Exhibit 10.1
                                                                    ------------


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


                              POWER SALES AGREEMENT

         THIS POWER SALES  AGREEMENT  ("Agreement"  or "PSA"),  made and entered
into as of January 1, 2001, by and between Allegheny Energy Supply Company, LLC,
a Delaware limited liability company,  hereinafter referred to as "AE Supply" or
"Seller"  and West Penn  Power  Company,  doing  business  as  Allegheny  Power,
hereinafter  referred  to as "AP" or  "Buyer"  (individually,  the  "Party"  and
collectively, the "Parties").

                                   WITNESSETH:

         WHEREAS,  AE Supply is an owner and  operator  of  electric  generating
facilities  and desires to sell such  electric  energy and  capacity  through an
agreement with AP; and

         WHEREAS,  AP maintains default service  obligations in its Pennsylvania
franchised  service  territory  and  desires  to  purchase  electric  energy and
capacity through an agreement with AE Supply; and

         WHEREAS,  the rules and procedures governing the supply and consumption
of  generation-sourced  Ancillary Services in AP's franchised service territory,
in the context of this Agreement,  are contemplated as they exist on the date of
this Agreement; and

         WHEREAS,  the Parties  desire to set forth certain terms and conditions
between the Parties:

                                    ARTICLE 1
                                   DEFINITIONS

         In addition to terms defined elsewhere in this Agreement, the following
definitions shall apply hereunder:

         "AFFILIATE"  means with respect to any person,  any other person (other
than  an  individual)  that,  directly,  or  indirectly,  through  one  or  more
intermediaries,  controls, or is controlled by, or is under common control with,
such  person.  For purposes of the  foregoing  definition,  "control"  means the
direct or indirect  ownership of more than five percent (5%) of the  outstanding
capital stock or other equity interests having ordinary voting power.

         "ANCILLARY  SERVICES"  means those  services  necessary  to support the
transmission  of  capacity  and energy  from  source to load  while  maintaining
reliable  operation of the  transmission  system in accordance with Good Utility
Operating Practices.  As used herein,  Ancillary Services shall be as defined by
Order 888A issued by the Federal Energy Regulatory Commission (FERC) on March 4,
1997.

         "AVAILABLE  CAPACITY  RESOURCES"  means  megawatts of net capacity from
owned or contracted for generating facilities, or load (including pumped storage
hydroelectric   generation   in  the  pumping   mode)  subject  by  contract  to
interruption, or contingency assistance capacity made available by contract, all
of which are defined by and  accredited  pursuant to the  procedure set forth in
Schedule 4 of the PJM West Reliability Assurance Agreement.

         "BUSINESS  DAY" means any day on which Federal  Reserve member banks in
New York City are open for business.


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         "CONSUMPTION ENERGY IMBALANCE" means the difference between the Default
Service Schedule and the actual metered  consumption of the Default Service load
plus applicable transmission and distribution losses, according to the West Penn
Power Company Electric  Generation  Supplier  Services Tariff,  as it may change
from time to time.

         "CONTROL  AREA" means an  electric  system or  combination  of electric
systems  to which a common  automatic  generation  control  scheme is applied in
accordance with Good Utility Operating Practices to:

            (a)  match, at all times, the power output of the generators  within
                 the  electric  system(s)  and  Power  purchased  from  entities
                 outside  the  electric  system(s),  with  the load  within  the
                 electric system(s);

            (b)  maintain scheduled interchange with other Control Areas;

            (c)  maintain  the  frequency  of  the  electric   system(s)  within
                 reasonable limits; and

            (d)  provide sufficient generating capacity to maintain spinning and
                 operating reserves.


         "CONTROL AREA OPERATOR" means an operator of a Control Area.

         "COSTS"  means,  with respect to the  Non-Defaulting  Party,  brokerage
fees,  commissions and other similar third-party  transaction costs and expenses
reasonably incurred by such Party either in terminating any arrangement pursuant
to which it has hedged its obligations or entering into new  arrangements due to
failure to deliver or receive  Power  hereunder,  determined  in a  commercially
reasonable manner;  and all reasonable  attorneys' fees and expenses incurred by
the Non-Defaulting  Party in connection with failure to deliver or receive Power
hereunder.

         "DEFAULT SERVICE" means AP's obligation to provide  generation  service
to all retail  customers within its  Pennsylvania  jurisdiction,  as Provider of
Last Resort,  according to statutory and regulatory  requirements as well as the
Settlement less any amounts of such obligation as AP may have satisfied  through
a selection of an  alternate  Power  supplier  pursuant to that  Settlement  or,
pursuant to Section 2.6, PURPA power suppliers.  For purposes of this Agreement,
Default  Service  shall also include AP Wholesale  Customer  obligations,  which
contracts  are in force and effect at the time of execution  of this  Agreement.
Any purchases by AP from alternate Power (excluding PURPA power) suppliers shall
provide  for:  an  all-inclusive  package of  products  having the same  service
characteristics  as  provided  by AE Supply  and  denoted  as Power  under  this
Agreement  (specifically  including  the AP  obligation  of  Available  Capacity
Resources  contained in the definition of Power); a constant  percentage of AP's
"around the clock"  Provider of Last Resort  obligations  during the term of the
purchase;  and a purchase  term of at least one fiscal or calendar  year or full
year multiples thereof, unless otherwise mutually agreed by the Parties. If such
purchases are made by AP, formal written notice of the contract  quantities must
be  provided  to AE  Supply at least 180 days (or a  mutually  agreeable  notice
period  less  than  180  days)  in  advance  of the  commencement  dates of such
purchases.

         "FINANCIAL  GAINS" means, with respect to any Party, an amount equal to
the present  value of the economic  benefit to it, if any  (exclusive of Costs),
resulting from the failure to deliver or receive Power hereunder,  determined in
a commercially reasonable manner.

         "FINANCIAL LOSSES" means, with respect to any Party, an amount equal to
the  present  value of the  economic  loss to it, if any  (exclusive  of Costs),
resulting from the failure to deliver or receive Power hereunder,


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


determined in a commercially reasonable manner.

          "GOOD UTILITY  OPERATING  PRACTICE" (GUOP) means any of the applicable
practices, methods, standards, guides or acts:

            (a)  required by any  Governmental  Authority,  regional or national
                 reliability council,  including NERC, ECAR, or the successor of
                 any of them, or other applicable  regional  reliability council
                 for AP's Control Area whether or not the Party whose conduct is
                 at issue is a member thereof;

            (b)  otherwise  engaged in or approved by a  significant  portion of
                 the electric utility industry,  during the relevant time period
                 which in the exercise of reasonable  judgment,  in light of the
                 facts  known,  or that  should  have  been  known at the time a
                 decision was made,  could have been expected to accomplish  the
                 desired result in a manner  consistent with Applicable Laws and
                 Regulations, good business practices, generation, transmission,
                 and distribution reliability, safety, environmental protection,
                 economy, and expediency.

            (c)  such other acts or practices as are  reasonably  necessary  and
                 mutually  agreed  upon  to  maintain  the  reliability  of  the
                 Transmission System or of the Project.

            (d)  Good Utility  Practice is intended to be acceptable  practices,
                 methods,  or acts generally  accepted in the region, and is not
                 intended to be limited to the optimum  practices,  methods,  or
                 acts to the exclusion of all others.

         "INTEREST RATE" means, for any date, the lesser of (a) two percent (2%)
over the per annum rate of interest  equal to the prime lending rate as may from
time to time be published in THE WALL STREET  JOURNAL  under Money Rates on such
day (or if not  published on such day on the most recent  preceding day on which
published), and (b) the maximum rate permitted by applicable law.

         "NERC" means the North  American  Electric  Reliability  Council or any
successor organization thereto.

         "ON-PEAK"  means  Monday  through  Friday   (excluding  NERC  holidays)
hour-ending 0800 through hour-ending 2300 (5x16).

         "OFF-PEAK"  means  Monday  through  Friday   hour-ending  2400  through
hour-ending 0700 and including Saturday,  Sunday, and NERC holidays  hour-ending
0100 through 2400.

         "OPERATING   COMMITTEE"   means   the   standing   committee   of   one
representative each from Buyer and Seller as referenced in Article 9.

         "PJM WEST" shall mean the aggregate of the control areas, recognized by
the North American Electric Reliability Council or any successor thereto, of the
PJM West Transmission Owners.


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001
<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         "PJM-WESTERN  HUB"  means the  aggregation  of  selected  busses at the
Western  interface  region  within the PJM Control  Area that  provides a common
point for commercial energy trading in the PJM Energy Market.

         "POWER" means  electric  capacity and energy of the type commonly known
as three-phase,  sixty-cycle,  alternating current together used to satisfy real
time load specifically  including any Available  Capacity Resources for which AP
is made  responsible by its Control Area after AP joins and is experiencing on a
real time basis the rules of a functioning Regional Transmission Organization or
RTO (RTO as defined by the Federal Energy Regulatory Commission).

         "POWER RESOURCES" means the sources of power (including  identification
of the Control Area) with which Seller has made arrangements in order to provide
Power under this Agreement.  AE Supply may source Power under this Agreement, in
whole or in part,  at any time,  from any number of suppliers  in the  wholesale
generation  market,  provided  applicable  North American  Electric  Reliability
Council (NERC), East Central Area Reliability Council (ECAR), or other pertinent
regional and sub-regional rules are observed.

         "REGULATORY   APPROVALS"   means  all  applicable   state  and  federal
regulatory authorizations, consents, or approvals required for this Agreement.

         "SCHEDULE" or "SCHEDULING" means communicating with and confirming with
all Transmitting Utilities as well as between Buyer and Seller that a particular
amount  of  Power  is to  be  delivered  or  received  and  providing  all  such
information  and satisfying all such  requirements  as may be necessary to cause
such parties to recognize and confirm the delivery or receipt of the Power.  All
scheduling of services with  Transmitting  Utility(s)  shall be  accomplished in
compliance with the scheduling rules of those service providers.  Between Seller
and Buyer,  scheduling  day-ahead shall be accomplished no later than 11:30 EPT,
one (1) business day before delivery,  or scheduling hourly no later than twenty
(20) minutes  before the start of the intended  power flow or as per other rules
as the Buyer and Seller may jointly agree to from time to time.

         "SETTLEMENT"   means  the  settlement  in  West  Penn  Power  Case  No.
R-00973981.

         "SUPPLY  ENERGY  IMBALANCE"  means  the  difference  between  a Default
Service  Schedule and  associated  Schedule(s)  according to the West Penn Power
Company Electric Generation Supplier Services Tariff, as it may change from time
to time.

         "TAXES"  means all ad valorem,  property,  occupation,  utility,  gross
receipts, sales, use, excise and other taxes or governmental charges,  licenses,
permits and assessments, other than taxes based on net income or net worth.

         "TRANSITION   PERIOD"  means  with  respect  to  AP's  Default  Service
obligation,  the period  beginning  12:01 am, January 1, 1999 through  midnight,
December 31, 2008.

         "TRANSMITTING  UTILITY"  means  the  utility  or  utilities  and  their
respective Control Area Operators and their successors,  transmitting Power that
is sold hereunder.

         "WHOLESALE  CUSTOMER"  means a customer who purchases  electric  energy
and/ or capacity for resale,  specifically  excluding (1) the OE-APS Interchange
Agreement, dated March 18, 1987, between Ohio Edison Company,  Monongahela Power
Company,  West Penn Power Company and The Potomac  Edison  Company) and; (2) the
APS-PEPCO  Power Resale  Agreement,  dated March 18, 1987,  between  Monongahela
Power Company,  West Penn Power Company,  The Potomac Edison Company and Potomac
Electric Power Company.


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


                                    ARTICLE 2
                               PRODUCT DESCRIPTION

2.1      SERVICE CHARACTERISTICS.  AE Supply will provide AP firm Power, through
         any  means  available  including  purchases,  in  amounts  equal to the
         Contract  Quantity as specified  in Section 2.2. The  provision of firm
         Power will be in amounts  adjusted  on a real time basis to  compensate
         for all losses and energy  imbalances  (whether Supply Energy Imbalance
         or Consumption  Energy Imbalance),  but shall specifically  exclude all
         other Ancillary Services.  The prices established in Section 7 shall be
         the total  compensation  for all services  contemplated in this Section
         2.1.

2.2      CONTRACT  QUANTITY.  AE Supply will be  responsible to meet all Default
         Service Schedules provided by AP that meet the notification  guidelines
         of the AP Control Area Operator and AE Supply. AE Supply may of its own
         accord  actually  modify the  Default  Service  Schedules  through  its
         dealings with the AP Control Area as long as it accepts the Consumption
         Energy Imbalance charge consequences of doing so.

2.3      FIRM POWER.  All deliveries  hereunder shall be deemed firm and a Party
         may only be excused from  delivering or receiving  Power  hereunder for
         reasons of Force  Majeure,  as defined in Section  13.1. In the event a
         Party fails to deliver or receive  Power  hereunder  for reasons  other
         than  Force  Majeure,  then  the  interrupting  Party  shall  have  the
         obligations set forth in Article 5.

2.4      ANCILLARY  SERVICES.  The  Buyer  shall be  responsible  for  Ancillary
         Services (other than those mentioned in 2.1 as being the responsibility
         of Seller).  Buyer may contract  with Seller  and/or  other  parties to
         supply all or part of the  Ancillary  Services  required to support its
         Default Service obligations. However, Buyer will make use of the supply
         of those  Ancillary  Services  provided  under  the  PURCHASE  AND SALE
         AGREEMENT FOR ANCILLARY  SERVICES BETWEEN ALLEGHENY POWER AND ALLEGHENY
         ENERGY  SUPPLY  COMPANY,  LLC  DATED  APRIL 26,  2000,  as long as that
         agreement  is still in effect  contemporaneously  with Buyer's need for
         Ancillary  Services  and  provided  that the prices for such  Ancillary
         Services are as specified in the agreement.

2.5      TRANSMISSION AND DISTRIBUTION  LOSSES.  Seller shall be responsible for
         any  transmission  losses and loss charges relating to the transmission
         of Power to the Delivery  Point(s) and shall make available  sufficient
         Power  at  the  Delivery   Point(s)  to  compensate   for  the  average
         distribution  losses  incurred  in  Buyer's  provision  of Power to the
         Default Service load.

2.6      STAND-BY,   MAINTENANCE,   AND  SUPPLEMENT  POWER  FOR  PUBLIC  UTILITY
         REGULATORY  POLICIES ACT OF 1978  PROJECTS  (PURPA  PROJECTS).  AP will
         utilize  the  contracted  output  from the AES Beaver  Valley  project,
         Allegheny  Lock & Dam #5 project and  Allegheny  Lock & Dam #6 project,
         (collectively,  "PURPA  Projects")  to supply a portion of its  Default
         Service obligation.  Each week, AP will provide AE Supply a schedule of
         available PURPA Project  generation for the following week. In addition
         to the  scheduling  requirements  herein,  AP will include in its daily
         Default  Service  schedules the daily  Default  Service  schedule,  the
         available PURPA Project generation and the difference to be supplied by
         AE  Supply.  AE Supply  will act as agent for AP in  administering  any
         interface with the AP Control Area Operator or its successor concerning
         the Control Area  Operator's  acceptance of this net  schedule.  In the
         event of PURPA  Project  planned  outages  or planned  derates,  forced
         outages or forced derates,  AE Supply agrees to provide  stand-by Power
         or maintenance Power, as the case may be, and perform schedule changes,
         as  necessary,  to  fulfill  the  daily  schedule.  The price for PURPA
         Stand-by,  Maintenance,  and  Supplemental  Power  shall be the same as
         provided  in  Article 7. AE Supply  will be  entitled  to any  capacity


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         commodity benefits  (including  Available Capacity  Resources) that may
         accrue from the PURPA Projects (if any) once AP becomes  subject to the
         rules of any RTO it may join, during the term of this Agreement.

2.7      BALANCING  SERVICES FOR  HYDRO-ELECTRIC  PURPA PROJECTS.  Understanding
         that  the  output  of the  hydro-electric  PURPA  Projects  may  not be
         precisely  determined  on an  hour-by-hour  basis,  AE Supply agrees to
         provide such balancing services necessary for AP to avoid Supply Energy
         Imbalance  or  Generator  Imbalance  penalties  when  Scheduling  these
         resources.  In return for such agreement, AE Supply will be entitled to
         any  capacity   commodity   benefits   (including   Available  Capacity
         Resources)  that may accrue  from the PURPA  Projects  (if any) once AP
         becomes subject to the rules of any RTO it may join, during the term of
         this Agreement. To facilitate the provision of such balancing services,
         AE  Supply  may  request  that the  hydro-electric  PURPA  Projects  be
         excluded  from the daily  Default  Service  Schedule,  as  required  by
         Section 2.6, and instead,  be netted against the daily Default  Service
         Schedule   retroactively,   using  the  actual  hourly  output  of  the
         hydro-electric PURPA Projects.

                                    ARTICLE 3
                           SCHEDULING AND FORECASTING

3.1      DEFAULT  SERVICE  SCHEDULES.  Daily Default  Service  Schedules will be
         submitted  by AP to AE Supply by 11:30 EPT,  one (1) business day prior
         to delivery. Schedules shall be submitted to:

                 AE Supply 24-Hour Scheduling Desk: 212-449-4797
                 FAX:  212-449-6595
                 EMAIL: AEPLANNING@ALLEGHENYENERGY.COM

         or such other  phone and fax  numbers as shall be  provided  in writing
         from Seller to Buyer.

3.2      POWER  TRANSMISSION  AND  SCHEDULING.   Seller  shall  arrange  and  be
         responsible for transmission service to the Delivery Point(s) and shall
         Schedule  or  arrange  for  Scheduling  service  with its  Transmitting
         Utility,  in accordance with the practice of the Transmitting  Utility,
         to deliver the Power to the Delivery Point(s). Buyer's obligation shall
         be to arrange for  transmission  service  with the AP Control  Area and
         pertinent  transmission  service  provider  at and  from  the  Delivery
         Point(s).  Unless  provided sixty (60) prior days written notice to the
         contrary by Buyer, AE Supply will act as agent for


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         AP with  respect  to  scheduling  the  requisite  amount  of  real-time
         transmission  service  at or from the  Delivery  Point(s)  for  Default
         Service with the AP Control  Area and  pertinent  transmission  service
         provider or their successors deemed necessary by the Control Area or AE
         Supply.

3.3      DEFAULT SERVICE FORWARD FORECASTS.  AP will provide AE Supply a rolling
         twenty-four (24) month forecast of its anticipated Default Service load
         by the  first  business  day of each  month  prior to the  start of the
         rolling 24-month period. AP does not guarantee maximum or minimum load.
         AE Supply's  obligation is to provide the  real-time  amount of Default
         Service  Power  required  to  satisfy  the  Default  Service   Schedule
         irrespective of the amount  forecasted by AP. If any purchases are made
         by AP which would reduce the contract quantities, formal written notice
         must be  provided  to AE  Supply  at  least  180  days  (or a  mutually
         agreeable  notice  period  less  than  180  days)  in  advance  of  the
         commencement  dates  of  such  purchases,  and  any  reductions  in the
         contract  quantities  will be reflected in the Default  Service Forward
         Forecasts.

3.4      DEFAULT  SERVICE  7-DAY  FORECASTS.  Upon  request and ninety (90) days
         notice, AP will provide AE Supply a rolling  seven-day  forecast of its
         anticipated  Default  Service load by 10:00AM EPT each business day. AP
         will update the rolling  seven-day  forecast as soon as new information
         becomes  available.  AP does not guarantee  maximum or minimum load. AE
         Supply's  obligation  is to  provide  the real time  amount of  Default
         Service Power required to satisfy the Default Service load irrespective
         of the amount forecasted by AP.

                                    ARTICLE 4
                          SPECIAL TERMS AND CONDITIONS

4.1      WHOLESALE  ARBITRAGE.  This is a "services  provision"  product that is
         designed  and priced to provide the  flexibility  necessary  to serve a
         variable  retail load. The inherent  flexibility of this product is not
         intended to permit AP the ability to pursue arbitrage  opportunities in
         any power market. Such arbitrage activities are prohibited.

4.2      DEFAULT  SERVICE  LOAD  MANAGEMENT.  To minimize the risk to AE Supply,
         hereunder,  AP agrees to enforce its applicable  tariff provisions with
         customers taking power under tariff,  enforce contract  provisions with
         customers   taking  power  under   contract,   enforce  PURPA  contract
         provisions,  exercise  interruptible  and curtailable  contract rights,
         promote the use of off-peak load riders, support regulatory initiatives
         that would  result in a decrease  in the  Default  Service  obligation,
         encourage  customers  to  choose  alternate  generation  suppliers  and
         actively  manage  Default  Service by among other  things  avoiding the
         extension of retail and pre-existing  Wholesale  Customer  contracts or
         commitments  whenever  it is  possible  for  AP to  do so  through  its
         unilateral  action. In addition,  as mutually agreeable to the Parties,
         AP shall undertake Utility


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         Initiated  Programs  ("UIPs") to reduce its Default Service Load during
         peak  periods.  UIPs may include  but are not  limited to a  generation
         service buy-back  program.  The Parties will share the net energy price
         benefits of UIPs equally by ascertaining and splitting on a 50:50 basis
         the hourly  difference  between the weight  average price to be charged
         Buyer to support the load that  otherwise  would have been incurred and
         the  proxy  price  for  real  power   market   energy  which  shall  be
         corresponding PJM Western Hub hourly posting.  In calculating the price
         that Buyer  would have been  charged  otherwise  hourly to support  the
         load,  there will be an appropriate  apportionment  to that load of any
         energy charged at other than PTC prices during that period according to
         Section  7.1(c) of this  Agreement.  Any  capacity  commodity  benefits
         (including  Available  Capacity  Resources)  that may accrue  from UIPs
         after AP  becomes  subject  to the  rules  of an  operating  RTO  will,
         however,  be the  exclusive  property of AE Supply,  during the term of
         this Agreement.

A.       INTERRUPTIBLE AND CURTAILABLE  LOADS. AP may have special  arrangements
     with certain retail  customers that permit  interruption or curtailment for
     economic  reasons.  AE Supply will notify AP by 9:00 am, one  business  day
     prior to delivery of its desire to interrupt these customers. AP will reply
     to AE  Supply  no later  than  10:30 am  specifying  the  quantity  of load
     available for interruption according to applicable contract or tariff terms
     and  conditions.  AP shall  interrupt the quantity of load  requested by AE
     Supply for the duration  requested  by AE Supply,  up to the amount of load
     available for  interruption.  AP will provide  sufficient  documentation to
     verify the load interrupted.  Any capacity  commodity  benefits  (including
     Available     Capacity      Resources)     that     may     accrue     from
     Interruptible/Curtailable Loads after AP becomes subject to the rules of an
     operating RTO will, however, be the exclusive property of AE Supply, during
     the term of this Agreement.

A.       BILLING DATA. AE Supply agrees to provide the required  operating  cost
     data  necessary  to  calculate  payments to the PURPA  Projects  under each
     respective  Electric Energy Purchase  Agreement  (EEPA).  Such  information
     includes but is not limited to the fixed and variable energy cost rates for
     the AP Proxy Units (FERC  accounts  500,  501,  502 - 507, and 510 - 514 or
     substitutes  therefore as may be acceptable  for use under the EEPAs).  Any
     operating  cost data provided by AE Supply to AP for PURPA Project  payment
     purposes  shall be used solely for such purposes and shall not be disclosed
     to any third-party  without prior consent by AE Supply.  The AP proxy units
     are Fort Martin Units 1 and 2, Pleasants  Units 1 and 2,  Hatfield's  Ferry
     Units 1, 2, and 3, and Harrison Units 1, 2, and 3. The information  will be
     provided to Transaction Accounting along with required daily logs, dispatch
     notes and mode reports for the PURPA Projects.

A.       PJM WEST OR RTO.  The  Parties  agree that the terms of this  Agreement
     shall be modified by the Operating Committee,  as required, to comport with
     the  operating  requirements  of PJM  West  or any  other  applicable  RTO.
     Further,  the Parties agree and maintain that any such modifications  shall
     be  accomplished  in a manner that  minimizes the material  effects on this
     Agreement.

A.       PJM WEST OR RTO VOTING RIGHTS.  During the term of this Agreement,  the
     Operating  Committee  shall  determine  the  allocation,  between AP and AE
     Supply,  of any and all voting rights and  privileges  assigned to AP under
     any PJM West or other applicable RTO agreement.

                                    ARTICLE 5
                     INTERRUPTIONS OF DELIVERIES OR RECEIPTS

5.1      INTERRUPTIONS  OF FIRM  TRANSACTIONS.  With respect to the unauthorized
         failure  to  Schedule  and  deliver  or  receive  in  whole  or in part
         deliveries or receipts in accordance with this Agreement:


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


            (a)  For  reasons  other  than  Force  Majeure,  if Seller  fails to
                 Schedule  for  delivery  and  actually   deliver  the  Contract
                 Quantity,  then Seller  shall incur any  penalties  and charges
                 that may be  imposed  on Buyer  by the AP  Control  Area or its
                 successor   Control  Area,  or  other   organization  with  the
                 authority to impose such charges or  penalties,  including  but
                 not limited to the aforementioned  Consumption Energy Imbalance
                 charge and Supply Energy  Imbalance charge that may result from
                 such failure.  For reasons other than Force  Majeure,  if Buyer
                 fails to use its best efforts to facilitate  Seller's submittal
                 of an accurate  Schedule for receipt of the  Contract  Quantity
                 (while Seller is acting as Buyer's  scheduling  agent) or Buyer
                 fails to use its best  efforts to submit an  accurate  Schedule
                 (should  Buyer decide to schedule  itself or hire another party
                 to do so for it),  Buyer  shall pay  Seller an amount  for each
                 unit of such deficiency equal to the difference between (i) the
                 price at which  Seller is able to sell  comparable  supplies of
                 Power using commercially  reasonable efforts or, absent a sale,
                 the market  price at the  PJM-Western  Hub or such other market
                 proxy  established  within the PJM West region as  commercially
                 appropriate  at  the  time  Seller  learns  of the  failure  to
                 Schedule for receipt of the Contract  Quantity,  in whole or in
                 part,  at which  Seller is or would be able to sell  comparable
                 supplies of Power at a commercially  reasonable price, and (ii)
                 the   applicable   Contract   Price  (as  adjusted  to  reflect
                 reasonable differences in transmission costs, if any). Evidence
                 of Buyer's  best  efforts  to  schedule  properly  shall be its
                 continuous  production  and timely  provision of load forecasts
                 according  to  standards  that would be  acceptable  under GUOP
                 standards and to include proper netting of PURPA generation and
                 Competitive  Default  Supplier load from  Schedules  set. In no
                 event  shall  amounts  paid by  Buyer  or  Seller  include  any
                 self-styled  penalties,  ratcheted  demands or similar charges.
                 The Parties  agree  further that such  payments will become due
                 and payable  hereunder in  accordance  with the  provisions  of
                 Article  10 for  Buyer's  non-performance  and in the  case  of
                 Seller's  non-performance,  within  twenty  (20) days after the
                 month in which Seller  failed to so perform or twenty (20) days
                 after Seller receives  Buyer's notice of said  non-performance,
                 whichever  is later.  The  aggrieved  Party  shall  provide the
                 non-performing  Party a demand for  payment  setting  forth the
                 basis and calculation of the amount demanded, such demand to be
                 sent in accordance with Section 18.3.

            (b)  Both  Parties  hereby  stipulate  that the damages set forth in
                 Section 5.1 above are  reasonable  in light of the  anticipated
                 harm and the  difficulty of estimation or calculation of actual
                 damages and each Party hereby  waives the right to contest such
                 damages as an unreasonable penalty.

            (c)  In the event  either  Buyer or Seller fails to pay to the other
                 Party any undisputed  amounts in accordance with Section 5.1(a)
                 above when due, the aggrieved Party shall have the right to (i)
                 suspend performance until such amounts plus interest calculated
                 at the Interest  Rate have been paid,  and/or (ii) exercise any
                 remedy available at law or in equity to enforce payment of such
                 amount plus interest calculated at the Interest Rate.

                                    ARTICLE 6
                   DELIVERY POINTS AND RELIABILITY GUIDELINES

6.1      DELIVERY POINT(S).  AE Supply will deliver firm Power to AP into the AP
         Control Area at any AP transmission interconnection(s) and/or generator
         step-up  transformer(s)  interconnections  within AP. AE Supply, at its
         sole  discretion,  may schedule the delivery of firm Power to AP in any
         combination of MW amounts and at any combination of delivery points, to
         satisfy the total Power supply requirements under this Agreement.

6.2      RELIABILITY  GUIDELINES.  Each Party  agrees to adhere to Good  Utility
         Operating Practice and specifically adhere to


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         the applicable  operating  policies,  criteria and/or guidelines of the
         NERC,  the  Control  Area  Operator  and any  regional  or  subregional
         requirements.

                                    ARTICLE 7
                                 PRICE AND TITLE

A.       PRICE. The Contract Price for Power supplied  hereunder by Seller shall
         be determined for the categories of Power as follows:

            (a)  For all Power  delivered in any calendar  year during  Off-Peak
                 periods,  the  applicable  Contract Price shall be the weighted
                 average of all Prices to Compare, by rate  classification,  and
                 including retail special  (non-tariff)  contracts customers and
                 pro forma  representations  of unbundled  generation  costs for
                 Wholesale  Customers  (collectively  "PTC").  With  respect  to
                 Buyer's   retail  tariff   customers,   the  PTC  shall  be  as
                 established by the  Pennsylvania  Public Utility  Commission in
                 the  Settlement.  The pro forma  representations  of  unbundled
                 generation  costs for Wholesale  Customers for PTC  calculation
                 purposes  shall be  conducted  in accord  with the  calculation
                 method attached hereto as Exhibit 1. All PTCs shall be less: 1)
                 PA Gross Receipt Taxes, if and as applicable and 2), until such
                 time  as AP is  subject  to the  rules  of a  functioning  RTO,
                 Ancillary  Services  (including any separately  traded capacity
                 products such as Available  Capacity Resources whether they are
                 strictly  called  Ancillary  Services or not). The intention is
                 for AP to retain the obligation to pay Gross Receipts Tax using
                 the revenues  from its Default  Service  customers  that result
                 from the  portion  of  billings  to those  customers  earmarked
                 specifically  for the  purpose  of  collecting  Gross  Receipts
                 Taxes. Once AP is subject to the rules of an RTO on a real time
                 basis,  AP will  provide  all  revenues  it  collects  from its
                 Default Service  customers for Ancillary  Services to AE Supply
                 as part of the PTC  calculation  and/or  cause that  revenue to
                 flow to AE Supply under a separate agreement,  provided that AE
                 Supply is actually  performing  as supplier of those  Ancillary
                 services.  In exchange  for the payment of  Ancillary  Services
                 revenues to AE Supply  hereunder  (if there is any),  AE Supply
                 shall provide the quantity of Ancillary  Services needed by the
                 Default Service  customers that provide the revenue stream that
                 AE Supply  actually  receives from AP (otherwise the provisions
                 of  any  separate   agreement  for  Ancillary   Services  shall
                 prevail).

                 The Parties  agree that should AP be  permitted to increase the
                 rates it charges some or all of its customers  specifically for
                 the purpose of  recovering  the market  expense  for  Available
                 Capacity Resources or any other generation  services,  AP shall
                 pay  any  additional   revenues   collected   specifically  for
                 Available  Capacity  Resources  or  other  generation  services
                 market  expenses to AE Supply if AE Supply is  supplying  them.
                 Notwithstanding  anything  herein,  should AP be  permitted  to
                 increase  the  rates it  charges  its  customers  such  that AP
                 recognizes no income benefits,  now or in the future, from such
                 increase.  AP shall retain and accrue such additional  revenues
                 for the future benefit of its customers;  provided however, the
                 Contract Price shall be no less than the PTCs for each calendar
                 year established in the Settlement, by customer class, plus any
                 additional  revenues  (per MWh) that AP is permitted to collect
                 specifically  for  Available  Capacity   Resources,   Ancillary
                 Services or other generation services market expenses, where AE
                 Supply is the supplier.

                 The methodology  used to develop a weighted  average PTC at any
                 point in time is as provided in Section 7.1(d) below.


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


            (b)  For a fixed  amount of Power  delivered  in any  calendar  year
                 during On-Peak periods (called the "Base Level On-Peak Power"),
                 the applicable  Contract Price shall be the weighted average of
                 all PTCs  pertaining  to that  calendar  year as  explained  in
                 7.1(a) above. The fixed amounts of Base Level On-Peak Power for
                 each calendar year are as follows:

                       Year                  MWhs
                      -----               ---------
                       2001               9,300,000
                       2002               7,000,000
                       2003               3,500,000
                       2004               1,750,000
                       2005               1,250,000
                       2006               1,000,000
                       2007                 500,000
                       2008                 250,000

                 If the actual  amount of calendar  year Power  consumed  during
                 On-Peak  periods  is less than or equal to the  pertinent  Base
                 Level On-Peak  Power,  the Contract  Price  pertinent to all of
                 said Power shall be the PTC.

            (c)  For all Power  delivered  during  On-Peak  periods  during each
                 calendar  year  beyond  the  Base  Level  On-Peak  Power,   the
                 applicable  Contract  Price  shall  be at  market-based  rates,
                 within a range  bounded by: 1) that  calendar  year's  weighted
                 average  PTC;  and 2) the  straight  arithmetic  average of the
                 forward  on-peak  firm power  calendar  year  prices  posted by
                 Energy Argus (or equivalent  publicly  available forward market
                 price publication) prospectively for that calendar year for the
                 PJM-Western  Hub,  or such other hub or market  proxy as deemed
                 appropriate by the Operating  Committee,  provided any such hub
                 is   established   and   maintained   by  the  PJM   Office  of
                 Interconnection   and  is   commercially   recognized   in  the
                 marketplace  for trading  within the PJM West  region,  on each
                 Monday in the four (4) consecutive  weeks beginning in November
                 prior  to  the  start  of  the  calendar  year  ("Posted  Price
                 Average",  or PPA).  Should a price  not be  published  on each
                 Monday,  the most recent  published  price prior to that Monday
                 will be used.  In the event that the PPA for any calendar  year
                 is greater than the PTC, the  Operating  Committee  may, at its
                 discretion, establish the Contract Price within this range.

            (d)  Weighted   average  PTCs  for  each   calendar  year  shall  be
                 calculated  by weighting the PTC, by rate  classification,  and
                 including retail special  (non-tariff)  contracts customers and
                 Wholesale Customers by the amount of MWhs consumed by each rate
                 class  relative  to the  total  MWhs  consumed  by all  Default
                 Service  customers  in that  calendar  year.  With  respect  to
                 Buyer's   retail  tariff   customers,   the  PTC  shall  be  as
                 established by the  Pennsylvania  Public Utility  Commission as
                 per the  Settlement.  Further,  all PTCs shall be less PA Gross
                 Receipts  Taxes,  if and as applicable.  In doing so, any PURPA
                 Project Power used to supply Default Service customers shall be
                 applied  against the load imposed on Buyer by the lowest priced
                 of the rate  classifications,  moving  sequentially  upward  in
                 price  among  the rate  classifications  so that  such  load is
                 removed  appropriately  from the weighted average  calculation.
                 The calculation so described is an after-the-fact determination
                 and, as such,  will be imposed  retroactively  on any real-time
                 billing,  thereby resulting in adjusted  billings.  Prospective
                 weighted average PTCs will be calculated to provide values that
                 can be input to the  comparison  called for in


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>
Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4

                 Section 7.1(d) above so that concurrent,  real-time billing can
                 occur between Seller and Buyer.  Unless the Operating Committee
                 determines otherwise,  the prospective calendar year PTCs shall
                 be as follows:

                          Year         PTC/ Mwh
                          ----         ---------
                          2001           $28.65
                          2002           $28.92
                          2003           $29.01
                          2004           $29.46
                          2005           $29.73
                          2006           $32.31
                          2007           $32.40
                          2008           $34.87

         It shall be the Operating  Committee's  responsibility to set real-time
         weighted  average  PTC's  each  calendar  year  and  at  various  times
         intra-year,  if necessary,  with the  intention of minimizing  year-end
         billing  adjustments.  If intra-year PTC adjustments are made, then the
         actions  specified  in  Section  7.1(c)  shall be  repeated  from  that
         adjustment date forward.

A.       TITLE TRANSFER.  Title to,  possession of, and risk of loss (except for
         electrical system distribution  losses) of Power Scheduled and received
         or  delivered  hereunder  shall  transfer  from  Seller to Buyer at the
         Delivery  Point(s).  Seller  warrants  title  to  the  Power  sold  and
         delivered hereunder and the right of Seller to sell such Power.

                                    ARTICLE 8
                                TERM OF AGREEMENT

8.1      TERM.  Subject to the other  provisions of this Agreement,  the term of
         this Agreement shall commence  retroactive on January 1, 2001 and shall
         remain in effect through the Transition Period.

A.       TERMINATION.  In the event of an  attempted  hostile  takeover of AP as
     determined by the Board of Directors of AP, AP shall  provide  notice to AE
     Supply of such attempted hostile takeover.  Should said takeover attempt be
     successful  and not be approved by the board of  directors of AP, AE Supply
     may terminate this Agreement upon ninety (90) days' written  notice,  which
     notice  shall be  provided  within  thirty  (30) days after the  successful
     completion of said hostile takeover.

                                    ARTICLE 9
                               OPERATING COMMITTEE

9.1      OPERATING   COMMITTEE.   An  Operating  Committee   consisting  of  one
         representative  each from Buyer and  Seller  shall be  established  for
         purposes of administering this Agreement.  The representatives shall be
         indicated  by the  Parties  to one  another in writing on the first day
         that this Agreement  becomes  effective and each time thereafter that a
         Party wishes to make a change in  representation.  Each  representative
         shall be an officer of the source organization empowered to commit that
         organization to decisions made by the Committee. Affirmative actions of
         the  Operating  Committee  can be taken only upon the agreement of both
         Buyer's  and


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         Seller's  representatives.  The duties of the Operating Committee shall
         include,  but are not  limited  to,  rendering  needed  decisions  that
         otherwise  might require some form of alternative  dispute  resolution,
         proposing  amendments to this Agreement as required to accommodate  RTO
         or other  requirements  as set forth in section 4.5  herein,  acquiring
         necessary data, making  calculations and determining values as required
         to implement the provisions of Article 7, and any other items necessary
         to the proper administration of this Agreement.

                                   ARTICLE 10
                               BILLING AND PAYMENT

10.1     PAYMENTS AND STATEMENTS. Each Monday or next subsequent business day if
         Monday is a Banking or Company  holiday,  for the  preceding  seven-day
         period Sunday  through  Saturday AE Supply shall notify AP via email of
         the  amount to be  prepaid  based on the  transactions  Scheduled  or a
         reasonable estimate for the pertinent period ("Prepayments").  AP shall
         pay the  requested  prepaid  amount  within  twenty-four  (24) hours of
         notification.  On or before the  eighth  working  day of each  calendar
         month,  AE  Supply  shall  calculate  the  amount  due for  the  actual
         deliveries  to AP for the previous  calendar  month.  That amount shall
         then be  reconciled  with the total  prepaid  amounts  received from AP
         during the previous  calendar  month.  Any payment or credit due as the
         result of such reconciliation shall be made by the end of the twentieth
         (20th) calendar day of the month.  Payment shall be made to the account
         designated by Seller in Section 18.3 by wire transfer.

10.2     PAST DUE AMOUNTS. Any undisputed amounts, other than Prepayments,  both
         principal  and  interest,  not  paid by the due date  shall  be  deemed
         delinquent  and will accrue  interest  calculated at the Interest Rate,
         such interest to be calculated  daily from the due date to the date the
         unpaid amount is paid in full.

10.3     DISPUTES  AND  ADJUSTMENTS  OF  INVOICES.  A Party may,  in good faith,
         dispute  the  correctness  of any invoice or  adjustment  to an invoice
         rendered  under this Agreement or adjust any invoice for any arithmetic
         or  computational  error  within  six (6)  months  from the date of the
         invoice.  If Buyer, in good faith,  disputes any part of any statement,
         Buyer shall provide a written  explanation of the basis for the dispute
         and pay the portion of such  statement  conceded to be correct no later
         than the due date as calculated in accordance with Section 10.1. If any
         amount disputed by Buyer,  other than Prepayments,  is determined to be
         due to Seller,  it shall be paid by Buyer within two (2) Business  Days
         of  such  determination,  together  with  interest  calculated  at  the
         Interest  Rate from the original due date until the date paid. If Buyer
         fails to pay  amounts  due to Seller  in a timely  manner,  other  than
         Prepayments,  Seller may suspend  performance  pending  receipt of full
         payment  (and shall  have no  further  duty to the Buyer as a result of
         such action).

10.4     AUDIT.  Each  Party or third  party  representative  of a Party has the
         right,  at its sole expense and during normal working hours, to examine
         the records of the other Party to the extent  reasonably  necessary  to
         verify accuracy of any statement,  charge or computation  made pursuant
         to the provisions of this Agreement.  If any such  examination  reveals
         any  inaccuracy in any  statement,  the necessary  adjustments  in such
         statement  and the payments  thereof  shall be made  promptly and shall
         bear interest calculated at the Interest Rate from the date overpayment
         or  underpayment  was  made  until  paid;  provided,  however,  that no
         adjustment for any statement or payment will be made unless  objections
         to the  accuracy  thereof  were made prior to the lapse of twelve  (12)
         months from the rendition  thereof,  and thereafter any objection shall
         be deemed waived.

10.5     RECORDS.  Each Party  shall keep such  records as may be  necessary  to
         afford the other a clear history of all deliveries of Power hereunder.


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


10.6     RECORDING.  Each Party  acknowledges  and agrees that either  Party may
         create a tape or  electronic  recording  of  conversations  between the
         Parties to this  Agreement,  with proper  audible notice as required by
         law,  that may be  submitted  in evidence in any  proceeding  or action
         relating to this Agreement.

                                   ARTICLE 11
                                 INDEMNIFICATION

11.1     SELLER'S INDEMNIFICATION. Seller hereby agrees to indemnify, defend and
         hold  harmless  Buyer,  its  agents,  servants,  affiliates,  officers,
         directors,  employees  and  representatives,   (collectively,  "Buyer's
         Indemnitees")  of each,  from and against  any and all losses,  claims,
         damages  or   liabilities  to  third  parties   (including   reasonable
         attorneys' fees actually  incurred and including,  without  limitation,
         penalties or fines  imposed by government  authorities)  arising out of
         the  fraud,  gross  negligence  or the  willful  misconduct  of  Seller
         relating to Power  delivered  under this Agreement until such Power has
         been  delivered to Buyer at the Delivery  Point(s)  including,  without
         limitation,  the loss or claims for loss or damage to property,  except
         to the extent caused by the fraud, negligence or the willful misconduct
         or breach of obligation under this Agreement of the Buyer's Indemnitees
         and provided  that Seller shall be promptly  notified in writing of any
         such claim or suit brought  against any such Buyer's  Indemnitees.  The
         foregoing  notwithstanding,  Seller's  obligations under this Agreement
         towards any  Buyer's  Indemnitees  are  conditioned  upon such  Buyer's
         Indemnitees providing such cooperation as Seller may reasonably request
         in  connection  with its  defense  or  settlement  of the claim or suit
         against such Buyer's Indemnitees.

11.2     BUYER'S INDEMNIFICATION.  Buyer hereby agrees to indemnify,  defend and
         hold harmless  Seller,  its agents,  servants,  affiliates,  directors,
         employees, and representatives,  (collectively, "Seller's Indemnitees")
         of each,  from and  against  any and all  losses,  claims,  damages  or
         liabilities  to third parties  (including  reasonable  attorneys'  fees
         actually incurred and including, without limitation, penalties or fines
         imposed by  government  authorities)  arising  out of the fraud,  gross
         negligence,  or willful misconduct of Buyer relating to Power delivered
         under this  Agreement  after such Power has been  delivered to Buyer at
         the Delivery Point(s) including, without limitation, the loss or claims
         for loss or damage to  property,  except  to the  extent  caused by the
         fraud,  negligence  or the willful  misconduct  or breach of obligation
         under this  Agreement of the  Seller's  Indemnitees  and provided  that
         Buyer shall be promptly  notified in writing of any such claims or suit
         brought   against  any  such   Seller's   Indemnitees.   The  foregoing
         notwithstanding,  Buyer's  obligations under this Agreement towards any
         Seller's   Indemnitees  are  conditioned   upon  Seller's   Indemnitees
         providing  such   cooperation  as  Buyer  may  reasonably   request  in
         connection  with its defense or settlement of the claim or suit against
         such Seller's Indemnitees.

                                   ARTICLE 12
                            ASSIGNMENT AND SUCCESSION

12.1     ASSIGNMENT AND SUCCESSION. Neither Party shall assign this Agreement or
         its rights  hereunder  without the prior  written  consent of the other
         Party, provided,  however, either Party may, without the consent of the
         other Party (and without  relieving  itself from liability  hereunder),
         (i) transfer,  sell,  pledge,  encumber or assign this Agreement or the
         accounts,  revenues or proceeds hereof in connection with any financing
         or other financial arrangements; (ii) transfer or assign this Agreement
         to an affiliate  of such Party which  affiliate's  creditworthiness  is
         equal to or higher than that of such Party; (iii) except as provided in
         Section 8.2 hereof,  transfer or assign this Agreement to any person or
         entity  succeeding to all or  substantially  all of the Party's


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         assets  provided  that  Party has at least a S&P rating of BBB- or Baa3
         from Moody's (or their  equivalents  should those agencies change their
         rating designations).  Upon any assignment made in compliance with this
         Section  12.1,  this  Agreement  shall inure to and be binding upon the
         successors and assigns of the assigning Party.  References to any Party
         named herein shall include such Party's successors and assigns.

                                   ARTICLE 13
                    LIMITATION OF LIABILITY AND FORCE MAJEURE

13.1     FORCE MAJEURE. To the extent either Party is prevented by Force Majeure
         from carrying out, in whole or in part, its  obligations  hereunder and
         such Party (the  Claiming  Party) gives notice and details of the Force
         Majeure to the other Party as soon as  practicable,  then the  Claiming
         Party shall be excused from the performance of its  obligations  (other
         than the  obligation  to make  payments  then due or becoming  due with
         respect  to  performance  prior to the Force  Majeure).  The term Force
         Majeure shall mean an event or  circumstance  which  prevents one Party
         from performing its obligations hereunder,  which event or circumstance
         was not anticipated,  which is not within the reasonable  control of or
         the result of the  negligence of the Claiming  Party and which,  by the
         exercise of due diligence  the Claiming  Party is unable to overcome or
         avoid or cause to be avoided.  Force  Majeure shall not be based on (i)
         the loss of Buyer's markets; (ii) Buyer's inability economically to use
         or resell the Power purchased  hereunder;  (iii) the loss or failure of
         Seller's  supply;  or (iv) Seller's ability to sell the Power at a more
         advantageous  price.  Neither  Party may raise a claim of Force Majeure
         based in whole or in part on  interruption  by a  Transmitting  Utility
         unless  (i) such  Party has  contracted  for firm  transmission  with a
         Transmitting  Utility for  transmission of the Power to be delivered to
         or received at the Delivery  Point(s) and (ii) such interruption is due
         to Force  Majeure or similar  term as  defined  under the  Transmitting
         Utility's tariff.

13.2     LIMITATION OF LIABILITY.  THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES
         AND  MEASURES  OF  DAMAGES  PROVIDED  IN  THIS  AGREEMENT  SATISFY  THE
         ESSENTIAL  PURPOSES  HEREOF.  FOR BREACH OF ANY  PROVISION FOR WHICH AN
         EXPRESS  REMEDY OR MEASURE OF DAMAGES IS PROVIDED,  SUCH EXPRESS REMEDY
         OR MEASURE  OF  DAMAGES  SHALL BE THE SOLE AND  EXCLUSIVE  REMEDY,  THE
         OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND
         ALL OTHER  REMEDIES  OR DAMAGES AT LAW OR IN EQUITY ARE  WAIVED.  IF NO
         REMEDY OR  MEASURE  OF DAMAGES  IS  EXPRESSLY  PROVIDED  HEREIN OR IN A
         TRANSACTION,  THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL
         DAMAGES  ONLY,  SUCH  DIRECT  ACTUAL  DAMAGES  SHALL  BE THE  SOLE  AND
         EXCLUSIVE  REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY
         ARE WAIVED.  UNLESS EXPRESSLY  HEREIN PROVIDED,  NEITHER PARTY SHALL BE
         LIABLE FOR CONSEQUENTIAL,  INCIDENTAL,  PUNITIVE, EXEMPLARY OR INDIRECT
         DAMAGES,  LOST  PROFITS  OR OTHER  BUSINESS  INTERRUPTION  DAMAGES,  BY
         STATUTE,  IN  TORT  OR  CONTRACT,  UNDER  ANY  INDEMNITY  PROVISION  OR
         OTHERWISE.  IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN
         IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE
         CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,
         WHETHER SUCH  NEGLIGENCE  BE SOLE,  JOINT OR  CONCURRENT,  OR ACTIVE OR
         PASSIVE.  TO THE EXTENT ANY DAMAGES  REQUIRED TO BE PAID  HEREUNDER ARE
         LIQUIDATED,  THE PARTIES  ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR
         IMPOSSIBLE TO DETERMINE AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE
         A REASONABLE APPROXIMATION OF THE HARM OR LOSS.


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


                                   ARTICLE 14
                                      TAXES

14.1     COOPERATION.  Each Party shall use reasonable  efforts to implement the
         provisions of and to administer  this Agreement in accordance  with the
         intent of the Parties to minimize  Taxes,  so long as neither  Party is
         materially adversely affected by such efforts.

14.2     TAXES.  Seller shall pay or cause to be paid all taxes,  fees,  levies,
         penalties,  license or charges  imposed by any  governmental  authority
         ("Taxes") on or with respect to the Power arising prior to the Delivery
         Point(s).  Buyer  shall  pay or cause  to be paid all  Taxes on or with
         respect  to  Power  at and from the  Delivery  Point(s)  other  than ad
         valorem, franchise or income taxes which are related to the sale of the
         Power and are,  therefore,  the  responsibility  of the Seller.  In the
         event  Seller is  required by law or  regulation  to remit or pay Taxes
         which  are  Buyer's  responsibility  hereunder,  Buyer  shall  promptly
         reimburse  Seller  for  such  Taxes.  If Buyer  is  required  by law or
         regulation  to remit or pay  Taxes  that  are  Seller's  responsibility
         hereunder,  Buyer may deduct the amount of any such Taxes from the sums
         due to Seller hereunder. Nothing shall obligate or cause a Party to pay
         or be liable to pay any taxes for which it is exempt under the law.

                                   ARTICLE 15
                           DEFAULT AND RESPONSIBILITY

15.1     EVENTS OF DEFAULT.  An event of default  shall mean,  with respect to a
         Party ("Defaulting Party") the occurrence of any of the following:

            (a)  the failure to make,  when due, any undisputed  payment,  other
                 than  Prepayments,  required pursuant to this Agreement if such
                 failure is not  remedied  within five (5)  Business  Days after
                 written notice;

            (b)  any  representation or warranty made by a Party herein shall be
                 false or misleading in any material respect when made; and

            (c)  the failure to perform any material  covenant or obligation set
                 forth in the  Agreement  (except to the extent  constituting  a
                 separate event of default and except for a Party's  obligations
                 to deliver or receive the Power, the exclusive remedy for which
                 is provided in Section 5.1) if such failure  shall not be cured
                 within five (5) Business Days after written notice.

15.2     REMEDIES.  If an event of  default  shall  have  occurred  and shall be
         continuing,  the Non-Defaulting Party may, in its sole discretion,  (i)
         designate a day, no earlier than the day such notice is  effective  and
         no later than twenty (20) days after such  notice is  effective,  as an
         early  termination  date ("Early  Termination  Date") to liquidate  and
         terminate  this  Agreement  between the Parties,  and (ii) withhold any
         payments  due  to  the  Defaulting  Party  under  this  Agreement.  The
         Non-Defaulting  Party shall  calculate,  in a  commercially  reasonable
         manner,  a Settlement  Amount as of the Early  Termination Date (or, to
         the extent that in the reasonable opinion of the  Non-Defaulting  Party
         portions of this Agreement are commercially  impracticable to liquidate
         and terminate or may not be liquidated and terminated  under applicable
         law on the Early  Termination Date, as soon thereafter as is reasonably
         practicable).

15.3     NET OUT OF SETTLEMENT AMOUNTS. The Non-Defaulting Party shall aggregate
         all  Settlement  Amounts  into a single net amount  ("Net  Amount") and
         notify the  Defaulting  Party of the Net Amount  owed or owing.  If the
         Non-Defaulting  Party's aggregate Financial Losses and Costs exceed its
         aggregate  Financial Gains, the Defaulting Party shall within three (3)
         Business  Days of  receipt  of such  notice,  pay the Net Amount to the
         Non-Defaulting  Party, which Net Amount shall bear interest  calculated
         at the Interest Rate from the Early Termination Date


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         until paid. If the  Non-Defaulting  Party's  aggregate  Financial Gains
         exceed its Financial Losses and Costs, if any, resulting from the event
         of default,  the  Non-Defaulting  Party shall pay the Net Amount to the
         Defaulting Party on the next regularly scheduled payment date.

15.4     DISPUTES WITH RESPECT TO NET AMOUNT.  If the Defaulting  Party disputes
         the Non-Defaulting  Party's  calculation of the Net Amount, in whole or
         in part,  the Defaulting  Party shall,  within two (2) Business Days of
         receipt of the  Non-Defaulting  Party's  calculation of the Net Amount,
         provide to the Non-Defaulting  Party a detailed written  explanation of
         the basis for such dispute;  provided,  however, that if the Net Amount
         is due from the  Defaulting  Party,  the  Defaulting  Party shall first
         transfer  collateral  satisfactory  to the  Non-Defaulting  Party in an
         amount  equal  to the Net  Amount  to an  escrow  account  to an  agent
         acceptable to both Parties.

15.5     SUSPENSION OF PERFORMANCE.  Notwithstanding any other provision of this
         Agreement,  after the  occurrence of (i) an event of default so long as
         the event of  default is  continuing  and has not been cured or (ii) an
         event  which,  with  notice  or the  passage  of  time or  both,  would
         constitute an event of default, the Non-Defaulting  Party, upon written
         notice  to the  Defaulting  Party,  shall  have the  right  to  suspend
         performance hereunder and to exercise any remedy available at law or in
         equity, except as provided in Article 16.

                                   ARTICLE 16
                                   ARBITRATION

16.1     COMPULSORY BINDING  ARBITRATION.  All disputes of every kind and nature
         between the Parties arising out of or in connection with this Agreement
         shall be submitted to binding  arbitration  pursuant to the  Commercial
         Arbitration Rules of the American Arbitration  Association (as the same
         may be  amended  from  time to time,  the "AAA  Rules").  If and to the
         extent that the provisions of this Agreement are inconsistent  with the
         AAA  Rules,  the  provisions  of this  Agreement  shall  control in any
         arbitration proceeding.

16.2     DEMAND FOR ARBITRATION. Either party may make demand for arbitration in
         writing to the other  party,  setting  forth the nature of the dispute,
         the amount  involved,  if any, the remedies  sought and the name of the
         arbitrator appointed by the party demanding arbitration. Copies of such
         notice shall also be given to the American  Arbitration  Association as
         required by the AAA Rules.

16.3     ARBITRATORS.  Within ten (10) days  after any  demand  for  arbitration
         under Section 16.2,  the other party shall name its  arbitrator,  or in
         default thereof,  such arbitrator shall be named forthwith  pursuant to
         the AAA  Rules.  The two  arbitrators  so  selected  shall name a third
         arbitrator  within  seven  (7)  days  after  selection  of  the  second
         arbitrator  from the  National  Panel of  Arbitrators  of the  American
         Arbitration Association or, in the absence of such agreement on a third
         arbitrator  by the two  arbitrators  so appointed,  a third  arbitrator
         shall be appointed pursuant to the AAA Rules. At least one of the three
         arbitrators   named  or  appointed  under  this  Section  shall  be  an
         attorney-at-law.

16.4     RULES FOR  ARBITRATION.  The Federal  Rules of Civil  Procedure and the
         Federal  Rules  of  Evidence  shall  apply  to all  proceedings  of any
         arbitration hereunder, including discovery proceedings.  Depositions in
         advance of the hearing  shall be  permitted  for  purposes of preparing
         testimony,  but shall be  limited in number so as to avoid any delay in
         achieving  the time  periods  for  decisions  required  hereunder.  All
         questions relating to discovery and disclosure shall be referred to one
         of the  arbitrators,  who  shall  be  chosen  for such  purpose  by the
         arbitrators   and  shall  be  an   attorney-at-law;   and  his  or  her
         determination shall be final.

16.5     HEARING AND AWARD. The arbitration hearing shall be held in Pittsburgh,
         Pennsylvania,  and shall  commence not later than forty (40) days after
         the date of the original  demand under Section  16.2.  The award of the
         arbitrators  shall be made not later  than  thirty  (30) days after the
         date of closing of the hearing,  or if oral  hearings have been waived,
         after the date of  transmitting  the final  statements and proof to the
         arbitrators;  provided,  however,  that in no event  shall any award be
         made later than eighty (80) days after the date of the original  demand
         for arbitration under Section 16.2.

16.6     ARBITRATOR'S  AUTHORITY.  In the event the arbitrators find a breach of
         the terms and  conditions  of this  Agreement  to have  occurred and be
         continuing,  the arbitrators  shall have express authority to order (i)
         specific performance; and (ii) the payment of damages to compensate the
         non-breaching  party  for  any  loss;   provided,   in  the  event  the
         arbitrators  find either  Party's  actions to be in breach of the terms
         and conditions of this Agreement, that Party shall promptly comply with
         the  arbitrators'  decision  and  order  (including  in the  event  the


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         arbitrators  order  specific  performance,  correcting any action taken
         during such proceeding  inconsistent  with the arbitrator's  decision).
         Any payment of damages ordered by the  arbitrators  shall bear interest
         at the  Interest  Rate  from  the  date as of which  such  damages  are
         calculated  to the date on which the party  entitled  thereto  receives
         payment thereof in full.

16.7     PERFORMANCE  DURING  ARBITRATION  PROCEEDINGS.  During the  pendency of
         arbitration under this Article,  (a) Buyer and Seller shall continue to
         perform their respective obligations  hereunder,  without setoff during
         the pendency of such  arbitration  of any amount so  disputed,  and (b)
         neither Buyer nor Seller shall  exercise any other  remedies  hereunder
         arising by virtue of the matters in dispute.

                                   ARTICLE 17
                       CREDIT AND COLLATERAL REQUIREMENTS

17.1     FINANCIAL  INFORMATION.  If requested by a Party, the other Party shall
         deliver (i) within one hundred and twenty (120) days  following the end
         of each fiscal  year,  a copy of such  Party's or such  Party's  parent
         company's  annual  report  containing  audited  consolidated  financial
         statements  for such fiscal year and (ii) within  sixty (60) days after
         the end of each of its first three fiscal quarters of each fiscal year,
         a  copy  of  such  Party's   quarterly  report   containing   unaudited
         consolidated financial statements for such fiscal quarter. In all cases
         the  statements  shall be for the most  recent  accounting  period  and
         prepared in accordance with generally accepted accounting principles or
         such other principles then in effect,  provided,  however,  that should
         any  such  statements  not  be  available  timely  due  to a  delay  in
         preparation  or  certification,  such  delay  shall  not be an event of
         default  so long as such  Party  diligently  pursues  the  preparation,
         certification and delivery of the statements.

17.2     CREDIT  ASSURANCES.  If a Party  ("Requesting  Party") has commercially
         reasonable  grounds to believe that the other Party's  creditworthiness
         or  performance  under this  Agreement has become  unsatisfactory,  the
         Requesting  Party will  provide  the other  Party with  written  notice
         requesting  collateral  in the form of cash,  letter of credit or other
         security  acceptable  to  Requesting  Party  in  an  amount  reasonably
         determined  by the  Requesting  Party.  Upon receipt of such notice the
         other Party shall have three (3) Business  Days to remedy the situation
         by providing  such  collateral  to the  Requesting  Party as reasonably
         determined by the Requesting  Party.  In the event that the other Party
         fails to provide such collateral or guarantee or other credit assurance
         acceptable  to the  Requesting  Party within three (3) Business Days of
         receipt of notice,  then the Requesting  Party may suspend  receipts or
         deliveries hereunder.

17.3     GRANT OF SECURITY  INTEREST  AND  REMEDIES.  To secure its  obligations
         under this  Agreement and to the extent either or both Parties  deliver
         collateral  hereunder,  each Party  hereby  grants to the other Party a
         present and continuing  security  interest in and lien on (and right of
         setoff  against),  and  assignment  of all  cash  collateral  and  cash
         equivalent  collateral and any and all proceeds resulting  therefrom or
         the  liquidation  thereof,  whether now or hereafter held by, on behalf
         of, or for the benefit of, such other  Party,  and each Party agrees to
         take such  action as the other  Party  reasonably  requires in order to
         perfect the other Party's first priority security interest in, and lien
         on (and  right of  setoff  against),  such  collateral  and any and all
         proceeds resulting therefrom or from the liquidation  thereof.  Upon or
         any time  after the  occurrence  or deemed  occurrence  and  during the
         continuation of an event of default or an Early  Termination  Date, the
         Non-Defaulting  Party  may do any  one or more  of the  following:  (i)
         exercise  any of such  rights  and  remedies  of a secured  party  with
         respect to all collateral, including any such rights and remedies under
         law then in effect;  (ii) exercise its rights of setoff against any and
         all  property  of  the  Defaulting  Party  in  the  possession  of  the
         Non-Defaulting Party or its agent; (iii) draw on any outstanding letter
         of credit issued for its benefit;  and (iv)  liquidate  all  collateral
         then held by or for the  benefit of the  secured  Party  (free from any
         claim  or right  of any  nature  whatsoever  of the


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


         Defaulting  Party,  including  any  equity  or  right  of  purchase  or
         redemption by the Defaulting Party).

                                   ARTICLE 18
                                  MISCELLANEOUS

18.1     REPRESENTATIONS  AND WARRANTIES.  As of the date and year first written
         above, each Party represents and warrants to the other Party that:

            (a)  it is duly  organized,  validly  existing and in good  standing
                 under the laws of the jurisdiction of its formation;

            (b)  it  has  all  regulatory  authorizations  necessary  for  it to
                 legally perform its obligations under this Agreement;

            (c)  the execution,  delivery and  performance of this Agreement are
                 within its powers,  have been duly  authorized by all necessary
                 action and do not  violate any of the terms and  conditions  in
                 its governing  documents,  any contracts to which it is a party
                 or any law, rule,  regulation  order or the like  applicable to
                 it;

            (d)  this  Agreement and other  documents  executed and delivered in
                 accordance with this Agreement constitute its legally valid and
                 binding  obligations  enforceable against it in accordance with
                 their terms.

18.2     GOVERNING  LAW. This Agreement and the rights and duties of the Parties
         hereunder shall be governed by and construed, enforced and performed in
         accordance with the laws of the Commonwealth of  Pennsylvania,  without
         regard to principles of conflicts of law.

18.3     NOTICES. Any notice, request, demand, statement or payment provided for
         in this  Agreement  shall be  confirmed  in writing,  unless  otherwise
         noted, and shall be made as specified below;  provided,  however,  that
         notices of interruption and  communications  to Transmitting  Utilities
         may be provided  verbally,  effective  immediately  and,  upon request,
         confirmed in writing. A notice sent by facsimile  transmission shall be
         deemed  received by the close of the  Business Day on which such notice
         was  transmitted  or such earlier time as is confirmed by the receiving
         Party unless it confirms a prior verbal communication in which case any
         such notice shall be deemed received on the day sent.

                     Party:                AE Supply Company, LLC
                     Account Name:         AE Supply Company
                     Bank:                 PNC Bank
                     ABA #:                043000096
                     Account #:            1008969371
                     Invoices:
                                           AE Supply Company LLC
                                           4350 Northern Pike
                                           Monroeville, PA  15146-2841
                                           ATTN:  Maureen Miller


                     Party:                Allegheny Power
                     Account Name:         West Penn Power Company
                     Bank:                 PNC Bank


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


                     ABA#:                 043000096
                     Account#:             2000485
                     Invoices:
                                           West Penn Power Company
                                           800 Cabin Hill Drive
                                           Greensburg, PA 15601
                                           ATTN:  Marianne Tonini

         Or to such  other  address  as Buyer or Seller  shall from time to time
         designate by letter properly addressed.

18.4     ENTIRETY.  This Agreement  constitutes the entire agreement between the
         Parties  hereto.  There are no prior or  contemporaneous  agreements or
         representations  affecting  the same  subject  matter  other than those
         herein  expressed.  Except for those matters which,  in accordance with
         this  Agreement,   may  be  resolved  by  the  Parties  and  documented
         electronically, it is further agreed that no amendment, modification or
         change herein shall be enforceable, except as specifically provided for
         in this  Agreement,  unless  produced in writing  and  executed by both
         Parties.

18.5     NON-WAIVER.  No  waiver  by  either  party  hereto  of any  one or more
         defaults by the other in the  performance  of any of the  provisions of
         this  Agreement  shall be construed as a waiver of any other default or
         defaults whether of a like kind or different nature.

18.6     SEVERABILITY. Except as otherwise stated herein, any provision, article
         or  section  declared  or  rendered  unlawful  by a  court  of  law  or
         regulatory  agency  with  jurisdiction  over  the  Parties,  or  deemed
         unlawful  because of statutory  change,  will not otherwise  affect the
         lawful obligations that arise under this Agreement.

18.7     HEADINGS. The headings used for the Articles herein are for convenience
         and  reference  purposes only and shall in no way affect the meaning or
         interpretation of the provisions of this Agreement.

18.8     CONFIDENTIALITY.  Neither Party shall  disclose the terms or conditions
         of this  Agreement to a third party (other than the Party's  employees,
         lenders, counsel, accountants, or advisors who have a need to know such
         information and have agreed to keep such terms confidential)  except in
         order to comply with any applicable law or regulation, or any exchange,
         Control Area or other regional or sub-regional requirements.


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in duplicate
originals effective as of the day and year first written above.

WEST PENN POWER COMPANY D/B/A ALLEGHENY     ALLEGHENY ENERGY SUPPLY COMPANY, LLC
POWER



By:   /s/ Jim Haney                     By:   /s/ David C. Benson
      ---------------------------------       ----------------------------------
          Jim Haney                               David C. Benson
Name:                                   Name:
      ---------------------------------       ----------------------------------

Title:  Vice President                  Title: Vice President
      ---------------------------------       ----------------------------------

Date:                                   Date:
      ---------------------------------       ----------------------------------


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001

<PAGE>


Allegheny Energy Supply Company, LLC
First Revised Rate Schedule FERC No. 4
Supersedes Rate Schedule FERC No. 4


                                                                       EXHIBIT 1

                   PRO FORMA WHOLESALE MONTHLY GENERATION RATE

Pro Forma  Wholesale  Generation  Rate = (Bundled Rate  Schedule  Billing - OATT
Transmission Cost) / metered kilowatt-hours



where:

         Bundled Rate Schedule Billing = total monthly charges  determined under
the FERC Electric Tariff, First Revised Volume No. 1 of West Penn Power Company

         OATT  Transmission  Cost =  calculated  total  monthly  cost  under the
Allegheny Power Open Access Transmission Tariff ("OATT"). Sub-transmission costs
are determined on a customer  specific direct assignment basis utilizing monthly
fixed charge rates of 1.70%  (service to 15 kV) and 1.74% (service from 15 kV to
100 kV).


Issued by David C. Benson, Vice President             Effective: January 1, 2001
Issued on May 24, 2001