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U.S. Securities and Exchange Commission


(Release No. 35-27847)

Filings Under the Public Utility Holding Company Act of 1935, as amended ("Act")

May 21, 2004

Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendment(s) is/are available for public inspection through the Commission's Branch of Public Reference.

Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by June 15, 2004, to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549-0609, and serve a copy on the relevant applicant(s) and/or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of facts or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After June 15, 2004, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.

Connecticut Light and Power Company, et al. (70-9905)

The Connecticut Light and Power Company ("CL&P"), a wholly owned electric utility subsidiary of Northeast Utilities, a public utility holding company, and CL&P Receivables Corporation ("CRC"), a wholly-owned special purpose subsidiary of CL&P, both located at 107 Selden Street, Berlin, Connecticut 06037-5457, have filed a declaration under section 12(c) and rules 46 and 54 of the Act.

By orders dated September 29, 1997 and October 15, 2001 (Holding Co. Act Release Nos. 26761 and 27453) ("Orders"), the Commission authorized CL&P to organize CRC to engage in an accounts receivable purchase and sale program through July 8, 2004, and to, among other things, permit CRC to pay CL&P dividends out of capital from time-to-time to achieve the optimum balance of capital to achieve economic efficiency ("Program"). CL&P and CRC now propose to extend the Program through July 3, 2007, under the same terms and conditions.

The Program consists of two agreements. Under the first agreement, between CL&P and CRC ("Company Agreement"), CL&P sells or transfers as equity contributions from time-to-time all eligible categories of its billed and unbilled accounts received ("Receivables") and related assets ("Related Assets") to CRC. The purchase price paid by CRC for any Receivables and Related Assets takes into account historical loss statistics on CL&P's receivables pool and the purchaser's ("Purchaser") cost of funds. Under the second agreement ("CRC Agreement"), CRC sells fractional undivided interests ("Receivable Interests") in the Receivables to the Purchaser from time-to-time.

The availability of Receivables and Related Assets varies from time-to-time in accordance with electric energy use by CL&P's customers. As a result of this and certain other factors, the funds CRC has available to make a purchase at any time may not match the cost of Receivables and Related Assets available. The Program includes certain mechanisms to accommodate this mismatch. When the amount of Receivables and Related Assets originated by CL&P exceeds the amount of cash CRC has available, either CRC will make the purchase and owe the balance of the purchase price to CL&P on a deferred basis (the unpaid portion will accrue interest or the purchase price will involve a discount to reflect the deferral), or CL&P will make a capital contribution to CRC in the form of the Receivables and Related Assets for which CRC lacks purchase price funds at that time. Conversely, if CRC develops a substantial cash balance (due to collections of previously transferred Receivables exceeding the balance of newly created Receivables available for purchase), CRC will likely dividend the excess cash to CL&P. These dividends may represent a return of previous capital contributions by CL&P to CRC. Through these mechanisms, CRC does not itself retain substantial cash balances at any time and substantially all cash realized from the collection of the Receivables (net of the costs of the program and any reductions in the outstanding balance of Receivable Interests) is made available to CL&P.

CL&P and CRC will continue to be obligated to reimburse the Purchaser and its agent ("Agent") for various costs and expenses associated with the Company Agreement and the CRC Agreement upon extension of the Program. CRC will also continue to be required to pay to the Agent certain fees for services in connection with these agreements.

CL&P is working with the parties to the agreements to extend the Program through July 3, 2007. CRC may, following written notice to the Agent, terminate in whole or reduce in part the unused portion of its purchase limit in accordance with the terms and conditions of the CRC Agreement. The CRC Agreement allows the Purchaser to assign all of its rights and obligations under the CRC Agreement (including its Receivable Interests and the obligations to fund Receivable Interests) to other persons. However, any assignment will not change the nature of the obligations of CL&P or CRC under the Company Agreement and the CRC Agreement.

Allegheny Energy Inc. (70-10178)

Allegheny Energy Inc. ("Allegheny"), a registered holding company, 10435 Downsville Pike, Hagerstown, Maryland 21740, has filed an application-declaration ("Application") under sections 6(a)2 and 7 of the Act and rule 54 under the Act.

Allegheny proposes to eliminate a stockholder protection rights plan ("Plan") previously authorized by the Commission by order dated July 23, 1999 (Holding Co. Act Release No. 27052) ("Plan Order"). Under the Plan, the Allegheny Board of Directors ("Board") declared a dividend of one right ("Right") for each outstanding share of Allegheny common stock, par value $1.25 per share ("Common Stock"), payable to all stockholders of record on May 16, 2000. Allegheny now proposes to eliminate these Rights and terminate the Plan.

Allegheny initially adopted the Plan in order to discourage abusive takeover tactics and to ensure that each shareholder is treated fairly in any transaction involving an acquisition of control over Allegheny. The Plan was implemented according to a rights agreement ("Rights Agreement") between Allegheny and ChaseMellon Shareholder Services, Inc. ("Rights Agent"). In particular, the Rights Agreement was designed to create the possibility that Allegheny's stockholders, by exercising their Rights, would be able to increase substantially the cost of acquiring more than 15% of Allegheny's outstanding Common Stock.

Shareholder proposals were submitted at Allegheny's annual meetings in May of 2001 and 2002, seeking to make the adoption or maintenance of a "poison pill" subject to shareholder approval. Each year, the proposal received the affirmative vote of more than 50 percent of the votes cast; therefore, the Nominating and Corporate Governance Committee of the Board reconsidered the appropriateness of the Plan and, in July 2003, recommended to the Board that the Rights and the Plan be terminated. The Board approved that recommendation.

I. Description of Rights Being Eliminated.

A. Exercise Price.

The Rights created under the Rights Agreement entitle the holders to purchase one share of Common Stock at a pre-determined exercise price ("Exercise Price"), subject to adjustment. The Rights, currently held by owners of Allegheny's Common Stock, are not exercisable and cannot be traded without the outstanding shares of Common Stock until the occurrence of a triggering event, which is described below. At that time, the Rights would become exercisable and certificates ("Rights Certificates") representing the Rights would be distributed and would be traded independently of outstanding shares. However, the Rights would not entitle the holder to make a discounted purchase of shares of Allegheny's Common Stock or of the common stock of the person acquiring Allegheny until the occurrence of a Flip-in or Flip-over event, which are described below.

B. Triggering Events.

The Rights Agreement provides that the Rights will not become exercisable (i.e., Common Stock could not be purchased at the Exercise Price) until the earlier of (i) the first date, or a later date as the Board may from time to time fix, of public announcement by Allegheny that any person or group ("Acquiring Person") acquires beneficial ownership of 15% or more of Allegheny's outstanding Common Stock ("Flip-in Date") and (ii) 10 days (unless extended by the Board) after any person or group commences a tender or exchange offer which would, upon its consummation, result in that person or group becoming an Acquiring Person ("Flip-over Trigger").

C. Flip-in.

Upon the occurrence of a Flip-in Date, the holders of the Rights, other than an Acquiring Person and certain transferees, whose Rights will become void, would immediately have the right to receive, for each Right exercised, Common Stock having a market value equal to two times the Exercise Price then in effect. At its option, the Board may, at any time after the Flip-In Date but before the acquirer acquires more than 50% of Common Stock, elect to exchange all Rights which have not become null for Common Stock at a ratio of one share for each Right.

D. Flip-over.

On or after the Flip-in Date, and prior to (i) Allegheny being acquired by another person or entity not controlled by Allegheny ("Acquirer") in a merger or other business combination transaction in which the Common Stock is exchanged for securities or other property and the Acquirer receives different treatment than all other holders of Common Stock, or (ii) 50% or more of Allegheny's consolidated assets or earnings power being sold or transferred to an Acquirer, Allegheny is obligated under the Plan to enter into a supplemental agreement with the Acquirer for the benefit of the holders of the Rights providing that each holder of a Right (except Rights which previously were to be voided as set forth above) would be entitled to receive, for each Right exercised, common stock of the Acquirer having a market value equal to two times the Exercise Price then in effect.

E. Redemption of Rights.

The Rights could be redeemed, as a whole, at the discretion of the Board, at a Redemption Price of $.01 per Right, subject to adjustment. The Redemption Price shall be paid, at Allegheny's option, in cash, shares of Common Stock or other equivalent Allegheny securities, at any time prior to the close of business on the date that any person became an Acquiring Person. The Rights expire at the close of business 10 years from the date of the Rights Agreement, unless earlier redeemed or exchanged by Allegheny as described below.

F. Exchange of Shares for Rights.

At any time after a Flip-in Date and prior to the time that any person (other than Allegheny and certain related entities), together with its affiliates and associates, become the beneficial owner of 50% or more of the outstanding shares of Common Stock, the Board could direct the exchange of shares of Common Stock for all of the Rights (other than Rights which have become void) at the exchange ratio of one share of Common Stock per Right, subject to adjustment.

G. Adjustment to Exercise Price.

The Exercise Price payable and the number of shares of Common Stock (or other securities, as the case may be) issuable upon exercise of the Rights were subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision or combination of, the Common Stock, or (ii) upon the distribution to holders of the Common Stock of securities or assets (excluding regular periodic cash dividends) whether by dividend, reclassification, recapitalization or otherwise.

H. Termination of the Plan and the Rights Agreement.

The Plan provides that Allegheny may amend the Plan without the approval of any holders of Rights prior to the Flip-In Date. Since Allegheny no longer intends that the Rights be exercisable under the Plan or the Rights Agreement, Allegheny proposes to terminate the Rights by notice to the Rights Agent as provided in Amendment 1 to the Plan. Upon the termination of the Rights, the Plan and the Rights Agreement will be terminated. To the extent required under the Act, Allegheny requests authorization to terminate the Rights, the Plan, and the Rights Agreement.

For the Commission, by the Division of Investment Management, pursuant to delegated authority.

Margaret H. McFarland
Deputy Secretary


Modified: 10/30/2001