AMENDED AND RESTATED

                                     BY-LAWS

                                       OF

                           PENNSYLVANIA POWER COMPANY

                           (Effective March 15, 2002)


                            MEETINGS OF STOCKHOLDERS

Section 1.  Annual Meetings.
----------  ----------------

      The annual meeting of stockholders  shall be held on such date and at such
time as the Board of Directors  may  determine  each year.  Such meetings may be
held within or without the  Commonwealth  of Pennsylvania at such time and place
as the directors may determine.

Section 2.  Special Meetings.
----------  -----------------

      Special  meetings of the stockholders may be called at any time by (i) the
Chairman of the Board, (ii) the President,  (iii) the Directors,  by action at a
meeting or a majority of the  Directors  acting  without a meeting,  or (iv) the
holders of 25% or more of the outstanding shares entitled to vote thereat.  Such
meetings may be held within or without the  Commonwealth of Pennsylvania at such
time and place as may be specified in the notice thereof.

Section 3.  Notice of Meetings.
----------  -------------------

      Written  notice of every  annual or special  meeting  of the  stockholders
stating the time,  place and purposes thereof shall be given to each stockholder
entitled  to notice as  provided  by law,  not less than seven (7) nor more than
sixty (60) days before the date of the  meeting.  Such notice may be given by or
at the  direction of the Chairman of the Board,  the  President or the Corporate
Secretary.  Except to the full extent that notice is legally  permitted  (now or
hereafter)  to be  given  by any  other  form of  media,  including  any form of
electronic or other  communications,  notice shall be given by personal delivery
or by mail addressed to the stockholder at his last address as it appears on the
records of the  Corporation.  Any stockholder may waive in writing notice of any
meeting,  either before or after the holding of such meeting,  and, by attending
any meeting  without  protesting the lack of proper  notice,  shall be deemed to
have waived notice thereof.


<PAGE>


Section 4.  Business Transacted at Meetings.
----------  --------------------------------

      Business  transacted at any special meeting of  stockholders  shall be for
the purposes stated in the notice.

Section 5.  Quorum and Adjournments.
----------  ------------------------

      The holders of a majority of the stock issued and outstanding and entitled
to vote thereat,  present in person or represented by proxy,  shall constitute a
quorum at all  meetings  of the  stockholders  for the  transaction  of business
except as otherwise provided by statute or by the Articles of Incorporation. If,
however,  such quorum shall not be present or  represented at any meeting of the
stockholders,  the stockholders  entitled to vote thereat,  present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than  announcement at the meeting,  until a quorum shall be
present or  represented.  At such  adjourned  meeting at which a quorum shall be
present or  represented,  any business may be  transacted  which might have been
transacted at the meeting as originally notified.

Section 6.  Required Vote; Inspectors.
----------  --------------------------

      (a) When a quorum is present or  represented  at any meeting,  the vote of
the holders of a majority of the stock having  voting power present in person or
represented  by proxy shall decide any  question  brought  before such  meeting,
unless the question is one upon which by express provision of the statutes or of
the Articles of  Incorporation  a different  vote is required in which case such
express provision shall govern and control the decision of such question.

      (b)   Inspectors  of election  may be appointed to act at any meeting of
stockholders in accordance with Pennsylvania law.

Section 7.  Voting Power of Stockholders.
----------  -----------------------------

      (a) Every  stockholder of record of the  Corporation  shall be entitled at
each  meeting of  stockholders  to one vote for each share of stock held by such
stockholder  according  to the books of the  Corporation  as of the date of such
vote or, if a record  date is set by the Board of  Directors,  as of such record
date.

      (b) Whenever the right shall have accrued to the holders of the  Preferred
Stock to elect Directors,  voting separately as a class, the terms of office, as
Directors,  of all persons who may be Directors of the  Corporation  at the time
shall terminate upon the election of a majority of the Board of Directors by the
holders of the Preferred  Stock,  except that if the holders of the Common Stock
shall not have elected the remaining  Directors of the  Corporation,  then,  and
only in that event, the Directors of the Corporation in office just prior to the
election of a majority of the Board of Directors by the holders of the Preferred
Stock shall elect the remaining  Directors of the Corporation.  Thereafter while
the majority of the Board of  Directors  is being  elected by the holders of the
Preferred  Stock,  the  remaining  Directors,  whether  elected by  Directors as
provided  above or whether  originally  or later  elected by the  holders of the
Common Stock, shall continue in office until their successors are elected by the
holders of the Common Stock.


<PAGE>


      Whenever  the right  shall have  accrued to the  holders of the  Preferred
Stock to elect Directors,  voting separately as a class, it shall be the duty of
the President, a Vice President or the Corporate Secretary of the Corporation to
call and cause  notice  to be given to the  stockholders  entitled  to vote at a
meeting to be held at such time as the Corporation's  officers may fix, not less
than  forty-five  nor more than sixty days after the accrual of such right,  for
the purpose of electing  Directors.  The notice so given shall be mailed to each
holder of record of the Preferred  Stock at his last known address  appearing on
the books of the Corporation and shall set forth,  among other things:  (i) that
by reason of the fact  that  dividends  payable  on the  Preferred  Stock are in
default in an amount  equal to four full  quarterly  payments or more per share,
the holders of the Preferred Stock, voting separately as a class, have the right
to elect the smallest number of Directors  necessary to constitute a majority of
the full  Board of  Directors  of the  Corporation,  (ii) that any holder of the
Preferred  Stock has the right,  at any  reasonable  time, to inspect,  and make
copies of, the list or lists of holders of the Preferred Stock maintained at the
principal  office of the  Corporation  or at the office of any Transfer Agent of
the  Preferred  Stock,  and (iii) either the  entirety of this  paragraph or the
substance  thereof with respect to the number of shares of the  Preferred  Stock
required to be represented at any meeting,  or adjournment  thereof,  called for
the  election  of  Directors  of  the  Corporation.  At  the  first  meeting  of
stockholders held for the purpose of electing  Directors during such time as the
holders of the Preferred Stock shall have the special right,  voting  separately
as a class,  to elect  Directors,  the  presence  in  person  or by proxy of the
holders of a majority  of the  outstanding  Common  Stock  shall be  required to
constitute  a quorum  of such  class  for the  election  of  Directors,  and the
presence in person or by proxy of the  holders of a majority of the  outstanding
Preferred  Stock shall be required to  constitute a quorum of such class for the
election of Directors; provided, however, that in the absence of a quorum of the
holders of the Preferred  Stock,  no election of Directors  shall be held, but a
majority of the holders of the  Preferred  Stock who are present in person or by
proxy shall have power to adjourn the  election of the  Directors  to a date not
less than fifteen nor more than fifty days from the giving of the notice of such
adjourned meeting provided below; and provided,  further, that at such adjourned
meeting,  the  presence  in  person  or by  proxy of the  holders  of 35% of the
outstanding  Preferred  Stock shall be required to  constitute  a quorum of such
class  for the  election  of  Directors.  In the event  such  first  meeting  of
stockholders  shall be so adjourned,  it shall be the duty of the  President,  a
Vice President or the Corporate  Secretary of the  Corporation,  within ten days
from the date on which such first  meeting shall have been  adjourned,  to cause
notice of such  adjourned  meeting to be given to the  stockholders  entitled to
vote thereat,  such adjourned  meeting to be held not less than fifteen days nor
more than fifty days from the giving of such second  notice.  Such second notice
shall be given in the form and manner  provided above with respect to the notice
required to be given of such first  meeting of  stockholders,  and shall further
set forth that a quorum  was not  present  at such  first  meeting  and that the
holders  of 35%  of  the  outstanding  Preferred  Stock  shall  be  required  to
constitute  a  quorum  of such  class  for the  election  of  Directors  at such
adjourned  meeting.  If the requisite  quorum of holders of the Preferred  Stock
shall not be  present  at said  adjourned  meeting,  then the  Directors  of the
Corporation  then in office shall remain in office until the next annual meeting
of the  Corporation,  or  special  meeting  in lieu  thereof,  and  until  their
successors shall have been elected and shall qualify. Neither such first meeting
nor such adjourned meeting shall be held on a date within sixty days of the date
of the next  annual  meeting  of the  Corporation  or  special  meeting  in lieu


<PAGE>


thereof.  At each annual meeting of the Corporation,  or special meeting in lieu
thereof,  held during such time as the holders of the  Preferred  Stock,  voting
separately as a class,  shall have the right to elect a majority of the Board of
Directors,  the foregoing  provisions of this paragraph shall govern such annual
meeting,  or  special  meeting in lieu  thereof,  as if said  annual  meeting or
special meeting were the first meeting of  stockholders  held for the purpose of
electing Directors after the right of the holders of the Preferred Stock, voting
separately  as a class,  to elect a majority of the Board of  Directors,  should
have accrued,  with the exception that if, at any adjourned  annual meeting,  or
special meeting in lieu thereof,  35% of the outstanding  Preferred Stock is not
present in person or by proxy,  all the Directors  shall be elected by a vote of
the  holders of a majority  of the Common  Stock of the  Corporation  present or
represented at the meeting.  For the purposes of the foregoing  provisions,  the
Preferred Stock of all classes shall be deemed to be a single class.

      Any vacancy in the Board of Directors occurring during any period that the
Preferred  Stock  shall have  representatives  on the Board shall be filled by a
majority  vote of the  remaining  Directors  representing  the  class  of  stock
theretofore  represented by the Director causing the vacancy or by the remaining
Director representing such class if there be but one.

      In the  event  that  any of  the  provisions  hereof  may  conflict  or be
inconsistent  with any other  provisions  of these  By-Laws,  then (this  By-Law
having been adopted by the vote of the holders of all of the outstanding  shares
of Common Stock of the Corporation) the provisions hereof shall govern in so far
as permitted by law.

Section 8.  Voting by Proxy.
----------  ----------------

      At any meeting of the stockholders, any stockholder may be represented and
vote by a proxy or proxies appointed by an instrument  executed or authenticated
by the  stockholder or its duly authorized  attorney-in-fact  to the full extent
permitted  by law  (now or  hereafter)  and  filed  with or  transmitted  to the
Corporate  Secretary or its designated  agent.  In the event that any such proxy
shall  designate  two or more  persons to act as  proxies,  a  majority  of such
persons present at the meeting, or, if only one shall be present,  then that one
shall have and may exercise  all of the powers  conferred by such proxy upon all
of the persons so designated unless the proxy shall otherwise  provide.  No such
proxy shall be valid after the  expiration  of  thirty-six  (36) months from the
date of its execution,  authentication  or transmission,  unless coupled with an
interest, or unless the person executing it specifies therein the length of time
for which it is to  continue  in force.  Subject  to the  above,  any proxy duly
executed  is not  revoked  and  continues  in full  force  and  effect  until an
instrument revoking it or a duly executed proxy bearing a later date is filed or
electronically  transmitted to the Corporate Secretary of the Corporation or its
designated agent.

Section 9.  Action by Stockholders Without a Meeting.
----------  -----------------------------------------

      Any action which may be taken by the vote of the stockholders at a meeting
may be taken without a meeting if authorized by the consent of the  stockholders
holding at least a majority of the voting  power,  unless the  provisions of the
statutes or of the Articles of Incorporation  provide that a greater  proportion
of  consents  shall be  required.  Such  consents  may take such form  (written,
electronic or otherwise) as permitted by law (now or  hereafter).  Such consents
shall be filed with or entered upon the records of the Corporation.


<PAGE>


                                    DIRECTORS

Section 10.  Authority of Directors.
-----------  -----------------------

      (a) The  business  of the  Corporation  shall be  managed  by its Board of
Directors, which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute, the Articles of Incorporation,  or
these By-Laws directed or required to be exercised or done by the stockholders.

      (b) Any action required or permitted to be taken at a meeting of the Board
of Directors or any  committee of the Board of Directors  may be taken without a
meeting if,  prior or  subsequent  to such  action,  all members of the Board of
Directors  or of such  committee,  as the case  may be,  consent  thereto.  Such
consents may take such form  (written,  electronic or otherwise) as permitted by
law (now or  hereafter).  Such consents  shall be filed with or entered upon the
records of the Corporate Secretary of the Corporation.

Section 11.  Number; Qualifications.
-----------  -----------------------

      The number of Directors shall be not less than three (3) and not more than
five (5) (plus any Directors  separately  elected by the holders of any class of
stock other than the Common Stock as provided in the  Articles of  Incorporation
as amended from time to time).  The number of Directors may be determined (a) by
the vote of the holders of a majority of the shares  entitled to vote thereon at
any annual  meeting  or  special  meeting  called  for the  purpose of  electing
Directors  or (b) by action of the Board of Directors at a meeting or by consent
by the vote of a majority of the Directors in office at the time. When so fixed,
such  number  shall  continue to be the  authorized  number of  Directors  until
changed by the  stockholders  or Directors in the manner  described  above.  Any
increase  in the  number of  Directors  shall be  deemed to create a vacancy  or
vacancies  which may be filled as provided  in Section  14. A  reduction  in the
number of  Directors  shall not be applied to remove any  Director  from  office
prior to the expiration of his term.  Directors need not be  stockholders of the
Corporation and need not be United States citizens or residents of Pennsylvania.

Section 12.  Election of Directors.
-----------  ----------------------

      At each meeting of the  stockholders  for the election of  Directors,  the
persons  receiving  the greatest  number of votes shall be the  Directors.  Such
elections shall be by ballot  whenever  requested by any person entitled to vote
at such meeting; but unless so requested,  such election may be conducted in any
way approved at such meeting.

Section 13.  Term of Office; Removal; Resignations.
-----------  --------------------------------------

      (a) Directors   shall  hold  office  until  the   annual  meeting  of  the
stockholders next following their election and until their respective successors
are elected, or until their earlier resignation, death or removal from office.

      (b) Any Director or the entire Board of Directors  may be removed upon the
affirmative  vote of the  holders  of a  majority  of the  voting  power  of the
Corporation.


<PAGE>


      (c) Any  Director may resign at any time by giving  written  notice of his
resignation to the President or Corporate  Secretary.  Any  resignation  will be
effective  upon actual  receipt by such person or, if later,  as of the date and
time specified in such written notice.

Section 14.  Vacancies.
-----------  ----------

      Vacancies,  including  those  caused  by an  increase  in  the  number  of
Directors,  may be filled by a majority of the remaining  Directors  though less
than a quorum.  When one or more  Directors  shall  give  notice of his or their
resignation  to the Board,  effective at a future date, the Board shall have the
power to fill such vacancy or vacancies to take effect when such  resignation or
resignations  shall become effective,  each Director so appointed to hold office
during  the  remainder  of the  term of  office  of the  resigning  Director  or
Directors.  Whenever any vacancy shall occur among the Directors,  the remaining
Directors shall  constitute the Directors of the Corporation  until such vacancy
is filled or until the number of Directors is changed as in Section 11 hereof.


                       MEETINGS OF THE BOARD OF DIRECTORS

Section 15.  Organizational Meeting.
-----------  -----------------------

      Immediately  after  each  annual  meeting  of the  stockholders  at  which
Directors are elected,  or each special meeting held in lieu thereof,  the newly
elected Directors,  if a quorum thereof is present, shall hold an organizational
meeting at the same place or at such other time and place as may be fixed by the
stockholders  at  such  meeting,  for  the  purpose  of  electing  officers  and
transacting any other business. Notice of such meeting need not be given. If for
any reason  such  organizational  meeting  is not held at such  time,  a special
meeting of the Directors  for such purpose  shall be held as soon  thereafter as
practicable.

Section 16.  Regular Meetings.
-----------  -----------------

      Regular meetings of the Directors may be held without notice at such times
and places  within or  without  the  Commonwealth  of  Pennsylvania  as shall be
determined by the Directors from time to time.

Section 17.  Special Meetings.
-----------  -----------------

      Special  meetings  of the  Directors  may be held at any  time  within  or
without the Commonwealth of Pennsylvania upon call by the Chairman of the Board,
the  President,  or the  Corporate  Secretary  upon the  written  request of two
Directors.  Notice  of each  such  meeting  shall be given to each  Director  by
letter, facsimile,  electronic mail, telegram,  telephone, or in person not less
than forty-eight (48) hours prior to such meeting. Notices sent by mail shall be
sent postage  prepaid and shall be addressed to each  Director at his address as
it appears upon the records of the  Corporation.  Notice by mail shall be deemed
to be given at the time when the notice is deposited in the mail,  and notice by
facsimile,  electronic  mail or telegram shall be deemed to be given at the time
when  confirmation of successful  transmission  is received.  Such notice may be
waived by Directors  either before or after the meeting,  and such waivers shall


<PAGE>


be filed with or entered upon the records of the meeting.  The attendance of any
Director at any such meeting without protesting the lack of proper notice, prior
to or at the commencement of the meeting,  shall be deemed to be a waiver by the
Director  of notice of the  meeting.  Unless  otherwise  limited  in the  notice
thereof,  any  business  may be  transacted  at any  organizational,  regular or
special meeting.

Section 18.  Quorum and Adjournments; Participation by Communications
----------   --------------------------------------------------------
             Equipment.
             ----------

      (a) A majority of the Directors,  at a meeting duly called and held, shall
be necessary to constitute a quorum for the  transaction of business and the act
of a  majority  of the  Directors  present  at any  meeting at which a quorum is
present shall be the act of the Board of  Directors,  except as may be otherwise
specifically provided by statute or by the Articles of Incorporation. Any action
required or  permitted  to be taken at a meeting of the  Directors  may be taken
without a meeting if a  consent,  setting  forth the  action so taken,  shall be
signed or authenticated by all of the Directors entitled to vote with respect to
the subject matter thereof. Any meeting duly called,  whether or not a quorum is
present,  may, by vote of a majority of the Directors present, be adjourned from
time  to time  and  place  to  place  within  or  without  the  Commonwealth  of
Pennsylvania,  in which case no further notice of the adjourned  meeting need be
given.

      (b) Meetings of the Board of Directors or of any committee of the Board of
Directors  may be held  through  any means of  communications  equipment  if all
persons   participating  can  hear  each  other,  and  such  participation  will
constitute presence in person at such meeting.

Section 19.  Committees.
-----------  -----------

      The Board of  Directors  may,  by  resolution  passed by a majority of the
Directors, designate one or more committees, each committee to consist of one or
more of the Directors of the  Corporation,  which, to the extent provided in the
resolution,  shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation. Such committee or
committees  shall have such name or names as may be determined from time to time
by  resolution  adopted by the Board of  Directors.  The  committees  shall keep
regular  minutes  of their  proceedings  and  report  the same to the Board when
required.

Section 20.  Compensation.
-----------  -------------

      The Directors may be paid their  expenses,  if any, for attendance at each
meeting of the Board of Directors and may be paid a fixed sum for  attendance at
each meeting of the Board of Directors.  The sums may be different for different
Directors,  and the sum  shall be  established  by  resolution  of the  Board of
Directors  and may be changed from time to time by  resolution.  No such payment
shall  preclude any Director from serving the  Corporation in any other capacity
and receiving compensation  therefor.  Members of special or standing committees
may be allowed like compensation for attending committee meetings.


<PAGE>


                               EXECUTIVE COMMITTEE

Section 21.  Executive Committee.
-----------  --------------------

      The Board of Directors at any time may elect from its members an Executive
Committee which shall consist of not less than three (3) members. Each member of
such  Committee  shall hold office  during the  pleasure of the Board and may be
removed by a majority vote of the whole Board at any time with or without cause.
Vacancies  occurring in the Committee may be filled by the Board.  The Committee
shall  prescribe  its own  rules  for  calling  and  holding  meetings,  and for
transacting business,  subject, however, to any rules prescribed by the Board of
Directors,  and the Committee  shall keep minutes of its actions.  Action by the
Committee may be taken at meetings  thereof attended by not less than a majority
thereof, or without a meeting by instrument in writing signed by not less than a
majority  of the  members.  Except as the  Committee's  powers and duties may be
limited or otherwise prescribed by the Board of Directors, the Committee, during
the intervals between the meetings of the Board,  shall possess and may exercise
all of the powers and  authority of the Board of Directors,  however  conferred,
provided,  however,  that the  Committee  shall  not be  empowered  to elect the
officers (other than Assistant  Secretaries and Assistant Treasurers) or to fill
vacancies in the Board of Directors or in the  Executive  Committee.  Subject to
such exceptions,  persons dealing with the Corporation shall be entitled to rely
upon any action of the  Committee  with the same force and effect as though such
action had been taken by the Board of Directors.


                                    OFFICERS

Section 22.  Generally.
-----------  ----------

      The Corporation  may have a Chairman,  elected by the directors from among
their number, and shall have a President, a Corporate Secretary and a Treasurer.
The Corporation may also have one or more Vice Chairmen, Vice Presidents, Senior
Vice  Presidents and such other officers and assistant  officers as the Board of
Directors  may deem  appropriate.  If the Board of Directors so desires,  it may
elect a Chief  Executive  Officer  to manage  the  affairs  of the  Corporation,
subject  to the  direction  and  control of the Board of  Directors.  All of the
officers  shall be  elected  by the  Board  of  Directors.  Notwithstanding  the
foregoing, by specific action, the Board of Directors may authorize the Chairman
or the  President  to  appoint  any person to any  office  other than  Chairman,
President,  Corporate Secretary, or Treasurer. Any number of offices may be held
by the same person,  and no two offices must be held by the same person.  Any of
the offices may be left vacant from time to time as the Board of  Directors  may
determine.  In  case  of  the  absence  or  disability  of  any  officer  of the
Corporation or for any other reason deemed sufficient by a majority of the Board
of  Directors,  the Board of  Directors  may  delegate  the  absent or  disabled
officer's powers or duties to any other officer or to any director.


<PAGE>


Section 23.  Authority and Duties of Officers.
-----------  ---------------------------------

      The  officers  of the  Corporation  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 the Board of Directors, the Chairman or
the President  regardless of whether such  authority and duties are  customarily
incident to such office.

Section 24.  Compensation.
-----------  ------------

      The  compensation  of all officers and agents of the  Corporation  who are
also members of the Board of Directors of the  Corporation  will be fixed by the
Board of  Directors or by a committee  of the Board of  Directors.  The Board of
Directors may fix, or delegate the power to fix, the  compensation  of the other
officers and agents of the  Corporation  to the Chief  Executive  Officer or any
other officer of the Corporation.

Section 25.  Succession.
----------   ----------

      The officers of the  Corporation  will hold office until their  successors
are elected. Any officer may be removed at any time by the affirmative vote of a
majority  of the  whole  Board.  Any  vacancy  occurring  in any  office  of the
Corporation  may be filled  by the  Board of  Directors  or by the  Chairman  or
President as provided in Regulation 22.

Section 26.  Delegation of Duties.
-----------  ---------------------

      The Directors are authorized to delegate the duties of any officers to any
other officer and generally to control the action of the officers and to require
the performance of duties in addition to those mentioned herein.

Section 27.  Signing Checks and Other Instruments.
-----------  -------------------------------------

      The  Directors  are  authorized  to  determine  or  provide  the method of
determining how checks,  notes, bills or exchange and similar  instruments shall
be signed, countersigned or endorsed.


                              CERTIFICATES OF STOCK

Section 28.  Contents of Certificates.
-----------  -------------------------

      Every stockholder shall be entitled to one or more certificates, signed by
the President or a Vice President and by the Treasurer,  an Assistant Treasurer,
the Corporate Secretary, or an Assistant Corporate Secretary of the Corporation,
certifying  the number and class of shares owned by him in the  Corporation.  If
the  Corporation  is  authorized  to issue shares of more than one class or more
than one series of any class,  there shall be set forth upon the face or back of
the certificate a full or summary statement of the designations, preferences and
relative, participating, optional or other special rights of the various classes


<PAGE>


of stock or series thereof and the  qualifications,  limitations or restrictions
of such rights,  or the certificate  shall have a statement that the Corporation
will  furnish  such  information  to any  stockholders  upon request and without
charge. If the Corporation shall be authorized to issue only special stock, such
certificate  shall set forth in full or  summarize  the rights of the holders of
such stock.

Section  29.  Countersignature  of  Authentication  by  Transfer  Agents  or
-------  ---  ----------------  --  --------------  --  --------  ------  --
              Registrars.
              -----------

      Whenever any certificate is countersigned or otherwise  authenticated by a
transfer agent or registrar, then a facsimile of the signatures of such officers
of the Corporation may be engraved, stamped, or printed upon such certificate in
lieu of the actual  signatures.  In case any officer or officers  who shall have
signed, or whose facsimile  signature or signatures shall have been used on, any
such certificate or certificates shall cease to be an officer or officers of the
Corporation,  whether  because of death,  resignation or otherwise,  before such
certificate or certificates  shall have been delivered by the Corporation,  such
certificate or certificates  may  nevertheless be adopted by the Corporation and
be issued  and  delivered  as though  the  person or  persons  who  signed  such
certificate or  certificates,  or whose facsimile  signature or signatures shall
have been used  thereon,  had not ceased to be an officer  or  officers  of such
Corporation.


                                LOST CERTIFICATES

Section 30.  Replacement of Lost Certificates.
-----------  ---------------------------------

      The Board of Directors may direct a new  certificate or certificates to be
issued in place of any  certificate or  certificates  theretofore  issued by the
Corporation  alleged  to have  been  lost or  destroyed,  upon the  making of an
affidavit  of that fact by the person  claiming the  certificate  of stock to be
lost  or  destroyed.  When  authorizing  such  issue  of a  new  certificate  or
certificates,  the Board of Directors  may, in its discretion and as a condition
precedent to the issuance  thereof,  require the owner of such lost or destroyed
certificate or certificates, or his legal representative,  to advertise the same
in such manner as it shall  require  and/or give the  Corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
Corporation  with  respect  to the  certificate  alleged  to have  been  lost or
destroyed.


                                TRANSFER OF STOCK

Section 31.  Transfer of Stock.
-----------  ------------------

      Upon surrender to the Corporation or the transfer agent of the Corporation
of a certificate  for shares duly endorsed or accompanied by proper  evidence of
succession,  assignment  or authority  to transfer,  it shall be the duty of the
Corporation to issue a new  certificate to the person entitled  thereto,  cancel
the old certificate and record the transaction on its books.


<PAGE>


                  RECORD DATES AND CLOSING OF TRANSFER BOOKS

Section 32.  Record Dates and Closing of Transfer Books.
-----------  -------------------------------------------

      The  Board of  Directors  may fix a time not  exceeding  sixty  (60)  days
preceding  the date of any  meeting  of  stockholders  or the date fixed for the
payment of any dividend or  distribution or the date for the allotment of rights
as the record date for the determination of the stockholders  entitled to notice
of or to vote at any such  meeting or  entitled  to receive  payment of any such
dividend,   distribution  or  allotment  of  rights,   and  in  such  case  only
stockholders of record on the date so fixed shall be entitled to notice of or to
vote at such meeting or to receive  payment of such  dividend,  distribution  or
allotment  of rights,  as the case may be,  notwithstanding  any transfer of any
shares on the books of the Corporation after any record date so fixed. The Board
of Directors may close the books of the Corporation  against transfers of shares
during the whole or any part of the period between such record date and the date
of the event in respect for which such record date was fixed.


                             REGISTERED STOCKHOLDERS

Section 33.  Recognition of Record Ownership.
-----------  --------------------------------

      The  Corporation  shall be entitled to recognize the exclusive  right of a
person registered on its books as the owner of shares to receive dividends,  and
to vote as such  owner,  and to hold liable for calls and  assessments  a person
registered  on its  books as the  owner of  shares,  and  shall  not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other  person,  whether  or not it shall  have  express or other
notice thereof, except as otherwise provided by the laws of Pennsylvania.


                               GENERAL PROVISIONS

                                    DIVIDENDS

Section 34.  Payment of Dividends.
-----------  ---------------------

      The Board of Directors may declare dividends upon the capital stock of the
Corporation, subject to the provisions of the Articles of Incorporation, if any,
at any  regular or special  meeting  pursuant to law.  Dividends  may be paid in
cash, in property or in shares of the capital  stock,  subject to the provisions
of the Articles of Incorporation.  Before payment of any dividend,  there may be
set aside out of any funds of the  Corporation  available for dividends such sum
or sums as the Directors from time to time, in their absolute discretion,  think
proper  as a  reserve  or  reserves  to meet  contingencies,  or for  equalizing
dividends,  or for repairing or maintaining any property of the Corporation,  or
for such other purpose as the Directors shall think conducive to the interest of
the Corporation and the Directors may modify or abolish any such reserves in the
manner in which it was created.


<PAGE>


                                   FISCAL YEAR

Section 35.  Fiscal Year.
-----------  ------------

      The fiscal year of the  Corporation  shall be fixed by  resolution  of the
Board of Directors.


                                      SEAL

Section 36.  Corporate Seal.
-----------  ---------------

      The corporate seal of the Corporation  shall be of such design,  and shall
contain such words, as may be prescribed by the Directors.


                          TRANSFER AGENT AND REGISTRAR

Section 37.  Transfer Agent; Registrar.
-----------  --------------------------

      The  Corporation may open transfer books in any state of the United States
or in any foreign country for the purpose of transferring  securities  issued by
it, and it may employ an agent or agents to keep the  records of its  securities
to transfer or to  register  securities  or both,  in  Pennsylvania  or in other
states or in a foreign  country,  or both,  and the acts of such agents shall be
binding on the  Corporation.  The duties and liabilities of such agent or agents
shall be such as may be agreed to by the Corporation.  If no such transfer agent
is appointed to act in  Pennsylvania  in respect to its shares,  the Corporation
shall keep an office in Pennsylvania at which shares shall be transferable,  and
at which it shall keep books in which shall be recorded the names and  addresses
of all stockholders and all transfers of shares.


                   PROVISIONS IN ARTICLES OF INCORPORATION

Section 38.  Governance By Articles of Incorporation.
-----------  ----------------------------------------

      These  By-Laws are at all times  subject to the  provisions of the Amended
and Restated  Articles of  Incorporation  of the Corporation  (including in such
term whenever used in these  By-Laws,  amendments  thereto),  and in case of any
conflict between any provision  herein and in the Amended and Restated  Articles
of  Incorporation,  the  provisions  in the  Amended  and  Restated  Articles of
Incorporation shall be deemed to govern.


<PAGE>


                                   AMENDMENTS

Section 39.  Procedure for Amendments.
-----------  -------------------------

      These  By-Laws  may be  altered,  changed  or  amended  in any  respect or
superseded  by new By-Laws in whole or in part, by the  affirmative  vote of the
holders of record of shares  entitling them to exercise a majority of the voting
power of the Corporation at an annual or special meeting called for such purpose
or without a meeting by the consent of the holders of record of shares entitling
them to exercise a majority of the voting power of the  Corporation.  In case of
adoption of any By-Law or amendment by such  consent,  the  Corporate  Secretary
shall enter the same in the  corporate  records and mail a copy  thereof to each
stockholder who would have been entitled to vote thereon and did not participate
in the adoption thereof.


                          INDEMNIFICATION AND INSURANCE

Section 40.  Indemnification.
-----------  ----------------

      The Corporation shall indemnify, to the full extent then permitted by law,
any  person  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, by reason of the fact that he or she
is or was a member of the Board of Directors or an officer, employee or agent of
the  Corporation,  or is or was serving at the request of the  Corporation  as a
director,   trustee,   officer,   employee  or  agent  of  another  corporation,
partnership,  joint venture,  trust or other  enterprise.  The Corporation shall
indemnify such person against expenses,  including  attorney's fees,  judgments,
fines and amounts paid in settlement, actually and reasonably incurred by him by
reason of the fact that he is or was such person to the full extent to which the
Corporation  is  empowered  or  authorized  to  indemnify  any person  under the
Pennsylvania  Business  Corporation Law as now in effect or as amended from time
to time.  The  Corporation  shall pay, to the full extent then permitted by law,
expenses,  including  attorney's  fees,  incurred  by a member  of the  Board of
Directors in defending any such action, suit or proceeding as they are incurred,
in advance of the final disposition thereof, and may pay, in the same manner and
to the full extent then  permitted by law, such  expenses  incurred by any other
person.

      The  indemnification  and payment of expenses provided hereby shall not be
exclusive  of, and shall be in addition  to, any other  rights  granted to those
seeking  indemnification  under any law,  the  Articles  of  Incorporation,  any
agreement,  vote of  stockholders  or  disinterested  members  of the  Board  of
Directors,  or  otherwise,  both as to action in official  capacities  and as to
action  in  another  capacity  while  he or she is a  member  of  the  Board  of
Directors,  or an  officer,  employee  or agent of the  Corporation,  and  shall
continue as to a person who has ceased to be a member of the Board of Directors,
officer,  employee  or agent  and  shall  inure  to the  benefit  of the  heirs,
executors and administrators of such a person.


<PAGE>


Section 41.  Insurance.
-----------  ----------

      The  Corporation  may,  to the  full  extent  then  permitted  by law  and
authorized by the Board of Directors, purchase and maintain insurance or furnish
similar protection,  including but not limited to trust funds, letters of credit
or  self-insurance,  on behalf of or for any  persons  described  in  Section 40
against any  liability  asserted  against and incurred by any such person in any
such  capacity,  or  arising  out of his  status  as  such,  whether  or not the
Corporation  would  have  the  power  to  indemnify  such  person  against  such
liability.  Insurance may be purchased from or maintained with a person in which
the Corporation has a financial interest.


      I, the  undersigned,  being  Corporate  Secretary  of  Pennsylvania  Power
Company,  do hereby certify the foregoing to be the By-Laws of said Corporation,
as adopted in an action in  writing  of the  stockholders  dated the 15th day of
March, 2002.


                                          ------------------------------------
                                          Nancy C. Ashcom
                                          Corporate Secretary