); or
on behalf of the Company, file a petition or otherwise voluntarily commence a case, or proceeding, or filing an answer not denying the material allegations of a complaint in any proceeding seeking relief under any federal or state bankruptcy, insolvency or debtor's reorganization law.

Without the approval by Class A Members holding eighty percent (80%) of the Shares of Class A Interest (a "Super-Majority Vote"), the Manager will not, and will have no power or authority to:

do any of the acts listed in this Agreement as requiring Super-Majority Vote;
permit the Company to merge or consolidate with any Person;
adopt any resolution of dissolution;
sell all or substantially all of the Company's assets, either in a single transaction or in a series of related transactions, other than to Weirton SPS pursuant to the Lease; or
enter into any agreement to do any of the foregoing.

Duties of the Manager. In addition to obligations imposed by other provisions of this Agreement, the Manager, by itself or through agents, on behalf of the Company and at the expense of the Company, is to:

use commercially reasonable efforts to cause the Company to execute and deliver the Operative Documents to perform its obligations under the Operative Documents, and to take such steps as may be necessary or desirable to protect the Company's rights under this Agreement;
maintain at the Company's principal place of business a list, updated from time to time, that accurately sets forth the names and addresses of the Members; the Interests held by the Members, separately identified as to their status as Class A Members or Class B Members; the amount of each Member's Commitment; and the capital each Member has paid to the Company; and update, from time to time, Exhibit I to accurately reflect the then-current information;
furnish to each Member (i) as soon as practicable, but in no event later than ninety days after the end of each Fiscal Year, financial statements of the Company audited by Ernst & Young LLP or by another firm of certified public accountants proposed by the Manager and approved by Majority Vote (including, without limitation, a balance sheet and statements of income and Members' equity); and (ii) by March 15 of each calendar year all information required for federal and state income tax reporting purposes with respect to the Company, including without limitation a copy of Schedule K-1 to the Company's federal income tax return for the Fiscal Year most recently ended;
arrange for the preparation of all necessary informational federal income tax forms on behalf of the Company and for the preparation and filing of any and all state and local income and franchise tax returns required to be filed by the Company;
maintain and preserve during the term of the Company and for five years thereafter, or for such longer time as is necessary to determine the cost basis of the Company assets, at the Company's office designated pursuant to Section 1.4 (or, if the Company has been terminated, at the location designated by the Manager in written notice to the Members), complete and accurate books of account in accordance with the provisions of this Agreement, a list of the names and addresses of each Member, copies of the Articles of Organization, this Agreement, and copies of all financial statements and tax returns of the Company for the most recent five-year period during the term of the Company;
obtain and maintain on behalf of the Company such all-risk, public liability, workers' compensation, Manager's liability, fidelity, forgery, and other insurance, if any, as may be available on commercially reasonable terms and as may be deemed necessary or appropriate by the Manager; and
hold all Company property in the Company name or, in the case of cash or cash equivalents, in one or more depository accounts as to which the Company is a beneficial owner.

Standard of Care; Indemnity.

Any Member or any director, trustee, or officer of any Member serving on behalf of the Company, the Manager, and any employee of the Company in the performance of his, her, or its duties, is entitled to rely in good faith on information, opinions, reports, or other statements, including financial statements, books of account, and other financial data, if prepared or presented by: (i) one or more employees of the Company if the person relying on the statements reasonably believes that the person preparing or presenting the material is reliable and competent in that matter; or (ii) legal counsel, public accountants, or other persons as to matters that the person relying on the statements reasonably believes are within the person's professional or expert competence.
The Manager is to perform his, her, or its duties as a manager in good faith, in a manner he, she, or it reasonably believes to be in or not opposed to the best interests of the Company, and with the care that an ordinarily prudent person in a similar position would use under similar circumstances.
The Manager cannot be found to have violated Section 5.4(b) unless it is proved, by clear and convincing evidence, in an action brought against the Manager, that he, she, or it has not met the standard of Section 5.4(b).
The Manager is to be liable in damages for any action that he, she, or it takes or fails to take as a manager only if it is proved, by clear and convincing evidence, that his, her, or its action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the Company or undertaken with reckless disregard for the best interests of the Company.
The Company will provide indemnification to Indemnitees as set forth in Appendix C.

Waiver of Conflict of Interest.

Each Member hereby waives, on behalf of itself and the Company, any claim or cause of action against (i) the Manager, (ii) any employee of the Manager or any of its Affiliates made available to the Company while remaining an employee of such Manager or Affiliate (a "Seconded Employee") or (iii) other Members for any breach of fiduciary duty to the Company by the Manager, a Seconded Employee or a Member as a result of a conflict of interest between the Company and the Manager, any of the Manager's Affiliates or a Member.

Each Member acknowledges and agrees that in the event of any such conflict of interest a Member, the Manager and each such Seconded Employee may act in the best interest of the Member, Manager or any of the Manager's Affiliates. This Section 5.5 entitles a Member, the Manager or a Seconded Employee to prefer the interests of such Member, the Manager or any of the Manager's Affiliates over the interests of the Company or any other Member, but does not permit (i) action taken solely to harm the Company or another Member, or (ii) any breach of this Agreement.
Neither a Member, the Manager nor any Seconded Employee is obligated to reveal confidential or proprietary information belonging to such Member or the Manager (or any of the Manager's Affiliates) or to recommend or take any action in such Person's position as a Member, Manager or as Seconded Employee that prefers the interests of the Company over the interests of such Member or Manager (or any of the Manger's Affiliates). Each Member hereby waives the fiduciary duty of such Person, if any, to such Member or the Company in the event of any such conflict of interest.

POWERS AND DUTIES OF AND
LIMITATIONS ON THE MEMBERS

Rights of the Members. Each Member is entitled to receive the financial statements and tax reporting information referred to at Section 5.3(c) and (d) and have such additional rights as are elsewhere provided in this Agreement or by mandatory requirements of applicable law.
Limitations on the Rights of the Members. Subject to any mandatory requirements of applicable law, no Member (in its capacity as a Member) has the right to take any part whatsoever in the management and control of the ordinary business of the Company, sign for or bind the Company, compel a sale or appraisal of Company assets other than in the case of a judicial dissolution, or sell or assign its Interest in the Company except as provided in this Agreement.
Limited Liability of the Members. Except for contributions specifically required under Section 2.1 or 2.3 of this Agreement, the Members (solely in their capacity as Members) have no obligation to contribute to the Company and no liability for any Company obligations. Any liability to return distributions made by the Company is limited to mandatory requirements of the Act or of any other applicable law.
Voting Rights of Members.

By Majority Vote or Super-Majority Vote, as applicable, the Class A Members may consent or withhold consent with respect to those matters as the Members may consent to under the provisions of this Agreement or, under the Act, must give consent to in order for the Manager's actions to be authorized.
Class B Members shall have no voting rights hereunder (except to the extent a Class B Member that is also a Class A Member has voting rights with respect to such Member's Class A Interest).
Members shall exercise their voting rights as provided in Appendix D.

Anything to the contrary in this Agreement notwithstanding, until the occurrence of the Full Rights ROC Completion, a Limited Rights Member shall have no voting rights of any kind under this Agreement, and until such Full Rights ROC Completion, any minimum threshold voting requirement in this Agreement shall be adjusted accordingly so that the aggregate Class A Interest Shares, a given percentage of which must vote in favor of or approve any matter being submitted for a vote, shall not include any Class A Interest Shares of Limited Rights Members.

Certain Agreements with Members and Affiliates of Members. The Company may purchase or sell goods or other services from or to any Member or any of their Affiliates. Any profits or income earned by a Member or Affiliate as the result of a transaction with the Company belongs to the Member or Affiliate and not the Company, so long as amounts paid for, and other terms relating to the furnishing of such goods or services, are not materially less advantageous to the Company than the amounts and terms for and upon which similar goods or services could be obtained in the same geographic area from good quality corporations or business enterprises which are not Members or Affiliates of Members.
No Restrictions in Other Businesses. Nothing in this Agreement shall restrict in any manner the freedom of each Member to conduct its business, either as currently contacted in as it may be conducted in the future, in such manner as such Member sees fit; provided, however, that this Section 6.6 does not excuse any Member from performing any duty or obligation expressly set forth herein, including, without limitation, the obligations contained in Article 2.

TRANSFERS OF INTERESTS

General Restriction. No Member can make a Transfer of all or part of its Interest or any interest therein, except as set forth in this Agreement. The Company is not to recognize any Transfer of an Interest otherwise than in accordance with the terms and provisions of this Agreement.
Certain Permitted Transfers. Any Member may in the manner provided in Section 7.3 Transfer all but not less than all of its Interest (a) to any Person all of the equity of which is owned by the Member or to any Person that directly or indirectly owns all of the equity of the Member; (b) to any other Person approved by a Majority Vote, (c) as expressly permitted by the Subscription Agreement(s) executed and delivered by a Member in connection with such Member's Initial Capital Contribution, or (d) in compliance with the provisions set forth in Appendix E, provided however, that, except in the case of a Transfer permitted pursuant to Subsection (c) of this Section 7.2, a Class A Member shall not Transfer its Class A Interest to any Person other than another existing Class A Member without the prior written approval of the Manager. If a Limited Rights Member so transfers its Interest, the transferee of such Interest shall thereafter be considered a "Limited Right Member" as to such Interest.

Requirements for Transfer. If there is to be any Transfer of any Interest pursuant to Section 7.2(a), (b) or (c) or to a Bona Fide Offeror as provided in Appendix E, such Transfer will be permitted only after compliance with the following requirements: (a) the transferee must execute and deliver to the Company such evidence as it may require, including without limitation, an opinion of counsel in form and substance satisfactory to the Company, to confirm that the Transfer of the Interest does not violate the Securities Act of 1933, as amended, or any state securities law, and (b) the transferee must execute and deliver a counterpart of this Agreement and expressly assume the Commitment and any other duties and obligations of the transferor hereunder. Upon compliance with the foregoing conditions and Transfer of the Interest, the transferee will be admitted as a Member and the transferor will cease to be a Member.

DISSOLUTION

Dissolution. The Company dissolves upon the occurrence of any of the following events, whether or not the event would cause a dissolution under the Act: (a) the termination of the Lease Agreement in accordance with its terms; (b) a Super-Majority Vote in favor of dissolution of the Company; or (c) the entry of a decree of judicial dissolution. Except as specifically stated in this Section 8.1, no event that would cause a dissolution under the Act causes a dissolution of the Company.
No Withdrawal. No Member has any right to withdraw from the Company. Except as specifically stated in Section 8.1, no event that would constitute withdrawal of a Member under the Act constitutes a withdrawal under this Agreement or causes a dissolution of the Company.
Election to Continue the Company. Upon an event of dissolution described in Section 8.1, the Company is to be dissolved and wound up and liquidated pursuant to Section 8.4, unless the Members by Majority Vote, within 90 days after such event, elect to continue the Company. If the Members elect to continue the Company, the continuing Company will operate and carry on the business of the Company under this Agreement. The continuing Company succeeds to all rights and assets of the Company and by this Agreement (and without the need for any further act or instrument) assumes the Company's liabilities.
Winding-up and Liquidation of the Company.

Upon an event of dissolution described in Section 8.1 if there is no election to continue pursuant to Section 8.3, the Manager is to diligently proceed to wind up the affairs of the Company, liquidate its assets, and distribute the assets in accordance with this Agreement. During the time prior to liquidation, the Company continues as a continuing limited liability Company bound by the terms of this Agreement, the continuing Company succeeds to all Company assets and liabilities, the business of the Company is to be continued, and the Manager has the right to do all acts authorized by law for the purpose of winding up the affairs of the Company.
In the event of liquidation of the Company, the Manager shall take the following steps:

first, use its best efforts to sell the Business as a going concern;
second, to the extent the Business cannot be sold in its entirety as a going concern, determine which Company properties and assets should be distributed in kind, and dispose of all other Company properties and assets at the best cash price obtainable therefor;
third, apply Company property to the payment of the debts and liabilities of the Company, the expenses of liquidation, and the establishment of any reserves deemed necessary by the Manager;
fourth, repay any loans and advances (other than capital contributions) by Members and all accrued interest thereon; and
fifth, distribute any remaining Company assets to the Members in accordance with their positive Capital Account balances as determined pursuant to Section 3.1; provided, however, that all such assets shall be distributed in the following order of priority: (A) first, amongst the Full Rights Members until their Capital Accounts are reduced to zero, and (B) second, amongst Limited Rights Members.

If any reserves are established in connection with the liquidation, the Manager may pay over the amounts reserved to an escrow agent to be held by it for the purposes of disbursing the reserves in payment of any contingencies which may arise and, at the expiration of any period as the Manager considers advisable, for distribution of the balance of the funds in the same manner and with the same priorities as are provided in clause 8.4(b)(v). The Members are to look solely to the assets of the Company for the return of their capital contributions.

Time for Winding-up. A reasonable time, up to three (3) years, will be allowed for the orderly liquidation of assets of the Company and the discharge of liabilities to creditors so as to enable the Manager to minimize the normal losses attendant upon a liquidation.
Final Accounting. Each of the Members is to be furnished with a statement setting forth the assets and liabilities, if any, of the Company as of the date of the complete liquidation which is to be audited and certified to by the Company's independent public accountants. Upon the compliance by the Manager with the distribution provisions of this Agreement, the Members cease to be members a nd the Company ceases to exist.

AMENDMENT OF AGREEMENT

Amendment by the Manager.

Except as otherwise specifically provided in this Agreement, the Manager may adopt an amendment to this Agreement to do any one or more of the following: (i) to implement or effectuate the provisions of any part of this Agreement or to continue the Company for the term provided herein under the laws of the State of Delaware and of any state or jurisdiction in which it shall do business; (ii) to take any action, on the advice of counsel to the Company, as may be necessary or appropriate to satisfy then current requirements of the Code with respect to partnerships or limited liability companies that have been structured to be classified as partnerships under the Code or any applicable laws or regulations; or (iii) to cure any ambiguity, defect, or inconsistency.
All Members are to be furnished with a copy of each proposed amendment prior to its adoption. No amendment that is proposed to become effective under this Section 9.1 shall become effective without approval under Section 9.2 if Class A Members holding Class A Interests aggregating 20% or more deliver to the Company within 30 calendar days following delivery of the amendment to the Members their written objection to the amendment.

Other Amendments. Except as specifically provided in Section 9.1 or otherwise in this Agreement:

Any amendment that would increase a Member's obligation to make contributions to the capital of the Company or further limit a Member's ability to hold or make a Transfer of that Member's Interest, is effective with respect to a Member only if the Member does not act to disapprove the amendment by returning, within thirty days after the request is made, an executed counterpart of a proposed consent to the amendment, indicating disapproval of the action; and
Subject to Section 6.4(c), any other amendment is effective if approved by a Super-Majority Vote.

Further Assurances. Each Member is to execute all documents and instruments necessary to evidence his, her, or its approval of all actions, including, without limitation, amendments to this Agreement, taken or authorized by the Members by Majority Vote, by Super-Majority Vote or otherwise as provided in this Agreement.
Power of Attorney.

Each Member by its signature on this Agreement irrevocably makes, constitutes, and appoints each Manager the true and lawful attorney for the Member, in the Member's place and stead, with the power from time to time to substitute or resubstitute one or more others as such attorney, and to make, execute, swear to, acknowledge, verify, deliver, file, record, and publish any and all documents, certificates, or other instruments that may be required or considered desirable by the Manager to (i) effectuate the provisions of this Agreement (including, without limitation, any amendments), (ii) enable the continuing Company to continue to conduct the business of the Company, or (iii) comply with any applicable law in connection with the foregoing.
It is expressly intended by the Member that this power of attorney is a special power of attorney coupled with an interest in favor of the Managers and as such is irrevocable and survives the Member, its merger, dissolution, or other termination of existence.

MISCELLANEOUS PROVISIONS

Notices. All notices to the Company shall be in writing and are to be sent registered or certified mail, return receipt requested, or by recognized overnight courier or facsimile addressed to the Manager at the Company's principal place of business. All notices to a Member are to be sent addressed to such Member at the address as may be specified by the Member from time to time in a notice to the Company. All notices are effective the next day, if sent by recognized overnight courier or facsimile, or five (5) days after deposit in the United States mail, postage prepaid, properly addressed and return receipt requested.
Waiver. Each of the Members hereby irrevocably waives any and all rights, duties, obligations, and benefits with respect to any action for partition of Company property or to compel any sale or appraisal thereof or any deceased Member's interest therein. Further, all rights, duties, benefits, and obligations including inventory and appraisal of the Company assets or sale of a deceased Member's interest therein, provided in the laws of Delaware, or the operation of any other rule or law of any other jurisdiction to compel any sale or appraisal of Company assets or sale or appraisal of a deceased Member's interest therein, are hereby waived and dispensed with. The Interest of a deceased Member is subject to the provisions of this Agr eement.
Notice of Tax Examinations. Any Member receiving advice that the Service intends to examine any income tax return of the Company is to promptly notify the Company or the other Members. Each Member is to report on its federal income tax return items of income and loss on a basis consistent with the Form K-1 prepared by or on behalf of the Company.
Whole Agreement. This Agreement together with its Appendices and any other agreements referenced herein contain the entire understanding between the parties and supersede any prior understanding and agreements between them respecting the within subject matter. There are no agreements, arrangements, or understandings, oral or written, between and among the Members relating to the subject matter of this Agreement that are not set forth or expressly referred to herein.
Governing Law. This Agreement is governed and is to be construed in accordance with the laws of the State of Delaware without giving effect to its rules concerning conflicts of laws.
Binding Nature. Except as otherwise provided in this Agreement, this Agreement is binding upon and inures to the benefit of the Members and their successors, personal representatives, heirs, devisees, guardians, and assigns.
Invalidity. In the event that any provision of this Agreement is invalid, the validity of the remaining provisions of the Agreement are not in any way to be affected thereby.
Counterparts. This Agreement and any amendment may be executed in multiple counterparts, each of which is an original and all of which constitute one agreement or amendment, as the case may be, notwithstanding that all of the parties are not signatories to the original or the same counterpart, or that signature pages from different counterparts are combined, and the signature of any party to any counterpart is a signature to and may be appended to any other counterpart.
Construction. The headings contained in this Agreement are for reference purposes only and do not affect the meaning or interpretation of this Agreement. All personal pronouns used in this Agreement, whether used in the masculine, feminine, or neuter gender, include all other genders; the singular includes the plural and vice versa. Unless otherwise specifically stated, references to Sections, Subsections, Articles, Exhibits or Appendices refer to the Sections, Subsections, Articles, Exhibits and Appendices of this Agreement.

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IN WITNESS WHEREOF, the undersigned have caused their duly authorized representatives to execute this Agreement as of the date first above written.

THE CLEVELAND-CLIFFS IRON COMPANY By: /s/ Donald J. Gallagher Name: Donald J. Gallagher Title: Vice President	NORFOLK SOUTHERN RAILWAY COMPANY By: /s/ John H. Friedman Name: John H. Friedman Title: Assistant to Chairman
ALLEGHENY ENERGY SOLUTIONS, INC. By: /s/ Ronald Cardwell Name: Ronald Cardwell Title: Vice President, Allegheny Energy Solutions	BOC GASES DIVISION OF THE BOC GROUP, INC. By: /s/ Stanley P. Borowiec Name: Stanley P. Borowiec Title: V.P. Marketing & Product Management
MILLCRAFT PRODUCTS, INC. By: /s/ Jack B. Piatt Name: Jack B. Piatt Title: Chairman	INTERNATIONAL MILL SERVICE, INC. By: /s/ John T. Dehcyua Name: John T. Dehcyua Title: President & CEO

THE MEMBERSHIP INTERESTS EVIDENCED BY THIS DOCUMENT ARE SUBJECT TO RESTRICTIONS ON ASSIGNMENT AND TRANSFER SET FORTH HEREIN. THE INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNTIL REGISTERED OR UNTIL THE MANAGER HAS RECEIVED AN OPINION OF LEGAL COUNSEL, OR OTHER ASSURANCES SATISFACTORY TO THAT MANAGER, THAT AN INTEREST MAY LEGALLY BE SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION, ALL AS PROVIDED IN THIS DOCUMENT.

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

MABCO STEAM COMPANY, LLC

dated as of

October 31, 2001

APPENDIX A Definitions

MABCO STEAM COMPANY, LLC

DEFINITIONS

This Appendix A is attached to and is a part of the Limited Liability Company Operating Agreement (the "Agreement") of MABCO Steam Company, LLC (the "Company"). As used in the Agreement. Unless otherwise specified, the capitalized terms defined or cross-referenced in this Appendix A shall have the meanings assigned to them or cross-referenced herein. Unless otherwise specified, reference in this Appendix A to any Section, Appendix or Exhibit is a reference to a Section, Appendix or Exhibit to the Agreement.

"Act" means the Delaware Limited Liability Company Act, as amended from time to time. Any reference to the Act automatically includes a reference to any subsequent or successor limited liability company law in Delaware.

"Additional Capital Contribution" has the meaning set forth in Section 2.1(b).

"Adjusted Book Income" or "Adjusted Book Loss" for any Fiscal Year means Book income or loss remaining after any special allocations made for that Fiscal Year under Appendix B.

"Adjusted Capital Account Balance" means a Member's Capital Account balance increased by the sum of (i) the Member's share of Company minimum Gain (as defined in Appendix B and (ii) the Member's share of Member Nonrecourse Minimum Gain (as defined in Appendix B).

"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with the specified person. A Person controls another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the "controlled" Person, whether through ownership of voting securities, by contract, or otherwise. Affiliate also includes any Person who is related by blood or marriage to the Person in question.

"Agreed Value" means the value of any Initial Capital Contribution, which shall be (a) in the case of any Initial Capital Contribution of any Initial Member, the amount specified on Exhibit I, and (b) in all other cases (i) in the case of cash, the amount thereof, and (ii) all other cases, the amount described in such Member's Subscription Agreement (or exhibits or attachments thereto).

"Agreement" means the Agreement, as amended from time to time in accordance with its terms.

"Bankruptcy" means, with respect to any Person, that Person's filing a petition or otherwise voluntarily commencing a case, or proceeding, or filing an answer not denying the material allegations of a complaint in any proceeding seeking relief under any federal or state bankruptcy, insolvency, or debtors' reorganization law; being the voluntary or involuntary subject of an order for relief by any court under any such law; or being adjudicated a "bankrupt," "debtor," or "insolvent" under any such law; or there being appointed under any such law a "trustee," "receiver," or "custodian" to manage his or its business or properties; or there being commenced under any such law a case or proceeding proposing such an order for relief, adjudication, or appointment with respect to that Person or its business, which proceeding is consented to by that Person or which is not dismissed within ninety days after being commenced.

"Bona Fide Offer": see Section 1 of Appendix E.

"Book" means the method of accounting required to comply with Appendix B, as distinguished from any accounting method that the Company may adopt for financial reporting or other purposes.

"Business": see Section 1.3.

"Business Day" means any day other than a Saturday or Sunday or other day on which commercial banks in New York, New York are authorized or required to close.

"Capital Account" means the capital account of a Member maintained in accordance with Section 4.1.

"Capital Contribution" means any contribution to the capital of the Company in cash or property by a Member whenever made.

"Class A Interest" means the Class A membership Interest of the Company.

"Class A Member" means each Member that holds a Class A Interest, so long as that Person holds a Class A Interest. A Class A Member may also be a Class B Member.

"Class B Interest" means the Interest issued to each Member in exchange for such Member's Initial Capital Contribution and Commitment.

"Class B Member" means each Member that holds a Class B Interest, so long as that Person holds a Class B Interest.

"Code" means the Internal Revenue Code of 1986, as amended. References to specific sections of the Code include references to corresponding provisions of any succeeding internal revenue law of the United States of America.

"Commitment": see Section 2.1(b).

"Company" means MABCO Steam Company, LLC.

"Exercise Notice": see Section 2 of Appendix E.

"Fiscal Year" means the fiscal year of the Company as determined by the Manager from time to time, and, initially, means a fiscal year ending on December 31.

"Full Right ROC Completion" shall occur once (i) the Full Rights Members of the Company, if any, no longer hold any Class B Interests, and (ii) every Full Rights Member has received distributions which, in the aggregate, equal the interest accrued on such Full Rights Member's Initial Capital Contribution pursuant to Section 2.7 of the Agreement through the date of such determination.

"Full Rights Member": see Section 2.1(a)

"Guaranty Agreement" means that certain Guaranty agreement by Weirton in favor of the Company, dated as of or about the date hereof.

"Indemnitee": see Section 3 of Appendix C.

"Initial Capital Contribution" means the Capital Contribution contributed by a Member pursuant to the Subscription Agreement executed by such Member pursuant to Section 2.1(a) of the Agreement.

"Initial Members" means the Persons identified in Exhibit I and their respective successors in interest. Reference to an "Initial Member" means any one of the Initial Members so long as that person holds an interest and any Initial Member that was or is its predecessor or successor in interest.

"Installment Member" shall mean a Member that does not contribute one hundred percent (100%) of its Initial Capital Contribution concurrently with such Member's execution of this Agreement.

"Interest" means a membership interest in the Company, including any and all benefits to which a Member may be entitled under this Agreement and the obligations of a Member under this Agreement, whether as a Class A Member or Class B Member.

"Lease Agreement" means that Lease Agreement dated as of or about the date hereof between the Company and Weirton SPS, as amended from time to time in accordance with its terms.

"Limited Rights Member": see Section 2.1(a)

"Limited Right ROC Completion" shall occur once (i) the Limited Rights Members of the Company, if any, no longer hold any Class B Interests, and (ii) every Limited Rights Member has received distributions which, in the aggregate, equal the interest accrued on such Limited Rights Member's Initial Capital Contribution pursuant to Section 2.7 of the Agreement through the date of such determination.

"Majority Vote": see Section 5.2(b).

"Members" means all of the Persons identified in Exhibit I and their successors in interest, and other Persons who are admitted as Members. Reference to a "Member" means any one of the Members so long as that person holds an interest and any Member that was or is its predecessor or successor in interest.

"Nonparticipating Members" means each Member that (a) is entitled to receive notice of the proceedings from the Service, (b) is a member of a notice group defined in Section 6223(b)(2) of the Code, and (c) has timely filed a statement with the Secretary of Treasury (or his delegate) providing that the Tax Matters Partner shall not have authority to bind the Member.

"Offeree": see Section 1 of Appendix E.

"Offer Notice": see Section 1 of Appendix E.

"Offeror": see Section 1 of Appendix E.

"Operative Documents" means the following: the Purchase Agreement; the Lease; the Memorandum of Lease (as defined in Appendix A to the Purchase Agreement and Lease); the Guaranty Agreement; the Supply Agreement (as defined in Appendix A to the Purchase Agreement and Lease); the Assignment and Release of Supply Agreement (as defined in Appendix A to the Purchase Agreement and Lease); the Purchase Money Note (as defined in Appendix A to the Purchase Agreement and Lease); and the Transfer Documents(as defined in Appendix A to the Purchase Agreement and Lease).

"Person" or "person" means and includes any natural person and any corporation, firm, partnership, trust, estate, limited liability company, or other entity resulting from any form of association.

"Price": see Section 1 of Appendix E.

"Purchase Agreement" means the Purchase Agreement, dated on or about the date hereof, among Weirton SPS, as seller, the Company, as purchaser, and Weirton, as guarantor.

"Seconded Employees": see Section 5.6(a).

"Service" means the Internal Revenue Service, or its successor administrative agency, under the laws of the United States.

"Share" means a Member's "Initial Share" of Class A Interest or Class B Interest, as applicable, as set forth in Exhibit I, as adjusted from time to time to reflect redemptions, permitted Transfers or the issuance of additional Class A or Class B membership interests.

"Super-Majority Vote": see Section 5.2(c).

"Tax Matters Partners" means The Cleveland-Cliffs Iron Company or another Member appointed to that office by the Manager and confirmed by Majority Vote, that has the rights and powers set forth herein.

"Transfer" means any sale, assignment, pledge, hypothecation, encumbrance, disposition, transfer (including, without limitation, a transfer by will or intestate distribution), gift, or attempt to create or grant a security interest in any Interest or interest therein or portion thereof, whether voluntary or involuntary, by operation of law or otherwise.

"Transfer Provisions": see Section 7.2.

"Weirton" means Weirton Steel Corporation, a Delaware corporation.

"Weirton SPS" means F.W. Holdings, Inc.

APPENDIX B Tax Matters

MABCO STEAM COMPANY, LLC

TAX MATTERS

This Appendix B is attached to and is a part of the Limited Liability Company Operating Agreement (the "Agreement") of MABCO Steam Company, LLC (the "Company"). Capitalized terms used in this Appendix B and not defined herein have the meanings specified or cross-referenced in Appendix A to the Agreement. Unless otherwise specified, each reference in this Appendix B to any Section, Appendix or Exhibit is a reference to a Section, Appendix or Exhibit to the Agreement. The parties to the Agreement intend that the Company be classified as a partnership for federal income tax purposes pursuant to section 7701(a)(2) of the Code and the regulations thereunder. The provisions of this Appendix are intended to comply with the requirements of Treas. Reg. Section 1.704-1(b)(2)(iv) and Treas. Reg. Section 1.704-2 with respect to maintenance of capital accounts and allocations, and shall be interpreted and applied accordingly.

DEFINITIONS

Definitions. For purposes of this Appendix B, the capitalized terms listed below shall have the meanings indicated. Capitalized terms not listed below and not otherwise defined in this Appendix B shall have the meanings specified in the Agreement.

"Account Reduction Item" means (i) any adjustment described in Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(4); (ii) any allocation described in Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(5), other than a Nonrecourse Deduction or a Member Nonrecourse Deduction; or (iii) any distribution described in Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(6), other than a Nonrecourse Distribution or a Member Nonrecourse Distribution.

"Adjusted Capital Account Balance" means, as of the end of any taxable year, a Member's Capital Account balance as of the end of such taxable year (taking into account all contributions made by such Member and distributions made to such Member during such taxable year and any special allocations required by Sections 3.02, 3.03, 3.04(a), (b), and (d), and 3.06 of this Appendix B, increased by the sum of (i) such Member's share of Company Minimum Gain and (ii) such Member's share of Member Nonrecourse Debt Minimum Gain, both determined after taking into account any such special allocations.

"Adjusted Fair Market Value" of an item of Company property means the greater of (i) the fair market value of such property or (ii) the amount of any nonrecourse indebtedness to which such property is subject within the meaning of section 7701(g) of the Code.

"Book" means the method of accounting prescribed for compliance with the capital account maintenance rules set forth in Treas. Reg. Section 1.704-1(b)(2)(iv) as reflected in Articles II and III of this Appendix B, as distinguished from any accounting method which the Company may adopt for other purposes such as financial reporting.

"Book Value" means, with respect to any item of Company property, the book value of such property within the meaning of Treas. Reg. Section 1.704-1(b)(2)(iv)(g)(3); provided, however, that if the Company adopts the remedial allocation method described in Treas. Reg. Section 1.704-3(d) with respect to any item of Company property, the Book Value of such property shall be its book basis determined in accordance with Treas. Reg. Section 1.704-3(d)(2).

"Company Minimum Gain" means partnership minimum gain determined pursuant to Treas. Reg. Section 1.704-2(d) and Section 5.02 of this Appendix B.

"Deemed Liquidation" means a liquidation of the Company that is deemed to occur pursuant to Treas. Reg. Section 1.708-1(b)(1)(iv) in the event of a termination of the Company pursuant to section 708(b)(1)(B) of the Code.

"Excess Deficit Balance" means the amount, if any, by which the balance in a Member's Capital Account as of the end of the relevant taxable year is more negative than the amount, if any, of such negative balance that such Member is treated as obligated to restore to the Company pursuant to Treas. Reg. Section 1.704-1(b)(2)(ii)(c), Treas. Reg. Section 1.704-1(b)(2)(ii)(h), Treas. Reg. Section 1.704-2(g)(1), or Treas. Reg. Section 1.704-2(i)(5). Solely for purposes of computing a Member's Excess Deficit Balance, such Member's Capital Account shall be reduced by the amount of any Account Reduction Items that are reasonably expected as of the end of such taxable year.

"Excess Nonrecourse Liabilities" means excess nonrecourse liabilities within the meaning of Treas. Reg. Section 1.752-3(a)(3).

"Exculpatory Liability" means a liability that is recourse to the Company as an entity, and for which no Member or Related Person bears the economic risk of loss under Treas. Reg. Section 1.752-2.

"Member Nonrecourse Debt" means any liability of the Company to the extent that (i) the liability is nonrecourse for purposes of Treas. Reg. Section 1.1001-2 and (ii) a Member or a Related Person bears the economic risk of loss under Treas. Reg. Section 1.752-2.

"Member Nonrecourse Debt Minimum Gain" means minimum gain attributable to Member Nonrecourse Debt pursuant to Treas. Reg. Section 1.704-2(i)(3).

"Member Nonrecourse Deduction" means any item of Book loss or deduction that is a partner nonrecourse deduction within the meaning of Treas. Reg. Section 1.704-2(i)(1) and (2).

"Member Nonrecourse Distribution" means a distribution to a Member that is allocable to a net increase in such Member's share of Member Nonrecourse Debt Minimum Gain pursuant to Treas. Reg. Section 1.704-2(i)(6).

"Nonrecourse Deduction" means, subject to Section 5.02 of this Appendix B, a nonrecourse deduction determined pursuant to Treas. Reg. Section 1.704-2(b)(1) and Treas. Reg. Section 1.704-2(c).

"Nonrecourse Distribution" means a distribution to a Member that is allocable to a net increase in Company Minimum Gain pursuant to Treas. Reg. Section 1.704-2(h)(1).

"Regulatory Allocation" means (i) any allocation made pursuant to Section 3.04(a) of this Appendix B to the extent that such allocation is attributable to a prior distribution that is treated as a Nonrecourse Distribution (after taking into account Section 5.03(a) of this Appendix B); (ii) any allocation made pursuant to Section 3.04(b) of this Appendix B to the extent that such allocation is attributable to a prior distribution that is treated as a Member Nonrecourse Distribution (after taking into account Section 5.03(b) of this Appendix B); (iii) any reallocation made pursuant to Section 3.04(d) or (e) of this Appendix B; or (iv) any allocation or reallocation made pursuant to Section 3.05 of this Appendix B.

"Related Person" means, with respect to a Member, a person that is related to such Member pursuant to Treas. Reg. Section 1.752-4(b).

"Revaluation Event" means (i) a liquidation of the Company (within the meaning of Treas. Reg. Section 1.704-1(b)(2)(ii)(g) but not including a Deemed Liquidation); or (ii) a contribution of more than a de minimis amount of money or other property to the Company by a new or existing Member or a distribution of more than a de minimis amount of money or other property to a retiring or continuing Member where such contribution or distribution alters the Share of any Member.

"Section 705(a)(2)(B) Expenditures" means nondeductible expenditures of the Company that are described in section 705(a)(2)(B) of the Code, and organization and syndication expenditures and disallowed losses to the extent that such expenditures or losses are treated as expenditures described in section 705(a)(2)(B) of the Code pursuant to Treas. Reg. Section 1.704-1(b)(2)(iv)(i).

"Section 751 Property" means unrealized receivables and substantially appreciated inventory items within the meaning of Treas. Reg. Section 1.751-1(a)(1).

"Tax Basis" means, with respect to any item of Company property, the adjusted basis of such property as determined in accordance with the Code.

"Treasury Regulation" or "Treas. Reg." means the temporary or final regulation(s) promulgated pursuant to the Code by the U.S. Department of the Treasury, as amended, and any successor regulation(s).

CAPITAL ACCOUNTS

Maintenance.

A single Capital Account shall be maintained for each Member in accordance with this Article II.
Each Member's Capital Account shall from time to time be increased by:

the amount of money contributed by such Member to the Company (including the amount of any Company liabilities which the Member assumes (within the meaning of Treas. Reg. Section 1.704-1(b)(2)(iv)(c)), but excluding liabilities assumed in connection with the distribution of Company property and excluding increases in such Member's share of Company liabilities pursuant to section 752 of the Code), excluding any money contributed for the acquisition of any Class A Interest;
the fair market value of property contributed by such Member to the Company (net of any liabilities secured by such property that the Company is considered to assume or take subject to pursuant to section 752 of the Code);
allocations to such Member of Company Book income and gain (or the amount of any item or items of income or gain included therein);
upon the revaluation of Company property pursuant to Section 2.02(a) of this Appendix B, the Book gain (if any) that would have been allocated to such Member if such Company property had been sold at its Adjusted Fair Market Value as of the date of such revaluation; and
upon the distribution of Company property to a Member, if Company property is not revalued pursuant to Section 2.02(a) of this Appendix B, the Book gain (if any) that would have been allocated to such Member if such Company property had been sold at its Adjusted Fair Market Value immediately prior to the distribution.

Each Member's Capital Account shall from time to time be reduced by:

the amount of money distributed to such Member by the Company for purposes of redeeming such Member's Class B Interest (including the amount of such Member's individual liabilities for which the Company becomes personally and primarily liable but excluding liabilities assumed in connection with the contribution of property to the Company and excluding decreases in such Member's share of Company liabilities pursuant to section 752 of the Code);
the fair market value of property distributed to such Member by the Company for purposes of redeeming such Member's Class B Interest (net of any liabilities secured by such property that such Member is considered to assume or take subject to pursuant to section 752 of the Code);
allocations to such Member of Company Book loss and deduction (or items thereof);
upon the revaluation of Company property pursuant to Section 2.02(a) of this Appendix B, the Book loss (if any) that would have been allocated to such Member if such Company property had been sold at its Adjusted Fair Market Value as of the date of such revaluation; and
upon the distribution of Company property to a Member, if Company property is not revalued pursuant to Section 2.02(a) of this Appendix B, the Book loss (if any) that would have been allocated to such Member if such Company property had been sold at its Adjusted Fair Market Value immediately prior to the distribution.

The Company shall make such other adjustments to the Capital Accounts of the Members as are necessary to comply with the provisions of Treas. Reg. Section 1.704-1(b)(2)(iv).

Revaluation of Company Property.

Upon the occurrence of a Revaluation Event, the Manager may revalue all Company property (whether tangible or intangible) for Book purposes to reflect the Adjusted Fair Market Value of Company property immediately prior to the Revaluation Event. In the event that Company property is so revalued, the Capital Accounts of the Members shall be adjusted in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv)(f).
Upon the distribution of Company property to a Member, if Company property is not revalued pursuant to Section 2.02(a) of this Appendix B, the property to be distributed shall be revalued for Book purposes to reflect the Adjusted Fair Market Value of such property immediately prior to such distribution, and the Capital Accounts of all Members shall be adjusted in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv)(e).

Restoration of Negative Balances. No Member with a deficit balance in its Capital Account shall have any obligation to the Company, to any other Member or to any third party to restore or repay said deficit balance.
Transfers of Interests.

Upon the transfer of a Member's entire interest in the Company, the Capital Account of such Member shall carry over to the transferee.
Upon the transfer of a portion of a Member's interest in the Company, the portion of such Member's Capital Account attributable to the transferred portion shall carry over to the transferee. In the event that the document effecting such transfer specifies the portion of such Member's Capital Account to be transferred, such portion shall be deemed to be the portion attributable to the transferred portion of such Member's interest for purposes of this Section 2.04(b).

ALLOCATION OF BOOK INCOME AND LOSS

Book Income And Loss.

The Book income or loss of the Company for purposes of determining allocations to the Capital Accounts of the Members shall be determined in the same manner as the determination of the Company's taxable income, except that (i) items that are required by section 703(a)(1) of the Code to be separately stated shall be included; (ii) items of income that are exempt from inclusion in gross income for federal income tax purposes shall be treated as Book income, and related deductions that are disallowed under section 265 of the Code shall be treated as Book deductions; (iii) Section 705(a)(2)(B) Expenditures shall be treated as deductions; (iv) items of gain, loss, depreciation, amortization, or depletion that would be computed for federal income tax purposes by reference to the Tax Basis of an item of Company property shall be determined by reference to the Book Value of such item of property; and (v) the effects of upward and downward revaluations of Company property pursuant to Section 2.02 of this A ppendix B shall be treated as gain or loss respectively from the sale of such property.
In the event that the Book Value of any item of Company property differs from its Tax Basis, the amount of Book depreciation, depletion, or amortization for a period with respect to such property shall be computed so as to bear the same relationship to the Book Value of such property as the depreciation, depletion, or amortization computed for tax purposes with respect to such property for such period bears to the Tax Basis of such property. If the Tax Basis of such property is zero, the Book depreciation, depletion, or amortization with respect to such property shall be computed by using a method consistent with the method that would be used for tax purposes if the Tax Basis of such property were greater than zero.
Allocations to the Capital Accounts of the Members shall be based on the Book income or loss of the Company as determined pursuant to this Section 3.01. Such allocations shall be made as provided in the Agreement except to the extent modified by the provisions of this Article III.

Allocation of Nonrecourse Deductions. Notwithstanding any other provisions of the Agreement, Nonrecourse Deductions shall be allocated among the Members in proportion to their respective Shares.
Allocation Of Member Nonrecourse Deductions. Notwithstanding any other provisions of the Agreement, any item of Member Nonrecourse Deduction with respect to a Member Nonrecourse Debt shall be allocated to the Member or Members who bear the economic risk loss for such Member Nonrecourse Debt in accordance with Treas. Reg. Section 1.704-2(i).
Chargebacks Of Income And Gain. Notwithstanding any other provisions of the Agreement:

Company Minimum Gain. In the event that there is a net decrease in Company Minimum Gain for a taxable year of the Company, then before any other allocations are made for such taxable year, each Member shall be allocated items of Book income and gain for such year (and, if necessary, for subsequent years) to the extent required by Treas. Reg. Section 1.704-2(f).
Member Nonrecourse Debt Minimum Gain. In the event that there is a net decrease in Member Nonrecourse Debt Minimum Gain for a taxable year of the Company, then after taking into account allocations pursuant to paragraph (a) immediately preceding, but before any other allocations are made for such taxable year, each Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such year shall be allocated items of Book income and gain for such year (and, if necessary, for subsequent years) to the extent required by Treas. Reg. Section 1.704-2(i)(4).
Application for Waiver. In the event that the Manager determines that the application of the provisions of Section 3.04(a) or Section 3.04(b) of this Appendix B would cause a distortion in the economic arrangement among the Members, any Officer may, on behalf of the Company, request a waiver of the application of either or both of such provisions pursuant to Treas. Reg. Section 1.704-2(f)(4) or Treas. Reg. Section 1.704-2(i)(4).
Qualified Income Offset. In the event that any Member unexpectedly receives any Account Reduction Item that results in an Excess Deficit Balance at the end of any taxable year after taking into account all other allocations and adjustments under this Agreement other than allocations under Section 3.04(e) of this Appendix B, then items of Book income and gain for such year (and, if necessary, for subsequent years) will be reallocated to each such Member in the amount and in the proportions needed to eliminate such Excess Deficit Balance as quickly as possible.
Gross Income Allocation. If, at the end of any taxable year, the Capital Accounts of any Members have Excess Deficit Balances after taking into account all other allocations and adjustments under this Agreement, then items of Book income and gain for such year will be reallocated to such Members in the amount and in the proportions needed to eliminate such Excess Deficit Balances as quickly as possible.

Reallocation To Avoid Excess Deficit Balances. Notwithstanding any other provisions of the Agreement, no Book loss or deduction shall be allocated to any Member to the extent that such allocation would cause or increase an Excess Deficit Balance in the Capital Account of such Member. Such Book loss or deduction shall be reallocated away from such Member and to the other Members in accordance with the Agreement, but only to the extent that such reallocation would not cause or increase Excess Deficit Balances in the Capital Accounts of such other Members.
Corrective Allocation. Subject to the provisions of Sections 3.02, 3.03, 3.04 and 3.05 of this Appendix B, but notwithstanding any other provision of the Agreement, in the event that any Regulatory Allocation is made pursuant to this Appendix for any taxable year, then remaining Book items for such year (and, if necessary, Book items for subsequent years) shall be allocated or reallocated in such amounts and proportions as are appropriate to restore the Adjusted Capital Account Balances of the Members to the position in which such Adjusted Capital Account Balances would have been if such Regulatory Allocation had not been made.
Other Allocations.

If during any taxable year of the Company there is a change in any Member's interest in the Company, allocations of Book income or loss for such taxable year shall take into account the varying interests of the Members in the Company in a manner consistent with the requirements of Section 706 of the Code.
If and to the extent that any distribution of Section 751 Property to a Member in exchange for property other than Section 751 Property is treated as a sale or exchange of such Section 751 Property by the Company pursuant to Treas. Reg. Section 1.751-1(b)(2), any Book gain or loss attributable to such deemed sale or exchange shall be allocated only to Members other than the distributee Member.
If and to the extent that any distribution of property other than Section 751 Property to a Member in exchange for Section 751 Property is treated as a sale or exchange of such other property by the Company pursuant to Treas. Reg. Section 1.751-1(b)(3), any Book gain or loss attributable to such deemed sale or exchange shall be allocated only to Members other than the distributee Member.

ALLOCATION OF TAX ITEMS

In General. Except as otherwise provided in this Article IV, all items of income, gain, loss, and deduction shall be allocated among the Members for federal income tax purposes in the same manner as the corresponding allocation for Book purposes.
Section 704(C)(1)(A) Allocations. In the event that the Book Value of an item of Company property differs from its Tax Basis, allocations of depreciation, depletion, amortization, gain, and loss with respect to such property will be made for federal income tax purposes in a manner that takes account of the variation between the Tax Basis and Book Value of such property in accordance with section 704(c)(1)(A) of the Code and Treas. Reg. Section 1.704-1(b)(4)(i). The Manager may select any reasonable method or methods for making such allocations, including, without limitation, any method described in Treas. Reg. Section 1.704-3(b), (c), or (d).
Tax Credits. Tax credits shall be allocated among the Members in accordance with Treas. Reg. Section 1.704-1(b)(4)(ii).

OTHER TAX MATTERS

Excess Nonrecourse Liabilities. For the purpose of determining the Members' shares of the Company's Excess Nonrecourse Liabilities pursuant to Treas. Reg. Section 1.752-3(a)(3) and 1.707-5(a)(2)(ii), and solely for such purpose, the Members' interests in profits are hereby specified to be their respective Shares.
Exculpatory Liabilities. The Manager may (a) treat deductions attributable to Exculpatory Liabilities as deductions that are not Nonrecourse Deductions, and (b) disregard Exculpatory Liabilities in the determination of Company Minimum Gain.
Treatment Of Certain Distributions. In the event that (i) the Company makes a distribution that would (but for this Subsection (a)) be treated as a Nonrecourse Distribution; and (ii) such distribution does not cause or increase a deficit balance in the Capital Account of the Member receiving such distribution as of the end of the Company's taxable year in which such distribution occurs; then the Manager may treat such distribution as not constituting a Nonrecourse Distribution to the extent permitted by Treas. Reg. Section 1.704-2(h)(3).

In the event that (i) the Company makes a distribution that would (but for this Subsection (b)) be treated as a Member Nonrecourse Distribution; and (ii) such distribution does not cause or increase a deficit balance in the Capital Account of the Member receiving such distribution as of the end of the Company's taxable year in which such distribution occurs; then the Manager may treat such distribution as not constituting a Member Nonrecourse Distribution to the extent permitted by Treas. Reg. Section 1.704-2(i)(6).

Reduction Of Basis. In the event that a Member's interest in the Company may be treated in whole or in part as depreciable property for purposes of reducing such Member's basis in such interest pursuant to section 1017(b)(3)(C) of the Code, the Manager may, upon the request of such Member, make a corresponding reduction in the basis of its depreciable property with respect to such Member, and shall make such adjustment if required by Treas. Reg. Section 1.1017-1(g)(2)(C). Such request shall be submitted to the Company in writing, and shall include such information as may be reasonably required in order to effect such reduction in basis.
Entity Classification. Neither the Company nor any Member shall file or cause to be filed any election, the effect of which would be to cause the Company to be classified as other than a partnership for federal income tax purposes, without the prior written consent of all Members.

tax matters partner

Tax Matters Partner. The Tax Matters Partner has the power to:

Enter into a settlement agreement with the Service with respect to determinations of Company tax items which shall bind each Member other than the Nonparticipating Members, which settlement may be on such terms as the Tax Matters Partner determines in its sole discretion to be in the best interests of the Members as a class;
In its sole discretion, decide whether or not to commence judicial action for review of Company items included in a notice of final Company administrative adjustment, with the selection of the appropriate court and the Company items to be contested to be determined in the sole discretion of the Tax Matters Partner;
In its sole discretion, determine whether to appeal from an adverse decision in an action commenced under Section 6.01(b) of this Appendix B and prosecute any such appeal;
In its sole discretion, intervene on behalf of the Company in any judicial action commenced by any other Member or notice group defined in Section 6223(b)(2) of the Code as to Company tax items;
File a request with the Service for an administrative adjustment as a substituted Company return, or otherwise, and to request judicial review on behalf of the Company as to any part of a request for administrative adjustment not allowed by the Service, with the selection of the appropriate court, the Company items to be contested, and the decision whether to appeal from an adverse decision in any such action to be determined in the sole discretion of the Tax Matters Partner;
In its sole discretion, enter into an agreement with respect to all present or former Members to extend the period for assessing any tax which is attributable to any Company item (and no other person is authorized to enter into such an agreement);
Upon receipt of a notice of the commencement of administrative proceedings by the Service, furnish to the Service the name, address, profits interest, and taxpayer identification number of each person who was a Member in the Company at any time during the applicable Company taxable year and such revised or additional information as may be required by law; and
Conform to any tax administrative requirements as may be placed on Tax Matters Partners by Treasury Regulations adopted after the date hereof as to income tax or any other federal tax applicable to the Company.

APPENDIX C Indemnification

MABCO STEAM COMPANY, LLC

INDEMNIFICATION

This Appendix C is attached to and is a part of the Limited Liability Company Operating Agreement (the "Agreement") of MABCO Steam Company, LLC (the "Company"). Capitalized terms used in this Appendix C and not defined herein have the meanings specified or cross-referenced in Appendix A unless otherwise specified, all references in this Appendix C to any Section, Appendix or Exhibit is a reference to a Section, Appendix or Exhibit to the Agreement.

Right to Indemnity. If any Member or the Manager, or any trustee, director, officer, partner, member, or manager of any Member or of the Manager serving on behalf of the Company (an "Indemnitee") was or is a party or is threatened to be made a party in any threatened, pending, or completed action, suit, proceeding, or investigation involving a cause of action or alleged cause of action for damages or other relief arising from or related to the business or affairs of the Company or the offer or sale of any Interest, the Company (but without recourse to the separate assets of any Member) is to indemnify the Indemnitee against all losses, costs, and expenses, including attorneys' fees, judgments, and amounts paid in settlement actually and reasonably incurred by the Indemnitee in connection with the action, suit, proceeding, or investigation, so long as the Indemnitee has met the standard set forth in Section 5.4(b). The termination of any action, suit, proceeding, or i nvestigation by judgment, order, settlement, or conviction upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that an Indemnitee did not act in good faith and in a manner she, he, or it reasonably believed to be in or not opposed to the best interests of the Company and with the care that an ordinarily prudent person in a like position would use under similar circumstances and, with respect to any criminal action, proceeding, or investigation, that she, he, or it had reasonable cause to believe her, his, or its conduct was unlawful.
Advancement of Expenses. Expenses, including attorneys' fees, incurred by any Indemnitee in defending an action, suit, proceeding, or investigation are to be paid by the Company as they are incurred, in advance of the final disposition of the action, suit, proceeding, or investigation, upon the terms and conditions as may be determined by the Manager, upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that such Person is not entitled to be indemnified hereunder.
Other Rights to Indemnity or Reimbursement, Survival. Notwithstanding the foregoing, indemnification under this Agreement is to be provided only with respect to losses, costs, expenses, judgments, and amounts which otherwise are not compensated for by insurance carried for the benefit of the Company. Indemnification under this Agreement is not exclusive of any other rights to which those seeking indemnification may be entitled under any rule of law (whether common law or statutory), agreement, or arrangement, whether as to action in an official capacity and as to action in another capacity while holding such position or while employed by or acting as agent for the Company, and continues as to an Indemnitee who has ceased to serve in any capacity on behalf of the Company and inures to the benefit of the heirs, successors, executors, and administrators of the Indemnitee.
Indemnification of Employees and Agents. The Company may indemnify any employee or agent of the Company and any employee or Affiliate of any Member serving on behalf of the Company upon such terms and conditions, if any, as the Manager considers appropriate.
Insurance. The Company may purchase and maintain insurance on behalf of any Person who is or was or has agreed to become a Manager against any liability asserted against him and incurred by him or on his behalf in any capacity, or arising out of his status as a Manager or in another capacity, whether or not the Company would have the power to indemnify him against the liability under the provisions of this Agreement.
Savings Clause. If this Appendix C or any portion thereof is invalidated on any ground by any court of competent jurisdiction, then the Company is nevertheless to indemnify each Indemnitee as to costs, charges, and expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement with respect to any action, suit, proceeding, or investigation, whether civil, criminal, administrative, or investigative, including any action by or in the right of the Company, to the full extent permitted by any applicable portion of this Appendix C that has not been invalidated and to the fullest extent permitted by applicable law.

APPENDIX D Voting

MABCO STEAM COMPANY, LLC

VOTING PROCEDURES

This Appendix D is attached to and is a part of the Limited Liability Company Operating Agreement (the "Agreement") of MABCO Steam Company, LLC. Capitalized terms used in this Appendix D and not defined herein have the meanings specified or cross-referenced in Appendix A unless otherwise specified, all references in this Appendix D to any Section, Appendix or Exhibit is a reference to a Section, Appendix or Exhibit to the Agreement.

Meeting of Members.

There is not to be an annual meeting of Members. Special Meetings of Members may be called by any Class A Member(s) holding at least 20% of the Class A Shares, or by the Manager.
Notice of the time, place, and purpose of a meeting of the Members is effective if (i) delivered to each Member by hand, facsimile, or recognized overnight delivery service not less than 72 hours and not more than 60 calendar days prior to the time of the meeting; (ii) if placed in the mail addressed to each Member with proper first class postage prepaid, not less than 10 business days and not more than 60 calendar days before the date of the meeting; or (iii) if telephoned to each member not less than 72 hours and not more than 60 calendar days before the meeting. Failure to specifically identify an action to be taken or the business to be transacted does not invalidate any action taken or any business transacted at a special meeting. Notice of adjournment of a meeting need not be given if the time and place to which it is adjourned are fixed and announced at the meeting.
Meetings of the Members may be held at any location, within or without the United States. Members may participate in a meeting of the Members by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting constitutes presence in person at the meeting.
Whenever notice of a meeting is required to be given under this Agreement, a written waiver of notice, signed by the Member entitled to notice, whether before or after the time of the meeting, is equivalent to notice. A Member's attendance at a meeting is a waiver of notice of that meeting, except when the Member attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Record Date of Members.

For any lawful purpose, including without limitation, the determination of the Members who are entitled to: (i) receive notice of or to vote at a meeting of the Members, (ii) receive payment of any distribution, or (iii) participate in the execution of written consents, waivers, or releases, the Manager may fix a record date which cannot be a date earlier than the date on which the record date is fixed and is not to be more than 30 calendar days preceding the date of the meeting, distribution, or other action.
The record date set for any meeting is the record date for all adjournments of the meeting, unless the Manager who fixed the original record date fix another date, in accordance with this Agreement. If a new record date is fixed, notice of the new record date and of the date, time, and place to which the meeting was adjourned is to be given to the Members of record as of the new record date in accordance with this Agreement.
The Manager may close the transfer books against transfers of membership interests during the whole or any part of the period after a record date and until the meeting (including any adjournments of the meeting), distribution, or other action.
If no record date is fixed, the record date for determining the Members who are entitled to receive notice of, or who are entitled to vote at a meeting, to receive a distribution, or to take any action is the date next preceding the day at which the notice is given, the meeting is held, the distribution is made, or the action is taken, as the case may be.

Voting.

Except to the extent that the voting rights of a Member or any Member's membership interests or any class of membership interest are increased, limited, or denied by the terms of this Agreement, Class A Members vote their Class A Shares on each matter submitted to the Members for their vote, consent, waiver, release, or other action by Majority Vote and by Super-Majority Vote. Unless this Agreement otherwise provides, a Class A Member votes that Member's entire Class A Share even though the Additional Capital Contribution has not been fully paid, but Interests on which a capital contribution is overdue for payment under the terms of this Agreement or in default cannot be voted.
Class A Members holding Class A Interests that represent more than 66 2/3 percent of the Shares of Class A Interests outstanding are a quorum for the transaction of business on any matters as to which a vote is to be taken. The holders of 66 2/3 of the Class A Shares present at a meeting of the Members may adjourn the meeting from time to time.
Except to the extent that this Agreement otherwise provides, the affirmative vote of Class A Members holding more than sixty-six and two-thirds percent (66 2/3%) of the Shares of Class A Interests outstanding is approval by Majority Vote, and the affirmative vote of Class A Members holding more than eighty percent (80%) of all Shares of Class A Interest is approval by Super-Majority Vote.

Written Consent or Action. Any action that the Members may authorize or take at a meeting may be authorized or taken without a meeting with notice to all Members and the affirmative vote or approval of, and in a writing or writings signed by those Members whose vote would be necessary to take or authorize the action at a meeting.
Rescission or Revocation. Any vote, consent, waiver, release, or other action authorized or taken by the Members may be rescinded or revoked by the same vote, consent, waiver, release, or other action as of the time of the rescission or revocation is taken, as was required to authorize or take the action in the first instance, subject to the contract rights of other persons.
Proxies.

A Member may vote, execute consents, waivers, and releases, and exercise any of the Member's other rights by proxy or proxies appointed in writing and signed by the Member.
No appointment of a proxy is valid after the expiration of eleven months after it is made unless the writing specifies the date on which it is to expire or the length of time it is to continue in force. Every appointment is revocable unless the appointment of a proxy is coupled with an interest. A revocable proxy is not revoked by the death, incompetence, or other incapacity of the Member that made the proxy unless, before the authority granted is exercised, written notice of the incapacity is received by the Company from the authorized representative of the Member. Without affecting any vote previously taken, the Member appointing a proxy may revoke a revocable appointment by a later proxy received by the Company or by giving notice of revocation to the Company in writing or at a meeting. Presence at a meeting in person does not, unless other action indicating revocation is taken, revoke any proxy then in effect.

Records of Actions Taken. Upon any exercise of Voting Rights, the Manager is to keep complete and accurate records and notify all Members of the action taken.
Further Assurances. All Members are contractually bound by the action taken or authorized pursuant to any exercise of Voting Rights. Each Member is to exercise all of the Member's rights and powers as a Member under this Agreement, and applicable law in a manner designed to effectuate the action taken or authorized pursuant to any exercise of Voting Rights, and is to execute, acknowledge, and deliver such consents, approvals, agreements, or other documents or instruments as may be furnished from time to time by the Manager in order to effectuate the actions taken or authorized pursuant to the exercise of Voting Rights consummated in accordance with this Agreement.

APPENDIX E Transfer Provisions

MABCO STEAM COMPANY, LLC

TRANSFER PROVISIONS

This Appendix E is attached to and is a part of the Limited Liability Company Operating Agreement (the "Agreement") of MABCO Steam Company, LLC. Capitalized terms used in this Appendix E and not defined herein have the meanings specified or cross-referenced in Appendix A unless otherwise specified. All references in this Appendix E to any Section, Appendix or Exhibit is a reference to a Section, Appendix or Exhibit to the Agreement.

1. If a Member (the "Offeror") receives an offer from an unaffiliated third party (the "Offeree") to purchase all, but not less than all, of the Offeror's Interest for cash (a "Bona Fide Offer"), and such Member desires to accept the Bona Fide Offer, the Member is to give notice to the Company ("Offer Notice") specifying (i) the identity of the Offeree; (ii) the price (the "Price"), and (iii) any other material terms and conditions of the offer, including copies of any proposed purchase agreement, letter of intent or similar document(s).

2. The Offer Notice will be the Offeror's offer to the Company and/or the other Members to sell all, but not less than all, of the Offeror's Interest at the Price. Promptly upon receipt of the Offer Notice, the Company will send a copy thereof to each Member. Within fifteen (15) days of receipt of such copy each Member will notify the Company of the maximum percentage, if any, of the Offeror's Interest such Member desires to acquire. Any Member that does not timely give such notice to the Company will have elected not to acquire any percentage of the Offeror's Interest. Upon receipt of the Members' notices, if any, the Manager will allocate the Offeror's Interest among the Members that desire to purchase portions thereof so that each is allocated its Proportional Share. If the other Members desire to purchase, in the aggregate, all of the Offeror's Interest, then the Company will within thirty (30) days of receipt of the Offer Notice give notice to the Offeror, stating that its offer to sell has b een accepted, and specifying the closing date ("Exercise Notice"). In all other cases, the Offeror will have the right and obligation, subject to Section 7.3, to sell its Interest to the Offeree on the terms and conditions set forth in the Bona Fide Offer.

3. In the case of any purchase by the Members of an Offeror's Interest pursuant to Section 2 hereof, the closing of the purchase and sale will take place at the offices of the Company at 11:00 a.m. on the date specified in the Exercise Notice, or such other place, time or date as the Company and the Offeror may agree. At the closing, each of the purchasing Members will deliver, by bank check or wire transfer, a percentage of the Price equal to the percentage of the Offeror's Interest being acquired, against delivery by the Offeror of instrument(s) of conveyance, satisfactory in form and substance to the Company, warranting (i) that the Interest, or portion thereof, being conveyed is conveyed free and clear of all liens, encumbrances and rights of others, other than those arising under this Agreement, (ii) that the conveyance has been duly authorized by all necessary corporate action of the Offeror, and (iii) that such conveyance does not violate the rights of any third person. The Offeree's interest will be deemed transferred, and the Offeror no longer a Member, upon tender by the purchasing Members of the Price at the closing and, if the Offeror does not tender its Interest or tenders a conveyance not satisfactory to the Company, the Company will hold the Price in escrow for delivery to the Offeror upon delivery by it of conveyance documents satisfactory to the Company. A purchase of an Offeror's Interest pursuant to this Section 3 does not require compliance with Section 7.3.

EXHIBIT I

LIST OF MEMBERS
MEMBERS; CONTRIBUTIONS

Member The Cleveland-Cliffs Iron Company	Initial Capital Contribution (Agreed Value) $10,400,000	Initial Share of Class A Interest 52.021%	Initial Share of Class B Interest 52.021%
Allegheny Energy Solutions, Inc.	$3,000,000	15.006%	15.006%
Norfolk Southern Railway Company	$2,400,000	12.005%	12.005%
BOC Gases Division of the BOC Group, Inc.	$1,200,000	6.002%	6.002%
International Mill Service, Inc.	$1,000,000	5.002%	5.002%
Millcraft Products, Inc.	$1,000,000	5.002%	5.002%
Allegheny Energy Solutions, Inc.	$991,881	4.962%	4.962%

EXHIBIT II

FORM OF SUBSCRIPTION AGREEMENT

(ATTACHED)

Limited Liability Company Operating Agreement
of
MABCO Steam Company, LLC

Table of Contents

ARTICLE 1. ORGANIZATIONAL MATTERS 1

1.1 Formation of the Company; Term 1

1.2 Name 1

1.3 Purpose of the Company; Business 1

1.4 Principal Place of Business, Office and Agent 1

1.5 Fictitious Business Name Statement; Other Certificates 1

ARTICLE 2. CAPITALIZATION 2

2.1 Capital Contributions; Initial Interests 2

2.2 Additional Members; Additional Interests. 2

2.3 Call for Capital Contributions 3

2.4 Capital Contributions Unconditional 3

2.5 Default in Payment 3

2.6 Additional Contributions 3

2.7 Interest 3

2.8 Withdrawal 4

ARTICLE 3. CAPITAL ACCOUNTS AND ALLOCATIONS 4

3.1 Capital Accounts 4

3.2 Allocations of Book Income and Loss 4

3.3 Tax Allocations 4

ARTICLE 4. DISTRIBUTIONS AND REDEMPTIONS 4

4.1 Limitations on Distributions and Redemption 4

4.2 Operative Documents Limitations 4

4.3 Distributions; Mandatory Redemptions 5

ARTICLE 5. MANAGEMENT 5

5.1 The Manager 5

5.2 Authority of the Manager; Limitations 6

5.3 Duties of the Manager 7

5.4 Standard of Care; Indemnity 8

5.5 Waiver of Conflict of Interest 9

ARTICLE 6. POWERS AND DUTIES OF AND LIMITATIONS ON THE MEMBERS 9

6.1 Rights of the Members 9

6.2 Limitations on the Rights of the Members 9

6.3 Limited Liability of the Members 9

6.4 Voting Rights of Members 9

6.5 Certain Agreements with Members and Affiliates of Members 10

6.6 No Restrictions in Other Businesses 10

ARTICLE 7. TRANSFERS OF INTERESTS 10

7.1 General Restriction 10

7.2 Certain Permitted Transfers 10

7.3 Requirements for Transfer 11

ARTICLE 8. DISSOLUTION 11

8.1 Dissolution 11

8.2 No Withdrawal 11

8.3 Election to Continue the Company 11

8.4 Winding-up and Liquidation of the Company 11

8.5 Time for Winding-up 12

8.6 Final Accounting 12

ARTICLE 9. AMENDMENT OF AGREEMENT 13

9.1 Amendment by the Manager 13

9.2 Other Amendments 13

9.3 Further Assurances 13

9.4 Power of Attorney 13

ARTICLE 10. MISCELLANEOUS PROVISIONS 14

10.1 Notices 14

10.2 Waiver 14

10.3 Notice of Tax Examinations 14

10.4 Whole Agreement 14

10.5 Governing Law 14

10.6 Binding Nature 14

10.7 Invalidity 15

10.8 Counterparts 15

10.9 Construction 15

APPENDIX A Definitions 1

APPENDIX B Tax Matters 1

APPENDIX C Indemnification 1

End of TOC - Do not delete this paragraph!

EX-3 30 wheatlandex31.htm CERTIFICATE OF AMENDMENT, DATED MAY 17, 2001 CERTIFICATE OF FORMATION EXIBIT 3.1

STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF
ALLEGHENY ENERGY SUPPLY WHEATLAND GENERATING FACILITY, LLC

1. The name of the limited liability company is Allegheny Energy Supply Wheatland Generating Facility, LLC.

2. The Certificate of Amendment of the limited liability company is hereby amended as follows:

a). The address of its registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

3. The foregoing amendment is to become effective immediately upon the filing of this Certificate of Amendment.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Allegheny Energy Supply Wheatland Generating Facility, LLC this 17th day of May, 2001.

                                                  Member:
                                                  ALLEGHENY ENERGY SUPPLY COMPANY, LLC
                                                  a Delaware limited liability company

                                                  By:    /s/ Patricia J. Clark
                                                  Name: Patricia J. Clark
                                                  Title: Assistant Secretary

EX-3 31 wheatlandex32.htm SECOND AMENDED AND RESTATED LLC AGREEMENT, DATED AUGUST 7, 2001 LIMITED LIABILITY COMPANY EXHIBIT 3.2

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY
AGREEMENT
OF
ALLEGHENY ENERGY SUPPLY
WHEATLAND GENERATING FACILITY, LLC

This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Allegheny Energy Supply Wheatland Generating Facility, LLC (the "Company") is made and entered into as of August 7, 2001 by Allegheny Energy Supply Company, LLC, ("AE Supply"), a Delaware limited liability company as the sole member (the "Parent" or "Member"). As used in this Agreement, the term "Member" means Parent or any other person or entity that is admitted as a Member of the Company in accordance with this Agreement and the Delaware Limited Liability Company Act (6 Del.C. Section 18-101 et seq.), as amended from time to time (the "Act"), in each case so long as such person or entity remains a member of the Company, and the term "Members" means all of such persons or entities (whether one or more) collectively.

The Member, by execution of this Agreement, hereby establishes the Company as a limited liability company pursuant to and in accordance with the Act.

2. Name. The name of the limited liability company formed hereby is Allegheny Energy Supply Wheatland Generating Facility, LLC.

4. Registered Office. The address of the registered office of the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

9. Restriction on Powers. Notwithstanding any other provision of this Agreement and any provision of law, the Company shall not, without the consent of all of the Members (a) dissolve or liquidate, in whole or in part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) consent to the institution of bankruptcy or insolvency proceedings against it or to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (c) file a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a part of its property, (e) make a general assignment for the benefit of creditors, (f) admit in writing its inability to pay its debts gen erally as they become due, or (g) take any corporate action in furtherance of the actions set forth in clauses (a) through (f) of this Section 9.

11. Capital Contributions. Without creating any rights in favor of any third party, initial capital contributions shall be made by the Members at the times and in the amounts determined by the Members, and may be made in cash or other property as determined by the Members. Members have contributed amounts in cash, and no other property, to the Company according to the percentage interests set forth on Annex I hereto.

12. Additional Contributions. No member is required to make any additional capital contributions to the Company. However, a Member may make additional capital contributions to the Company.

13. Allocation of Profits and Losses. The Company's profits and losses shall be allocated in proportion to the ownership percentages of the Members.

15. Restrictions on Transfer. No Member may transfer, sell, assign, pledge, encumber or otherwise dispose of any part of its membership interest without the consent of the other Members.

16. Exculpation. Neither the Members, nor any owner, officer, or employee of the Company or the Members, shall be liable, responsible or accountable in damages or otherwise to the Company or the Members for any action taken or failure to act (even if such action or failure to act constituted the negligence of a person) on behalf of the Company within the scope of the authority conferred on the person described in this Agreement or by Law unless such act or omission was performed or omitted fraudulently or constituted gross negligence or willful misconduct. To the extent that, at law or in equity, the Members, or any owner, officer, or employee of the Company or the Members have duties (including fiduciary duties) and liabilities relating to the Company, the Members or any owner, officer, or employee of the Company or the Members acting under this Agreement shall not be liable to the Company o r the Members for their reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of the Members or any owner, officer, or employee of the Company or the Members otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of the Members or any owner, officer, or employee of the Company or the Members.

17. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware, all rights and remedies being governed by said laws.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Second Amended and Restated Limited Liability Company Agreement as of the date first written above.

                                                  Member:

                                                  ALLEGHENY ENERGY SUPPLY COMPANY, LLC,
                                                  a Delaware limited liability company

                                                  By:  /s/ David C. Benson
                                                  Name:  David C. Benson
                                                  Title:    Vice President

ANNEX I

Percentage Interests of the Members

Allegheny Energy Supply Company, LLC 100%

EX-3 32 odysseyex31.htm CERTIFICATE OF ORGANIZATION, DATED MAY 17, 2001 Microfilm Number ____2000084-1439

Microfilm Number ____9866-1275 . Entity Number ____28 34883	Filed with the Department of State on Sept. 4, 1998 _____________________________________ Secretary of the Commonwealth
.DOMESTIC LIMITED LIABILITY COMPANY DSCB:15-8913 (Rev 95)
In compliance with the requirements of 15 Pa.C.S. Section 8913 (relating to certificate of organization), the undersigned, desiring to organize a limited liability company, hereby state(s) that: 1. The name of the limited liability company is: Odyssey Communications, LLC________ _______________________________________________________________________________________________ 2. The (a) address of this limited liability company's initial registered office in this Commonwealth or (b) name of its commercial registered office provider and the county of venue is: (a) 108 Spring Grove Boulevard, Belle Vernon, PA 15012 Westmoreland . Number and Street City State Zip County c/o: ___________________________________________________________________________________________________ Name of Commercial Registered Office Provider County For a limited liability company represented by a commercial registered office provider, the county in (b) shall be deemed the county in which the limited liability company is located for venue and official publication purposes. 3. The name and address, including street and number, if any, of each organizer are:
NAME Alex P. Yawny . Joseph M. Opferman	ADDRESS 108 Spring Grove Boulevard, Belle Vernon, PA 15012 625 Deer Watch Drive, Cannonburg, PA 15317
4. (Strike out if inapplicable): ~~A member's interest in the company is to be evidenced by a certificate of membership interest.~~ 5. (Strike out if inapplicable): Management of the company is vested in a manager or managers. 6. The specified effective date, if any is: September 7 1998________________ month day year hour, if any 7. (Strike out if inapplicable): ~~The company is a restricted professional company organized to render the following restricted~~ professional service(s): 8. For additional provisions of the certificate, if any, attach an 8 1/2 x 11 sheet. ___________________________________________________________________________________________________________ ___________________________________________________________________________________________________________ IN TESTIMONY WHEREOF the organizer(s) has (have) signed this Certificate of Organization this 3rd day of September 1998 /s/ Alex P. Yawny________________________ (Signature) /s/_Joseph M. Opferman____________________ (Signature) ________________________________________

EX-3 33 odysseyex32.htm AMENDED AND RESTATED OPERATING AGREEMENT, DATED SEPTEMBER 29, 2000 ODYSYEY COMMUNICATIONS, LLC

EXHIBIT 3.2
ODYSSEY COMMUNICATIONS AMENDED AND RESTATED OPERATING AGREEMENT
THIS AMENDED AND RESTATED OPERATING AGREEMENT ("Operating Agreement") made September 29, 2000, by and between the undersigned parties (Members) and replaces the Operating Agreement dated September 7, 1998 and all prior dated such agreements.
RECITALS
WHEEREAS, Odyssey Communications, LLC was organized on September 28, 1998 as a Pennsylvania limited liability corporation by the filing of a Certificate of Organization with the Department of State of the Commonwealth of Pennsylvania under and pursuant to the Pennsylvania Limited Liability Law of 1994, 15 Pa. C.S. 8901 et seq., as amended ("Act");
WHEREAS, Allegheny Communications Connect, Inc., a Delaware corporation, obtained a 40% Membership Interest in Odyssey effective July 1, 2000;
WHEREAS, the Members have agreed to enter into this Operating Agreement to conduct and regulate the affairs of Odyssey, the conduct of its business, and the relations of its Members; and
WHEREAS, the Members have agreed that this document shall serve as an "operating agreement' within the meaning of Section 8903 of the Act and supercede any prior dated operating agreements.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises herein set forth, the parties agree as follows:
ARTICLES I DEFINITIONS
1.1		Definitions. For purposes of this Agreement, the following words or terms have the meanings indicated:
(A)	Administrative Services Agreement shall mean any agreement pursuant to which a Controlled Person of a Member has agreed to provide administrative services to Odyssey.
(B)	Agreement or Operating Agreement shall mean this operating Agreement, as amended from time to time.
(C)	Allegheny Communications Connect, Inc. shall mean Allegheny Communications Connect Inc., a wholly owned subsidiary of Allegheny Ventures, Inc., an Allegheny Energy, Inc. company.
2

(D)

Controlled Person shall mean any Person which directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another Person. As used in this definition, the term "control" means the possession, direly or indirectly, of the power to direct or cause the direction of the management and policies of Person, whether through ownership of voting securities, by contract or otherwise.

(E)

Capital Account shall mean the capital account established for each Member in accordance with the following provisions:

(1)

To each Member's Capital Account there shall be credited such Member's capital contributions made to Odyssey pursuant to the provisions of this Agreement, such Member's share of profits and any items in the nature of income or gain which are specially allocated pursuant to Sections 4.4 or 4.5 hereof, and subject to the provisions of Section 6.1, the amount of any Company liabilities assumed by such Member or which are secured by any property distributed to such Member;

(2)

To each Member's Capital Account there shall be debited the amount of cash and the fair market value of any property distributed to such Member pursuant to any provision of this Agreement and such member's share of losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 6.1 hereof, and liabilities assumed by Odyssey or which are secured by any property contributed by such Member to Odyssey; and

(3)

In the event all or a portion of a Membership Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.

Allocation for Profits and Losses shall be made in accordance with Sections 4.2 and 4.3 hereof. The Capital Accounts shall be maintained in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv), notwithstanding any provision contained herein to the contrary.

(F)

Code shall mean the Internal Revenue Code and the rules and regulations promulgated thereunder, as amended.

(G)

Company Asset means the interest of Odyssey in any entity or security (whether in corporation securities, equity, debt or hybrid securities, partnership or joint venture interests, other contractual rights or otherwise), or group of related entities or securities, and any business and other assets, or group of related businesses and other assets, owned directly or indirectly, by Odyssey and acquired by Odyssey in one transaction or a series of related transactions.

(H)

Depreciation means, for each fiscal year, an amount equal to the depreciation, amortization, or other cost recover deduction allowable with respect to an asset for such fiscal year, except that if the Gross Asset Value of an asset differs from its adjusted basis for

3

federal income tax purposes at the beginning of such fiscal year, "Depreciation" shall be an amount that bears the same ration to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such fiscal year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such fiscal year is zero, "Depreciation" shall be determined by a reasonable method selected by the Members.

(I)

Fair Market Value means the price that would be paid for a given asset in an arm's length transaction between a willing seller and willing buyer, as determined by the Members in their sole discretion.

(J)

Gross Asset Value means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:

(1)

The initial Gross Asset Value of any asset contributed by a Member to Odyssey shall be the gross Fair Market Value of such asset, as determined by the Members;

(2)

Except as provided in Section 3.6, the Gross Asset Values of all property of Odyssey shall be adjusted to equal the respective gross Fair market Values of such property, as determined by the Members, as of the following time: (i) the acquisition of any additional Membership Interest in Odyssey by any new or existing Member in exchange for more that a de minimis Capital Contribution: (ii) the distribution by Odyssey to a Member of more than a de minimis amount of property of Odyssey; and (iii) the Liquidation of Odyssey;

(3)

The Gross Asset Value of any property of Odyssey distributed to any Member shall be equal to the gross Fair Market Value of the property on the date of distribution as determined by the Members; and

(4)

The Gross Asset Values of assets of Odyssey shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to the extend the Members determine that an adjustment pursuant to subsection (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (d).

If the Gross asset Value of an asset has been determined or adjusted pursuant to subsection (a), (b), or (d) of this definition, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

(K)

Interest Rate shall mean a per annum rate of interest calculated as the

4

	Prime interest rate + 1/2 percent, but such rate shall not at any time exceed the maximum rate allowed by law under the applicable circumstances.
(L)	Information shall have the meaning set forth in Section 6.2 hereof.
(M)	Liquidation means (i) when used with reference to Odyssey, the earlier of (a) the date upon which Odyssey is terminated under Section 708(b)(1) of the Code and (b) the date upon which Odyssey ceases to be a going concern and (ii) when used with reference to any Member, the earlier of the date upon which such Member's entire interest in Odyssey is terminated other than by transfer, assignment or other disposition to a Person other than Odyssey.
(N)	Majority Non-Delinquent Members shall mean, at any time, Non-Delinquent Members the Non-Interested Percentage of which aggregate greater than fifty percent (50%).
(O)	Non-Delinquent Member shall mean, (i) with respect to any Interested Transaction, all Members other than the Delinquent Member and (ii) with respect to any other provision in the Agreement which describes a situation which is unique to a particular Member via-a-vis the other Members.
(P)	Non-Interested Percentage Interest shall mean, with respect to any Non-Delinquent Members, such Non-Delinquent Members Interest expressed as a percentage of all Interests of all Non-Delinquent Members, determined by dividing the membership interest owned by such Non-Delinquent Member by the total number of membership interest then owned by all Non-Delinquent Members.
(Q)	Operating Committee shall mean the committee established by the Members pursuant to Section 5.4 hereof.
(R)	Managers shall mean the members of the Operating Committee selected pursuant to Section 5.4 hereof.
(S)	Member or Members shall mean Allegheny Communications Connect, Inc., Alex P. Yawny, Joseph M. Opferman, and any Person later admitted to Odyssey as a member pursuant to Article VII.
(T)	Membership Interest shall mean the membership interest of each Member in Odyssey, as set forth in Section 4.1.
(U)	Net Cash from Operations shall mean the gross cash proceeds from Company operations less the portion thereof (without duplication) used to pay or establish reserves for all Company expenses, operation, debt payments, capital improvements, replacements, contingencies, or for any other use, as determined by the Operating Committee in the exercise of its powers pursuant to the provisions of Article V, and in its sole discretion. Net Cash from Operations shall not be reduced by depreciation, amortization, or similar allowances but shall be increased by any reduction of reserves previously established.
5

(V)		Parent shall mean Allegheny Ventures, Inc. with respect to Allegheny Communications Connect with respect to Odyssey.
(W)		Person shall mean any individual, corporation, voluntary association, joint stock company, limited liability company, business or other trust, partnership, or any other legal entity.
(X)		Profits and Losses shall mean Odyssey's taxable income or loss for each fiscal year determined in accordance with generally accepted accounting principles ("GAPP") and the methods followed by Odyssey for federal income tax purposes (for this purpose all tens and the methods followed by Odyssey for federal income tax purposes (for this purpose all items of income, gain, loss or deduction required to be separately stated pursuant to Code Section 703(a)(1) shall be included in taxable income or loss) with the following adjustments.
(1)	There shall be added to such taxable income or taxable loss an amount equal to any income received by Odyssey during such period which is wholly exempt from federal income tax (e.g. interest income which is exempt from federal income tax under Section 103 of the Code.);
(2)	Any expenditures of Odyssey described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses, shall be subtracted from such taxable income or loss;
(3)	In the event the Gross Asset Value of any Company Asset is adjusted pursuant to this Agreement, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses, and shall be allocated in accordance with the provisions of Article III;
(4)	Gain or loss resulting from any disposition of property or assets of Odyssey with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of such property or assets disposed of, notwithstanding that the adjusted tax basis of such property or assets differs from its Gross Asset Value;
(5)	In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year or other period; and
(6)	To the extent an adjustment to the adjusted tax basis of any Company Asset pursuant to Section 734(b) or Section 743(b) of the Code is required pursuant to Treasury Regulation Section 1.704-1(b)(2)(i)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in Liquidation of a Member's Membership Interest in Odyssey, the mount of such adjustment shall be treated as an item of gain (if the
6

adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits and Losses.

(Y)

Super Majority shall mean one less vote required for a unanimous decision. If five (5) Board members are voting, four (4) votes out of five (5) votes are required. If four (4) Board members are voting, three (3) votes out of four (4) votes are required. If three (3) Board members are voting, two (2) votes out of three (3) votes are required.

(Z)

Treasury Regulation or Regulation shall mean a regulation or proposed regulation promulgated under the Code by the U.S. Department of Treasury, as amended from time to time, and any successor regulation.

ARTICLE II ORGANIZATION

2.1

Name and Formation of Company. The name of Odyssey is "Odyssey Communications, LLC." The Company may also conduct its business under one or more assumed names. The Company is formed as a Pennsylvania limited liability company under and pursuant to the provisions of the Act by the filing of the Certificate as required by the Act.

2.2

Representations ad Warranties Concerning Formation of Odyssey. Each of the parties represents and warrants to the other that:

(A)

It is validly organized and existing and in good standing according to the laws of the state of its incorporation or organization, and it is qualified to do business in every jurisdiction where the failure to be so qualified would have a material adverse effect on its ability to perform its obligations under this Agreement;

(B)

Neither the formation of odyssey, the execution and delivery this Agreement (including all contracts or other agreements necessary to carry out the purposes of this Agreement), nor the performance of the obligations undertaken pursuant to this Agreement will contravene any provision of, or constitute a default under, any indenture, mortgage debenture, or other agreement to which it or its Controlled Persons is a party or any order, rule or regulation of any court, commission, or governmental agency having jurisdiction;

(C)

It will not willfully or knowingly violate any law or regulation regarding this Company or its business.

2.3

Purpose. The purpose of Odyssey is to conduct any and all activities that may be conducted by a "telecommunications construction, services and consulting company" and to do any and all things and to carry on any and all other activities necessary, convenient or incidental to the accomplishment of the foregoing purposes. The Company shall have all the powers necessary or convenient to effect the foregoing purposes including, but not limited to, the general powers conferred on limited liability companies under the Act. The Members agree to cooperate in obtaining all necessary authorizations from all governmental authorities having jurisdiction as may be required to conduct the purposes of Odyssey.

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2.4		Place of Business. Odyssey shall maintain its principal place of business at R.R. 12, Box 1000, Roseytown Road, Greensburg, PA 15601, or such other place or places as may be designated from time to time by the Members.
2.5		Registered Office and Registered Agent. The registered office of Odyssey in the Commonwealth of Pennsylvania shall be R.R. 12, Box 1000, Roseytown Road, Greensburg, PA 15601, or such other place or places as may be designated from time to time by the Members.
2.6		Intention for Company. Odyssey has been formed as a limited liability company under and pursuant to the Act. The members specifically intend and agree that Odyssey will not be a partnership (including a limited partnership) or any other venture except a limited liability company under and pursuant to the Act. No Member or Member of the Operating Committee shall be construed to be a Member in Odyssey or a Member of any other Member or Person and the Articles, this Agreement and the relationships created thereby and arising therefrom shall not be construed to suggest otherwise. Further, neither Odyssey nor the Members shall act, or purport to act, as a representative or agent of Allegheny Communications Connect or Controlled Person, except as otherwise set forth in writing. The Members intend that Odyssey be treated as a partnership for tax purposes.
2.7		Condition Precedent to Obligations of the Parties. The effective date of this Operating Agreement shall be subject to the receipt of required regulatory approvals as necessary for the parties to execute and deliver this Operating Agreement and perform hereunder.
ARTICLE III CAPITAL CONTRIBUTION AND CAPITAL ACCOUNTS
3.1		Initial Capital Contributions of the Members. Cash contributions and the Fair Market Value of in-kind contributions made by any Member has been credited to such Member's Capital Account.
3.2		Initial Capital Contributions for New members. Upon the execution of this Agreement, Allegheny Communications Connect will contribute the sum of $250,000 to Odyssey in exchange for a 40% Membership Interest of Odyssey's profit, loss and ownership, effective July 1, 2000.
3.3		Additional Capital Contributions.
(A)	In addition to the initial capital contributions of all the Members required under Section 3.1 and 3.2, each Member shall make additional capital contributions, from time to time, on or before the date specified in any notice form the Board sent in accordance with this Section 3.3, equal to its share of the additional capital contribution identified in any such notice. Each Member's share of any additional capital contribution required by the Board shall be equal to such Member's Membership Interest (expressed as a percentage) multiplied by the amount of the total additional capital contributions required from all Members. Additional capital contributions made by any Member under this Section 3.3(A) shall be credited to such Member's Capital Account. Unless otherwise agreed, all calls for additional capital contributions shall be for cash contributions.
(B)	The Board, by super majority vote, is hereby authorized to make calls on
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each of the Members for additional capital contributions in order for Odyssey to meet its cash, equity and operating requirements, provided that each additional capital contribution call pursuant to this section 3.3 shall be in writing and shall contain the following information:

(1)

The total amount of additional cash capital contributions requested from all Members;

(2)

The amount of additional cash capital contribution required from each Member, including the amount required from the Member to whom the request is addressed;

(3)

The purpose for which the funds are to be applied set forth in reasonable detail; and

(4)

The date, not less than thirty (30) days after the date of the written call, on which payments of the additional cash capital contributions shall be made by the Members.

(C)

If Odyssey does not have sufficient cash to pay its obligations, any Member may agree to advance all or part of the needed funds to or on behalf of Odyssey, provided that such Member obtains the other Member's written consent. Any advance described in this Section 3.3(C) shall bear interest at the Interest rate from the date of the advance until the date of payment, and is not a capital contribution.

3.4

Failure to Make Additional Capital Contribution. If any member fails to make payment when due of all or any portion of its share of Capital Call (such member the "Delinquent Member"), Odyssey shall give written notice such failure to the Delinquent Member with copies to each of the other Members. If the Delinquent Member fails to pay the amount due (including any costs associated therewith and interest on such obligation at the Interest Rate, which costs and interest payments shall not constitute Capital Contributions and shall not cause an increase in the Capital Account of such Delinquent Member) within ten (10) days of the giving of such notice by odyssey, the majority Non-Delinquent Members may elect to allow the Non-Delinquent Members to contribute (in addition to their portion of such Capital Call) all or any portion of such unpaid Capital Call in proportion to their respective Non-Interested Percentage Interests or on such basis as may be agreed among the Majority Non-Delinquent Membe rs. Any such contributing Non-Delinquent Member shall hereinafter be referred to as a "Contributing Member." Effective upon and in consideration for the making of such additional Capital Contributions by the Contributing Members, (1) Odyssey shall issue to the Contributing Members additional Membership Interest so that the Percentage Interest of each Contributing member shall be increased by the number of percentage points equal to a fraction, the numerator of which is equal to the unpaid Capital Call or portion thereof contributed by such Contributing Member and the denominator of which is equal to the current total of all capital accounts as of the date of the Capital Call plus the total of the Capital Call, and (2) the Percentage Interest of the Delinquent Member shall be reduced by the same number of percentage points as the amount of such increase and number of Membership Interest held by the Delinquent Member shall be cancelled to correspond to the number of additional Membership Interest issued to t he Contributing Members.

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3.5		Interest. No interest shall be paid on the Capital Account of any Member.
3.6		Adjustments in the Book Value of Odyssey's Assets. Adjustments to the book value of Odyssey's assets and the Members' Capital Accounts permitted by Treasury Regulation Section 1.704-1(b)(2)(iv)(f) shall be made if the Members reasonably determine that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members.
ARTICLE IV MEMBERSHIP INTERESTS, DISTRIBUTIONS AND TAXES
4.1		Membership Interests. As of the effective date of this Agreement, Odyssey's Membership Interests are as follows: Allegheny Communications Connect, Inc. 40% Alex P. Yawny 30% Joseph M. Opferman 30%
4.2		Allocation of Profits. After giving effect to the special allocations set forth in Section 4.4, Profits for any fiscal year shall be allocated to the Members in accordance with their Membership Interest.
4.3		Allocation of Losses. After giving effect to the special allocations set forth in Section 4.4, Losses for any fiscal year shall be allocated to the Members in accordance with their Membership Interest.
4.4		Tax Allocations.
(A)	Items of taxable income, gain, loss and deduction shall be determined in accordance with Section 703 of the Code, and except as otherwise provided in this Article IV, the Members' distributive shares of such items for purposes of Section 702 of the Code shall be determined according to their respective shares of Profits or Losses to which such items relate. In accordance with Section 704(c) of the Code and the regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of Odyssey shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to Odyssey for federal income tax purposes and its Gross Asset Value as of the date of contribution. In the event the Gross Asset Value of any Company Asset is adjusted pursuant to this Agreement, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation b etween the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Section 704(c) of the Code and the Regulations thereunder. The Company shall make curative allocations set forth in Treasury Regulation Section 1.704-3(c) to the extent necessary to fully offset the effect of the ceiling rule on the allocations pursuant to this Article IV. Such curative allocations shall be made at the time of the disposition of property, the allocations with respect to which were affected by the ceiling rule. Such curative allocations shall first be allocations of the gain or loss recognized by Odyssey on such disposition. To the extent such gain or loss is insufficient to fully offset the effect of the ceiling rule with respect to such property, allocations in the amount of such shortfall shall be made of other items of Company
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income, gain or loss of similar character recognized upon the disposition of all or substantially all of the assets of Odyssey. Any elections or other decisions relating to such allocations shall be made by the Members in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Article IV are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.

(B)

Qualified Income Offset, Minimum Gain Chargeback. Notwithstanding anything to the contrary in this Agreement, Profits and Losses shall be allocated as though this Agreement contained (and there is hereby incorporated herein by reference) (i) a qualified income offset provision that complies with Treasury Regulation Section 1.704(b)(2)(ii)(d) and (ii) minimum gain chargeback and partner minimum gain chargeback provisions which comply with the requirements of Treasury Regulation Section 1.704-2.

(C)

Allocations Upon Liquidating Dispositions. Profits or Losses resulting from the sale or other disposition of all or substantially all of the assets of Odyssey shall be allocated in accordance with this Article IV.

(D)

Tax Credits. All tax credits of Odyssey for a fiscal year shall be allocated among the Members in the same ration as Profits were allocated for such fiscal year, or it there were no Profits for such fiscal year, such tax credits shall be allocated to the Members in accordance with their respective Interests expressed as a percentage.

(E)

Treatment of Taxes Withheld; Distributions With Respect to Certain State and Local Taxes. All amounts withheld or paid by Odyssey pursuant to the Code or any provision of any state or local tax law with respect to any payment, distribution, or allocation to a Member, or any such amount that is paid by Odyssey solely by reason of the holding of a Membership Interest by any Member, shall be treated as amounts distributed to such Member pursuant to Section 4.5 hereunder and shall be debited to its Capital Account. Notwithstanding anything to the contrary herein, in the event that nay state, local or other income tax imposed on Odyssey as an entity for any fiscal year is reduced by reason of the holding of a Membership Interest by any Member, an amount equal to the reduction attributable to such Member shall be distributed to such Member within sixty (60) days after the end of the fiscal year.

4.5

Distributions. Other than distributions made pursuant to Article IX on termination, distributions of Net Cash from Operations shall be made at such times (but no less often than annually) as determined by the unanimous consent of the Board, in its sole discretion, to the Members in accordance with their Membership Interest; provided, however, that Members in default under this Agreement shall not be entitled to distributions so long as such Members are in default.

4.6

Non-Discretionary Minimum Distributions. All Members shall have the option to take a cash withdrawal from their capital account on a periodic basis, calculated as follows:

(A)

Odyssey's accountant shall estimate or project its taxable income on April 1^st (for the period January 1 march 31), June 1^st (for the period April 1 June 30), September 1^st (for the period July 1 September 30) and December 31^st (for the period October 1 December

11

31) of each year.

(B)

On the above dates, the above taxable income shall be multiplied by the maximum individual federal income tax rate plus the maximum individual self-employment tax rate (if wages cause Member to exceed FICA limit then the rate will only include the maximum Medicare portion of the self-employment rate) plus the maximum individual state tax rate plus the maximum individual local income tax rate.

(C)

The resulting product from above paragraph (B) shall then be multiplied by the Member's interest to determine the Member's "current estimated quarterly tax."

The minimum distribution shall be further adjusted by the Member's prior year final tax liability, within the Member's discretion. Accordingly, the minimum distributions shall occur on the following dates and be determined as follows:

Date

Minimum Distribution

April 1^st, current year

Greater of the current estimated quarterly tax or 25% of the Member's prior year final tax liability

June 1^st, current year

Greater of the current estimated quarterly tax or 25% of the Member's prior year final tax liability

September 1^st, current year

Greater of the current estimated quarterly tax or 25% of the Member's prior year final tax liability

December 31^st, current year

Greater of the current estimated quarterly tax or 25% of the Member's prior year final tax liability

March 15^th, following year
(year-end)

Balance of Members tax liability as calculated in above subparagraphs (A), (B), and (C) as applied to Odyssey's actual taxable income for the current year.

If any of the above minimum distributions are not withdrawn on its respective date, the amount of the minimum distribution not withdrawn can be added to a subsequent quarterly minimum distribution or the year-end minimum distribution, and withdrawn upon the above respective date. However, a Member shall not carry-over to the following year any minimum distribution that the Member fails to withdraw. Therefore, any minimum distribution not timely withdrawn by the Member for the current year will remain in the Member's capital account and will not be used to increase the Member's minimum distribution for the following year.

4.7

Limitation on Distributions. No Member shall be entitled to a distribution pursuant to Section 4.5, if after giving effect to the distribution, Odyssey would not be able to pay its debts as they become due in the usual course of business, or if Odyssey's total assets would be less than the sum of its total liabilities. A determination that a distribution is not prohibited und this subsection or the Act may be based either on financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances or

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			on a fair valuation or other method that is reasonable under the circumstances.
ARTICLE V- MANAGEMENT OF THE COMPANY
5.1			Board of Directors. The management and control of Odyssey shall be vested in a Board of Directors, which shall me responsible for the oversight and establishment of policy to be used by the Operating Committee for the implementation of operating procedures respecting the business affairs of Odyssey. The Board of Directors will consist of the Operating Committee plus two (2) independent members from the community. The two (2) independent members from the community and any subsequent vacancies in the positions held by the two (2) independent members from the community shall be selected or filled by the unanimous approval of the Operating Committee. The Board Members shall elect a Chairperson from amongst themselves. The Chairperson shall perform the duties set forth in this Agreement and is designated by the Board of Directors form time to time. Each member, including the Chairperson, shall be entitled to cast one vote with respect to any decisions made by the Board of Directors.
(A)		Notwithstanding any other provision of this Agreement and in enlargement of the laws of Pennsylvania, the actions of Odyssey enumerated below in this subsection (A) may be taken only upon the super majority consent of all of the Members. The actions requiring such approval are:
(i)	Any amendment or restatement of the Certificate or this Agreement;
(ii)	Any material change in the character or scope of the business and affairs of Odyssey;
(iii)	Entering into any partnership or joint venture with one or more third parties;
(iv)	The commission of any act that would contravene any provision of the Certificate of this Agreement or the Act;
(v)	any new issuance of Membership interests to persons not theretofore members of Odyssey;
(vi)	any additional capital contributions required under Section 3.3 hereof; and
(vii)	establishing the salaries, incentive compensation, and employment benefits of the officers and employment contract terms.
(B)		Notwithstanding any other provision of this Agreement and in enlargement of the laws of Pennsylvania, the actions of Odyssey enumerated below in this subsection (B) may be taken only upon the unanimous consent of all of the Members. The actions requiring such approvals are:
(i)	The sale of all or substantially all of the assets and property of Odyssey;
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(ii)

Any merger, consolidation, dissolution or winding-up of Odyssey; and

(iii)

Any discretion distributions as listed in Section 4.5.

(C)

Notwithstanding any other provision of this Agreement and in enlargement of the laws of Pennsylvania, the actions of Odyssey enumerated below in this subsection (C) may be taken only upon the majority consent of all of the Members. The actions requiring such approvals are:

(i)

Any private network contracts with unrelated Member in excess of $1 million;

(ii)

The creation of any lien or encumbrance on the property of Odyssey in excess of $50,000;

(iii)

any voluntary dissolution or termination of tax status of Odyssey;

(iv)

the adoption of an annual budget, prepared by the Operating Committee, for Odyssey in accordance with the provisions of Section 11.4 and any modification to such annual budget;

(v)

the incurrence of any indebtedness by, or expenditure of any funds of, Odyssey in excess of the amount set forth in the approved annual budget.

5.2

Board Meetings.

(A)

All members or their designee shall be present via telephone, cell phone, etc. at a meeting of the Board. The Chairperson of the Board or any Manger shall convene a meeting of the Board by sending a written convening notice, together with a proposed agenda, to the other Managers at least five (5) business days before the date of the meeting. The Board shall meet at least once each quarter at the offices of Odyssey or such other place as shall be specified or fixed in the notice of meeting. The Managers may waive notice convening a meeting of the Board. The presence of the Managers is equivalent to a waiver of the convening notice unless they are attending to object that the meeting was not properly convened.

(B)

Action may be taken by the Board without a meeting, without prior notice if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers entitled to vote.

(C)

THE chairperson shall cause written minutes to be prepared of all action taken by the Operating Committee and shall deliver a copy thereof to each Manager and Member within thirty (30) days after each meeting.

5.3

Appointment of Committees and Officers.

(A)

The Board in its sole discretion may from time to time establish committees to advise and/or research and review those matters and exercise those powers

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determined by the Board in establishing such committee. Unless otherwise specified in the writing designating the committee. A simple majority of the members of the Board may select its Chairman, fix its rules of procedure, fix the time and place of meetings and specify what notice of meeting, if any, shall be given.

(B)

Officers Appointed.

(i)

Except as otherwise provided herein: (A) The officers of Odyssey shall be selected by super majority consent of the Board and shall consist of a President, a Secretary, and a Treasurer and such other officers or agents as the Board may deem necessary, each of whom shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board and until their successors are appointed and qualified, (B) any officer or agent selected or appointed by the Board may be removed at any time, with or without cause, by unanimous consent of the Board; and (C) any vacancy occurring in any office of Odyssey from whatever cause may be filled by super majority action of the Board. The same person may hold any number of offices.

(ii)

The designated Executives shall have general day-to-day responsibility for Odyssey as outlined in 5.4 and shall see that all orders and resolutions of the Members are carried into effect.

(iii)

The Secretary shall attend all meetings for the Board and Operating Committee and record all the proceedings and actions of the Board and Operating Committee in a book to be kept for that purpose. He/She shall give, or cause to be given, notice of all meetings of the Board and Operating Committee, and shall perform such other duties as may be prescribed by the Board or Operating Committee.

(iv)

The Treasurer shall have the custody of Odyssey funds and properties and shall keep full and accurate accounts of receipts and disbursements in books belonging to Odyssey and shall deposit all moneys and other valuable effects in the name and to the credit of Odyssey in such depositories as may be designated by the Operating Committee. He/She shall disburse the funds of Odyssey as may be ordered by the Operating Committee, taking proper vouchers for such disbursements, and shall render to the Chairperson, the President and the Operating Committee, when the Board and/or Operating Committee so requires, an accounting of all transactions as Treasurer and of the financial condition of Odyssey. If required by the Board and/or Operating Committee, he/she shall give Odyssey a bond in such sum and with such surety or sureties as shall be satisfactory to the Board and/or Operating Committee for the faithful performance of the duties of this office, of all books, papers, vouchers, money and other pro perty of whatever kind in his/her possession or under his/her control belonging to Odyssey.

(v)

The Board may elect or appoint such other officers, including, without

15

limitation, one or more Vice Presidents and one or more Assistant Treasurers and Assistant Secretaries, as it may deem necessary or appropriate from time to time.

5.4

Operating Committee.

(A)

The Operating Committee shall consist of three (3) Persons. Each Member shall be entitled to name one person ("Managers") to the Operating Committee. The initial Managers will be the Vice President of Allegheny Communications Connect, or his designee, Alex P. Yawny and Joseph M. Opferman, or their designees. Each Manager shall be an employee of a Member or its Parent or a Member. Vacancies on the Operating Committee shall be filled by the Member that appointed (an/or employed) the Manager previously holding the position which is then vacant. If a Member leaves the company and there are only two (2) Members remaining, a replacement Person will be selected by remaining Managers. The Managers shall select a Chairperson from among themselves, The Chairperson shall perform the duties set forth in this Agreement, and as designated by the Operating Committee from time to time.

(B)

Each Manager, including the Chairperson, shall be entitled to case one vote with respect to any decision made by the Operating Committee, and the decisions of the Operating Committee shall be effectuated by the affirmative unanimous vote of the Managers present at a duly convened meeting. The actions requiring such approvals, but are not limited to, are:

(i)

The hiring of any direct relation;

(ii)

The election of two (2) independent members from the community to serve on the Board of Directors.

5.5

Dealings with Controlled Persons. It is anticipated that Controlled Persons of the Members will provide certain general administrative services to Odyssey. Such services shall be provided pursuant to an Administrative Services Agreement substantially in the form attached hereto as Exhibit A. Such agreement, and any other agreement between Odyssey and Controlled Persons, shall be fully disclosed to, and approved by, the Operating Committee.

5.6

Duties and Obligations of Operating Committee.

(A)

The Operating Committee shall take all actions, which may be necessary or appropriate for the continuance of Odyssey's valid existence as a limited liability company under the laws of the Commonwealth of Pennsylvania.

(B)

The Operating Committee shall use its best efforts to meet all current and future federal income tax requirements to assure that Odyssey will not fail to be classified for federal income tax purposes as a partnership rather than as an association taxable as a corporation.

(C)

The Operating Committee shall direct the affairs of Odyssey in the best

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interest in Odyssey, including the safekeeping and use of all Company funds and assets (regardless of whether in the immediate possession or control of the Operating Committee) and the use thereof for the benefit of Odyssey.

(D)

The Operating Committee shall, from time to time, prepare and file any amendment to Odyssey's Certificate and any other similar documents, which are required by law to be filed and recorded for any reason in such office or offices as are required under the laws of the Commonwealth of Pennsylvania.

(E)

The Managers shall devote such time to Odyssey business as may be necessary to adequately and properly manage and supervise Odyssey business and affairs in a efficient and workmanlike manner.

5.7

Indemnifications and Insurance.

(A)

To the fullest extent permitted under applicable law, Odyssey shall severally indemnify and hold harmless any Person (an "Indemnified Party") who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action by or in the right of Odyssey) by reason of or arising from any acts or omissions (or alleged acts or omission) on behalf of Odyssey or in furtherance of the interests of Odyssey arising out of the Indemnified Party's activities as a member/owner, manager, officer, employee, trustee or agent of Odyssey against losses, damages or expenses (including reasonable attorneys' fees, judgments, fines and amounts paid in settlement) actually and reasonably incurred by such Indemnified Party in connection with such action, suit or proceeding and for which such Indemnified Party has not otherwise been reimbursed, so long as such Indemnified Party did not act in bad faith or in a manner constituting gross negligence or willful misconduct or materially breach this Agreement. The termination of any action, suit or proceeding by judgment, order, settlement or upon a plea of nolo contedere or its equivalent shall not of itself (except insofar as such judgment, order, settlement or plea shall itself specifically provide) create a presumption that the Indemnified Party acted in bad faith or in a manner constituting gross negligence or willful misconduct or materially breached this Agreement.

(B)

Without limiting the generality of the foregoing subsection (a), the parties hereto further agree that no Member or Manager shall be personally liable to Odyssey or the Members for monetary damages for breach of its or his fiduciary duty in such capacity, provided, however, that nothing herein shall eliminate or limit such liability (i) for a breach of the Member's/Manager's duty of loyalty to Odyssey or the other Members, (ii) for acts or missions not in good faith or which involve intentional misconduct or a knowing violation of the law, or (iii) for any transaction form which such Member/Manager derived an improper personal benefit.

(C)

The Operating Committee shall obtain and maintain in force such insurance as it deems necessary to protect the property of Odyssey and to protect Odyssey against liability for claims of third persons, but in not even shall the coverage be less than $3,000,000. The Company shall be a named insured on the policies obtained. Each member shall be provided with a certificate disclosing the issuance of the policy and its basic terms. No such policy shall be canceled by the Operating Committee except after it shall have given at least thirty (30) days prior written notice to the Members to that effect. Except as assumed by

17

`

Odyssey, each of the members shall be responsible for insuring itself against damages, losses and liabilities relative to its respective Membership Interest in Odyssey.

ARTICLE VI LIABILITES AND OBLIGATIONS OF MEMBERS

6.1

Limited Liability of Members. The debts, obligations and liabilities of Odyssey, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of Odyssey and no Member shall be obligated personally for any such debt, obligation or liability of Odyssey solely by reason of being a Member. This provision notwithstanding, any Member may, by any other agreement or instrument, agree to be obligated personally for any or all of the debts, obligations and liabilities of Odyssey.

6.2

Confidentiality.

(A)

For the purpose of this section 6.2 , unless the context indicates otherwise, the term "Information" means all trade secrets or confidential or proprietary information of Odyssey or of any Member or Member's affiliate revealed, directly or indirectly to one or more of the other Members during the course of this Agreement, regardless of the form in which it appears, or under which it is communicated, all copies or recordings thereof (whether or not made in accordance with this Agreement) and recordings thereof (whether or not made in accordance with this Agreement) and the content of such information, including, but not limited to, all descriptions, economic data, computer programs and models and the results therefrom.

(B)

The Members agree to keep confidential all Information, and shall not, without prior written consent of the others, disclose to any third party, firm, corporation or entity (save and except to its Controlled Persons and their respective legal counsel, accountants and consultants, provided they undertake to comply with the provisions of this Section 6.2) such Information, not shall either Member use any such Information for purposes other than the operations of Odyssey. The Members agree to use their best efforts to limit the disclosure of the Information to only those directors, officers, employees and agents (including legal counsel, accountants and consultants) who need to know such Information.

(C)

The obligations set forth in subsection (B) shall not apply to any Information which a Member can demonstrate:

(1)

Was in its possession prior to the time of disclosure; or

(2)

Was in the public domain at the time of disclosure, or subsequently become part of the public domain through no fault of the Member or any Controlled Person of such Member.

(D)

In the event that Member is legally requested or required (by oral questions, interrogatories, request for Information or documents, subpoena, civil investigative demand or similar process) to disclose any Information, it is agreed that it sill provide the other Members with prompt notice of such request prior to complying therewith so that they may seek an appropriate protective order and/or waive compliance with the Section 6.2. If in the absence of a protective order of the receipt of a waiver hereunder, a Member is nonetheless legally compelled to disclose such Information, it may disclose such Information without liability

18

Hereunder. In addition any Member may disclose any Information if such disclosures necessary in connection with the enforcement of the rights of such Member in Odyssey hereunder.

(E)

The confidentiality obligations set forth in this Section 6.2 shall survive any termination of this Operating Agreement for a period of eighteen (18) months following the date of termination.

ARTICLE VII DISPOSITION OF MEMBERSHIP INTERESTS

7.1

General. Except with the unanimous written consent of the Board, or as otherwise permitted by this Article VII, a Member may not sell, assign, pledge, mortgage, hypothecate or otherwise transfer all or any part of its right, title or interest in Odyssey or interest arising pursuant to this Agreement, or all or any part of its right, title or interest in any evidence of indebtedness of Odyssey. No Membership Interest shall be disposed of without compliance with any and all state and federal securities laws and regulations; and unless the assignee of the Membership Interest provides Odyssey with the information agreements that the Members may require in connection with such disposition. Any attempted disposition of a Membership Interest in violation of this Article is invalid and shall be null and void.

7.2

Permitted Dispositions. Subject to the provisions of this Article VII, a Member may assign such Member's Membership Interest in Odyssey in whole or in part to a Controlled Person of such Member or to another Member, with the consent of the Board. If such assignment causes a termination of Odyssey pursuant to Code Section 708(b)(1)(B) prior to the time provide in Section 9.1, such assigning Member shall indemnify and hold harmless the other Members from any and all incremental federal, state and locate tax liability incurred by such other members that would not have been incurred except for the early termination.

7.3

Admission of Substitute Members. Except as provided in Section 7.2, an assignee of all or part of a Member's interest shall be admitted as a substitute Member and shall be entitled to the rights and powers of the assignor only if the Board unanimously consent. If admitted, the substitute Member shall have, to the extent assigned, all of the rights and powers, and shall be subject to all of the restrictions and liabilities, of a Member. As a condition precedent to any Person's becoming a substitute Member, it shall become a party hereto and shall evidence the same by executing and delivering one (or, at the request of Odyssey, more) counterparts of this Agreement.

7.4

Buy-Sell

(A)

Required Offer. A Member shall be required to first offer his interest to Odyssey and/or the remaining Members in the manner set forth below in paragraph (B) upon the occurrence of the following.

(1)

Transfer of a Member's interest.

(2)

Death of Alex P. Yawny and/or Joseph M. Opferman.

(3)

Disability of Alex P. Yawny and/or Joseph M. Opferman as defined in Section 6.2 of their respective Employment Agreements.

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(4)

Termination of Alex P. Yawny and/or Joseph M. Opferman's employment for any reason whatsoever other than death or disability.

(B)

Manner of Offer to Odyssey and Members.

(1)

Whenever an offer of a Member' s interest is required to be made in accordance with the provisions of above paragraph (A), such offer shall be given in writing to Odyssey. The offeror shall include in his or its offer to Odyssey the total interest involved, and the offeror's full name and address. Odyssey, as agent of the offeror, shall then give written notice of the offer to all Members then of record, other than the offeror, within three (3) business days after receipt of the offer. For each Member, the offer shall indicate the total interest that each Member receiving such offer shall be eligible to purchase (the interest being hereinafter called a Member's "proportionate share" which shall be based upon their current membership interest at the time of the offer).

(2)

The offeror's interest shall be offered for purchase as follows:

(i)

The remaining Members shall have the first option to purchase their proportionate share and shall communicate their acceptance of the offer in writing to Odyssey within thirty (30) days after transmission of the offer by Odyssey. An acceptance by the remaining members shall state the maximum interest each Member wishes to purchase.

(ii)

If the interest being purchased do not equal the total interests being offered, then the remaining offeror's interest shall be re-offered to the remaining Members and then Odyssey. Within three (3) business days after receipt of the written acceptances form the remaining Members and/or Odyssey, Odyssey shall give written notice of the acceptances to the offeror (or if offer is made as result of a Member's death, then the deceased member's representative).

(iii)

In the event some but not all of the offeror's interest is purchased by the remaining members, then the balance of the offeror's interest, within the total discretion of the offeror may be offered and transferred to a non-member(s) for a period of thirty (30) days after receipt of the above written acceptances, upon receipt of the written consent of the remaining Member(s).

(iv)

In the event the offeror elects not to offer the remaining interest to a non-member(s), or the remaining interest is offered to a non-member(s) and not all of the offeror's interest is being purchased, then the offeror's remaining interest shall be purchased by Odyssey.

20

(3)

Any offer made in accordance with this Section shall be irrevocable during the period in which it may be accepted by either the remaining Members or Odyssey, and shall be conditioned upon the transferee agreeing in writing to be bound by all the terms and conditions of this Agreement.

(C)

Price of Member's Interest.

(1)

The purchase price for the membership interest of Alex P. Yawny and Joseph M. Opferman offered for purchase on account of their death, permanent disability, involuntary termination by Odyssey without Cause as defined on Section 6.1 of their respective Employment Agreements, or voluntary termination by the Member for Good Reason as defined in Section 6.4 of their respective Employment Agreements, shall be calculated as follows:

(i)

Odyssey shall be valued in its totality by an independent appraiser in conformity with the Business Valuation Standards of The Institute of Business Appraisers and the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation on the ending day of Odyssey's fiscal quarter preceding the offer. The appraiser selected for the valuation must be mutually acceptable by the remaining Members and the offeror (or if the offer is made as a result of a Member's death, then the deceased Member's representative) by majority vote.

(ii)

The price of the offeror's membership interest shall be calculated by multiplying the above appraised value by the membership interest percentage being purchased.

(2)

The purchase price for the membership interest of Alex P. Yawny and Joseph M. Opferman offered for purchase on account of desire to transfer some or all of their interest, involuntary termination by Odyssey for Cause as defined in Section 6.4 of their respective Employment Agreements, or voluntary termination by the Member other than for Good Reason as defined in Section 6.4 of their respective Employment Agreements, shall be the greater of the following:

(i)

The offeror's capital account balance on the ending day of Odyssey's fiscal quarter preceding the offer; or

(ii)

The purchase price calculated in above paragraph (c)(1) reduced as follows should an offer be made prior to July 1, 2004:

Offer Made Reduction
Before 07/01/01 80%

After 06/30/01 but

21

Before 07/01/02                                      60%

After 06/30/02 but
Before 07/01/03                                      40%

After 06/30/03 but
Before 07/01/04                                      20%

After 06/30/04                                         0%

(3)

The purchase price for the membership interest of Allegheny Communications Connect, Inc. offered for purchase on account of their desire to transfer some or all of its interest, shall be the price calculated in above paragraph (C)(1).

(D)

Closing for Purchase of Offeror's Interest. The closing shall occur within forty-five (45) days after the offeror has received written notice of the remaining members' acceptances from Odyssey.

(E)

Payment for Offeror's Interest. At the closing, the remaining Members and/or Odyssey shall pay the purchase price calculated in above paragraph (C) to the offeror (or if the offer is made as a result of a Member's death, then the deceased Member's representative) by cashier's check or wire transfer of immediately available funds to the account designated in writing by the offeror.

ARTICLE VIII. BOOKS OF ACCOUNT, RECORDS AND REPORTS

8.1

Accounting. The Operating Committee shall designate a Member or Members to maintain proper and complete records and books of account, as required by the Act, in which shall be entered fully and accurately all transactions and other matters relative to Odyssey's business as are usually entered into records and books of account maintained by Persons engaged in businesses of like character. The Company books and records shall be prepared in accordance with generally accepted accounting principles consistently applied; and they shall at all times be maintained at the Registered Office of Odyssey and shall be open to the inspection and examination of the Members or their duly authorized representatives upon reasonable notice during regular business hours at the sole cost and expense of the examining Member.

8.2

Reports. As soon as practicable, but no later than the 30^th day after the end of each month, the Operating Committee shall send to the Members: (1) Statements of Income; and (2) a report summarizing the fees, distributions and other remuneration or compensation paid by Odyssey for such month to any Members or their respective Controlled Persons. As soon as practicable, but no later than the 60^th day after the end of each of the first three fiscal quarters of each fiscal year, and no later than the 60^th day after the close of the fiscal year, the Operating Committee shall send to the Members. (1) a balance sheet as of the end of such fiscal period and statements of income and Members' equity of such fiscal period, all of which shall be prepared in accordance with generally accepted accounting principles: (2)a cash flow statement; and (3) a report summarizing the fees, distributions and other remuneration or compensation paid by

22

		Odyssey for such fiscal period to any Members or their respective Controlled Persons. All statements shall be unaudited, except the year-end statements, which shall be accompanied by an opinion of independent certified public accountant, in each case unless the Operating Committee agrees to the contrary. To the extent such information exists, the Operating Committee shall provide the Members upon request supplemental detail supporting annual statements.
ARTICLE IX TERMINATION AND DISSOLITOIN OF THE COMPANY
9.1		Payment of Debts; Distributions.
(A)	Upon the winding up of odyssey, the Operating Committee shall proceed with the sale or disposition of the assets and termination of odyssey; and the proceeds of such sale or disposition, together with other available proceeds, shall be applied and distributed in the following order of priority: (1) to the expenses of liquidation; (2) to the payment of all debts and liabilities of Odyssey; and (3) to the establishment of any reserve which the Operating Committee, in its sole discretion, deems reasonable or necessary to provide for any contingent or unforeseen liabilities or obligations of Odyssey or the Operating Committee arising out of or in connection with Odyssey.
(B)	The proceeds, if any, remaining after payment of the amounts described in subsection (A) shall be distributed on or before the later of (i) the end of the taxable year during which such liquidation occurs, or (ii) 90 days after the date of such liquidation, to and among the Members with positive Capital Account balances in the proportion to the balances in each Capital Account, compared to the aggregate of all Capital Accounts. Any Member with a negative balance in its Capital Account upon the winding up of Odyssey shall make a capital contribution in cash to Odyssey to eliminate that negative balance before the later of (i) the end of the taxable year during which such liquidation occurs, or (ii) 90 days after the date of such liquidation.
(C)	Upon the winding up o Odyssey, all right, title and interest to the name "Odyssey Communications, LLC" shall be transferred to and vested in remaining Members excluding Allegheny Communications Connect provided capital account is greater than $.01. If capital accounts are not profitable, name reverts to Allegheny Communications Connect. In connection with such transfer, a value of zero ($0) shall be assigned to the name.
ARTICLE X TAX MATTERS
10.1		Tax Information. On or before May 15^th of each year, and a reasonable time before quarterly taxes are due, the Operating Committee shall send to the Members such tax information as shall be appropriate for the preparation by the Members or their respective federal, state and other local income or other tax returns.
10.2		Returns. The Operating Committee shall cause to be prepared and filed on or before the due date (or any extensions thereof) federal, state and local tax or information returns required to be filed by Odyssey. The Operating Committee, to the extent that Company funds are available, shall cause Odyssey to pay any taxes payable by Odyssey (it being understood that the expenses of preparation and filing of such tax returns, and the amounts of such taxes, are
23

			expenses of Odyssey and not of the Operating Committee); provided that the Operating Committee shall not be required to cause Odyssey to pay any tax so long as the Operating Committee or Odyssey is in good faith and by appropriate legal proceedings contesting the validity, applicability or amount thereof, such contest does not materially endanger any right or interest of Odyssey and the Operating Committee has considered the impact of such a contest on the Members.
10.3			Elections.
(A)		To the extend that Odyssey my be or is required to make elections for federal, state or local income or other tax purposes, and to the extent that Members may be or are required to make such elections concerning the business of Odyssey, such elections, including those enumerated below, shall be made by the Operating Committee:
(1)	To adopt the calendar year as the annual accounting period, unless otherwise required by law;
(2)	To adopt the accrual method of accounting;
(3)	To compute the allowance for depreciation utilizing the shortest life and fastest method permissible under the Modified Accelerated Cost Recovery System or other applicable depreciation system, for tax purposes only;
(4)	To amortize organization expenditures, if ay, over a sixty (60) month period in accordance with Code Section 195(b) and any similar state statute;
(5)	To amortize start-up expenditures, if any, over a sixty (60) month period in accordance with Code Section 709(b) and any similar state statute;
(6)	To make such other elections as it may deem advisable to reduce Company taxable income to the maximum extent possible and to take deductions in the earliest taxable year possible;
(7)	To make the election provided under Code Section 754 and any corresponding provision of applicable state law at the request of any Member; and
(8)	To elect to be treated as a partnership for federal income tax purposes.
			Any other elections shall be made in such manner as id best calculated, in the opinion of the Operating Committee, to serve the best interests of Odyssey and the Members.
10.4			Survival of Obligations. The provisions of this Article regarding tax matters shall survive the termination of the Agreement and/or the termination of any Member's interest under this Agreement and shall remain binding on that Member for a period of time necessary to resolve with the Internal Revenue Service, the Department of Treasury and/or any local tax authority any and all matters regarding the federal, state or local income or other taxation of
24

	Odyssey and all present or previous Members.
10.5	Tax Matters Member. Allegheny Communications Connect shall be the tax matters member of Odyssey pursuant to Section 6231(a)(7) of the Code. Allegheny Communications Connect shall inform all other Members of all matters which may come to its attention in its capacity as tax matters member by giving the other Members notice thereof within fifteen (15) days after Allegheny Communications Connect becomes so informed. Following issuance of said notice to all Members, the Members agree to consult with each other and respond to all matters in a manner that most accurately represents the interest of Allegheny Communications Connect and its Members. Expenses incurred at Allegheny Communications Connect level in connection with tax examinations and administrative or judicial proceedings will be shared equally by all members. If any Member in tends to file a notice of inconsistent treatment under Code Section 6222(b), such Member shall notify the other Members of its intention and the nature of suc h inconsistency at least thirty (30) days prior to filing such a notice. No Member shall enter in to any extensions of the limitations period for making assessments on behalf of any other Member without first obtaining the written consent of such Member. Any action specifically reserved for the determination of any member in its separate capacity under Code Sections 6222 through 6232 shall remain so and the provision of this Section 10.5 shall not be interpreted as authorization to act in a contrary manner.
ARTICLE XI FISCAL MATTERS
11.1	Fiscal Year. The fiscal year of Odyssey shall be the calendar year.
11.2	Company Funds. The fund of Odyssey shall be deposited in such bank account or accounts as are selected by the Operating Committee. Withdrawals from any such bank accounts shall be made by the Operating Committee or its duly authorized agent or agents. Company funds shall not be co-mingled with those of any other Person.
11.3	Working Capital. Except as otherwise agreed upon by the Operating Committee, it is the intention of the members that Odyssey shall operate first with the funds to be provided by them as Members under Section 3.1 and with its profits.
11.4	Business Plan. The Company shall operate within the overall parameters of a business plan which shall be submitted for consideration to and approved by the Board as soon as possible after the date hereof August 1 (and modified from time to time as circumstances require) and under annual capital and operating budgets which shall be approved by the Board at least sixty (60) days prior to the commencement of each fiscal year of Odyssey, except for the first. The capital and operating budgets for the first fiscal year shall be drawn and approved by the Board within ninety (90) days of the date hereof.
ARTICLE XOO MISCELLANEOUS
12.1	Governing Law. All question pertaining to this Operating Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.
12.2	Notices.
25

(A)

Any notice, request, consent, offer or demand required or permitted to be given under this Limited Liability Company Agreement shall be in writing and shall either be delivered in person or mailed by first class mail, postage prepaid, or sent by telex, telecopy or telegram, addressed to the Member at the addresses set forth in 12.2 (B).

(B)

Any notice, request, consent, offer or demand shall be deemed received, given or served, if mailed by first class mail, on the 3^rd day after the day of mailing; if sent by telecopy or telegram, 24 hours after the time of dispatch, provided that such telecopy or telegram is confirmed as being delivered; and if sent by a nationally recognized overnight courier, on the 2^nd day after the date of mailing.

(a)

If to Buyer, to it at:

Allegheny Communications Connect, inc.
R.R. 12, Box 1000
Roseytown Road
Greensburg, PA 15601
Attention: John W. Flinko

with a copy to:

Allegheny Energy, Inc.
10435 Downsville Pike
Hagerstown, MD 21740-1766
Attention: Anthony Wilson, Esq.

(b)

If to Seller, to it at:

Odyssey Communications, LLC
R.R. 12, Box 1000
Roseytown Road
Greensburg, PA 15601
Attention: Alex P. Yawny
Joseph M. Opferman

with a copy to:

Schiffman & Wojdowski
1300 Fifth Avenue
Pittsburgh, PA 15219-6270
Attention: Wayne M. Chiurazzi, Esq.

12.3

Agreement for Further Execution. As soon as practicable after being requested by the Board to do so, the Members agree to sign, swear to or acknowledge the Certificate required by the Act; to sign, swear to, or acknowledge any amendment or cancellation as required by law; to sign, swear to or acknowledge similar certificates of affidavits or certificates of fictitious firm name, trade name or the like (and any amendments or cancellations thereof) required by the laws of Pennsylvania; and to cause the filing of any of the same for record wherever such filing shall be required by law.

26

12.4	Authority to Amend. This Agreement may not be amended except in a writing executed by all of the Members.
12.5	Entire Agreement. This Agreement, together with the exhibits, contains the entire understanding between the Parties and supersedes any prior understanding and agreements between them respecting the subject matter herein. There are no representations, agreements, arrangements or understanding, oral or written, between or among the Members hereto relating to the subject matter of this Agreement which are not fully expressed or described herein.
12.6	Severability. This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations of the jurisdictions in which Odyssey does business. If any provision of this Agreement or the application thereto to any person or circumstances shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to any other Person or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law.
12.7	Captions. All Section titles and captions contained in this Agreement are for convenience only and shall not be deemed part of the context of this Agreement.
12.8	Number and Gender. All the terms and words used in this Agreement, regardless of the number and gender in which they are used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context or sense of this Agreement or any Section, paragraph or clause herein may require, the same as if such work had been fully and properly written in such number and gender.
12.9	Binding Effect. Subject to the provisions of this Agreement relating to transferability, this Agreement will be binding upon and shall inure to the benefit of the parties, and their respective distributes, heirs, successors and assigns.
12.10	Counterparts. This Agreement may be executed in several counterparts, each of which will be deemed an original but all of which will constitute one and the same.
12.11	Freedom of Action/Corporate Opportunity. (i) invest or own any interest publicly or privately in, or develop a business relationship with, any third party engaged in the same or similar activities or lines of business as, or otherwise in competition with, Odyssey or (ii) do business with any client or customer of Odyssey. Each Member expressly acknowledges and agrees that in the event that a Member or any of its affiliates, officers, employees or agents acquires knowledge of a potential transaction or matter that may be a corporate opportunity for such Member or Odyssey, such Member shall not have a duty to communicate or offer such corporate opportunity to Odyssey or be liable to Odyssey or the other Member for breach of any fiduciary duty by reason of the fact that such Member pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another person, or does not communicate information regarding, or offer such corporate opportunity to Odyssey.
27

IN WITNESS WHEREOF, the undersigned Parties have executed this Operating Agreement as of the date first above written.

                                       ODYSSEY COMMUNICATIONS, LLC

                                       By: /s/ Alex P. Yawny
                                                Name: Alex P. Yawny
                                                Title: President

                                       ODYSSEY COMMUNICATIONS, LLC

                                       By: /s/ Joseph M. Opferman
                                                Name: Joseph M. Opferman
                                                Title: Secretary-Treasurer

                                                                                                        (Corporate Seal)

                                       ALEGHENY COMMUNICATIONS CONNECT, INC.

                                       By: /s/ John W. Flinko
                                                Name: John W. Flinko
                                                Title: Vice President

                                       By: /s/ Denise F. Henderson
                                                Name: Denise F. Henderson
                                                Title: Assistant Secretary

                                                                                                        (Corporate Seal)

EXHIBIT A ADMINISTRATIVE SERVICES AGREEMENT
	The following services shall be provided by ACC:
- - -		Office space and amenties including square footage required to support three employees free of charge. Financial and/or economic analysis services to be provided free of charge.
	This Exhibit A shall be amended by unanimous consent of the Operating Committee from time to time as needed to reflect any additional services that may be offered.
29

EX-3 34 utilityassoc31.htm ARTICLES OF INCORPORATION, DATED SEPTEMBER 20, 2000 ARTICLES OF INCORPORATIONOFUTILITY ASSOCIATES, INC

EXHIBIT 3.1

ARTICLES OF INCORPORATION

OF

UTILITY ASSOCIATES, INC.

The name of the Corporation is Utility Associates, Inc.

II.

The authorized capital stock of the Corporation shall consist of 1,000,000 shares of voting common stock without par value.

III.

The street address of the initial registered office of the Corporation is 10 Piedmont Center, Suite 915, Atlanta, Georgia 30305, located in Fulton County. The initial registered agent of the Corporation at such office is Ted M. Davis.

IV.

The mailing address of the initial principal office of the Corporation is 10 Piedmont Center, Suite 915, Atlanta, Georgia 30305.

The name of the Incorporator of the Corporation is Arif S. Haq and his address is 1230 Peachtree Street, NE, Suite 3100, Promenade II, Atlanta, Georgia 30309.

VI.

No director of the Corporation shall be personally liable to the Corporation or its shareholders for monetary damages for breach of duty of care or other duty as a director; provided, however, that to the extent required by applicable law, this Article shall not eliminate or limit the liability of a director (i) for any appropriation, in violation of his duties, of any business opportunity of the Corporation, (ii) for acts or omissions which involve intentional misconduct or a knowing violation of law, (iii) for the types of liability set forth in Section 14-2-832 of the Georgia Business Corporation Code, or (iv) for any transaction from which the director derived an improper personal benefit. If applicable law is amended to authorize corporate action further eliminating or limiting the liability of directors, then the liability of each director of the Corporation shall be eliminated or

limited to the fullest extent permitted by applicable law, as amended. Neither the amendment or repeal of this Article, nor the adoption of any provision of these Articles of Incorporation inconsistent with this Article, shall eliminate or reduce the effect of this Article in respect of any acts or omissions occurring prior to such amendment, repeal or adoption of an inconsistent provision.
VII.
In discharging the duties of their respective positions and in determining what is believed to be in the best interests of the Corporation, the board of directors, committees of the board of directors, and individual directors, in addition to considering the effects of any action on the Corporation or its shareholders, may consider the interests of the employees, customers, suppliers, and creditors of the Corporation and its subsidiaries, the communities in which offices or other establishments of the Corporation and its subsidiaries are located, and all other factors such directors consider pertinent; provided, however, that this Article shall be deemed solely to grant discretionary authority to the directors and shall not be deemed to provide to any constituency any right to be considered. IN WITNESS WHEREOF, the undersigned has executed these Articles of Incorporation on September 20, 2000.

	/s/ Arif S. Haq Arif S. Haq, Incorporator
2

EX-3 35 utilityassocex32.htm BYLAWS BYLAWSOFUTILITY ASSOCIATES, INC

EXHIBIT 3.2

BYLAWS

OF

UTILITY ASSOCIATES, INC.

BYLAWS OF UTILITY ASSOCIATES, INC. TABLE OF CONTENTS
			Page
ARTICLE 1 DEFINITIONS			1
ARTICLE II GENERAL PROVISIONS REGARDING NOTICES			1
Section 1.	NOTICES	1
Section 2.	WAIVER OF NOTICE	2
ARTICLES III SHAREHOLDERS' MEETING			4
Section 1.	PLACE OF MEETING	4
Section 2.	ANNUAL MEETING	4
Section 3.	SPECIAL MEETINGS	4
Section 4.	NOTICE TO SHAREHOLDERS	4
Section 5.	FIXING OF RECORD DATE	5
Section 6.	QUORUM AND VOTING REQUIREMENTS	6
Section 7.	PROXIES	7
Section 8.	INFORMAL ACTIONS BY SHAREHOLDERS	7
ARTICLE IV DIRECTORS			8
Section 1.	GENERAL POWERS	8
Section 2.	NUMBER, TENURE, QUALIFICATIONS	8
Section 3.	VACANCIES, HOW FILLED	8
Section 4.	PLACE OF MEETING	8
Section 5.	COMPENSATION	8
Section 6.	REGULAR MEETINGS	8
Section 7.	SPECIAL MEETINGS	8
Section 8.	GENERAL PROVISIONS REGARDING NOTICE AND WAIVER	9
Section 9.	QUORUM	9
Section 10.	MANNER OF ACTING	9
Section 11.	COMMITTEES	9
Section 12.	ACTION WITHOUT FORMAL MEETING	10
Section 13.	CONFERENCE CALL MEETINGS	10
ARTICLE V OFFICERS			10
Section 1.	GENERALLY	10
Section 2.	COMPENSATION	11
Section 3.	RESIGNATION AND REMOVAL	11
Section 4.	VACANCIES	11
Section 5.	PRESIDENT	12
Section 6.	VICE PRESIDENT	12
Section 7.	SECRETARY	12
Section 8.	TREASURER	12
(i)

Section 9.

DEPUTY OFFICERS

12

Section 10.

ASSISTANT OFFICERS

13

ARTICLE VI INDEMNIFICATION

13

Section 1.

DEFINITIONS FOR INDEMNIFICATION PROVISIONS

13

Section 2.

MANDATORY INDEMNIFICATION AGAINST EXPENSES

14

Section 3.

AUTHORITY FOR PERMISSIVE INDEMNIFICATION

14

Section 4.

DETERMINATION AND AUTHORIZATION OF PERMITTED INDEMNIFICATION

15

Section 5.

SHAREHOLDER APPROVED INDEMNIFICATION

15

Section 6.

ADVANCES FOR EXPENSES

16

Section 7.

INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS

17

Section 8.

INSURANCE

17

Section 9.

EXPENSES FOR APPEARANCE AS WITNESS

17

ARTICLE VII REIMBURSEMENT OF NONDEDUCTIBLE PAYMENTS TO OFFICER AND EMPLOYEES

17

ARTICLE VIII FISCAL YEAR

18

ARTICLE IX ANNUAL STATEMENTS

18

ARTICLE X CAPITAL STOCK

19

Section 1.

FORM

19

Section 2.

TRANSFER

19

Section 3.

RIGHTS OF HOLDER

19

Section 4.

LOST OR DESTROYED CERTIFICATES

20

ARTICLE XI SEAL

20

ARTICLE XII REGISTERED OFFICE AND REGISTERED AGENT

20

ARTICLE XIII AMENDMENTS

20

Section 1.

AMENDMENTS GENERALLY

20

Section 2.

BYLAW INCREASING QUORUM OR VOTING REQUIREMENTS

21

BYLAWS OF UTILITY ASSOCIATES, INC.
ARTICLE I.
DEFINITIONS
As used in these Bylaws, the terms set forth below shall have the meanings indicated, as follows: "Articles of Incorporation" means the Articles of Incorporation of the Corporation, as amended from time to time. "Board" shall mean the Board of Directors of the Corporation. "Chief Executive Officer" shall mean the President of the Corporation, or such other officer as shall be designated by the Board as having the duties of the Chief Executive Officer, as described in Section 5 of Article V of these Bylaws. "Code" shall mean the Georgia Business Corporation Code, as amended from time to time. "Corporation" shall mean Utility Associates, Inc., a Georgia corporation. "Secretary" shall mean the Secretary of the Corporation, or such other officer as shall be designated by the Board as having the duties of the corporate Secretary as described in Section 7 of Article V of these Bylaws. Secretary of State" shall mean the Secretary of State of Georgia. "Voting group" shall have the meaning set forth in subsection (a) of Section 6 of Articles III of these Bylaws.
ARTICLE II.
GENERAL PROVISIONS REGARDING NOTICES
Section 1.	NOTICES. Except as otherwise provided in the Articles of Incorporation or these Bylaws, or as otherwise required by applicable law:
(a)	Any notice required by these Bylaws or by law shall be in writing unless oral notice is reasonable under the circumstances.
(b)	Notice may be communicated in person; by telephone, telegraph, teletype, or other form of wire or wireless communication; or by mail or private carrier. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published, or by radio, television, or other ofrm of public broadcast communication.
(c)	Written notice by the Corporation to any shareholder, if in a comprehensible form, is effective when mailed, if mailed with first-class postage prepaid and correctly addressed to the shareholder's address shown in the Corporation's current record of shareholders; provided that if the corporation has more than 500 shareholders of record entitled to vote at a meeting, it may utilize a class of mail other than first class if the notice of the meeting is mailed, with adequate postage prepaid, not less than 30days before the date of the meeting.
	2

(d)		Written notice to the Corporation may be addressed to its registered agent at its registered office or to the Corporation or its Secretary at its principal office shown in its most recent annual registration with the Secretary of State.
(e)		Except as provided in subsection (c) of this Section 1, written notice, if in a comprehensible form, is effective at the earliest of the following:
(1)	When received, or when delivered, properly addressed, to the addressee's last known principal place of business or residence;
(2)	Five days after its deposit in the mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed; or
(3)	On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.
(f)		Oral notice is effective when communicated if communicated in a comprehensible manner.
(g)		In calculating time periods for notice under these Bylaws, when a period of time measured in days, weeks, months, years, or other measurement of time is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted.
Section 2.		WAIVER OF NOTICE. Except as otherwise provided or required by the Articles of Incorporation, these Bylaws or applicable law:
(a)		A shareholder may waive any notice required to be given to such shareholder, before or after the date and time stated in the notice. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the Corporation for inclusion in the minutes or filing with the Corporation's corporate records.
(b)		A shareholder's attendance at a meeting:
(1)	Waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and
(2)	Waives objection to consideration f a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.
(c)		Neither the business transacted nor the purpose of the meeting need be specified in the waiver, except that any waiver by a shareholder of the notice of a meeting of shareholders with respect to an amendment of the Articles of Incorporation, a plan of merger or share exchange, a sale of assets or any other action which would entitle the shareholder to exercise statutory dissenter's rights under the Code and obtain payment for his shares shall not be effective unless:
(1)	Prior to the execution of the waiver of, the shareholder shall have been furnished the same material that under the Code would have been required to be sent to the shareholder in a notice of the meeting, including notice of any applicable dissenters' rights as provided in the Code; or
(2)	The waiver expressly waives the right to receive the material required to be furnished.
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(d)	A director may waive any notice required to be given to such director by the Code, the Articles of Incorporation, or these Bylaws before or after the date and time stated in the notice. Except as provided by subsection (e) of this Section 2, the waiver must be in writing, signed by the director entitled to the notice, and delivered to the Corporation for inclusion in the minutes or filing with the Corporation's corporate records.
(e)	A director's attendance at or participation in a meeting waives any required notice to him of the meeting unless the director at the beginning of the meeting (or promptly upon his arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote or assent to action taken at the meeting.
ARTICLE III. SHAREHOLDERS' MEETINGS
Section 1.	PLACE OF MEETIN. The Board (or if it is a special meeting called by the Chief Executive Officer or the presiding officer of the Board, if any, the person calling such meeting) may designate any place within or outside the State of Georgia as the place of meeting for any annual or special shareholders' meeting. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place within or outside the State of Georgia as the place for the holding of such meeting. If no designation is made, the place of meeting shall be the principal office of the Corporation.
Section 2.	ANNUAL MEETING. An annual meeting of the shareholders shall be held on the second Tuesday in April of each year, if not a legal holiday (and if such is a legal holiday, then on the next following day not a legal holiday), at such time and place as the Bard shall determine, at which time the shareholders shall elect a Board and transact such other business as may be properly brought before the meeting. Notwithstanding the foregoing, the Board may cause the annual meeting of shareholders to be held on such other date in any year as the Board shall determine to be in the best interests of the Corporation, and any business transacted at that meeting shall have the same validity as if transacted on the date designated herein.
Section 3.	SPECIAL MEETINGS. Except to the extent otherwise prescribed by statute or the Articles of Incorporation, special meetings of the shareholders, for any purpose or purposes, may be called by the Chief Executive Officer, or by the presiding officer of the Board, if any. The Chief Executive Officer or the Secretary shall call a special meeting when: (1) requested in writing by any two or more of the directors; or (2) requested in writing by shareholders owning shares representing at least twenty-five percent (25%) of all the votes entitled to be cast on any issue proposed to be considered at such meeting. Any such written request shall be signed and dated and shall state the purpose or purposes of the proposed meeting.
Section 4.	NOTICE TO SHAREHOLDERS.
(a)	Except as otherwise specifically provided in this Section 4, requirements with respect to the giving of notice and waiver of notice shall be governed by the provisions of Article II of these Bylaws.
(b)	The Corporation shall give notice to each shareholder entitled to vote thereat of the date, time and place of each annual and special shareholders' meeting no fewer than ten (10) nor more than sixty (60) days before the meeting date.
(c)	Unless otherwise required by the Code with respect to meetings at which specified actions will be considered (including but not limited to mergers, certain share exchanges, certain asset sales by the Corporation, and dissolution of the Corporation), notice of an annual meeting need not contain a description of the purpose or purposes for which the meeting is called.
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(d)	Notice of a special meeting must include a description of the purpose or purposes for which the meeting is called.
(e)	Unless a new record date is set (or is required by law or by the terms of these Bylaws to be set) therefore, notice of the date, time and place of any adjourned meeting need not be given otherwise than by the announcement at the meeting before adjournment. If a new record date for the adjournment meeting is or must be fixed, however, notice of the adjourned meeting must be given in accordance with these Bylaws as if such adjourned meeting were a newly-called meeting.
(f)	If any corporate action proposed to be considered at a meeting of shareholders would or might give rise to statutory dissenters' rights under the Code, the notice of such meeting shall state that the meeting is to include consideration of such proposed corporate action, and that the consummation of such action will or might give rise to such dissenters' rights, and shall include the description of such statutory dissenters' rights required by the Code.
(g)	If any corporate action which would give rise to statutory dissenters' rights under the Code is taken by written consent of shareholders without a meeting, or is taken at a meeting with respect to which less than all shareholders were entitled to receive notice, or is otherwise taken without a vote of shareholders, the Corporation shall cause notice thereof, including the information concerning statutory dissenters' rights contemplated by paragraph (b) above, to be given, not more than ten (10) days after the adoption of such action by shareholder vote at a meeting or by written consent to those shareholders who did not execute such written consent or who were not entitled to receive notice of such meeting, or to all shareholders if such action was otherwise taken without a vote of shareholders.
Section 5.	FIXING OF RECORD DATE.
(a)	For the purposes of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or shareholders entitled to demand a special meeting of a shareholders, or shareholders entitled to take any other action, the Board may fix in advance (but not retroactively from the date the Board takes such action) a date as the record date for any such determination or shareholders, such date in any case to be not more than seventy (70) days prior to the meeting or action requiring such determination of shareholders. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, the close of business on the last business day before the first notice of such meeting is delivered to shareholders shall be the record date. If no record date is fixed for determining shareholders entitled to take action without a meeting, the date the first shareholder signs the consent shall be the record date for such purpose. If no re cord date is fixed for determining shareholders entitled to demand a special meeting, or to take other action, the date of receipt of notice by the Corporation of demand for such meeting, or the date on which such other action is to be taken by the shareholders, shall be the record date for such purpose.
(b)	A separate record date may be established for each voting group entitled to vote separately on a matter at a meeting.
(c)	A determination of shareholders entitled to notice of or to vote at a shareholders meeting is effective for any adjournment of the meeting unless the Board fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
(d)	For the purpose of determining shareholders entitled to a distribution by the Corporation (other than one involving a purchase, redemption or other acquisition of the Corporation's shares), the record date shall be the date fixed for such purpose by the Board, or if the Board does not fix such a date, the date on which the Board authorizes such distribution.
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Section 6.		QUORUM AND VOTING REQUIREMENTS.
(A)		Except as otherwise provided by the Articles of Incorporation or the Code:
(i)	A "voting group" with respect to any given matter means all shares of one or more class or series which, under the Articles of Incorporation or the Code, are entitled to vote and be counted together collectively on that matter, and unless specified otherwise in the Articles of Incorporation, the Code or these Bylaws, all shares entitled to vote on a given matter shall be deemed to be a single voting group for purposes of that matter.
(ii)	Each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a shareholders' meeting.
(iii)	A majority of the votes entitled to be case on the matter by a voting group constitutes a quorum of that voting group for action on that matter.
(iv)	The presence of a quorum of each voting group entitled to vote thereon shall be the requisite for transaction of business on a given matter.
(v)	Action on a matter other than election of directors is approved by a voting group if a quorum of such voting group exists and the number of votes cast within such voting group in favor of such action exceeds the number of votes cast within such voting group against such action
(vi)	Except as otherwise provided in these Bylaws, all shares entitled to vote for election of directors shall vote thereon as a single voting group, and directors shall be elected by a plurality of votes cast by shares entitled to vote in the election in a meeting at which a quorum of such voting group is present.
(b)		Once a share is represented for any purpose other than solely to object to holding a meeting or transacting business at the meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is, or is required by law or these Bylaws to be, set for that adjourned meeting.
(c)		If a quorum for transaction of business shall not be present at a meeting of shareholders, the shareholders entitled to vote thereat, present in person or by proxy, shall have the power to adjourn the meeting from time to time, until the requisite amount of voting stock shall be present. No notice other than announcements at the meeting before adjournment shall be required of the new date, time or place of the adjourned meeting, unless a new record date for such adjourned meeting is, or is required by law or these Bylaws to be, fixed. At such adjourned meeting (for which no new record date is, or is required to be, set) at which a quorum shall be present in person or by proxy, any business may be transacted that might have been transacted at the meeting originally called.
Section 7.		PROXIES. At every meeting of the shareholders, any shareholder having the right to vote shall be entitled to vote in person or by proxy, but no proxy shall be: (i) effective unless given in writing and signed, either personally by the shareholder or his attorney-in-fact; or (ii) effective until received by the Secretary or other officer of agent authorized to tabulate votes; or valid after eleven months from its date, unless said proxy expressly provides for a longer period.
Section 8		INFORMAL ACTIONS BY SHAREHOLDERS. Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if written consent (which may take the
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		form of one or more counterpart copies), setting forth the action s taken, shall be signed by all the holders of all the shares entitled to vote with respect to the subject matter thereof and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Such consent shall have the same force and effect as a unanimous vote of the shareholders; provided, however, that no such consent which purports to be an approval of any plan of merger, share exchange, asset sale or other transaction (i) as to which shareholder approval is required by the Code and (ii) with respect to which specific disclosure requirements to voting shareholders are imposed by the Code, shall be effective unless:
(1)	prior to the execution of the consent, each consenting shareholder shall have been furnished the same material which, under the Code, would have been required to be sent to shareholders in a notice of a meeting at which the proposed action would have been submitted to the shareholders for action, including notice of any applicable dissenters' rights; or:
(2)	the written consent contains an express waiver of the right to receive the material otherwise required to be furnished.
ARTICLES IV.
DIRECTORS
Section 1.		GENERAL POWERS. All corporate powers of the Corporation shall be exercised by or under the authority of, and the business and affairs of the Corporation managed under the direction of, its Board, subject to any limitation set forth in the Articles of Incorporation, or any amendment to these Bylaws approved by the shareholders of the Corporation, or any otherwise lawful agreement among the shareholders of the Corporation.
Section 2.		NUMBER, TENURE, QUALIFICATIONS. The Board shall consist of one or more individuals, the precise number to be fixed by resolution of the shareholders form time to time. Each member of the Board shall hold office until the annual meeting of shareholders held next after his election and until his successor has been duly elected and has qualified, or until his earlier resignation, removal from office, or death. Directors shall be natural persons who are eighteen (18) years of age or older, but need not be shareholders or residents of Georgia unless the Articles of Incorporation require otherwise.
Section 3.		VACANCIES, HOW FILLED. If any vacancy shall occur in the membership of the Board by reason of the resignation, removal or death or a director, or due to an increase in the number of directors, the remaining directors shall continue to act, and such vacancies may be filled by the affirmative vote of the majority of the directors then in office, though less than a quorum, and if not therefore filled by action of the directors, may be filled by the shareholders at any meeting held during the existence of such vacancy. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office.
Section 4.		PLACE OF MEETING. The Board may hold its meetings at such place or places within or without the State of Georgia as it may from time to time determine.
Section 5.		COMPENSATION. Directors may be allowed such compensation for attendance at regular or special meetings of the Board and of any special or standing committees thereof as may be from time to time determined by resolution of the Board.
Section 6.		REGULAR MEETINGS. A regular annual meeting of the Board shall be held, without other notice than this bylaw, immediately after, and at the same place as, the annual meeting of shareholders. The Board may provide, by resolution, the time and place within or without the State of Georgia, for the holding of additional regular meeting without other notice than such resolution.
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Section 7.		SPECIAL MEETINGS. Special meetings of the Board may be called by the Chief Executive Officer or the presiding officer of the Board,. If different from the Chief Executive Officer, on not less than two (2) days' notice to each director by mail, telegram, cablegram or other form of wire or wireless communication, or personal delivery or other form of communication authorized under the circumstances by the Code, and shall be called by the Chief Executive Officer or the Secretary in like manner and on like notice on the written request of any two (2) or more members of the Board. Such notice shall state the time, date and place of such meeting, but need not describe the purpose of the meeting. Any such special meeting shall be held at such time and place as shall be stated in the notice of the meeting.
Section 8.		GENERAL PROVISIONS REGARDING NOTICE AND WAIVER. Except as otherwise expressly provided in this Article IV, matters relating to notice to directors and waiver of notice by directors shall be governed by the provisions of Article II of these Bylaws.
Section 9.		QUORUM. At all meetings of the Board, unless otherwise provided in the Articles of Incorporation or other provisions of these Bylaws, the presence of a majority of the Directors shall constitute a quorum for the transaction of business. In the absence of a quorum a majority of the Directors present at any meeting may adjourn from time to time until a quorum be had. Notice of the time and place of any adjourned meeting need only be given by announcement at the meeting at which adjournment is taken.
Section 10.		MANNER OF ACTING. Except as expressly otherwise provided by the Articles of Incorporation or other provisions of these Bylaws, if a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board. A director who is present at a meeting when corporate action is taken is deemed to have assented to the action unless:
(1)	He objects at the beginning of the meeting (or promptly upon his arrival) to holding it or transacting business at the meeting;
(2)	His dissent or abstention from the action taken is entered in the minutes of the meeting; or
(3)	He does not vote in favor of the action taken and delivers written notice of his dissent or abstention to the presiding officer of the meeting before its adjournment or to the Corporation immediately after adjournment of the meeting.
Section 11.		COMMITTEES.
(a)		Except as otherwise provided by the Articles of incorporation, the Board may create one or more committees and appoint members of the Board to serve on them. Each committee may have one or more members, who serve at the pleasure of the Board.
(b)		The provisions of these Bylaws and of the Code which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the Board, shall apply as well to committees created under this Section 11 and their members.
(c)		To the extent specified by the Articles of incorporation, these Bylaws and the resolution of the Board creating such committee, each committee may exercise the authority of the Board, provided that a committee may not:
(1)	Approve, or propose to shareholders for approval, action required by the Code to be approved by shareholders;
(2)	Fill vacancies on the Board or on any of its committees;
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(3)

Exercise any authority which the Board may have to amend the Articles of Incorporation;

(4)

Adopt, amend, or repeal bylaws; or

(5)

Approve a plan of merger not requiring shareholder approval.

Section 12.

ACTION WITHOUT FORMA MEETING. Except as expressly otherwise provided in the Articles of Incorporation, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if written consent thereto (which may take the form of one or more counterparts) is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board or committee. A consent executed in accordance herewith has the effect of a meeting vote and may be described as such in any document.

Section 13.

CONFERENCE CALL MEETINGS. Members of the Board, or any committee of the Board, may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can simultaneously hear each other during the meeting, and participation in a meeting pursuant to this Section shall constitute presence in person at such meeting.

ARTICLE V.

OFFICERS

Section 1.

GENERALLY. The Board shall from time to time elect or appoint such officers as it shall deem necessary or appropriate to the management and operation of the Corporation, which officers shall hold their offices for such terms as shall be determined by the Board and shall exercise such powers and perform such duties as are specified in these Bylaws or in a resolution of the Board. Except as specifically otherwise provided in resolutions of the Board, the following requirements shall apply to election or appointment of officers:

(a)

The corporation shall have, at a minimum, the following officers, which officers shall bear the titles designated therefor by resolution of the Board, but in the absence of such designation shall bear the titles set forth below:

TITLE

President

Treasurer

Secretary

(b)

All officers of the Corporation shall serve at the pleasure of the Board, and in the absence of specification otherwise in a resolution of the Board, each officer shall be elected to serve until the next succeeding annual meeting of the Board and the election and qualification of his successor, subject to his earlier death, resignation or removal.

(c)

Any person may hold two or more offices simultaneously, and no officer need be a Shareholder of the Corporation.

(d)

If so provided by resolution of the Board, any officer may be delegated the authority to appoint one or more officers or assistant officers, which appointed officers or assistant officers shall have the duties and powers specified in the resolution of the Board.

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Section 2.	COMPENSATION. Officers of the Corporation shall be entitled to reimbursement for any reasonable expenses incurred by them in the execution of the functions and duties of their respective offices, provided that any compensation so paid shall be solely for the purpose of reimbursement of expenses incurred and not in consideration of service as an officer of the Corporation. Further provided, that nothing contained herein shall be construed to preclude any officer from service the Corporation in any other capacity and receiving compensation therefor.
Section 3.	RESIGNATION AND REMOVAL. Any officer may resign by delivering a written resignation to the President or the Secretary of the Corporation at its principal office Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. An officer may be removed for cause only after reasonable notice and opportunity to be heard by the Board of Directors prior to action thereon. The Board of Directors may delegate the power to remove officers to a committee, whether such committee already exists or is formed specifically for such purpose, pursuant to Article IV, Section 11 of these Bylaws.
Section 4.	VACANCIES. A vacancy in any office, because of resignation, removal or death may be filled by the Board for the unexpired portion of the term, or if so provided by resolution of the Board, by an officer of the Corporation to whom has been delegated the authority to appoint the holder of such vacated office.
Section 5.	PRESIDENT. Subject to the control of the Board, the President shall in general manage, supervise and control all of the business and affairs of the Corporation. The President shall, when present, preside at all meetings of the Shareholders of the Corporation and the Board of Directors. The President may sign, individually or in conjunction with any other proper officer of the Corporation thereunto authorized by the Board, any deeds, mortgages, bonds, policies of insurance, contracts, or other instruments which the Board has authorized to be executed, except in cases where the execution thereof shall be expressly delegated by the Board or by the Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of the President of the Corporation and such other duties as may be prescribed by the Board from time to time.
Section 6.	VICE PRESIDENT. The Vice President shall, in the absence or disability of the President, perform the duties and exercise the powers of the President, and shall perform such other duties as shall from time-to-time be imposed by the Board of Directors or delegated by the President.
Section 7.	SECRETARY. The Secretary shall: (a) attend and keep the minutes of the meetings of Shareholders and of the Board's meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as otherwise required by law or the provisions of the Articles of Incorporation; (c) be custodian of the corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all documents for which a seal is required, the execution of which on behalf of the Corporation under its seal is duly authorized; (d) maintain, or cause an agent designated by the Board to maintain, a record of the Corporation's Shareholders in a form that permits the preparation of a list of the names and addresses of all Shareholders in alphabetical order; (e) have responsibility for the custody, maintenance and preservation of those corporate records which the Corporation is required by the Code or otherwise to create, maintain or preserve; and (f) in general perform all duties incident to the legal office of "Secretary," as described in the Code, and such other duties as from time to time may be assigned by the President or the Board.
Section 8.	TREASURER. The Treasurer, unless otherwise determined by the Board, shall: (a) have charge and custody of an be responsible for all funds and securities of the Corporation; receive and give receipts for monies due and payable to the Corporation form any source whatsoever, and deposit all such monies in the name of the Corporation in such banks, trust companies or other depositories as shall be selected by the Board; and (b) in general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned by the President or the Board.
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Section 9.		DEPUTY OFFICERS. The Board may create one or more deputy officers whose duties shall be, among any other designated thereto by the Board, to perform the duties of the officer to which such office has been deputized in the event of the unavailability or refusal of such officer to act. Deputy officers may hold such titles as designated therefor bv the Board; however, any officer designated with the prefix "Vice" or "Deputy" shall be, unless otherwise specified by resolution of the Board, automatically a deputy officer to the office with the title of which the prefix term is conjoined. Deputy officers shall have such other duties as prescribed by the Board from time to time.
Section 10.		ASSISTANT OFFICERS. The Board may appoint one or more officers who shall be assistants to principal officers of the Corporation, or their deputies, and who shall have such duties as shall be delegated to such assistant officers by the Board or such principal officers, including the authority to perform such functions of those principal officers in the place of and with full authority of such principal officers as shall be designated by the Board or (if so authorized) by such principal officers. The Board may by resolution authorize appointment of assistant officers by those principal officers to which such appointed officers will serve as assistants.
ARTICLE VI. INDEMNIFICATION
Section 1.		DEFINITIONS FOR INDEMNIFICATION PROVISIONS. As used in this Article VI, the term:
(1)	"Corporation" (when spelled with an initial capital letter) includes any domestic or foreign predecessor entity of the "Corporation" (as defined in Article I of these Bylaws) in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction.
(2)	"director" means an individual who is or was a director of the Corporation or an individual who, while a director of the Corporation, is or was serving at the Corporation's request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee, benefit plan, or other enterprise. A director is considered to be serving an employee benefit plan at the Corporation's request if his duties to the Corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. Director includes, unless the context requires otherwise, the estate or personal representative or a director.
(3)	"expenses" include attorneys' fees.
(4)	"liability" means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding.
(5)	"party" includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.
(6)	"proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.
Section 2.		MANDATORY INDEMNIFICATION AGAINST EXPENSES. Unless otherwise provided by the Articles of Incorporation, to the extent that a director has been successful, on the merits or otherwise, in the defense of any proceeding to which he was a party, or in defense of any claim, issue, or matter
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				therein, because he is or was a director of the Corporation, the Corporation shall indemnify the director against reasonable expenses incurred by him in connection therewith.
Section 3.				AUTHORITY FOR PERMISSIVE INDEMNIFICATION.
(a)				Except as provided in subsections (d) and (e) of this Section 3, or as otherwise provided in the Articles of Incorporation, the Corporation may indemnify or obligate itself to indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if he acted in a manner he believed in good faith to be in or not opposed to the best interest of the Corporation and, in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
(b)				A director's conduct with respect to an employee benefit plan for a purpose he believed in good faith to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsections (a) of this Section 3.
(c)				The termination of a proceeding by judgment, order, settlement, or conviction, or upon a pleas of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct set forth in subsection (a) of this Section 3.
(d)				The Corporation may not indemnify a director under this Section 3:
(1)	In connection with a proceeding by or in the right of the Corporation in which the director was adjudged liable to the Corporation; or
(2)	In connection with any other proceeding in which he was adjudged liable on the basis that personal benefit was improperly received by him.
(e)				Indemnification permitted under this Section 3 in connection with a proceeding by or in the right of the Corporation is limited to reasonable expenses incurred in connection with the proceeding.
Section 4				DETERMINIATION AND AUTHORIZATION OF PERMITTED INDEMNIFICATION
(a)				The Corporation may not indemnify a director under Section 3 of this Article VI unless a determination has been made in the specific case that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in subsection (a) of such Section 3.
(b)				The determination required by subsection (a) hereof shall be made:
(1)			By the Board by majority vote of a quorum consisting of directors not at the time parties to the proceeding;
(2)			If a quorum cannot be obtained under paragraph (1) of this subsection (b), by majority vote of a committee duly designated by the Board (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;
(3)			By special legal counsel:
(A)		Selected by the Board or its committee in the manner prescribed in paragraph (1) or (2) of this subsection; or
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(B)

If a quorum of the Bard cannot be obtained under paragraph (1) of this subsection and a committee cannot be designated under paragraph (2) of this subsection, selected by majority vote of the full Board (in which directors who are parties may participate); or

(4)

By the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination.

(c)

Authorization of indemnification or an obligation to indemnify and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, as set forth in subsection (b) hereof, except that if such determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled to select counsel under paragraph (3) of subsection (b) of this Section 4.

Section 5

SHAREHOLDER-APPROVED INDEMNIFICATION.

(a)

Without regard to any limitations contained in any other section of this Article VI, the Corporation may, if authorized by its shareholders by a majority of votes which would be entitled to be cast in a vote to amend the Corporation's Articles of Incorporation (which authorization may take the form of an amendment to the Articles of Incorporation or a contract, resolution or bylaw approved or ratified by the requisite shareholder vote), indemnify or obligate itself to indemnify a director made a party to a proceeding, including a proceeding brought by or in the right of the Corporation.

(b)

The Corporation shall not indemnify a director unless this Section 5 for any liability incurred in a proceeding in which the director is adjudged liable to the Corporation or is subject to injunctive relief in favor of the Corporation.

(1)

For any appropriation, in violation of his duties, or any business opportunity of the Corporation:

(2)

For acts or omissions which involve intentional misconduct or a knowing violation of law;

(3)

For any type of liability for unlawful distribution under Section 14-2-832 of the Code, or any successor statute; or

(4)

For any transaction from which he received an improper personal benefit,

(c)

Where approved or authorized in the manner described in subsection (a) of this Section 5, the Corporation may advance or reimburse expenses incurred in advance of final disposition of the proceeding only if:

(1)

The director furnishes the Corporation a written affirmation of his good faith belief that his conduct does not constitute behavior of the kind described in subsection (b) of this Section 5; and

(2)

The director furnishes the Corporation a written undertaking, executed personally or on his behalf, to repay any advances if it is ultimately determined that he is not entitled to indemnification under this Section 5.

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Section 6.		ADVANCES FOR EXPENSES.
(a)		The Corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:
(1)	The director furnishes the Corporation a written affirmation of his good faith belief that he has met the standard of conduct set forth in subsection (a) of Section 3 of this Article VI; and
(2)	The director furnishes the Corporation a written undertaking, executed personally or on his behalf, to repay any advances if it is ultimately determined that he is not entitled to indemnification under this Article.
(b)		The undertaking required by paragraph (2) of subsection (a) of this Section 6 must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.
Section 7.		INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS. Except as otherwise provided in the Articles of Incorporation, an officer of the Corporation who is not a director is entitled to mandatory indemnification under Section 2 of this Articles VI, and is entitled to permissive indemnification and advancement of expenses under the standards and procedures set forth in Section 3, 4 and 5 of this Article VI, to the same extent as a director, consistent with public policy.
Section 8.		INSURANCE. The Corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the Corporation or who, while a director, officer, employee, or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of anther foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by him in that capacity arising from his status as a director, officer, employee, or agent, whether or not the Corporation would have the power to indemnify him against the same liability under this Article VI or applicable law.
Section 9.		EXPENSES FOR APPEARANCE AS WITNESS. Nothing contained in this Article VI shall be deemed to limit the Corporation's power to pay or reimburse expenses incurred by a director or officer in connection with his appearance as a witness in a proceeding at a time when he has not been made a named defendant or respondent to the proceeding.
ARTICLE VII. REIMBURSEMENT OF NON-DEDUCTIBLE PAYMENTS TO OFFICERS AND EMPLOYEES
In the event any payments to an officer of employee of the Corporation, such as salary, commission, bonus, interest or rent expenses incurred by him, is thereafter disallowed in whole or in part by the Internal Revenue Service as a proper deduction for income tax purposes under Section 162 of the Internal Revenue Code of 1986 (or disallowed under any similar statutory section which may subsequently replace such Section 162), such disallowed payments shall be reimbursed by such officer or employee to the Corporation on or before ninety (90) days following the final determination of such disallowance by the Internal Revenue Service or entry of the final judgment of such determination if adjudicated. It shall be the duty of the Board to enforce reimbursement of each such amount disallowed, including the withholding from future compensation payments to such officer or employee until the amount owned to the Corporation has been recovered .
14

ARTICLE VIII. FISCAL YEAR
The fiscal year of the Corporation shall be established by the Board or, in the absence of Board action establishing such fiscal year, by the Chief Executive Officer.
ARTICLE IX. ANNUAL STATEMENTS
(a)		No later that four months after the close of each fiscal year, and in any case prior to the next annual meeting of shareholders, the Corporation shall prepare:
(i)	A balance sheet showing in reasonable detail the financial condition of the Corporation as of the close of the fiscal year, and
(ii)	A profit and loss statement showing the results of its operation during the fiscal year.
Upon written request, the Corporation shall mail promptly to any shareholder of record a copy of the most recent such balance sheet and profit and loss statement. If prepared for other purposes, the Corporation shall also furnish upon written request a statement of sources and applications of funds and a statement fo changes in shareholders' equity for the fiscal year. If financial statements are prepared by the Corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared, and disclose that they are prepared, on that basis. If financial statements are prepared otherwise than on the basis of generally accepted accounting principles, they must so disclose and must be prepared on the same basis as other reports or statements prepared by the Corporation for the use of others.
(b)		If the annual financial statements are reported upon by a public accountant, his report must accompany them. If not, the statements must be accompanied by a statement of the Chief Executive Officer or the person responsible for the Corporation's accounting records:
(1)	Stating his reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles an, if not, describing the basis of preparation; and
(2)	Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.
ARTICLE X. CAPITAL STOCK
Section 1.		FORM
(a)		Except as otherwise provided for in paragraph (b) of this Section 1, the interest of each shareholder shall be evidenced by a certificate representing shares of stock of the Corporation, which shall be in such form as the Board may from time to time adopt and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall exhibit the holder's name, the number of shares and class of shares and series, if any, represented thereby, the name of the Corporation and a statement that the Corporation is organized under the laws of the State of Georgia. Each certificate shall be signed by one or more officers of the Corporation specified by resolution of the Board, but in the absence of such specifications, shall be valid if
15

	executed by the Chief executive Officer or any Deputy or Assistant thereto, and such execution is countersigned by the Secretary, or any Deputy or Assistant thereto. Each stock certificate may but need not be sealed with the seal of the Corporation.
(b)	If authorized by resolution of the Board, the Corporation may issue some or all of the shares of any or all of its classes or series without certificates. The issuance of such shares shall not affect shares already represented by certificates until they are surrendered to the Corporation. Within a reasonable time after the issuance or transfer of any shares not represented by certificates, the Corporation shall send to the holder of such shares a written statement setting forth, with respect to such shares (i) the name of the Corporation as issuer and the Corporation's state of incorporation, (ii) the name of the person to whom such shares as issued, (iii) the number of shares and class of shares and series, if any, and (iv) the terms of any restrictions on transfer which, were such shares represented by a stock certificate would be required to be noted on such certificate, by law, by the Articles of Incorporation or these Bylaws, or by any legal agreement among the shareholders of the Corp oration.
Section 2.	TRANSFER. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate, or, in the case of shares not represented by certificates, the person named in the Corporation's stock transfer records as the owner of such shares, or in either case, by an attorney lawfully constituted in writing. In addition, with respect to shares represented by certificates, transfers shall be made only upon surrender of the certificate therefor, or in the case of a certificate alleged to have been lost, stolen or destroyed, upon compliance with the provisions of Section 4, Article X of these Bylaws.
Section 3.	RIGHTS OF HOLDER. The Corporation shall be entitled to treat the holder of record of any share of the Corporation as the person entitled to vote such share (to the extent such share is entitled to vote), to receive any distribution with respect to such share, and for all other purposes and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether it shall have express or other notice thereof, except as otherwise provided by law.
Section 4.	LOST OR DESTROYED CERTIFICATES. Any person claiming a certificate of stock to be lost, stolen or destroyed shall make an affidavit or affirmation of the fact in such manner as the Board may require and shall if the Board so requires, give the Corporation a bond of indemnity in the form and amount an with one or more sureties satisfactory to the Board, whereupon an appropriate new certificate may be issued in lieu of the one alleged to have been lost, stolen or destroyed.
ARTICLE XI. SEAL
	The corporate seal shall be in such form as shall be specified in the minutes of the organizational meeting of the Corporation, or as the Board may from time to time determine.
ARTICLE XII. REGISTERED OFFICE AND REGISTERED AGENT; OFFICE
(a)	The Corporation shall maintain at all times a registered office in State of Georgia and a registered agent at that office.
(b)	The Corporation may have other offices at such places within or without the State of Georgia as the Board may from time to time designate or the business of the Corporation may require or make desirable.
16

ARTICLE XIII. AMENDMENTS
Section 1.		AMENDMENTS GENERALLY
(a)		Except as otherwise provided in subsection (c) of this Section 1, or in the Articles of Incorporation or by applicable law, the Board may amend or repeal any provisions of these Bylaws or adopt any new bylaw, unless the shareholders have adopted, amended or repealed a particular bylaw provision and, in doing so, have expressly reserved to the shareholders the right of amendment or repeal therefor.
(b)		The Corporation's shareholders have the right to amend or repeal any provision of these Bylaws, or to adopt new bylaw provisions, even though such provisions may also be adopted, amended or repealed by the Board.
(c)		Any provision of these Bylaws limiting the authority of the Board or establishing staggered terms for directors may be adopted, amended or repealed only by the shareholders.
Section 2.		BYLAW INCREASING QUORUM OR VOTING REQUIREMENTS.
(a)		Except as provided in Section 14-2-1113 of the Code or any successor statute thereto (relating to the adoption of certain voting requirements in connection with certain corporate business combinations with statutorily defined "interest shareholders"), any bylaw which sets a greater quorum or voting requirement for shareholders (or voting groups of shareholders) than the minimum required by the Code may not be adopted, amended or repealed by the Board.
(b)		Except as otherwise provided in the Articles of Incorporation, a bylaw that fixes a greater quorum or voting requirement for the Board than the minimum required by the Code:
(1)	May be adopted, amended, or repealed by the shareholders only by the affirmative vote of a majority of the votes entitled to be cast; or
(2)	May be adopted, amended, or repealed by the directors only by a majority of the entire Board.
©		A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the Board may be amended or repealed only by a specified vote of either the shareholders or the Board, if such bylaw provision so provides.
17

EX-3 36 allgassvcsex31.htm ARTICLES OF INCORPORATION, DATED JANUARY 25, 1993 ARTICLES OF INCORPORATION EXHIBIT 3.1

ARTICLES OF INCORPORATION
OF
ALLIANCE GAS SERVICES, INC.

The undersigned, acting as incorporator of a corporation under the Kentucky Business Corporation Act, hereby adopts the following Articles of Incorporation for such corporation:

Article 1

The name of the corporation is: ALLIANCE GAS SERVICES, INC.

Article 2

The aggregate number of shares which the Corporation shall have authority to issue is ten thousand (10,000) shares, all of which are common stock without par value, and having voting power to the extent of one (1) vote for each share of stock.

Article 3

Article 4

The mailing address of the Corporation's principal office is Starks Building, Suite #627, 455 South 4^th Street, Louisville, Kentucky 40202.

Article 5

The name and address of the Incorporator is:

Victor L. Baltzell, Jr.
730 West Main Street, Suite 500
Louisville, KY 40202

Article 6

Section 1. No director of the corporation shall be personally liable to the corporation or its shareholders for monetary damages for any breach of his duties as a director, except for liability (i) for any transaction in which the director's personal financial interest is in conflict with the financial interests of the corporation or its shareholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or are known to the director to be a violation of law; (iii) for any vote for or assent to an unlawful distribution to shareholders as prohibited under applicable Kentucky law; (iv) for any transaction from which the director derived an improper personal benefit.

Section 2. If the Kentucky Business Corporation Act is amended after the date of the filing of these Articles of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Kentucky Business Corporation Act, as so amended, and without the necessity for further shareholder action in respect thereof.

Section 3. Any repeal or modification of this Article by the shareholders of the corporation shall not adversely affect any right or protection of a director of the corporation hereunder in respect of any act of omission occurring prior to the time of such repeal or modification.

Article 7

The indemnification authorized by this Article 8 shall not be exclusive of any other right of indemnification which any such person may have or hereafter acquire under any provision of these Articles or the Bylaws of the corporation, agreement, vote of shareholders or disinterested directors or otherwise. The corporation may take such steps as may be deemed appropriate by the Board of Directors to provide and secure indemnification to any such person, including, without limitation, the execution of agreements for indemnification between the corporation and individual directors, officers, employees or agents which may provide rights to indemnification which are broader or otherwise different than the rights authorized by this Article.

          IN TESTIMONY WHEREOF, witness the signature of the Incorporator this the 25^th day of January, 1993.

                                                  \s\ Victor L. Baltzell, Jr.
                                                  VICTOR L. BALTZELL, JR.

COMMONWEALTH OF KENTUCKY                 )
                                                            ) SS
COUNTY OF JEFFERSON                              )

Subscribed, sworn to and acknowledged before me by VICTOR L. BALTZELL, JR., this the 25^th day of January, 1993.
My commission expires: 7-24-94

                                                  \s\ Teresa R. Tuck
                                                  NOTARY PUBLIC
                                                  State at Large, Kentucky

THIS INSTRUMENT PREPARED BY:

\s\ Victor L. Baltzell, Jr.
VICTOR L. BALTZELL, JR.
MOSLEY, CLARE AND TOWNES
Fifth Floor, Hart Block Building
730 West Main Street
Louisville, Kentucky
Phone: (502) 583-7400

EX-3 37 allgassvcsex31a.htm AMENDMENT TO ARTICLES OF INCORPORATION, DATED MAY 3, 1995 AMENDMENT TO EXHIBIT 3.1(a)

AMENDMENT TO
ARTICLES OF INCORPORATION
OF
ALLIANCE GAS SERVICES, INC.

ANDREW R. FELLON, President, and JOHN C. MCCORD, Secretary, of ALLIANCE GAS SERVICES, INC., a Kentucky corporation (herein the "Corporation"), with its principal office located in Louisville, Kentucky, do hereby certify that pursuant to unanimous action in writing by the Board of Directors a resolution setting forth the proposed amendment of the Articles of Incorporation as set forth herein was approved by the Directors, and that said amendment and resolution was submitted to all the Shareholders of the Corporation who, by unanimous action in writing, adopted the following resolution to amend the Articles of Incorporation:

Article 2 of the Articles of Incorporation of ALLIANCE GAS SERVICES, INC., hereinafter referred to as "the Corporation" is amended to read as follows:

The capital stock of this corporation shall be divided into two (2) classes of common stock, no par value, nine thousand five hundred (9,500) shares thereof being known as Class A common stock and five hundred (500) shares thereof being known as Class B common stock. The Class B common stock shall be distinguished from the Class A common stock in that it shall have no voting privileges or power. In all other instances and respects, Class B common stock shall have full rights, privileges and power with Class A common stock. Class A common stock shall have voting power to the extent of one (1) vote for each share of such stock.

IN WITNESS WHEREOF, ANDREW R. FELLON, President, and JOHN C. MCCORD, Secretary, acting for and on behalf of the Corporation, have hereunto subscribed their names this 3 day of May, 1995.

EX-3 38 allgassvcsex32.htm BYLAWS BYLAWS EXHIBIT 3.2

BYLAWS
OF
ALLIANCE GAS SERVICES, INC.

______________________________________________________________________________

ADOPTED January 26, 1993

ARTICLE I

OFFICES

2. Other Places of Business. Branch or subordinate offices or places of business may be established at any time by the Board of Directors at any place where the Corporation is qualified to do business.

ARTICLE II

SHAREHOLDERS

2. Special Meeting. A special meeting of shareholders may be called for any purpose by the president or Board of Directors or as permitted by law. Holders of at least twenty-five percent (25%) of all votes entitled to be cast on any issue proposed to be considered at a proposed special meeting may also call such a meeting by signing, dating, and delivering to the Corporation's secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be held. Only business within the purpose or purposes described in the meeting notice shall be conducted at a special shareholders' meeting.

3. Action Without Meeting. The shareholders may act without a meeting if, prior or subsequent to such action, each shareholder who would have been entitled to vote upon such action shall consent in writing to such action. Such written consent or consents shall be filed in the minute book.

4. Quorum. The presence at a meeting in person or by proxy of the holders of shares entitled to case a majority of all shares issued and outstanding shall constitute a quorum.

5. Record Date. The record date for all meetings of shareholders shall be as fixed by the Board of Directors or as provided by Statute.

6. Notice of Meetings. The corporation shall notify all shareholders entitled to vote at the meeting of the date, time, place, and purpose of each annual and special shareholders' meeting no fewer than ten (10) nor more than sixty (60) days before the meeting date.

7. Voting for Directors. At each election for directors each shareholder entitled to vote at such election shall have the right to cast, in person or by proxy, as many votes in the aggregate as he shall be entitled to vote under the corporation's articles of incorporation, multiplied by the number of directors to be elected at such election; and each shareholder may cast the whole number of votes for one (1) candidate, or distribute such votes among two (2) or more candidates. Such directors shall not be elected in any other manner.

ARTICLE III

BOARD OF DIRECTORS

1. Management. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of its board of directors.

2. Number and Term of Office. The Board of Directors shall consist of not less than one (1) nor more than five (5) members. Each director shall be elected by the shareholders at each annual meeting and shall hold office until the next annual meeting of the shareholders and until that director's successor shall have been elected and qualified.

4. Special Meetings. A special meeting of the Board may be called at any time by the president or by any two (2) directors for any purpose. Such meeting shall be held upon not less than five (5) days notice if given orally (either by telephone or in person), or by telecopier, or upon not less than ten (10) days notice if given by depositing the notice in the United States mails, postage prepaid. Such notice shall specify the time, place, and purposes of the meeting.

5. Action Without Meeting. The Board may act without a meeting if each member of the board shall consent in writing thereto. Such consent or consents shall be filed in the minute book.

6. Quorum. A majority of the prescribed number of directors shall constitute a quorum for the transaction of business.

Vacancies in Board of Directors.

(a) If a vacancy occurs on the board of directors, including a vacancy resulting from an increase in the number of directors; the board of directors may fill the vacancy; or if the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

(b) If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders.

(c) A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

Removal of Directors by Shareholders.

(a) The shareholders may remove one (1) or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

(b) If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him.

(c) A director may not be removed if the number of votes sufficient to elect him under cumulative voting is voted against his removal.

(d) A director shall be removed by the shareholders only at a meeting called for the purpose of removing him and the meeting notice shall state that the purpose, or one (1) of the purposes, of the meeting is removal of the director.

9. Compensation of Directors. Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

10. Attendance at Meetings. The board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during this meeting. A director participating in a meeting by this means shall be deemed to be present in person at the meeting.

ARTICLE IV

WAIVERS OF NOTICE

ARTICLE V

OFFICERS

2. Duties and Authority of President. The president shall be chief executive officer of the Corporation. Subject only to the authority of the Board, the president shall have general charge and supervision over, and responsibility for, the business and affairs of the Corporation. Unless otherwise directed by the Board, all other officers shall be subject to the authority and supervision of the president. The president may enter into and execute in the name of the Corporation contracts or other instruments in the regular course of business which are authorized, either generally or specifically, by the Board. The president shall have the general powers and duties of management usually vested in the office of president of a corporation.

3. Duties and Authority of Vice President. The vice president shall perform such duties and have such authority as from time to time may be delegated to the vice president by the present or by the Board. In the event of the absence, death, inability or refusal to act by the president, the vice president shall perform the duties and be vested with the authority of the president.

4. Duties and Authority of Treasurer. The treasurer shall have the custody of the funds and securities of the Corporation and shall keep or cause to be kept regular books of account for the Corporation. The treasurer shall perform such other duties and possess such other powers as re incident to that office or as shall be assigned by the president or the Board.

5. Duties and Authority of Secretary. The secretary shall cause notices of all meetings to be served as prescribed in these Bylaws and shall keep or cause to be kept the minutes of all meetings of the shareholders and the Board. The secretary shall have charge of the seal of the Corporation. The secretary shall perform such other duties and possess such other powers as are incident to that office or as are assigned by the president or the Board.

7. Vacancies in Offices. The Board, in its absolute discretion, may fill all vacancies in offices, regardless of the cause of such vacancies, for the remainder of the terms of the offices.

ARTICLE VI

CORPORATE RECORDS

1. Corporate Records.

(a) The corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

The corporation shall maintain appropriate accounting records.

(c) The corporation or its agent shall maintain a records of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, by class of shares showing the number and class of shares held by each.

(d) The corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.

(e) The corporation shall keep a copy of the following records at its principal office:

Its articles or restated articles of incorporation and all amendments to them currently in effect;
Its bylaws or restated bylaws and all amendments to them currently in effect;
Resolutions adopted by its board of directors creating one (1) or more classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding;
The minutes of all shareholders' meetings, and records of all action taken by shareholders without a meeting, for the past three (3) years;
All written communications to shareholders generally within the past three (3) years, including the financial statements furnished for the past three (3) years under Article VII(1);
A list of the names and business addresses of its current directors and officers; and
Its most recent annual report delivered to the secretary of state.

2. Inspection of Records of Shareholders.

(a) Any shareholder of the corporation shall be entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in Section 1, above, if he gives the corporation written notice of his demand at least five (5) business days before the date on which he wishes to inspect and copy.

(b) Any shareholder of the corporation shall be entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation any of the following records of the corporation if the shareholder meets the requirements of subsection (c) of this section and gives the corporation written notice of his demand at least five (5) business days before the date on which he wishes to inspect and copy:

Excerpts from minutes of any meeting of the board of directors, records of any action of a committee of the board of directors while acting in place of the board of directors on behalf of the corporation, minutes of any meeting of the shareholders, and records of action taken by the shareholders or board of directors without a meeting, to the extent not subject to inspection under subsection (a) of this section;
Accounting records of the corporation; and
The record of shareholders.

His demand is made in good faith and for a proper purpose;
He describes with reasonable particularity his purpose and the records he desires to inspect; and
The records are directly connected with his purpose.

(d) The right of inspection granted by this section shall not be abolished or limited by the corporation's articles of incorporation or bylaws.

This section shall not affect:

The right of a shareholder to inspect records under KRS 271B.7-200 or, if the shareholder is in litigation with the corporation, to the same extent as any other litigant;
The power of a court, independently of this chapter, to compel the production of corporate records for examination.

(f) For purposes of this section, "shareholder" includes a beneficial owner whose shares are held in a voting trust or by a nominee on his behalf.

3. Scope of Inspection of Right.

(a) A shareholder's agent or attorney shall have the same inspection and copying rights as the shareholder he represents.

(b) The right to copy under Article VI(2) shall include, if reasonable, the right to receive copies made by photographic xerographic, or other means.

(d) The corporation may comply with a shareholder's demand to inspect the record of shareholders under Article VI(2)(b)(3) by providing him with a list of its shareholders that was compiled no earlier than the date of the shareholder's demand.

ARTICLE VII

REPORTS

1. Financial Statements for Shareholders. Upon the written request of any shareholder or holder of voting trust certificates for shares of a corporation the corporation shall mail to such shareholder or holder of voting trust certificates its most recent financial statements showing in reasonable detail its assets and liabilities and the results of its operations.

2. Other Reports to Shareholders. If the corporation indemnifies or advances expenses to a director under KRS 271B.8-510 to 271B.8-540 in connection with a proceeding by or in the right of the corporation, the corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders' meeting.

3. Annual Report for Secretary of State.

(a) The corporation shall deliver to the secretary of state for filing an annual report that sets forth:

The name of the corporation and the state under whose law it is incorporated;

The address of its registered office and the name if its registered agent at that office in this state;

The address of its principal office; and
The names and addresses of its directors and principal officers.

(b) Information in the annual report shall be current as of the date the annual report is executed on behalf of the corporation.

(c) The first annual report shall be delivered to the secretary of state between January 1 and June 30 of the year following the calendar year in which the corporation was incorporated. Subsequent annual reports shall be delivered to the secretary of state between January 1 and June 30 of the following calendar years.

ARTICLE VIII

AMENDMENT OF ARTICLES OF INCORPORATION

1. Authority to Amend.

(a) The corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation or to delete a provision not required in the articles of incorporation. Whether a provision is required or permitted in the articles of incorporation shall be determined as of the effective date of the amendment.

(b) A shareholder of the corporation shall not have a vested property right resulting from any provision in the articles of incorporation, including provisions relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation.

2. Amendment by Board of Directors. Unless the articles of incorporation provide otherwise, a corporation's board of directors may adopt one (1) or more amendments to the corporation's articles of incorporation without shareholder action:

(a) To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;

To delete the names and addresses of the initial directors;
To delete the names and addresses of the initial registered agent or registered office, if a statement of change is on file with the secretary of state;
To change each issued and unissued authorized share of an outstanding class into a greater number of whole shares if the corporation has only shares of that class outstanding;
To change the corporate name by substituting the word "corporation," "incorporated," "company," "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd.," for a similar word or abbreviation in the name, or by adding, deleting, or changing a geographical attribution for the name; or
To make any other change expressly permitted by law to be made without shareholder action.

Amendment by Board of Directors and Shareholders.

(a) The corporation's board of directors may propose one (1) or more amendments to the articles of incorporation for submission to the shareholders.

(b) For the amendment to be adopted:

(1) The board of directors shall recommend the amendment to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the amendment; and

(2) The shareholders entitled to vote on the amendment shall approve the amendment as provided in subsection (e) below.

(d) The corporation shall notify each other shareholder, whether or not entitled to vote, of the proposed shareholder's meeting in accordance with Article II(6). The notice of meeting shall also state that the purpose, or one (1) of the purposes, of the meetings is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment.

(e) Unless the law, the articles of incorporation, or the board of directors (acting pursuant to subsection (c) of this section) requires a greater vote or a vote by voting groups, the amendments to be adopted shall be approved by:

A majority A majority of the votes entitled to be cast on the amendment by any voting group with respect to which the amendment would create dissenters' rights; and
The votes entitled by KRS 271B.7-250 and 271B.7-260 by every other voting group entitled to vote on the amendment.

4. Articles of Amendment. A corporation amending its articles of incorporation shall deliver to the secretary of state for filing articles of amendment as required by KRS 271B.10-060.

5. Restated Articles of Incorporation. The corporation's board of directors may restate its articles of incorporation at any time with or without shareholder action in accordance with KRS 271B.10-070.

ARTICLE IX

AMENDMENT OF BYLAWS

1. Amendment by Board of Directors of hareholders.

(a) The corporation's board of directors may amend or repeal the corporation's bylaws unless:

The articles of incorporation or the law reserves this power exclusively to the shareholders in whole or part; or
The shareholders in amending or repealing a particular bylaws provide expressly that the board of directors may not amend or repeal that bylaw.

(b) The corporation's shareholders may amend or repeal the corporation's bylaws even though the bylaws may also be amended or repealed by its board of directors.

2. Bylaw Increasing Quorum or Voting Requirements for Directors.

(a) A bylaw that fixes a greater quorum or voting requirement for the board of directors may be amended or repealed:

If originally adopted by the shareholders, only by the shareholders, or

(2) If originally adopted by the board of directors, either by the shareholders or by the board of directors.

(b) A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the board of directors may provide that it may be amended or repealed only by a specific vote of either the shareholders or the board of directors.

(c) Action by the board of directors under subsection (2) above to adopt or amend a bylaw that changes the quorum or voting requirement for the board of directors shall meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.

ARTICLE X

FISCAL YEAR

1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January of each year.

IT IS HEREBY certified that the above By-Laws for the regulation of the affairs of ALLIANCE GAS SERVICES, INC., were adopted by the Directors of said corporation on the 26^th day of January, 1993.

\s\ John C. McCord
John C. McCord

EX-3 39 allgassvcsex32a.htm AMENDMENT TO BYLAWS, DATED JANUARY 26, 1994 EXHIBIT 3 EXHIBIT 3.2(a)

AMENDMENT TO BYLAWS

The undersigned Secretary of Alliance Gas Services, Inc. hereby certifies that the following amendments were adopted by the Board of Directors of said corporation by unanimous written consent as of January 26, 1994:

Section 1 of Article V of the Bylaws has been amended in its entirety to read as follows:

1. General. The officers of the Corporation shall be chosen by the Board of Directors and shall be a President (who shall be the Chief Executive Officer of the Corporation unless the Board of Directors shall expressly designate the Chairman of the Board, if any, as such), a Secretary and a Treasurer. Further, the Board of Directors may elect or appoint a Chairman of the Board, one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and such other officers and assistants to offices as it from time to time deems necessary. Any two or more offices may be held by the same person. The Chairman of the Board, if one is elected or appointed, shall preside at all meetings of the shareholders and the Board of Directors.

The first sentence of Section 2 of Article V of the Bylaws (following such Section's caption) has been amended in its entirety to read as follows:

The President shall be the Chief Executive Officer of the Corporation unless the Board of Directors shall have expressly designated the Chairman of the Board, if any, as such, pursuant to Section 1 of this Article V.

\s\ John C. McCord
John C. McCord, Secretary

EX-3 40 allgassvcsex32b.htm AMENDMENT TO BYLAWS, DATED JANUARY 6, 1996 EXHIBIT 3 EXHIBIT 3.2(b)

SECRETARY'S CERTIFICATE
RE: AMENDMENT TO BYLAWS

Section 1 of Article I of the Bylaws has been amended in its entirety to read as follows:

1. Registered Office. The registered office of the Corporation shall be at 500 Brown and Williamson Tower, Louisville, Kentucky. The address of the registered office may be changed from time to time by the Board of Directors.

\s\ John C. McCord
John C. McCord

EX-3 41 allgassvcsex32c.htm AMENDMENT TO BYLAWS, DATED SEPTEMBER 15, 1997 EXHIBIT 3 EXHIBIT 3.2(c)

SECRETARY's CERTIFICATE

RE: AMENDMENT TO BYLAWS

The undersigned Secretary of Alliance Gas Services, Inc., hereby certifies that the following amendments were adopted by the Board of Directors of said corporation by unanimous written consent, effective as of September 15, 1997:

Section 1 of Article I of the Bylaws has been amended in its entirety to read as follows:

Registered Office. The registered office of the Corporation shall be at 9300 Shelbyville Road, Suite 810, Louisville, Kentucky 40222. The address of the registered office may be changed from time to time by the Board of Directors.

\s\John C. McCord
John C. McCord, Secretary

EX-3 42 allenergysvcsincex32.htm PARTNERSHIP AGREEMENT, DATED DECEMBER 1, 1995 PARTNERSHIP AGREEMENT EXHIBIT 3.2

AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
BY AND BETWEEN
ALLEGHENY VENTURES, INC.
AND
ALLIANCE GAS SERVICES, INC.

ALLIANCE ENERGY SERVICES PARTNERSHIP

ALLIANCE ENERGY SERVICES PARTNERSHIP
AMENDED AND RESTATED PARTNERSHIP AGREEMENT
BETWEEN
ALLEGHENY VENTURES, INC.
AND
ALLIANCE GAS SERVICES, INC.

This Amended and Restated Partnership Agreement ("Agreement") is effective as of November 1, 2001 ("Effective Date"), by and between Allegheny Ventures, Inc., a Delaware corporation ("Allegheny"), and Alliance Gas Services, Inc., a Kentucky corporation ("AGS"), collectively referred to as "Partners" or "Parties", and singularly as "Partner" or "Party."

W I T N E S S E T H:

WHEREAS, Conoco Inc., a Delaware corporation ("Conoco"), and AGS formed a Kentucky general partnership (hereinafter referred to as the "Partnership") pursuant to the Partnership Agreement, effective as of the 1st day of December, 1995 (the "Original Agreement");

WHEREAS, Conoco sold its interest in the Partnership to Allegheny with the consent of AGS; and

WHEREAS, Allegheny and AGS intend to amend and restate the Original Agreement to set forth the provisions for ownership and operation of the Partnership.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter expressed, it is agreed by and between Allegheny and AGS as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the following words and terms shall have the meanings here ascribed to them:

"Accounting Period" shall mean a calendar month.

"Affiliate" shall mean, with respect to any Partner hereto, a Person that directly or indirectly (through one or more intermediaries) controls, is controlled by, or is under common control with that Partner.

"Business Purpose" shall mean the purpose set forth in ARTICLE II.A.

"calendar month" shall mean any of the twelve divisions of a Year as determined by the Gregorian calendar.

"calendar quarter" shall mean any of the four divisions of a Year beginning with the months of January, April, July or October.

"Capital Commitment" shall mean any acquisition or improvement that increases the assets and/or the value of the Partnership.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Contributing Partner" shall mean, with respect to a given property, a Partner which contributes such property to the Partnership.

"Effective Date" shall mean the day defined as such in the Preamble.

"Gas" shall mean all natural gas.

"Management Committee" shall mean the committee formed pursuant to ARTICLE VII.

"Net Cash Flow" shall mean the positive cash position described in ARTICLE X.A.1.

"Net Cash Deficit" shall mean the negative cash position described in ARTICLE X.A.1.

"Net Earnings" shall mean the net earnings of the Partnership determined in accordance with generally accepted accounting principles.

"Operating Agreement" shall mean the agreement under which Operator shall operate the Partnership.

"Operating Plan" shall mean the plan developed by the Management Committee to guide the operations under this Agreement for a calendar year.

"Operator" shall mean the Person(s) selected by the Management Committee, and managed by the Partnership Manager, to operate the Partnership.

"Operator Account(s)" shall mean the accounts established and maintained by the Operator(s) in accordance with and subject to ARTICLES IX.E.2. and IX.E.4. of this Agreement.

"Ownership Interest" shall mean those percentages of ownership as set forth at ARTICLE II.E.

"Partnership Account" shall mean the bank account or accounts established and maintained by the Partnership Manager in accordance with and subject to ARTICLE XI.A. of this Agreement.

"Partnership Manager" shall mean the Person responsible for managing the Partnership under the provisions of this Agreement.

"Person" shall mean any individual, partnership, association, trust, corporation or other entity.

"Related Energy Services" shall mean any services provided to customers relative to energy and includes, but is not limited to, gas transportation acquisition and management, volume management, gas storage management, alternate energy supply, electricity supply and various financial arrangements.

"Representative" shall mean the individual designated by each Partner pursuant to ARTICLE VII hereof.

"Tax Basis Capital Account" shall mean the account described in ARTICLE XII.B.2. and maintained on behalf of the Partners.

"Year" shall mean a calendar year.

Unless the context otherwise clearly indicates, words used in the singular include the plural, the plural includes the singular, and the neuter gender includes the masculine and the feminine.

ARTICLE II

INTRODUCTION

A. Formation and Purposes of the Partnership

The Partners hereby form a general partnership under the provisions of the Kentucky Uniform Partnership Act, KRS 362.150 - .360 (Michie 1995), (hereinafter the "Act"), for the purposes and on the terms and conditions of this Agreement.

The purposes of the Partnership are (a) to own and operate the assets of the Partnership; (b) to purchase, sell and market Gas and Related Energy Services; and (c) to transact any and all other activities as may be necessary, incidental or convenient to carry out the business of the Partnership contemplated herein, and as permitted by the Act.

B. Name

The name of the Partnership shall be "Alliance Energy Services Partnership".

C. Principal Place of Business

The principal place of business of the Partnership shall be at:
     Alliance Energy Services Partnership
     9960 Corporate Campus Drive, Suite 2000
     Louisville, KY 40223

D.      Mailing Address
The mailing address of the Partnership shall be:
     Alliance Energy Services Partnership
     9960 Corporate Campus Drive, Suite 2000
     Louisville, KY 40223

E.      Ownership of Partnership
Subject to the terms of this Agreement, each Partner shall have the following Ownership Interest in the Partnership:
          AGS                    50%
          Allegheny               50%

F.      Capital Expenditures
Each Party will pay capital costs of the Partnership on the basis of their Ownership Interest in the Partnership. Each Partner will be allowed the tax deductions, depreciation and amortization associated with its respective Ownership Interest and subsequent contributions, if any.

G. Statement of Partnership Principles
Operation of the Partnership, decisions of the Management Committee, and dealings between the Partners shall be guided by the following principles:
1.      Partnership profits are to come from the marketplace and not at the expense of one Partner to the benefit of the other.

2. Transactions between or among the Partners will be based on fair dealing and equitable treatment.

3. The Partners shall control the matters within the scope of this Agreement except to the extent they are hereinafter delegated.

ARTICLE III
TERM OF PARTNERSHIP AND AGREEMENT

The Partnership created hereby shall commence on the Effective Date and shall continue in full force and effect until dissolved at any time by mutual agreement of the Parties hereto. Where expressly provided, or necessary to effect the clear intent of the Parties, certain of the terms and provisions of this Agreement shall survive the termination of the Partnership and continue in force and effect for so long as the Parties own interests in properties which were formerly in the Partnership. The admission of new members to the Partnership and the retirement of existing Partners therefrom shall not act to dissolve the Partnership except upon the agreement of all of the Partners to this Agreement. The admission of a new partner requires the consent of all existing Partners. It shall be a condition of admission of any new member to the Partnership that it becomes a signatory to the Agreement.

ARTICLE IV

OBLIGATIONS--LIABILITIES

The obligation and liability of each of the Partners as between themselves and with respect to any and all liabilities and losses in connection with the business of the Partnership shall, except as otherwise provided in this Agreement, be on the basis of their Ownership Interests in the Partnership. In the event of a default hereunder by a Partner, the defaulting Partner does hereby indemnify the other Partner against any loss or liability resulting from such default.

ARTICLE V

INTERESTS OF PARTNERS

A. Interests of Parties in Partnership

Unless changed by other provisions, all costs and liabilities incurred in operations under this Agreement shall be borne and paid, and all property, equipment and materials acquired in operation of the Partnership shall be owned, by the Partnership.

B. Ownership of Partnership Property--Record Title

The interests which the Partners initially contribute to the Partnership and those which the Operator acquires on behalf of the Partnership may be held of record in the name of Operator but in such event it is held in trust for the Partnership.

ARTICLE VI

ACQUISITION, MAINTENANCE OR TRANSFER OF INTEREST

A. Acquisitions in Partnership

Any acquisition approved by the Management Committee shall be handled by the Operator for the benefit of the Partnership.

B. Sale, Transfer, Etc.

Should a Party desire to sell its interests under this Agreement, it may do so subject to the terms and conditions of ARTICLE XIII.A.

Any sale, transfer, other disposition or encumbrance under this ARTICLE VI by a Party shall not relieve that Party of any duties, obligations or liabilities under this Agreement, whether past, present or future, unless specifically agreed otherwise by the Partners.

ARTICLE VII

MANAGEMENT COMMITTEE

A. Membership Of The Management Committee

A Management Committee is hereby established to assist and direct the Partnership Manager in managing the affairs of the Partnership. The Management Committee shall be composed of four (4) Representatives, two (2) to be appointed by AGS and two (2) to be appointed by Allegheny. Each Partner shall cast one vote which shall be cast by the Management Committee Representative designated by such Partner. Each Partner may appoint an alternate Representative, who may act without notice to the other Party when the regular Representative is not available. Each Party shall have the right to change its Representative or alternate at any time by notifying the other Party in writing of such change. Allegheny's Representative shall be the first chairman of the Management Committee to initially serve through December 31, 2002, after which time the chairmanship shall alternate between the Parties annually unless otherwise agreed. All matters coming before the Management Committee shall be decided by a unanimous vote, except as otherwise specified herein.

B. Management Committee Authority

The Partners shall have overall supervision and control of the matters within the scope of this Agreement. However, the Partners do hereby delegate certain functions to the Management Committee. Specifically, the Management Committee shall have the authority with regard to the following matters:

1. Approval of the Operating Plan for each Year and long-range plans of the Partnership.

2. Approval of all budgets for each Year.

3. Review of calendar quarter operating results against the forecast and budget for such period and making any changes in the Operating Plan for subsequent calendar quarters.

4. Decision whether, and/or when, to expend Partnership funds for capital projects.

5. Selection of Partnership Manager.

6. Selection of Operator and the entering into of an Operating Agreement with such Person.

7. Formulation and issuance of contracting guidelines within which such Operator may act.

8. [Intentionally omitted].

C. Borrowings

The Management Committee shall have no authority to create any indebtedness for borrowed money which is payable by the Partnership or to encumber the assets of the Partnership or any Partner in any way, without the unanimous written approval of the Partners.

D. Management Committee Meetings

The Management Committee shall meet once every calendar quarter with the meeting held in the fourth calendar quarter to approve the Operating Plan and the budgets for the following year. Either Partner may call for additional meetings of the Management Committee by giving not less than five days notice in writing to the other Partner, which notice shall specify the matters to be considered. Meetings shall be held in such locations as the Partners may agree. A written record of each meeting shall be prepared under the direction of the Management Committee Chairman with copies distributed to each Partner as soon as possible after the meeting.

E. Actions Without A Meeting

Any matter arising under this Agreement (other than approval of the Operating Plan and budgets) may be submitted in writing, or by telephone confirmed in writing, to the Management Committee for consideration and vote without holding a meeting. For any matter so submitted, each Partner shall vote by giving written notice, or by telephone confirmed in writing, of its vote no later than five business days after receipt of such notice.

ARTICLE VIII

OPERATIONS

A. Employees

The Partnership shall have no employees and all Partnership operations shall be conducted by the Operator for the Partnership under the direction and supervision of the Management Committee and the Partnership Manager as set forth in ARTICLE IX.

B. Partnership Operation

All operations of the Partnership shall (except as otherwise specifically provided in this Agreement) be conducted pursuant to the terms and conditions set forth in ARTICLE IX and the Operating Agreement.

C. Prudent Operations

Partnership Manager, in the performance of its obligations and the exercise of its authority undertakes to use its best efforts to conduct all operations as a reasonably prudent manager.

D. Operator's Employees

The Operator shall determine the use and selection of any employees or contractors and all such employees or contractors shall be and remain the employees of such Operator, or contractors and shall not be employees of the Partnership.

E. Indebtedness

Neither the Partnership Manager nor the Operator shall have any authority to create any indebtedness for borrowed money which is payable by the Partnership or to encumber the assets of the Partnership, or any Partner in any way, without the unanimous written approval of the Partners.

ARTICLE IX

PARTNERSHIP MANAGER AND MANAGEMENT OF OPERATOR

A. Designation, Responsibilities, and Authority of Partnership Manager

1. Designation

The Partnership hereby designates Allegheny to manage the day-to-day business of the Partnership as the initial Partnership Manager and to take such actions as may be authorized by and necessary to further the purposes of this Agreement, and AGS hereby accepts such designation.

2. Responsibilities

     Without limiting the generality of ARTICLE IX.A.1. the Partnership Manager shall:
     a)      manage the Operator;
     b)      keep current books containing the name and address of each Partner, their Representatives and alternate Representatives.
     c)      keep correct and complete accounts of all receipts and disbursements, keep the partnership books and records, establish the Partnership's bank account(s) and deposit all monies or other valuable effects in the name and to the credit of the Partnership in such depository banks, trust companies, savings and loan associations or other similar institutions as may be approved by the Management Committee;
     d)      cause the financial statements of the Partnership to be audited by the Partnership's independent certified public accountant when approved by the Management Committee;
     e)      present, whenever required by the Partnership, reports of all financial transactions involving the Partnership hereunder; the Partnership Manager's Financial and Accounting System will be utilized to keep the Partnership books with the Partners each maintaining their respective detail records.
     f)      make, or cause to be made, all statutory and regulatory filings required of the Partnership, including without limitation, all permit applications, when authorized by the Management Committee;
     g)      prepare all Management Committee meeting agendas for the Partnership;
     h)      prepare, or cause to be prepared, and submit to Partnership recommended budgets and forecasts as specified in ARTICLE IX.C., below;
     i)      settle claims by or against the Partnership as such settlements have been previously approved by the Management Committee;
     j)      serve all notices required by the Management Committee;
     k)      assist Partnership to wind up and liquidate the Partnership in the event it is dissolved;
     l)      prepare or cause to be prepared and submitted to the Partnership any reports required by the Management Committee;
     m)      as the Management Committee may, from time-to-time, direct, negotiate and execute agreements on behalf of the Partnership;
     n)      make Partnership cash distributions to the Partners and cash calls from the Partners as authorized in this Agreement;
     o)      pay Operator any necessary cash advances as authorized in this Agreement;
     p)      administer the third-party debt of the Partnership.

     If at any time the Partnership Manager deems that additional funds are required to carry out the Partnership business, the Partnership Manager, by telex or facsimile, shall notify the Partners of the expected funding requirement pursuant to ARTICLE X.A.3. hereof.

3. Authority

The Partnership Manager shall have only such authority as is delegated to it by the Management Committee.

4. [Intentionally omitted]

B. Resignation or Removal of Partnership Manager and Selection of Successor

1. Resignation or Removal of Partnership Manager: Partnership Manager may resign at any time by giving written notice thereof to the Partnership. If Partnership Manager terminates its legal existence, is no longer a Partner hereunder, or is no longer capable of serving as Partnership Manager, Partnership Manager shall be deemed to have resigned without any action by the Partnership, except the selection of a successor. Partnership Manager may be removed by the other Partner if Partnership Manager commits repeated and continuing acts of material breaches of material obligations of Partnership Manager hereunder and is unable or unwilling to cure such breaches following notice thereof, or if Partnership Manager becomes insolvent, bankrupt or is placed in receivership. Such resignation or removal shall not become effective until 7 A.M. on the first day of the calendar month following the expiration of ninety (90) days after the giving of notice of resignation by Partnership Manager or action by such other Partner to remove Partnership Manager, unless a successor Partnership Manager has been selected and assumes the duties of Partnership Manager at an earlier date. A change of a corporate name or structure of Partnership Manager or transfer of Partnership Manager's interest to any single subsidiary, parent or successor corporation of Partnership Manager shall not be the basis for removal of Partnership Manager.

2. Selection of Successor Partnership Manager: Upon the resignation or removal of Partnership Manager, the Management Committee shall select a replacement.

C. Budgets and Forecasts

1.      Preparation of Budgets and Forecasts
The Partnership Manager shall cause to be prepared by the Operator and submitted to the Management Committee, for consideration and review, prior to October 30 of each Year, a proposed budget for the next Year and next three (3) Years, including anticipated outlays and receipts, for the following:
     a)      Capital Commitments and Expenditures
     b)      Operating Expenditures
     c)      Gas Volume and Margin Forecast
     d)      Earnings/Cash Flow Forecast

D.      Approval of Budgets and Forecasts
The budgets and forecasts identified in ARTICLE IX.C. shall be reviewed and may be modified by the Management Committee. The Management Committee shall approve the budgets prior to January 1 of each Year. In the event budget approval is not obtained prior to January 1, Operator shall be permitted to continue to operate as if the prior year's budget were in effect in the current year.

E. Responsibilities of Operator

Except as otherwise provided herein, any Person(s) acting on behalf of the Partnership as Operator hereunder, shall conduct and direct Partnership operations as permitted and required by, and within the limits of this Agreement and the limits imposed, if any, by the Management Committee. Operator shall be managed by the Partnership Manager, which will see that Operator complies with their obligations hereunder and under the Operating Agreement. Operator shall conduct all such operations in a good and workmanlike manner. Operator shall have no liability as Operator to Partners for losses sustained to or liabilities incurred by the Partnership, except for those attributable to Operator's acts of gross negligence or willful misconduct. Operator shall have all necessary power as set forth in the Operating Agreement to accomplish this responsibility including, but not limited to, the following:

1. Conduct and supervise operation of the Partnership for purposes of this Agreement in accordance with accepted industry standards and the limitations set forth in this Agreement and the Operating Agreement.

2. The Operator shall, as a part of its obligations regarding the Operator Account, establish and maintain one or more accounts through which all payments received by or on behalf of the Operator shall be deposited and thereafter disbursed as authorized by this Agreement. Monthly statements with regard to such accounts shall be retained with the records of the Operator. The funds in this account may not be commingled with the funds of the entity comprising the Operator; furthermore, such funds shall not be subject to the liens, encumbrances, or claims of any kind directed against the Operator individually.

3. Acquire parts, materials, supplies, or other personal property for the operation of the Partnership.

4. Keep appropriate books and records with respect to the operations hereunder and provide the Management Committee and Partnership Manager with periodic reports, statements and accounts with respect to operations in the form required by the Partnership Manager to prepare Partnership reports on consolidated operations.

5. Prepare, file, store and maintain in a manner such that they shall be available for periodic inspection by Partnership Manager all contracts, custody transfer documents, and such other records as may be required by laws, rules and regulations of governmental authorities or as may be reasonably requested by Partnership Manager.

6. Assist the Partnership Manager in the preparation of Operating Plan, budgets, schedules and appropriation requests.

7. Market the Gas from the operation of the Partnership, bill and collect sales revenues generated thereby and deposit the receipts into the Operator Account.

8. Purchase gas for the operation of the Partnership and pay invoices generated thereby.

9. Review invoices receiving documents and other requests for payment and approve and timely pay them from the Operator Account.

10. Provide or obtain the services of personnel who are Operator employees or contracted for by Operator for the safe and efficient operation of the Partnership.

11. Arrange for professional or technical services whether provided by Operator or others.

12. Handle all Operator personnel in connection with operation of the Partnership.

13. Comply with all applicable laws, orders, and lawful regulations and maintain in its own name all necessary permits and licenses. All permits and licenses shall be updated and renewed to avoid violation of law or regulations.

14. Make monthly excess cash distributions to the Partnership Account as determined and authorized in the Operating Agreement.

15. Negotiate and enter into agreements on behalf of the Partnership as authorized by the Management Committee.

The Operator shall receive an Overhead Charge for operating the Partnership in an amount of Four Hundred Twenty-Five Thousand Dollars ($425,000) per month payable from the Partnership account at the end of each month for the preceding month through the term hereof. Such monthly amount may be adjusted at any time, at least annually, and may be adjusted with the unanimous consent of the Management Committee. All charges for operating expenses will be made to the Operator Account at Operator actual cost as identified in the operating agreement without profit, all in accordance with the provisions of the Operating Agreement.

F. Resignation or Removal of Operator and Selection of Successor

1. Resignation or Removal of Operator: Operator may resign at any time by giving written notice thereof to the Partnership. If Operator terminates its legal existence, is no longer a Partner hereunder, or is no longer capable of serving as Operator, Operator shall be deemed to have resigned without any action by the Partnership, except the selection of a successor. Operator may be removed by the other Partner if Operator commits repeated and continuing acts of material breaches of material obligations of Operator hereunder and is unable or unwilling to cure such breaches following notice thereof, becomes insolvent, bankrupt or is placed in receivership. Such resignation or removal shall not become effective until 7 A.M. on the first day of the calendar month following the expiration of ninety (90) days after the giving of notice of resignation by Operator or action by such other Partner to remove Operator, unless a successor Operator has been selected and assu mes the duties of Operator at an earlier date. A change of a corporate name or structure of Operator or transfer of Operator's interest to any single subsidiary, parent or successor corporation of Operator shall not be the basis for removal of Operator.

2. Selection of Successor Operator: Upon the resignation or removal of Operator, the Management Committee shall select a replacement.

G. Employees

The number of employees or contractors used by Operator in conducting operations hereunder, their selection, the method of their hire and the hours of labor and the compensation for services performed shall be the decision of Operator. Employees of the Partners will continue to be employees of these entities while being assigned to the Partnership operation. No Party will have authority to hire individuals as direct employees of the Partnership.

H. Emergency Actions

Without limiting any rights of Operator, whenever any emergency arises which may jeopardize the operation contemplated herein and the action necessary to alleviate such emergency would require approval of the Management Committee, Operator shall have the right and authority to take such action and to spend monies as are necessary to protect lives or property without approval, but shall notify the Management Committee as soon as practical after such action is taken.

I. Suits and Claims

The Operator shall have the right to settle all suits and claims, to the extent not covered by insurance, arising out of the operations which do not exceed $10,000. Any suit or claim which exceeds $10,000 or is for an undetermined amount shall not be settled without the concurrence of the Management Committee. Any suit or claim which exceeds, or could reasonably be presumed to exceed, $10,000 shall be promptly reported to the Management Committee and the Operator shall cooperate in providing information to facilitate the handling of such suits and claims. Either Party shall have the right to be represented by its own counsel, at its own expense, in the settlement, compromise, or defense of such suits or claims.

ARTICLE X

EXPENDITURES AND DISTRIBUTIONS

A. Partnership Cash Distributions and Cash Calls

1. Net Cash Flow or Deficit

     At the end of each calendar quarter, the Partnership's consolidated net cash position for such calendar quarter shall be determined in the following manner:

     a)      Net Earnings, before noncash items such as depreciation and amortization, noncash write offs, and gains and losses on the sale of assets; plus

     b)      proceeds from the sale of assets; minus

     c)      capital expenditures incurred in accordance with this Agreement; minus

     d)      such calendar quarter's proportionate share of principal payments made or scheduled to be made on debt; minus

     e)      such change in cash reserves for future debt service as may be required by the Partnership debt agreements or as the Management Committee may from time to time deem necessary; plus or minus

     f)      such cash requirements necessary for the current period, such as other working capital items and other sources or uses of cash, and for the upcoming period based on the existing working capital position and next period's projected working capital needs of the Partnership or as otherwise modified by the Management Committee, minus

     g)      any cash distributions restriction imposed by debt or other agreements.

     If the above calculation yields a positive cash position, the Partnership is said to have a Net Cash Flow ("Net Cash Flow"). If the above calculation yields a negative cash position, the Partnership is said to have a net cash deficit ("Net Cash Deficit").

2. Cash Distributions

Cash distributions shall be distributed by the Partnership as directed by the Partnership Manager.

3. No Other Distribution

Except as provided in this ARTICLE or as part of a liquidating distribution as provided in ARTICLE XIII.D of this Agreement, no Partner shall be entitled to withdraw any part of its capital in the Partnership or to receive any other distribution from the Partnership. No Partner shall have the right to receive any property other than cash in liquidation of its interest, unless otherwise unanimously approved by the Management Committee.

4. Cash Calls

Unless otherwise agreed by all Partners, each Partner shall be invoiced by Partnership Manager for its proportionate share of the amount of any Net Cash Deficit determined in accordance with ARTICLE X., Section A.1.

Each Partner shall pay to the Partnership its said proportionate share of such cash calls properly invoiced within fifteen (15) days of such invoice date or as otherwise agreed in writing by all the Partners. Any Partner which fails to pay its share of such cash call on time shall be additionally obligated hereunder to pay interest thereon at an annual rate equal to two (2) percentage points over the prevailing prime rate of Morgan Guaranty Trust Company of New York, but not to exceed the maximum annual rate allowable at law.

B. Payment Defaults

1.      If any Partner fails or is unable to pay its share of expense within sixty (60) days after rendition of a statement therefor by Partnership Manager, the non-defaulting Partner shall, upon further written notice of not less than ten (10) days to the defaulting Partner, have the following rights:

     a)      to cure the same by advancing the necessary funds, on a proportional basis among the non-defaulting Partners unless otherwise agreed by them, and to recover any such amounts advanced, plus interest thereon at an annual rate equal to six percent (6%) over the prevailing prime rate of Morgan Guaranty Trust Company of New York, but not to exceed the maximum annual rate allowable at law, from all future distributions otherwise payable to such defaulting Partner by the Partnership pursuant to ARTICLE X.A.2.;

     b)      to require the defaulting Partner to sell its Ownership Interest to the non-defaulting Partner(s) within a period of ninety (90) days from such notice unless otherwise agreed by the Partners, for the fair market value of such Ownership Interest agreed to by the Partners within fifteen (15) days, or, in the event that the Partners fail to so agree, the fair market value for such Ownership Interest determined by a nationally recognized independent consulting firm selected by the non-defaulting Partners (the "Appraiser"). The Appraiser shall be given access to all information pertaining to the Partnership as it deems relevant to such determination of fair market value. Any amount owed by the defaulting Partner to the Partnership, plus liquidated damages in an amount equal to two times such amount, plus the costs of the Appraiser, if any, plus interest thereon at an annual rate equal to six percent (6%) over the prevailing prime rate of Morgan Guar anty Trust Company of New York but not to exceed the maximum annual rate allowable at law, shall be paid by the defaulting Partner to the Partnership upon closing of the sale and, at the option of the non-defaulting Partner(s), may be deducted from the sale price otherwise payable to the defaulting Partner hereunder; or

     c)      to cause the Partnership to be dissolved pursuant to ARTICLE XIII.

ARTICLE XI

FINANCIAL MATTERS

A. Partnership Account

The Partnership Manager shall establish the Partnership Account on behalf of the Partnership through which all payments received by or on behalf of the Partnership shall be deposited and thereafter disbursed as authorized by this Agreement. Monthly statements with regard to such accounts shall be retained with the records of the Partnership. The funds in this account shall remain independent and not be commingled with the funds of the entity comprising the Partnership Manager or Operator nor shall such funds be subject to the liens, encumbrances or claims or any kind directed against the Partnership Manager or Operator individually. Any cash in excess of requirements existing in the Partnership Account on any business day shall be invested in overnight or other interest bearing funds.

B. Books and Records

The financial books and records of the Partnership shall be kept and maintained by the Partnership Manager in accordance with generally accepted accounting principles consistently applied, and each Partner, or its designee, shall have access to such records and shall be entitled to examine or copy them at its sole expense, from time-to-time, during ordinary business hours. Both the financial and tax books and records of the Partnership for a fiscal Year shall be retained by the Partnership Manager for the minimum period necessary to comply with (a) the Federal record retention requirements of Section 6001 of the Code and the regulations thereunder, or any successor requirements thereof, and (b) any applicable state and local record retention requirements.

- The books and records of the Partnership shall be maintained or caused to be maintained by the Partnership Manager on a basis consistent with the Partnership's accounting for tax purposes and for financial reporting purposes.

- The accrual method of accounting shall be adopted by the Partnership.

C. Fiscal Year

The fiscal year of the Partnership shall end on December 31.

D. Financial Statements

1. Unless otherwise determined by the Management Committee, the Partnership Manager shall prepare or cause to be prepared the consolidated monthly and annual financial statements as specified in ARTICLE XI.D.2. below. Such statements shall be prepared in accordance with generally accepted accounting principles consistently applied. The Partnership Manager shall submit copies of such statements to each of the Partners as soon as practicable (but not later than thirty (30) days in the case of monthly financial statements) after the end of each Month or fiscal year, as the case may be. When requested by the Management Committee, the Partnership Manager shall cause the annual financial statements to be audited by the Partnership's independent certified public accountant, which shall be required to submit copies of its report to each Partner within thirty (30) days after completion thereof (but not later than one hundred twenty (120) days following the close of the relevant year). The Partnership Ma nager shall also furnish such other financial and support information to each Partner in such detail and with such frequency as such Partner may reasonably require.

2. Monthly financial statements required by this ARTICLE shall consist of monthly and year to date financial and operating statements, including but not limited to, a balance sheet and statements of income, cash flow, product inventory, changes in the Partners' capital account, and each Partner's share of the Partnership's profits and losses. Annual financial statements required by this ARTICLE shall consist of a balance sheet, statement of profits and losses, statement of the Partners' capital accounts and changes therein for such year, statement of cash flow and a statement reflecting each Partner's share of the Partnership's profits and losses.

E. Ad Valorem and Related Taxes

Beginning with the first Year after the Effective Date hereof, the Operator shall render for ad valorem taxation all property subject to this Agreement which by law should be rendered for such taxes, and it shall pay all such taxes thereon before they become delinquent. Operator shall pay all tax payments from the Operator Account.

If Operator considers any tax assessment improper, Operator may, at its discretion, protest within the time and manner prescribed by law, and prosecute the protest to a final determination, unless the Parties agree to abandon the protest prior to final determination. During the pendency of administrative or judicial proceedings, Operator may elect to pay, under protest, all such taxes and any interest and penalty. When any such protested assessment shall have been finally determined, the Operator shall pay the tax from the Operator Account, together with any interest and penalty accrued. The Partnership, through action of the Operator, shall pay or cause to be paid all excise, gathering and other taxes imposed upon or with respect to the processing or handling of Gas under the terms of this Agreement.

F. Insurance

-- At all times while operations are conducted hereunder, Partnership Manager shall comply and cause the Operator to comply with the worker's compensation laws of the state of operation hereunder; provided, however, that Partnership Manager or Operator may be a self-insurer for liability under said compensation laws. In addition, each Party shall carry or provide insurance in such amount as is sufficient to insure its interests and potential liabilities under this Agreement; such insurance may, in a Party's sole discretion, be in the form of "self-insurance". Notwithstanding insurance coverage, or the sufficiency or lack thereof, all losses and liabilities shall be borne by the Partners hereto and charged to the Partnership Account. Partnership Manager and Operator shall require all contractors engaged in work for the Partnership to comply with the worker's compensation law of the state of operation and to maintain such other insurance as P artnership Manager or the Management Committee may require.

ARTICLE XII

TAXES

A. Tax Matters Partner

1. Tax Matters Partner. The Partnership Manager is designated as the Tax Matters Partner ("TMP"), as such term is defined in Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended, ("Code"). In the event of any change in the TMP, the Partner serving as TMP at the beginning of a given taxable Year shall continue as TMP with respect to all matters concerning such Year. The TMP and other Partners shall use their best efforts to comply with responsibilities outlined in this section and in Code Sections 6222 through 6233 and 6050K (including any Treasury Regulations promulgated thereunder) and in doing so shall incur no liability to any other Partner. Notwithstanding the TMP's obligation to use its best efforts in the fulfillment of its responsibilities, the TMP shall not be required to incur any expenses for the preparation for, or pursuance of administrative, or judicial proceedings, unless the Partners agree on a method for sharing such expenses.

2. Information Request by TMP. The Partners shall furnish the TMP within two weeks from the receipt of the request with such information (including information specified in Code Sections 6230(e) and 6050K) as the TMP may reasonably request to permit it to provide the Internal Revenue Service with sufficient information for purposes of Code Sections 6230(e) and 6050K.

3. TMP Agreements with IRS. The TMP shall not agree to any extension of the statute of limitations for making assessments on behalf of any other Partner without first obtaining the written consent of that Partner. The TMP shall not bind any other Partner to a settlement agreement in tax audits without obtaining the written concurrence of any such Partner.

Any other Partner who enters into a settlement agreement with the Secretary of the Treasury with respect to any partnership items, as defined by Code Section 6231(a)(3), shall notify the other Partners of such settlement agreement and its terms within ninety (90) days from the date of the settlement.

4. Inconsistent Treatment of Partnership Item. If any Partner intends to file a notice of inconsistent treatment under Code Section 6222(b), such Partner shall, prior to the filing of such notice, notify the TMP of such intent and the manner in which the Partner's intended treatment of a partnership item is (or may be) inconsistent with the treatment of that item by the Partnership. Within one week of receipt the TMP shall remit copies of such notification to other Partners to the Partnership. If an inconsistency notice is filed solely because of a Partner not having received a Schedule K-1 in time for filing of its income tax return, the TMP need not be notified.

5. Communication of Proceedings to Partners. The TMP shall to the extent and in the manner provided by regulations issued pursuant to Section 6223(g) of the Code, keep all Partners informed of all administrative and judicial proceedings for the adjustment at the Partnership level of Partnership items.

6. Requests for Administrative Adjustment. No Partner shall file a request pursuant to Code Section 6227 for an administrative adjustment of partnership items for any Partnership taxable Year without first notifying all other Partners. If all other Partners agree with the requested adjustment, the TMP shall file the request for administrative adjustment on behalf of the Partnership. If unanimous consent is not obtained within thirty (30) days from such notice, or within the period required to timely file the request for administrative adjustment, if shorter, any Partner, including the TMP, may file a request for administrative adjustment on its own behalf.

7. Judicial Proceedings. Any Partner intending to file a petition under Code Sections 6226, 6228, or any other Code Section with respect to any Partnership item, or other tax matters involving the Partnership, shall notify the other Partners, prior to such filing, of the nature of the contemplated proceeding. In the case where the TMP is the Partner intending to file such petition, such notice shall be given sixty (60) days prior to filing to allow the other Partners to participate in the choosing of the forum in which such petition will be filed. If the Partners do not agree on the appropriate forum, then the appropriate forum shall be decided by majority vote. Each Partner shall have a vote in accordance with its Ownership Interest in the Partnership for the Year under audit. If a majority cannot agree, the TMP shall choose the forum. If a Partner intends to seek review of any court decision rendered as a result of such a proceeding such Partner shall notify the other Partners, prior to see king such review.

B. Income Tax Compliance and Capital Accounts

1. Tax Returns. The TMP shall prepare and file all required federal, state, and local partnership income tax returns, as well as all sales, use and other excise tax returns. In preparing such returns the TMP shall use its best efforts and in doing so shall incur no liability to any other Partner with regard to such returns. Not less than thirty (30) days prior to the due date (including extensions), but in no event later than September 1, the TMP shall submit to each Partner a copy of the income tax returns as proposed for review.

2. Fair Market Value Capital Accounts. The TMP shall establish and maintain FMV Capital Accounts and Tax Basis Capital Accounts for each Partner. Upon request, the TMP shall submit to each Partner along with a copy of any proposed Partnership income tax return an accounting of its respective FMV Capital Account and Tax Basis Capital Account as of the end of the tax return period.

3. Information Requests. Each Partner agrees to furnish to the TMP not later than sixty (60) days before the return due date (including extensions) such information relating to the operations conducted under this Agreement as may be required for the proper preparation of all such tax returns and capital accounts.

C. Elections

1. General Elections. For both income tax return and capital account purposes, the Partnership shall elect: (a) to use the maximum allowable accelerated tax method and the shortest permissible tax life for depreciation purposes, (b) to use the accrual method of accounting, (c) to treat all organizational costs of the Partnership as deferred expenses amortizable over a sixty (60) month period pursuant to Section 709(b) of the Code and comparable provisions of state law, (d) to amortize start-up expenditures over a sixty (60) month period pursuant to Section 195(d) of the Code and comparable provisions of state law, and (e) to report income on a calendar Year basis.

2. Other Elections or Consents. Any election other than those referenced above must be approved by the Management Committee.

D. Capital Contributions and FMV Capital Accounts

1. Capital Contributions. The respective capital contributions of each Partner to the Partnership shall be (a) each Partner's interest in the assets and associated properties contributed to this Partnership, and (b) all other amounts paid by each Partner characterized as contributions or expenses borne by such Partner under this Agreement.

2. FMV Capital Accounts. The FMV Capital Accounts shall be increased and decreased as follows:

(a) The FMV Capital Accounts shall be increased by: (i) the amount of money and the fair market value of any property contributed by each Partner, respectively, to the Partnership (net of liabilities assumed by the Partnership or to which the contributed property is subject); (ii) that Partner's ARTICLE XII.E.1. and E.2. allocated share of Partnership loss and deductions, or items thereof; and (iii) that Partner's share of Code Section 705(a)(1)(B) and (C) items.

(b) The FMV Capital Accounts shall be decreased by: (i) the amount of money and the fair market value of property distributed to each Partner (net of liabilities assumed by such Partner or to which the property is subject); (ii) that Partner's ARTICLE XII.E.1. and E.2. allocated share of Partnership loss and deductions, or items thereof; and (iii) that Partner's share of Code Section 705(a)(2)(B) items and Code Section 709 nondeductible and non-amortizable items.

(c) "Fair market value" when it applies to property contributed by or distributed to a Partner or other Partnership property shall be determined by the Management Committee.

E. Partnership Allocations

1. Primary FMV Capital Account Allocations. Except as provided elsewhere in this Agreement, each item of income, gain, loss or deduction shall be allocated to each Partner according to such Partner's Ownership Interest at the time such item is realized.

2. Other FMV Capital Account Allocations.

(a) Depreciation shall be allocated to each Partner in the ratio of its FMV Capital Account adjusted basis of the underlying depreciable asset;

(b) Loss (or simulated loss) upon the sale, exchange, distribution, abandonment or other disposition of depreciable or depletable property, shall be allocated to the Partners in the ratio of their respective FMV Capital Account adjusted basis in the depreciable property;

(c) Gain (or simulated gain) upon the sale, exchange, distribution, or other disposition of depreciable or depletable property shall be allocated to the Partners so that the FMV Capital Account balances of the Partners with respect to such property will most closely reflect their respective Ownership Interests;

(d) Costs or expenses of any other kind shall be allocated to each Partner in accordance with its respective contribution, or obligation to contribute, to such costs or expenses.

3. Tax Returns and Tax Basis Capital Account Allocations.

(a) Unless otherwise expressly provided herein, the allocations of Partnership items of income, gain, loss or deduction for tax return and Tax Basis Capital Account purposes shall be the same as those contained in ARTICLE XII.E.1. and E.2.;

(b) Depreciation shall be allocated to each Partner in accordance with its contribution to the adjusted tax basis of the depreciable asset;

(c) Any recapture of depreciation or any other item of deduction or credit shall, to the extent possible, be allocated among the Partners in accordance with their sharing of the depreciation or other item of deduction or credit which is recaptured;

(d) For Partnership property which has a value in the FMV Capital Accounts which differs from the adjusted tax basis of such property, any tax items relating to such property will be allocated to the Partners in a manner which takes into account the variation between the adjusted tax basis of such property and its FMV Capital Account value under Code Section 704(c).

F. Termination and Liquidating Distributions

1. Termination. Termination shall occur on the earlier of the events described in Code Sections 708(b)(1)(B) or 708(b)(1)(A).

(a) Termination Under Code Section 708(b)(1)(B). Upon termination under Code Section 708(b)(1)(B), each Partner's FMV Capital Account shall be adjusted as provided for in the regulations, Section 1.704-1(b)(2)(iv)(1), and ARTICLE XII. F.3. The distributions provided for in ARTICLE XII.F.2. through F.4. shall be deemed to have occurred, with the Partnership money and properties deemed contributed to a new Partnership, the terms of which are identical to those contained in this Agreement.

(b) Termination Under Code Section 708(b)(1)(A). Upon termination under Code Section 708(b)(1)(A), the business shall be wound-up and concluded, pursuant to ARTICLE XIII.D. and the assets shall be distributed to the Partners as described below by the end of such calendar year (or, if later, within ninety (90) days after the date of such termination). The assets shall be valued and distributed to the Partners in the order provided in ARTICLE XII.F.2. through F.4.

2. Reversion. First, all money representing unexpended contributions by any Partner and any property where no interest has been earned in that property under the Agreement by any other Partner shall be returned to the contributor.

3. Balancing. Second, the FMV Capital Accounts of the Parties shall be determined under this section. The TMP shall take the actions specified under this section in order to cause the ratio of the Partners' FMV Capital Accounts to reflect as closely as possible their Ownership Interests. The ratio of a Partner's FMV Capital Account is represented by a fraction, the numerator of which is the Partner's FMV Capital Account balance and the denominator of which is the sum of all Partners' FMV Capital Account balances. Such actions are hereafter referred to as "balancing the FMV Capital Accounts", and when completed, the FMV Capital Accounts of the Partners shall be referred to as being "balanced". The manner in which the FMV Capital Accounts of the Partners are to be balanced under this ARTICLE XII.F.3. shall be determined as follows:

(a) The fair market value of all Partnership properties shall be determined and the gain or loss for each property which would have resulted if a sale thereof at such fair market value had occurred shall be allocated in accordance with ARTICLE XII.E.2(b) and (c). If thereafter any Partner has a negative FMV Capital Account balance, that is, a balance less than zero, such Partner shall contribute an amount of money to the Partnership sufficient to achieve a zero balance FMV Capital Account. Any Partner may contribute an amount of money to the Partnership to facilitate the balancing of the FMV Capital Accounts. IF FMV Capital Accounts are not balanced, ARTICLE XII.F.3(b) or (c) shall apply;

(b) If all the Partners consent, any money or an undivided interest in certain selected properties shall be distributed to one or more Partners as necessary for the purpose of balancing the FMV Capital Accounts;

(c) Unless (b) above applies, an undivided interest in each and every property shall be distributed to one or more Partners in accordance with the ratios of their FMV Capital Accounts;

(d) If a property is to be valued under (a) above or distributed pursuant to (b) or (c) above, the fair market value of the property shall be agreed to by the Management Committee. In the event the Management Committee can not reach agreement as to the fair market value of property, the TMP shall cause a nationally recognized independent engineering firm to prepare an evaluation of fair market value of such property.

4. Final Distribution. Third, after the FMV Capital Accounts of the Partners have been adjusted pursuant to ARTICLE XII.F.3. above, all other or remaining property and interest then held by the Partnership shall be distributed to the Partners in accordance with their positive FMV Capital Account balances.

G. Transfers, Indemnification, and Correspondence

1. Transfers of Partnership Interests. Transfers of Ownership Interests shall be governed by the Agreement. A Partner transferring its interest, or any part thereof, shall notify the TMP in writing within two weeks of such transfer.

2. Indemnification. This Agreement does not include any indemnification provisions to protect Partners against any harm caused by a Code Section 708(b)(1)(B) termination. However, the Partners agree that if any of them makes a sale or assignment of its interest under this Agreement, such sale or assignment shall be structured, if reasonably possible, to avoid causing an Code Section 708(b)(1)(B) termination.

3. Correspondence. All correspondence relating to the preparation and filing of the Partnership's income tax returns and capital accounts shall be forwarded to:

Alliance Energy Services Partnership

c/o Allegheny Ventures, Inc.
800 Cabin Hill Drive - Room 340
Greensburgh, PA 15601

ARTICLE XIII

TRANSFER OF INTEREST AND DISSOLUTION

A. Transfer Of Interests

1. Assignment Neither this Agreement nor any portion of a Partner's Ownership Interest may be assigned by a Partner without the written consent of the other Partner which consent shall be based on the nonassigning Partner's sole judgment of the desirability of the proposed assignee as a Partner. Notwithstanding the preceding sentence, a Partner may not assign its Ownership Interest in the Partnership without the written consent of the other Partner if such assignment would constitute a sale or exchange of 50 percent or more of the total interest in partnership capital and profits within a 12-month period as defined in Section 708(b)(1)(B) of the Code.

2. Right Of First Refusal Subject to ARTICLE XIII.A.1., if a Partner desires to dispose of its Ownership Interest in the Partnership ("Transferring Partner") then it may do so, after first offering the interest to the other Partner who shall have a preferential right to purchase such interest on the same terms offered by a bona fide purchaser ready and able to purchase. The Transferring Partner shall give written notice to the other Partner, at least forty five (45) days prior to the effective date of such disposition, specifying the interest, the price and terms of sale, the identity of the proposed purchaser and attaching a good faith Letter of Intent between the Transferring Partner and the proposed purchaser containing the material terms and conditions of the sale. The other Partner shall have a period of forty (40) days after the receipt of the notice to exercise its option to purchase the interest on the terms and conditions set forth in the Letter of Intent o r similar document. The other Partner shall exercise its option by giving written notice to the Transferring Partner within such 40-day period. If the other Partner does not exercise its option within the 40-day period, or after all required government approvals have been received, whichever is later, the Transferring Partner may proceed with the proposed sale. If the Transferring Partner has not completed said sale within 120 days, the preferential right of the other Partner shall be considered as revived and the interest shall have to be reoffered to the other Partner in accordance with the provisions of ARTICLE XIII.A.1.

B. Withdrawal

Except for matters technically constituting a withdrawal but permitted by ARTICLE XIII.A., a Partner may not voluntarily withdraw from the Partnership without the approval of the other Partner. Such withdrawal shall be on such terms and conditions as the Management Committee may prescribe.

C. Bankruptcy

If, (a) Partner files a voluntary petition in bankruptcy, is adjudicated a bankrupt, becomes insolvent, makes an assignment for the benefit of creditors, or applies for or consents to the appointment of a receiver or trustee with respect to any substantial part of its assets, or (b) a receiver or trustee is appointed or an attachment or execution levied with respect to any substantial part of a Partner's assets and the appointment is not vacated or the attachment or execution is not released within thirty (30) days, then the Partnership shall be dissolved pursuant to ARTICLE XIII.D. hereof by the other Partner, if allowed by applicable law. For the purposes of this ARTICLE XIII.C., the term "insolvent" shall mean that such Partner is not paying its debts to the Partnership or others, as such debts become due, or that such Partner is otherwise insolvent within the meaning of Title 11 U.S.C. or other applicable federal bankruptcy law.

D. Dissolution; Winding Up; Liquidation

1. Causes Of Dissolution The Partnership shall be dissolved on the happening of any of the following events:

a) Occurrence of any contingency which is specified elsewhere in this Agreement as causing dissolution.

b) A final determination that the business of the Partnership or the participation therein by a Partner is a violation of law.

c) Unanimous agreement of the Partners.

2. Technical Dissolution The Partners acknowledge that withdrawal (including by transfer), expulsion, or the bankruptcy of a Partner technically may cause a dissolution of the Partnership even though not specified in ARTICLE XIII.D.1.

3. Right To Continue Business After Dissolution On dissolution of the Partnership, either Partner (except a Partner who withdrew or otherwise caused a dissolution pursuant to ARTICLE XIII.D. hereof) shall have the right to elect to continue the business of the Partnership under the same name, by themselves, or with any additional Persons they may choose. If both Partners desire to continue the business, but are unable to agree on the terms for continuation of the business, the Partnership shall be liquidated pursuant to ARTICLE XIII.D.5.

4. Survival Of Provisions The provisions of this Agreement shall survive any termination of this Partnership and/or the termination of any Partner's interest in this Partnership and shall remain binding on the Partners for a period of time necessary to resolve all matters (including, without limitation, Partnership tax returns, election and audits) regarding the federal and any applicable state income taxation of the Partnership.

5. Winding Up And Liquidation On dissolution of the Partnership, it shall be wound up and liquidated as quickly as circumstances will allow. The assets of the Partnership shall first be applied to satisfy amounts owing to creditors other than Partners and then to satisfy amounts owing to Partners other than for capital and profits.

ARTICLE XIV

COMPLIANCE WITH LAWS AND REGULATIONS

A. Laws, Regulations and Orders

This Agreement shall be subject to the laws of the state of Kentucky to the valid rules, regulations, and orders of any duly constituted regulatory body of said state; and to all other applicable federal, state, and local laws, ordinances, rules, regulations, and orders.

B. Governing Law

THIS AGREEMENT AND ALL MATTERS PERTAINING HERETO, INCLUDING, BUT NOT LIMITED TO, MATTERS OF PERFORMANCE, NONPERFORMANCE, BREACH, REMEDIES, PROCEDURES, RIGHTS, DUTIES AND INTERPRETATION OR CONSTRUCTION, SHALL BE GOVERNED AND DETERMINED BY THE LAW OF KENTUCKY.

C. Regulatory Agencies

Nothing herein contained shall grant, or be construed to grant, Partnership Manager the right or authority to waive or release any rights, privileges, or obligations which any Partner may have under federal or state laws or under rules, regulations or orders promulgated under such laws in reference to oil, gas and mineral operations.

ARTICLE XV

MISCELLANEOUS

A. Indemnity

1. Obligations of Partner

In addition to such other indemnity obligations as are expressly set forth in this Agreement, and superseding ARTICLE XV.A.2. below to the extent that both ARTICLES XV.A.1. and XV.A.2. apply, each Partner hereby indemnifies and hold harmless and agrees to defend each of the other Partners and their affiliates and their directors, officers, employees, and agents and the Partnership from and against all claims, loss, damage, demands, liabilities, obligations, or rights of actions, including outside legal fees, which may arise as a result of:

a. Breach of this Agreement by the indemnifying Partner;

b. Intentional misrepresentation by the indemnifying Partner;

c. Anything done or omitted to be done through the gross negligence or willful misconduct of the indemnifying Partner or of its officers, directors, employees or agents;

d. Any action by the indemnifying Partner or any of its officers, directors, employees or agents whose services have not been specifically contracted for by the Partnership, which action has not been authorized or approved by the Management Committee or which binds the Partner beyond the Business Purpose of the Partnership as defined in this Agreement.

e. Any claims brought by third parties against the other Partners or their affiliates or the Partnership as a result of any activity engaged in by the indemnifying Partner outside the Business Purpose of the Partnership or the ordinary course of business of the Partnership.

2. Cross Indemnifications

To the extent not covered by applicable insurance carried by or for the Partnership, each Partner agrees to defend, indemnify and hold harmless each other Partner and its affiliates and their directors, officers, employees and agents from any loss or expense, including outside legal fees, in excess of the indemnified Partner's Ownership Interest share thereof arising out of or resulting from any claim, liability, demand, judgment or other obligation against the indemnified Partner, including negligence of the indemnified Partner, through the ordinary course of business of the Partnership or by reason of its being a party to this Agreement and a Partner in the Partnership, except as provided otherwise in ARTICLE XV.A.1. above. It is not the intent of the Partners to release from liability any third party with whom the Partnership contracts for gas or services. The indemnification provisions hereof are not made for the benefit of any person or entity other than the Partne rs, their affiliates, and their officers, director, employees, and agents.

3. Partnership

Partnership shall release, indemnify and hold harmless Partnership Manager and its affiliates and their respective officers, directors, agents and employees, from and against all fines, penalties, assessments, claims, demands, damages and causes of action including attorneys fees (to the extent such fines, penalties, assessments, claims, demands, damages and causes of action are not satisfied by insurance required to be carried pursuant to this Agreement) for any violation or alleged violation of any laws, statutes, rules or regulations of any governmental body, and for injury to or death of any persons and loss or damage to any property, in any way arising out of, in connection with, or incident to the design, engineering, construction and/or testing of the Partnership by Partnership Manager or its affiliates or their respective officers, directors, employees or agents in connection with the services rendered hereunder; provided, however, that Partnership shall not be re quired to release, indemnify or hold harmless Partnership Manager or its affiliates or their respective officer, directors, agents or employees from liability in any way arising out of, in connection with or incident to gross negligence, recklessness or willful misconduct of Partnership Manager or its affiliates or their respective officers, directors, employees or agents, or from liability to Partnership Manager's employees or its affiliates' employees.

4. Partnership Manager

Partnership Manager shall release, indemnify and hold harmless Partnership, the Partners and each Partner's affiliates and their respective officers, directors, agents and employees, from and against all fines, penalties, assessments, claims, demands, damages and causes of action including attorneys fees (to the extent such fines, penalties, assessments, claims, demands, damages and causes of action are not satisfied by insurance required to be carried pursuant to this Agreement) for any violation or alleged violation of any laws, statutes, rules or regulations of any governmental body, and for injury to or death of any persons and loss or damage to any property, in any way arising out of, in connection with, or incident to the Partnership Manager's gross negligence, recklessness or willful misconduct or the gross negligence, recklessness or willful misconduct of its affiliates or of its affiliates or of their respective officers, directors, employees or agents.

5. Notice

The indemnified Partner shall promptly give notice to the indemnifying Partner or Partners of any claims, loss, damage, demands, liabilities, obligations or rights of action for which such Partner seeks indemnification.

6. Settlements

No Partner, nor the Partnership, which is entitled to indemnification under ARTICLE XV.A., may settle a third party claim which is subject to the indemnification provisions of this ARTICLE without the prior written consent of all Partners responsible for indemnifying such Partner or the Partnership from and against such third party claims.

7. Survival

The provisions of and obligations set forth in ARTICLE XV.A. shall survive the termination of this Partnership and/or the termination, in whatever manner, of any Partner's interest under this Agreement.

B. Notices

All notices authorized or required between the Parties and required by any of the provisions of this Agreement, unless otherwise specifically provided, shall be given in writing by mail or telegram, postage or charges prepaid, or by telex or telecopier and addressed to the Parties to whom the notice is given at the addresses listed below. The originating notice given under any provision hereof shall be deemed given only when received by the Party to whom such notice is directed, and the time for such Party to give any notice in response thereto shall run from the date the originating notice is received. The second or any responsive notice shall be deemed given when deposited in the mail or with the telegraph company, with postage or charges prepaid, or sent by telex or telecopier. Each Party shall have the right to change its address at any time, and from time-to-time, by giving written notice thereof to all other Parties.

ALLIANCE GAS SERVICES, INC.
800 Cabin Hill Drive - Room 340
Greensburgh, PA 15601

ALLEGHENY VENTURES, INC.
800 Cabin Hill Drive - Room 340
Greensburgh, PA 15601

C. Alternative Dispute Resolution

The Parties will in good faith attempt to promptly resolve any controversy or dispute between the Parties arising out of or relating to this Agreement by negotiation between the Parties. If, after negotiation for a period not to exceed thirty (30) days, the Parties have not resolved the matter, then, at the request of either Party, the Parties will immediately mediate the matter through non-binding mediation at the earliest possible mutually agreed time. In the event the dispute is not resolved by such mediation, then the Parties will discuss the possibility of attempting further resolution of the dispute through another appropriate, non-binding, Alternative Dispute Resolution process such as mini-trial, neutral expert fact finding, or advisory opinion by a single neutral expert. If the Parties do not avail themselves of an Alternate Dispute Resolution process, then any dispute between the Partners arising out of or related to this Agreement shall be decided by arbitration, which shall be done in a ccordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect and, to the extent consistent with this Agreement, the Federal Arbitration Act (Title 9 United States Code) then in effect; provided, however, that the arbitration shall not be conducted by the American Arbitration Association unless the Partners so agree. Notice of the demand for arbitration shall be filed in writing with the other Party and shall be made within a reasonable time after the dispute has arisen.

Absent the Partners' agreement to the contrary, arbitration proceedings shall be conducted by a panel of three arbitrators. Each Partner shall appoint one arbitrator and the two arbitrators so appointed shall select a third arbitrator. If either Partner fails to appoint an arbitrator within the ten (10) days after demand for arbitration is given, or if the two arbitrators appointed by the Parties fail to appoint a third arbitrator within twenty (20) days after demand for arbitration is given, the Regional Office of the American Arbitration Association for the city in which the arbitration is to be held shall appoint the arbitrator or arbitrators necessary to complete the panel of three arbitrators.

The Partner demanding arbitration shall submit to the arbitration panel in writing the questions to be decided. The jurisdiction of the arbitrators shall be limited to the question or questions so submitted. The Partners agree that the arbitrators, in addition to a final award, may (i) render an interim ruling, including injunction relief, and (ii) assess responsibility for costs and other expenses, including reasonable attorneys' fees and costs incurred by the parties, arising out of or occurring because of the arbitration proceedings. The ultimate award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction. The arbitration shall be conducted in either Houston, Texas, or Louisville, Kentucky, or in such other location as the Parties may agree.

D. Other Instruments

The Parties hereto covenant and agree that they will execute such other and further instruments and documents as are or may be necessary or convenient to effectuate and carry out the terms and provisions of this Agreement and the business of the Partnership.

E. Headings

The headings used in this Agreement are used for administrative purposes only and do not constitute substantive matter to be considered in construing the terms and provisions of this Agreement.

F. Legal Construction

In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision thereof and this Agreement shall be construed as if such invalid, illegal unenforceable provision had never been contained herein.

G. Counterpart

This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original.

H. Prior Agreements Superseded

Agreement supersedes any prior understanding or written or oral agreements between the Parties respecting the subject matter hereof.

I. Amendments

This Agreement may be amended or modified by the Partners from time-to-time, but only by a written instrument executed by the Partners.

J. Confidentiality

All technical and proprietary information furnished by either Partner will be held in confidence by the Partners and will not be disclosed to others without the prior mutual consent of the Partners. This obligation does not apply to information which is required by law or any governmental agency to be disclosed nor to disclosures to parties seeking to acquire some or all of the stock of one of the Partners. Furthermore, this obligation shall not apply to information which now or hereafter becomes part of the public domain through no fault of either Partner, which either Partner can show was in its possession at the time of disclosure, or which either Partner hereafter receives from a third party free of any confidential obligation.

EXECUTED, and made effective as of, the dates first set out above.

                                                       ALLEGHENY VENTURES, INC.

                                                       By:  /s/ Paul M. Barbas
                                                       Name:   Paul M. Barbas
                                                       Title:    President

                                                       ALLIANCE GAS SERVICES, INC.

                                                       By:  /s/ Paul M. Barbas
                                                       Name:   Paul M. Barbas
                                                       Title:   President

EX-99 43 exg.htm CORPORATE STRUCTURE EXHIBIT G

CORPORATE STRUCTURE as of 12/31/01 OF
ALLEGHENY ENERGY, INC. AND ITS SUBSIDIARIES

ALLEGHENY ENERGY, INC.

Allegheny Energy Service Corporation

     Monongahela Power Company
          Allegheny Pittsburgh Coal Company (22.97%)
          Allegheny Generating Company (27%)
          Mountaineer Gas Company
               Mountaineer Gas Services, Inc.
                    Universal Coil, LLC (50%)

     The Potomac Edison Company
          Allegheny Pittsburgh Coal Company (25%)
          PE Transferring Agent, LLC

     West Penn Power Company
          Allegheny Pittsburgh Coal Company (50%)
          West Virginia Power and Transmission Company
               West Penn West Virginia Water Power Company
          West Penn Transferring Agent LLC
          West Penn Funding Corporation
               West Penn Funding LLC

     Allegheny Energy Supply Company, LLC (98.033)%
          Allegheny Generating Company (77.03%)
       Allegheny Energy Supply Capital, LLC
       Allegheny Energy Supply Conemaugh, LLC
       Allegheny Energy Supply Gleason Generating Facility, LLC
       Allegheny Energy Supply Lincoln Generating Facility, LLC
       Allegheny Energy Supply Wheatland Generating Facility, LLC
       Energy Financial Company, L.L.C.
       Lake Acquisition Company, L.L.C.
       Allegheny Energy Supply Development Services, LLC
       Acadia Bay Energy Company, LLC

Allegheny Energy Supply Hunlock Creek, LLC
Hunlock Creek Energy Ventures (50%)

     Allegheny Ventures, Inc.
          AYP Energy, Inc.
          Allegheny Communications Connect, Inc.
               Allegheny Communications Connect of Virginia, Inc.
               Allegheny Communications Connect of Pennsylvania, LLC
          Allegheny Communications Connect of Ohio, LLC
          Allegheny Communications Connect of West Virginia, LLC
          AFN Finance Company No. 2, LLC
          Odyssey Communications, LLC (40%)
          AFN, LLC (15.85%)
          Allegheny Energy Solutions, Inc.
          MABCO Steam Company, LLC (19.968%)
            APS Cogenex, L.L.C. (50%)
       Alliance Energy Services Partnership (50%)
       Alliance Gas Services, Inc.
           Alliance Energy Services Partnership (50%)
       Fellon-McCord Associates, Inc.
       Utility Associates, Inc. (10%)

Ohio Valley Electric Corporation (12.5%)

Indiana-Kentucky Electric Corporation

Green Valley Hydro, LLC

EX-99 44 exh.htm BALANCE SHEET, INCOME STATEMENT AND CASH FLOW STATEMENT OF ALLEGHENY ENERGY SUPPLY HUNLOCK CREEK, LLC Exhibit H


Exhibit H

	BALANCE SHEET - DECEMBER 31, 2001
	(000's)
				Allegheny
				Energy
				Supply
				Hunlock
ASSETS				Creek, LLC
	Property, plant and equipment:
		At original cost		2,797

	Investments and other assets:
		Unregulated investments		18,047

	Current assets
		Account receivable - other		48
		Prepaid taxes		74

			Total assets	20,966


Capitalization and Liabilities
	Capitalization:
		Members equity		20,416

	Current liabilities:
		Accounts payable to affiliates		550

			Total capitalization and liabilities	20,966


STATEMENT OF INCOME FOR YEAR ENDED DECEMBER 31, 2001
			(000's)
				Allegheny
				Energy
				Supply
				Hunlock
				Creek, LLC
Operating revenues:
			Total operating revenues	0

Operating expenses:
			Total operating expenses	104

			Net Income (loss)	(104)


STATEMENT OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2001
		(000's)
				Allegheny
				Energy
				Supply
				Hunlock
Cash Flows from Operations:				Creek, LLC
	Net income (loss)			(104)
	Changes in certain assets and liabilities:
		Accounts receivable, net		(48)
		Prepaid taxes		(74)
		Accounts payable to affiliates		(2,185)
		Other		2,392
		Total Cash Flows from Operations		(19)

Cash Flows used in Investing:
	Unregulated generation construction expenditures and investments			(1,662)
	Unregulated investments			1,681
		Total Cash Flows used in Investing		19

Cash Flows from (used in) Financing:
	Parent Company contribution			0
		Total Cash Flows from (used in) Financing		0

Net Change in Cash and Temporary
	Cash Investments			0
		Cash and Temporary Cash Investments at January 1		0
		Cash and Temporary Cash Investments at December 31		0

Supplemental cash flow information:
	Cash paid during the year for:
		Interest (net of amount capitalized)		0
		Income taxes		0

-----END PRIVACY-ENHANCED MESSAGE-----

(D)		Controlled Person shall mean any Person which directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another Person. As used in this definition, the term "control" means the possession, direly or indirectly, of the power to direct or cause the direction of the management and policies of Person, whether through ownership of voting securities, by contract or otherwise.
(E)		Capital Account shall mean the capital account established for each Member in accordance with the following provisions:
(1)	To each Member's Capital Account there shall be credited such Member's capital contributions made to Odyssey pursuant to the provisions of this Agreement, such Member's share of profits and any items in the nature of income or gain which are specially allocated pursuant to Sections 4.4 or 4.5 hereof, and subject to the provisions of Section 6.1, the amount of any Company liabilities assumed by such Member or which are secured by any property distributed to such Member;
(2)	To each Member's Capital Account there shall be debited the amount of cash and the fair market value of any property distributed to such Member pursuant to any provision of this Agreement and such member's share of losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 6.1 hereof, and liabilities assumed by Odyssey or which are secured by any property contributed by such Member to Odyssey; and
(3)	In the event all or a portion of a Membership Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.
Allocation for Profits and Losses shall be made in accordance with Sections 4.2 and 4.3 hereof. The Capital Accounts shall be maintained in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv), notwithstanding any provision contained herein to the contrary.
(F)		Code shall mean the Internal Revenue Code and the rules and regulations promulgated thereunder, as amended.
(G)		Company Asset means the interest of Odyssey in any entity or security (whether in corporation securities, equity, debt or hybrid securities, partnership or joint venture interests, other contractual rights or otherwise), or group of related entities or securities, and any business and other assets, or group of related businesses and other assets, owned directly or indirectly, by Odyssey and acquired by Odyssey in one transaction or a series of related transactions.
(H)		Depreciation means, for each fiscal year, an amount equal to the depreciation, amortization, or other cost recover deduction allowable with respect to an asset for such fiscal year, except that if the Gross Asset Value of an asset differs from its adjusted basis for
3

		federal income tax purposes at the beginning of such fiscal year, "Depreciation" shall be an amount that bears the same ration to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such fiscal year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such fiscal year is zero, "Depreciation" shall be determined by a reasonable method selected by the Members.
(I)		Fair Market Value means the price that would be paid for a given asset in an arm's length transaction between a willing seller and willing buyer, as determined by the Members in their sole discretion.
(J)		Gross Asset Value means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:
(1)	The initial Gross Asset Value of any asset contributed by a Member to Odyssey shall be the gross Fair Market Value of such asset, as determined by the Members;
(2)	Except as provided in Section 3.6, the Gross Asset Values of all property of Odyssey shall be adjusted to equal the respective gross Fair market Values of such property, as determined by the Members, as of the following time: (i) the acquisition of any additional Membership Interest in Odyssey by any new or existing Member in exchange for more that a de minimis Capital Contribution: (ii) the distribution by Odyssey to a Member of more than a de minimis amount of property of Odyssey; and (iii) the Liquidation of Odyssey;
(3)	The Gross Asset Value of any property of Odyssey distributed to any Member shall be equal to the gross Fair Market Value of the property on the date of distribution as determined by the Members; and
(4)	The Gross Asset Values of assets of Odyssey shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subsection (d) to the extend the Members determine that an adjustment pursuant to subsection (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (d).
		If the Gross asset Value of an asset has been determined or adjusted pursuant to subsection (a), (b), or (d) of this definition, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.
(K)		Interest Rate shall mean a per annum rate of interest calculated as the
4

	adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits and Losses.
(Y)		Super Majority shall mean one less vote required for a unanimous decision. If five (5) Board members are voting, four (4) votes out of five (5) votes are required. If four (4) Board members are voting, three (3) votes out of four (4) votes are required. If three (3) Board members are voting, two (2) votes out of three (3) votes are required.
(Z)		Treasury Regulation or Regulation shall mean a regulation or proposed regulation promulgated under the Code by the U.S. Department of Treasury, as amended from time to time, and any successor regulation.
ARTICLE II ORGANIZATION
2.1		Name and Formation of Company. The name of Odyssey is "Odyssey Communications, LLC." The Company may also conduct its business under one or more assumed names. The Company is formed as a Pennsylvania limited liability company under and pursuant to the provisions of the Act by the filing of the Certificate as required by the Act.
2.2		Representations ad Warranties Concerning Formation of Odyssey. Each of the parties represents and warrants to the other that:
(A)	It is validly organized and existing and in good standing according to the laws of the state of its incorporation or organization, and it is qualified to do business in every jurisdiction where the failure to be so qualified would have a material adverse effect on its ability to perform its obligations under this Agreement;
(B)	Neither the formation of odyssey, the execution and delivery this Agreement (including all contracts or other agreements necessary to carry out the purposes of this Agreement), nor the performance of the obligations undertaken pursuant to this Agreement will contravene any provision of, or constitute a default under, any indenture, mortgage debenture, or other agreement to which it or its Controlled Persons is a party or any order, rule or regulation of any court, commission, or governmental agency having jurisdiction;
(C)	It will not willfully or knowingly violate any law or regulation regarding this Company or its business.
2.3		Purpose. The purpose of Odyssey is to conduct any and all activities that may be conducted by a "telecommunications construction, services and consulting company" and to do any and all things and to carry on any and all other activities necessary, convenient or incidental to the accomplishment of the foregoing purposes. The Company shall have all the powers necessary or convenient to effect the foregoing purposes including, but not limited to, the general powers conferred on limited liability companies under the Act. The Members agree to cooperate in obtaining all necessary authorizations from all governmental authorities having jurisdiction as may be required to conduct the purposes of Odyssey.
7

	each of the Members for additional capital contributions in order for Odyssey to meet its cash, equity and operating requirements, provided that each additional capital contribution call pursuant to this section 3.3 shall be in writing and shall contain the following information:
(1)	The total amount of additional cash capital contributions requested from all Members;
(2)	The amount of additional cash capital contribution required from each Member, including the amount required from the Member to whom the request is addressed;
(3)	The purpose for which the funds are to be applied set forth in reasonable detail; and
(4)	The date, not less than thirty (30) days after the date of the written call, on which payments of the additional cash capital contributions shall be made by the Members.
(C)	If Odyssey does not have sufficient cash to pay its obligations, any Member may agree to advance all or part of the needed funds to or on behalf of Odyssey, provided that such Member obtains the other Member's written consent. Any advance described in this Section 3.3(C) shall bear interest at the Interest rate from the date of the advance until the date of payment, and is not a capital contribution.
3.4		Failure to Make Additional Capital Contribution. If any member fails to make payment when due of all or any portion of its share of Capital Call (such member the "Delinquent Member"), Odyssey shall give written notice such failure to the Delinquent Member with copies to each of the other Members. If the Delinquent Member fails to pay the amount due (including any costs associated therewith and interest on such obligation at the Interest Rate, which costs and interest payments shall not constitute Capital Contributions and shall not cause an increase in the Capital Account of such Delinquent Member) within ten (10) days of the giving of such notice by odyssey, the majority Non-Delinquent Members may elect to allow the Non-Delinquent Members to contribute (in addition to their portion of such Capital Call) all or any portion of such unpaid Capital Call in proportion to their respective Non-Interested Percentage Interests or on such basis as may be agreed among the Majority Non-Delinquent Membe rs. Any such contributing Non-Delinquent Member shall hereinafter be referred to as a "Contributing Member." Effective upon and in consideration for the making of such additional Capital Contributions by the Contributing Members, (1) Odyssey shall issue to the Contributing Members additional Membership Interest so that the Percentage Interest of each Contributing member shall be increased by the number of percentage points equal to a fraction, the numerator of which is equal to the unpaid Capital Call or portion thereof contributed by such Contributing Member and the denominator of which is equal to the current total of all capital accounts as of the date of the Capital Call plus the total of the Capital Call, and (2) the Percentage Interest of the Delinquent Member shall be reduced by the same number of percentage points as the amount of such increase and number of Membership Interest held by the Delinquent Member shall be cancelled to correspond to the number of additional Membership Interest issued to t he Contributing Members.
9

	income, gain or loss of similar character recognized upon the disposition of all or substantially all of the assets of Odyssey. Any elections or other decisions relating to such allocations shall be made by the Members in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Article IV are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement.
(B)	Qualified Income Offset, Minimum Gain Chargeback. Notwithstanding anything to the contrary in this Agreement, Profits and Losses shall be allocated as though this Agreement contained (and there is hereby incorporated herein by reference) (i) a qualified income offset provision that complies with Treasury Regulation Section 1.704(b)(2)(ii)(d) and (ii) minimum gain chargeback and partner minimum gain chargeback provisions which comply with the requirements of Treasury Regulation Section 1.704-2.
(C)	Allocations Upon Liquidating Dispositions. Profits or Losses resulting from the sale or other disposition of all or substantially all of the assets of Odyssey shall be allocated in accordance with this Article IV.
(D)	Tax Credits. All tax credits of Odyssey for a fiscal year shall be allocated among the Members in the same ration as Profits were allocated for such fiscal year, or it there were no Profits for such fiscal year, such tax credits shall be allocated to the Members in accordance with their respective Interests expressed as a percentage.
(E)	Treatment of Taxes Withheld; Distributions With Respect to Certain State and Local Taxes. All amounts withheld or paid by Odyssey pursuant to the Code or any provision of any state or local tax law with respect to any payment, distribution, or allocation to a Member, or any such amount that is paid by Odyssey solely by reason of the holding of a Membership Interest by any Member, shall be treated as amounts distributed to such Member pursuant to Section 4.5 hereunder and shall be debited to its Capital Account. Notwithstanding anything to the contrary herein, in the event that nay state, local or other income tax imposed on Odyssey as an entity for any fiscal year is reduced by reason of the holding of a Membership Interest by any Member, an amount equal to the reduction attributable to such Member shall be distributed to such Member within sixty (60) days after the end of the fiscal year.
4.5		Distributions. Other than distributions made pursuant to Article IX on termination, distributions of Net Cash from Operations shall be made at such times (but no less often than annually) as determined by the unanimous consent of the Board, in its sole discretion, to the Members in accordance with their Membership Interest; provided, however, that Members in default under this Agreement shall not be entitled to distributions so long as such Members are in default.
4.6		Non-Discretionary Minimum Distributions. All Members shall have the option to take a cash withdrawal from their capital account on a periodic basis, calculated as follows:
(A)	Odyssey's accountant shall estimate or project its taxable income on April 1^st (for the period January 1 march 31), June 1^st (for the period April 1 June 30), September 1^st (for the period July 1 September 30) and December 31^st (for the period October 1 December
11

	31) of each year.
(B)	On the above dates, the above taxable income shall be multiplied by the maximum individual federal income tax rate plus the maximum individual self-employment tax rate (if wages cause Member to exceed FICA limit then the rate will only include the maximum Medicare portion of the self-employment rate) plus the maximum individual state tax rate plus the maximum individual local income tax rate.
(C)	The resulting product from above paragraph (B) shall then be multiplied by the Member's interest to determine the Member's "current estimated quarterly tax."
		The minimum distribution shall be further adjusted by the Member's prior year final tax liability, within the Member's discretion. Accordingly, the minimum distributions shall occur on the following dates and be determined as follows:
Date			Minimum Distribution
April 1^st, current year			Greater of the current estimated quarterly tax or 25% of the Member's prior year final tax liability
June 1^st, current year			Greater of the current estimated quarterly tax or 25% of the Member's prior year final tax liability
September 1^st, current year			Greater of the current estimated quarterly tax or 25% of the Member's prior year final tax liability
December 31^st, current year			Greater of the current estimated quarterly tax or 25% of the Member's prior year final tax liability
March 15^th, following year (year-end)			Balance of Members tax liability as calculated in above subparagraphs (A), (B), and (C) as applied to Odyssey's actual taxable income for the current year.
		If any of the above minimum distributions are not withdrawn on its respective date, the amount of the minimum distribution not withdrawn can be added to a subsequent quarterly minimum distribution or the year-end minimum distribution, and withdrawn upon the above respective date. However, a Member shall not carry-over to the following year any minimum distribution that the Member fails to withdraw. Therefore, any minimum distribution not timely withdrawn by the Member for the current year will remain in the Member's capital account and will not be used to increase the Member's minimum distribution for the following year.
4.7		Limitation on Distributions. No Member shall be entitled to a distribution pursuant to Section 4.5, if after giving effect to the distribution, Odyssey would not be able to pay its debts as they become due in the usual course of business, or if Odyssey's total assets would be less than the sum of its total liabilities. A determination that a distribution is not prohibited und this subsection or the Act may be based either on financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances or
12

(ii)	Any merger, consolidation, dissolution or winding-up of Odyssey; and
(iii)	Any discretion distributions as listed in Section 4.5.
(C)		Notwithstanding any other provision of this Agreement and in enlargement of the laws of Pennsylvania, the actions of Odyssey enumerated below in this subsection (C) may be taken only upon the majority consent of all of the Members. The actions requiring such approvals are:
(i)	Any private network contracts with unrelated Member in excess of $1 million;
(ii)	The creation of any lien or encumbrance on the property of Odyssey in excess of $50,000;
(iii)	any voluntary dissolution or termination of tax status of Odyssey;
(iv)	the adoption of an annual budget, prepared by the Operating Committee, for Odyssey in accordance with the provisions of Section 11.4 and any modification to such annual budget;
(v)	the incurrence of any indebtedness by, or expenditure of any funds of, Odyssey in excess of the amount set forth in the approved annual budget.
5.2			Board Meetings.
(A)		All members or their designee shall be present via telephone, cell phone, etc. at a meeting of the Board. The Chairperson of the Board or any Manger shall convene a meeting of the Board by sending a written convening notice, together with a proposed agenda, to the other Managers at least five (5) business days before the date of the meeting. The Board shall meet at least once each quarter at the offices of Odyssey or such other place as shall be specified or fixed in the notice of meeting. The Managers may waive notice convening a meeting of the Board. The presence of the Managers is equivalent to a waiver of the convening notice unless they are attending to object that the meeting was not properly convened.
(B)		Action may be taken by the Board without a meeting, without prior notice if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers entitled to vote.
(C)		THE chairperson shall cause written minutes to be prepared of all action taken by the Operating Committee and shall deliver a copy thereof to each Manager and Member within thirty (30) days after each meeting.
5.3			Appointment of Committees and Officers.
(A)		The Board in its sole discretion may from time to time establish committees to advise and/or research and review those matters and exercise those powers
14

		determined by the Board in establishing such committee. Unless otherwise specified in the writing designating the committee. A simple majority of the members of the Board may select its Chairman, fix its rules of procedure, fix the time and place of meetings and specify what notice of meeting, if any, shall be given.
(B)		Officers Appointed.
(i)	Except as otherwise provided herein: (A) The officers of Odyssey shall be selected by super majority consent of the Board and shall consist of a President, a Secretary, and a Treasurer and such other officers or agents as the Board may deem necessary, each of whom shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board and until their successors are appointed and qualified, (B) any officer or agent selected or appointed by the Board may be removed at any time, with or without cause, by unanimous consent of the Board; and (C) any vacancy occurring in any office of Odyssey from whatever cause may be filled by super majority action of the Board. The same person may hold any number of offices.
(ii)	The designated Executives shall have general day-to-day responsibility for Odyssey as outlined in 5.4 and shall see that all orders and resolutions of the Members are carried into effect.
(iii)	The Secretary shall attend all meetings for the Board and Operating Committee and record all the proceedings and actions of the Board and Operating Committee in a book to be kept for that purpose. He/She shall give, or cause to be given, notice of all meetings of the Board and Operating Committee, and shall perform such other duties as may be prescribed by the Board or Operating Committee.
(iv)	The Treasurer shall have the custody of Odyssey funds and properties and shall keep full and accurate accounts of receipts and disbursements in books belonging to Odyssey and shall deposit all moneys and other valuable effects in the name and to the credit of Odyssey in such depositories as may be designated by the Operating Committee. He/She shall disburse the funds of Odyssey as may be ordered by the Operating Committee, taking proper vouchers for such disbursements, and shall render to the Chairperson, the President and the Operating Committee, when the Board and/or Operating Committee so requires, an accounting of all transactions as Treasurer and of the financial condition of Odyssey. If required by the Board and/or Operating Committee, he/she shall give Odyssey a bond in such sum and with such surety or sureties as shall be satisfactory to the Board and/or Operating Committee for the faithful performance of the duties of this office, of all books, papers, vouchers, money and other pro perty of whatever kind in his/her possession or under his/her control belonging to Odyssey.
(v)	The Board may elect or appoint such other officers, including, without
15

	limitation, one or more Vice Presidents and one or more Assistant Treasurers and Assistant Secretaries, as it may deem necessary or appropriate from time to time.
5.4			Operating Committee.
(A)		The Operating Committee shall consist of three (3) Persons. Each Member shall be entitled to name one person ("Managers") to the Operating Committee. The initial Managers will be the Vice President of Allegheny Communications Connect, or his designee, Alex P. Yawny and Joseph M. Opferman, or their designees. Each Manager shall be an employee of a Member or its Parent or a Member. Vacancies on the Operating Committee shall be filled by the Member that appointed (an/or employed) the Manager previously holding the position which is then vacant. If a Member leaves the company and there are only two (2) Members remaining, a replacement Person will be selected by remaining Managers. The Managers shall select a Chairperson from among themselves, The Chairperson shall perform the duties set forth in this Agreement, and as designated by the Operating Committee from time to time.
(B)		Each Manager, including the Chairperson, shall be entitled to case one vote with respect to any decision made by the Operating Committee, and the decisions of the Operating Committee shall be effectuated by the affirmative unanimous vote of the Managers present at a duly convened meeting. The actions requiring such approvals, but are not limited to, are:
(i)	The hiring of any direct relation;
(ii)	The election of two (2) independent members from the community to serve on the Board of Directors.
5.5			Dealings with Controlled Persons. It is anticipated that Controlled Persons of the Members will provide certain general administrative services to Odyssey. Such services shall be provided pursuant to an Administrative Services Agreement substantially in the form attached hereto as Exhibit A. Such agreement, and any other agreement between Odyssey and Controlled Persons, shall be fully disclosed to, and approved by, the Operating Committee.
5.6			Duties and Obligations of Operating Committee.
(A)		The Operating Committee shall take all actions, which may be necessary or appropriate for the continuance of Odyssey's valid existence as a limited liability company under the laws of the Commonwealth of Pennsylvania.
(B)		The Operating Committee shall use its best efforts to meet all current and future federal income tax requirements to assure that Odyssey will not fail to be classified for federal income tax purposes as a partnership rather than as an association taxable as a corporation.
(C)		The Operating Committee shall direct the affairs of Odyssey in the best
16

	interest in Odyssey, including the safekeeping and use of all Company funds and assets (regardless of whether in the immediate possession or control of the Operating Committee) and the use thereof for the benefit of Odyssey.
(D)	The Operating Committee shall, from time to time, prepare and file any amendment to Odyssey's Certificate and any other similar documents, which are required by law to be filed and recorded for any reason in such office or offices as are required under the laws of the Commonwealth of Pennsylvania.
(E)	The Managers shall devote such time to Odyssey business as may be necessary to adequately and properly manage and supervise Odyssey business and affairs in a efficient and workmanlike manner.
5.7		Indemnifications and Insurance.
(A)	To the fullest extent permitted under applicable law, Odyssey shall severally indemnify and hold harmless any Person (an "Indemnified Party") who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action by or in the right of Odyssey) by reason of or arising from any acts or omissions (or alleged acts or omission) on behalf of Odyssey or in furtherance of the interests of Odyssey arising out of the Indemnified Party's activities as a member/owner, manager, officer, employee, trustee or agent of Odyssey against losses, damages or expenses (including reasonable attorneys' fees, judgments, fines and amounts paid in settlement) actually and reasonably incurred by such Indemnified Party in connection with such action, suit or proceeding and for which such Indemnified Party has not otherwise been reimbursed, so long as such Indemnified Party did not act in bad faith or in a manner constituting gross negligence or willful misconduct or materially breach this Agreement. The termination of any action, suit or proceeding by judgment, order, settlement or upon a plea of nolo contedere or its equivalent shall not of itself (except insofar as such judgment, order, settlement or plea shall itself specifically provide) create a presumption that the Indemnified Party acted in bad faith or in a manner constituting gross negligence or willful misconduct or materially breached this Agreement.
(B)	Without limiting the generality of the foregoing subsection (a), the parties hereto further agree that no Member or Manager shall be personally liable to Odyssey or the Members for monetary damages for breach of its or his fiduciary duty in such capacity, provided, however, that nothing herein shall eliminate or limit such liability (i) for a breach of the Member's/Manager's duty of loyalty to Odyssey or the other Members, (ii) for acts or missions not in good faith or which involve intentional misconduct or a knowing violation of the law, or (iii) for any transaction form which such Member/Manager derived an improper personal benefit.
(C)	The Operating Committee shall obtain and maintain in force such insurance as it deems necessary to protect the property of Odyssey and to protect Odyssey against liability for claims of third persons, but in not even shall the coverage be less than $3,000,000. The Company shall be a named insured on the policies obtained. Each member shall be provided with a certificate disclosing the issuance of the policy and its basic terms. No such policy shall be canceled by the Operating Committee except after it shall have given at least thirty (30) days prior written notice to the Members to that effect. Except as assumed by
17

`		Odyssey, each of the members shall be responsible for insuring itself against damages, losses and liabilities relative to its respective Membership Interest in Odyssey.
ARTICLE VI LIABILITES AND OBLIGATIONS OF MEMBERS
6.1			Limited Liability of Members. The debts, obligations and liabilities of Odyssey, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of Odyssey and no Member shall be obligated personally for any such debt, obligation or liability of Odyssey solely by reason of being a Member. This provision notwithstanding, any Member may, by any other agreement or instrument, agree to be obligated personally for any or all of the debts, obligations and liabilities of Odyssey.
6.2			Confidentiality.
(A)		For the purpose of this section 6.2 , unless the context indicates otherwise, the term "Information" means all trade secrets or confidential or proprietary information of Odyssey or of any Member or Member's affiliate revealed, directly or indirectly to one or more of the other Members during the course of this Agreement, regardless of the form in which it appears, or under which it is communicated, all copies or recordings thereof (whether or not made in accordance with this Agreement) and recordings thereof (whether or not made in accordance with this Agreement) and the content of such information, including, but not limited to, all descriptions, economic data, computer programs and models and the results therefrom.
(B)		The Members agree to keep confidential all Information, and shall not, without prior written consent of the others, disclose to any third party, firm, corporation or entity (save and except to its Controlled Persons and their respective legal counsel, accountants and consultants, provided they undertake to comply with the provisions of this Section 6.2) such Information, not shall either Member use any such Information for purposes other than the operations of Odyssey. The Members agree to use their best efforts to limit the disclosure of the Information to only those directors, officers, employees and agents (including legal counsel, accountants and consultants) who need to know such Information.
(C)		The obligations set forth in subsection (B) shall not apply to any Information which a Member can demonstrate:
(1)	Was in its possession prior to the time of disclosure; or
(2)	Was in the public domain at the time of disclosure, or subsequently become part of the public domain through no fault of the Member or any Controlled Person of such Member.
(D)		In the event that Member is legally requested or required (by oral questions, interrogatories, request for Information or documents, subpoena, civil investigative demand or similar process) to disclose any Information, it is agreed that it sill provide the other Members with prompt notice of such request prior to complying therewith so that they may seek an appropriate protective order and/or waive compliance with the Section 6.2. If in the absence of a protective order of the receipt of a waiver hereunder, a Member is nonetheless legally compelled to disclose such Information, it may disclose such Information without liability
18

	Hereunder. In addition any Member may disclose any Information if such disclosures necessary in connection with the enforcement of the rights of such Member in Odyssey hereunder.
(E)	The confidentiality obligations set forth in this Section 6.2 shall survive any termination of this Operating Agreement for a period of eighteen (18) months following the date of termination.
ARTICLE VII DISPOSITION OF MEMBERSHIP INTERESTS
7.1		General. Except with the unanimous written consent of the Board, or as otherwise permitted by this Article VII, a Member may not sell, assign, pledge, mortgage, hypothecate or otherwise transfer all or any part of its right, title or interest in Odyssey or interest arising pursuant to this Agreement, or all or any part of its right, title or interest in any evidence of indebtedness of Odyssey. No Membership Interest shall be disposed of without compliance with any and all state and federal securities laws and regulations; and unless the assignee of the Membership Interest provides Odyssey with the information agreements that the Members may require in connection with such disposition. Any attempted disposition of a Membership Interest in violation of this Article is invalid and shall be null and void.
7.2		Permitted Dispositions. Subject to the provisions of this Article VII, a Member may assign such Member's Membership Interest in Odyssey in whole or in part to a Controlled Person of such Member or to another Member, with the consent of the Board. If such assignment causes a termination of Odyssey pursuant to Code Section 708(b)(1)(B) prior to the time provide in Section 9.1, such assigning Member shall indemnify and hold harmless the other Members from any and all incremental federal, state and locate tax liability incurred by such other members that would not have been incurred except for the early termination.
7.3		Admission of Substitute Members. Except as provided in Section 7.2, an assignee of all or part of a Member's interest shall be admitted as a substitute Member and shall be entitled to the rights and powers of the assignor only if the Board unanimously consent. If admitted, the substitute Member shall have, to the extent assigned, all of the rights and powers, and shall be subject to all of the restrictions and liabilities, of a Member. As a condition precedent to any Person's becoming a substitute Member, it shall become a party hereto and shall evidence the same by executing and delivering one (or, at the request of Odyssey, more) counterparts of this Agreement.
7.4		Buy-Sell
(A)	Required Offer. A Member shall be required to first offer his interest to Odyssey and/or the remaining Members in the manner set forth below in paragraph (B) upon the occurrence of the following.
(1)	Transfer of a Member's interest.
(2)	Death of Alex P. Yawny and/or Joseph M. Opferman.
(3)	Disability of Alex P. Yawny and/or Joseph M. Opferman as defined in Section 6.2 of their respective Employment Agreements.
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(4)		Termination of Alex P. Yawny and/or Joseph M. Opferman's employment for any reason whatsoever other than death or disability.
(B)		Manner of Offer to Odyssey and Members.
(1)		Whenever an offer of a Member' s interest is required to be made in accordance with the provisions of above paragraph (A), such offer shall be given in writing to Odyssey. The offeror shall include in his or its offer to Odyssey the total interest involved, and the offeror's full name and address. Odyssey, as agent of the offeror, shall then give written notice of the offer to all Members then of record, other than the offeror, within three (3) business days after receipt of the offer. For each Member, the offer shall indicate the total interest that each Member receiving such offer shall be eligible to purchase (the interest being hereinafter called a Member's "proportionate share" which shall be based upon their current membership interest at the time of the offer).
(2)		The offeror's interest shall be offered for purchase as follows:
(i)	The remaining Members shall have the first option to purchase their proportionate share and shall communicate their acceptance of the offer in writing to Odyssey within thirty (30) days after transmission of the offer by Odyssey. An acceptance by the remaining members shall state the maximum interest each Member wishes to purchase.
(ii)	If the interest being purchased do not equal the total interests being offered, then the remaining offeror's interest shall be re-offered to the remaining Members and then Odyssey. Within three (3) business days after receipt of the written acceptances form the remaining Members and/or Odyssey, Odyssey shall give written notice of the acceptances to the offeror (or if offer is made as result of a Member's death, then the deceased member's representative).
(iii)	In the event some but not all of the offeror's interest is purchased by the remaining members, then the balance of the offeror's interest, within the total discretion of the offeror may be offered and transferred to a non-member(s) for a period of thirty (30) days after receipt of the above written acceptances, upon receipt of the written consent of the remaining Member(s).
(iv)	In the event the offeror elects not to offer the remaining interest to a non-member(s), or the remaining interest is offered to a non-member(s) and not all of the offeror's interest is being purchased, then the offeror's remaining interest shall be purchased by Odyssey.
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(3)		Any offer made in accordance with this Section shall be irrevocable during the period in which it may be accepted by either the remaining Members or Odyssey, and shall be conditioned upon the transferee agreeing in writing to be bound by all the terms and conditions of this Agreement.
(C)		Price of Member's Interest.
(1)		The purchase price for the membership interest of Alex P. Yawny and Joseph M. Opferman offered for purchase on account of their death, permanent disability, involuntary termination by Odyssey without Cause as defined on Section 6.1 of their respective Employment Agreements, or voluntary termination by the Member for Good Reason as defined in Section 6.4 of their respective Employment Agreements, shall be calculated as follows:
(i)	Odyssey shall be valued in its totality by an independent appraiser in conformity with the Business Valuation Standards of The Institute of Business Appraisers and the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation on the ending day of Odyssey's fiscal quarter preceding the offer. The appraiser selected for the valuation must be mutually acceptable by the remaining Members and the offeror (or if the offer is made as a result of a Member's death, then the deceased Member's representative) by majority vote.
(ii)	The price of the offeror's membership interest shall be calculated by multiplying the above appraised value by the membership interest percentage being purchased.
(2)		The purchase price for the membership interest of Alex P. Yawny and Joseph M. Opferman offered for purchase on account of desire to transfer some or all of their interest, involuntary termination by Odyssey for Cause as defined in Section 6.4 of their respective Employment Agreements, or voluntary termination by the Member other than for Good Reason as defined in Section 6.4 of their respective Employment Agreements, shall be the greater of the following:
(i)	The offeror's capital account balance on the ending day of Odyssey's fiscal quarter preceding the offer; or
(ii)	The purchase price calculated in above paragraph (c)(1) reduced as follows should an offer be made prior to July 1, 2004:
			Offer Made Reduction Before 07/01/01 80% After 06/30/01 but
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		Before 07/01/02 60% After 06/30/02 but Before 07/01/03 40% After 06/30/03 but Before 07/01/04 20% After 06/30/04 0%
(3)	The purchase price for the membership interest of Allegheny Communications Connect, Inc. offered for purchase on account of their desire to transfer some or all of its interest, shall be the price calculated in above paragraph (C)(1).
(D)			Closing for Purchase of Offeror's Interest. The closing shall occur within forty-five (45) days after the offeror has received written notice of the remaining members' acceptances from Odyssey.
(E)			Payment for Offeror's Interest. At the closing, the remaining Members and/or Odyssey shall pay the purchase price calculated in above paragraph (C) to the offeror (or if the offer is made as a result of a Member's death, then the deceased Member's representative) by cashier's check or wire transfer of immediately available funds to the account designated in writing by the offeror.
ARTICLE VIII. BOOKS OF ACCOUNT, RECORDS AND REPORTS
8.1			Accounting. The Operating Committee shall designate a Member or Members to maintain proper and complete records and books of account, as required by the Act, in which shall be entered fully and accurately all transactions and other matters relative to Odyssey's business as are usually entered into records and books of account maintained by Persons engaged in businesses of like character. The Company books and records shall be prepared in accordance with generally accepted accounting principles consistently applied; and they shall at all times be maintained at the Registered Office of Odyssey and shall be open to the inspection and examination of the Members or their duly authorized representatives upon reasonable notice during regular business hours at the sole cost and expense of the examining Member.
8.2			Reports. As soon as practicable, but no later than the 30^th day after the end of each month, the Operating Committee shall send to the Members: (1) Statements of Income; and (2) a report summarizing the fees, distributions and other remuneration or compensation paid by Odyssey for such month to any Members or their respective Controlled Persons. As soon as practicable, but no later than the 60^th day after the end of each of the first three fiscal quarters of each fiscal year, and no later than the 60^th day after the close of the fiscal year, the Operating Committee shall send to the Members. (1) a balance sheet as of the end of such fiscal period and statements of income and Members' equity of such fiscal period, all of which shall be prepared in accordance with generally accepted accounting principles: (2)a cash flow statement; and (3) a report summarizing the fees, distributions and other remuneration or compensation paid by
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(A)		Any notice, request, consent, offer or demand required or permitted to be given under this Limited Liability Company Agreement shall be in writing and shall either be delivered in person or mailed by first class mail, postage prepaid, or sent by telex, telecopy or telegram, addressed to the Member at the addresses set forth in 12.2 (B).
(B)		Any notice, request, consent, offer or demand shall be deemed received, given or served, if mailed by first class mail, on the 3^rd day after the day of mailing; if sent by telecopy or telegram, 24 hours after the time of dispatch, provided that such telecopy or telegram is confirmed as being delivered; and if sent by a nationally recognized overnight courier, on the 2^nd day after the date of mailing.
(a)	If to Buyer, to it at: Allegheny Communications Connect, inc. R.R. 12, Box 1000 Roseytown Road Greensburg, PA 15601 Attention: John W. Flinko with a copy to: Allegheny Energy, Inc. 10435 Downsville Pike Hagerstown, MD 21740-1766 Attention: Anthony Wilson, Esq.
(b)	If to Seller, to it at: Odyssey Communications, LLC R.R. 12, Box 1000 Roseytown Road Greensburg, PA 15601 Attention: Alex P. Yawny Joseph M. Opferman with a copy to: Schiffman & Wojdowski 1300 Fifth Avenue Pittsburgh, PA 15219-6270 Attention: Wayne M. Chiurazzi, Esq.
12.3			Agreement for Further Execution. As soon as practicable after being requested by the Board to do so, the Members agree to sign, swear to or acknowledge the Certificate required by the Act; to sign, swear to, or acknowledge any amendment or cancellation as required by law; to sign, swear to or acknowledge similar certificates of affidavits or certificates of fictitious firm name, trade name or the like (and any amendments or cancellations thereof) required by the laws of Pennsylvania; and to cause the filing of any of the same for record wherever such filing shall be required by law.
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Section 9.	DEPUTY OFFICERS	12
Section 10.	ASSISTANT OFFICERS	13
ARTICLE VI INDEMNIFICATION			13
Section 1.	DEFINITIONS FOR INDEMNIFICATION PROVISIONS	13
Section 2.	MANDATORY INDEMNIFICATION AGAINST EXPENSES	14
Section 3.	AUTHORITY FOR PERMISSIVE INDEMNIFICATION	14
Section 4.	DETERMINATION AND AUTHORIZATION OF PERMITTED INDEMNIFICATION	15
Section 5.	SHAREHOLDER APPROVED INDEMNIFICATION	15
Section 6.	ADVANCES FOR EXPENSES	16
Section 7.	INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS	17
Section 8.	INSURANCE	17
Section 9.	EXPENSES FOR APPEARANCE AS WITNESS	17
ARTICLE VII REIMBURSEMENT OF NONDEDUCTIBLE PAYMENTS TO OFFICER AND EMPLOYEES			17
ARTICLE VIII FISCAL YEAR			18
ARTICLE IX ANNUAL STATEMENTS			18
ARTICLE X CAPITAL STOCK			19
Section 1.	FORM	19
Section 2.	TRANSFER	19
Section 3.	RIGHTS OF HOLDER	19
Section 4.	LOST OR DESTROYED CERTIFICATES	20
ARTICLE XI SEAL			20
ARTICLE XII REGISTERED OFFICE AND REGISTERED AGENT			20
ARTICLE XIII AMENDMENTS			20
Section 1.	AMENDMENTS GENERALLY	20
Section 2.	BYLAW INCREASING QUORUM OR VOTING REQUIREMENTS	21

(3)	Exercise any authority which the Board may have to amend the Articles of Incorporation;
(4)	Adopt, amend, or repeal bylaws; or
(5)	Approve a plan of merger not requiring shareholder approval.
Section 12.		ACTION WITHOUT FORMA MEETING. Except as expressly otherwise provided in the Articles of Incorporation, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if written consent thereto (which may take the form of one or more counterparts) is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board or committee. A consent executed in accordance herewith has the effect of a meeting vote and may be described as such in any document.
Section 13.		CONFERENCE CALL MEETINGS. Members of the Board, or any committee of the Board, may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can simultaneously hear each other during the meeting, and participation in a meeting pursuant to this Section shall constitute presence in person at such meeting.
ARTICLE V.
OFFICERS
Section 1.		GENERALLY. The Board shall from time to time elect or appoint such officers as it shall deem necessary or appropriate to the management and operation of the Corporation, which officers shall hold their offices for such terms as shall be determined by the Board and shall exercise such powers and perform such duties as are specified in these Bylaws or in a resolution of the Board. Except as specifically otherwise provided in resolutions of the Board, the following requirements shall apply to election or appointment of officers:
(a)		The corporation shall have, at a minimum, the following officers, which officers shall bear the titles designated therefor by resolution of the Board, but in the absence of such designation shall bear the titles set forth below:
TITLE President Treasurer Secretary
(b)		All officers of the Corporation shall serve at the pleasure of the Board, and in the absence of specification otherwise in a resolution of the Board, each officer shall be elected to serve until the next succeeding annual meeting of the Board and the election and qualification of his successor, subject to his earlier death, resignation or removal.
(c)		Any person may hold two or more offices simultaneously, and no officer need be a Shareholder of the Corporation.
(d)		If so provided by resolution of the Board, any officer may be delegated the authority to appoint one or more officers or assistant officers, which appointed officers or assistant officers shall have the duties and powers specified in the resolution of the Board.
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(B)	If a quorum of the Bard cannot be obtained under paragraph (1) of this subsection and a committee cannot be designated under paragraph (2) of this subsection, selected by majority vote of the full Board (in which directors who are parties may participate); or
(4)			By the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination.
(c)				Authorization of indemnification or an obligation to indemnify and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, as set forth in subsection (b) hereof, except that if such determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled to select counsel under paragraph (3) of subsection (b) of this Section 4.
Section 5				SHAREHOLDER-APPROVED INDEMNIFICATION.
(a)				Without regard to any limitations contained in any other section of this Article VI, the Corporation may, if authorized by its shareholders by a majority of votes which would be entitled to be cast in a vote to amend the Corporation's Articles of Incorporation (which authorization may take the form of an amendment to the Articles of Incorporation or a contract, resolution or bylaw approved or ratified by the requisite shareholder vote), indemnify or obligate itself to indemnify a director made a party to a proceeding, including a proceeding brought by or in the right of the Corporation.
(b)				The Corporation shall not indemnify a director unless this Section 5 for any liability incurred in a proceeding in which the director is adjudged liable to the Corporation or is subject to injunctive relief in favor of the Corporation.
(1)		For any appropriation, in violation of his duties, or any business opportunity of the Corporation:
(2)		For acts or omissions which involve intentional misconduct or a knowing violation of law;
(3)		For any type of liability for unlawful distribution under Section 14-2-832 of the Code, or any successor statute; or
(4)		For any transaction from which he received an improper personal benefit,
(c)				Where approved or authorized in the manner described in subsection (a) of this Section 5, the Corporation may advance or reimburse expenses incurred in advance of final disposition of the proceeding only if:
(1)		The director furnishes the Corporation a written affirmation of his good faith belief that his conduct does not constitute behavior of the kind described in subsection (b) of this Section 5; and
(2)		The director furnishes the Corporation a written undertaking, executed personally or on his behalf, to repay any advances if it is ultimately determined that he is not entitled to indemnification under this Section 5.
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