****Exhibit**10.16AMENDMENT TO SEVERANCE AGREEMENT          WHEREAS, Allegheny Energy Service Corporation for itself and as agent for its parent,Allegheny Energy, Inc., the affiliates and subsidiaries of AESC and AEI, and any successors orassigns of any of the foregoing previously entered into that certain employment agreement withDavid E. Flitman (the “Executive”) dated August 3, 2006 (the “Agreement”).          WHEREAS, effective as of November 1, 2007, the parties desire to amend the Agreement to complywith certain changes in applicable law.          NOW, THEREFORE, in consideration of the covenants contained herein, and for other good andvaluable consideration, the parties hereto agree as follows:     1. A new paragraph is added to the end of the Agreement to read as follows:     “AESC shall be entitled to withhold from payments due hereunder any required federal,state or local withholding or other taxes. To the extent that any amounts payable to youunder the Agreement are subject to Section 409A(a)(2)(B) of the Code, any requirements thatsuch amounts be paid promptly shall not apply and instead such amounts shall be paid in a lumpsum as of the date six (6) months after the date of termination. The Agreement shall beinterpreted to avoid any penalty sanctions under Section 409A of the Code. If any payment orbenefit cannot be provided or made at the time specified herein without incurring sanctionsunder Section 409A of the Code, then such benefit or payment shall be provided in full at theearliest time thereafter when such sanctions will not be imposed. For purposes of Section409A of the Code, each payment made under the Agreement shall be treated as a separate paymentand any payment to be made upon a termination of employment under the Agreement may only bemade if such termination of employment constitutes a “separation from service” as determinedunder Section 409A of the Code and its corresponding regulations and related guidance. Allreimbursements and in-kind benefits provided under the Agreement shall be made or provided inaccordance with the requirements of Section 409A of the Code, including, where applicable, therequirement that (i) any reimbursement is for expenses incurred during your lifetime (orduring a shorter period of time specified in the Agreement), (ii) the amount of expenseseligible for reimbursement, or in-kind benefits provided, during a calendar year may notaffect the expenses eligible for reimbursement, or in-kind benefits to be provided, in anyother calendar year, (iii) the reimbursement of an eligible expense will be made on or beforethe last day of the calendar year following the year in which the expense is incurred, and(iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchangefor another benefit.”          IN WITNESS WHEREOF, the parties hereto have caused the Amendment to be executed as of the datefirst above written.
 

 
     Allegheny Energy Service Corporation       By: /s/ Paul J. Evanson          Paul J. Evanson    Chairman, President, and    Chief Executive Officer            Allegheny Energy, Inc.       By: /s/ Paul J. Evanson          Paul J. Evanson    Chairman, President, and    Chief Executive Officer                 AGREED AND ACCEPTED:       /s/ David E. Flitman     David E. Flitman       
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