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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) of the SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) of the SECURITIES EXCHANGE ACT OF
1934
 Commission File Number of issuing entity: 333-139820
 MP Environmental Funding LLC
 Exact name of issuing entity, as specified in its charter)
 
 Delaware
(State of Incorporation)
    
    20-5961603
(IRS Employer Identification Number)
 2215-B Renaissance Drive, Suite #5
Las Vegas, Nevada
(Address of Principal Executive 
Offices)
    
    89119
(Zip Code)
 (702) 740-4244
(Telephone Number)
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  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ
    Documents Incorporated by Reference




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TABLE OF CONTENTS  Part IItem 1. Business.Item 1A. Risk Factors.Item 1B. Unresolved Staff Comments.Item 2. Properties.Item 3. Legal Proceedings.Item 4. Submission of Matters to a Vote of Security Holders.Part IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Item 6. Selected Financial Data.Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.Item 7A. Quantitative and Qualitative Disclosures about Market Risk.Item 8. Financial Statements and Supplementary Data.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosuresItem 9A. Controls and Procedures.Item 9B. Other Information.Part IIIItem 10. Directors and Executive Officers of the Registrant.Item 11. Executive Compensation.Item 12. Security Ownership of Certain Beneficial Owners and Management.Item 13. Certain Relationships and Related Transactions.Item 14. Principal Accountant Fees and Services.PART IVItem 15. Exhibits, Financial Statement Schedules.Item 1112 (b). Significant Obligors of Pool Assets.Item 1114(b)(2). Credit Enhancement and other Support, Except for Certain Derivative Instruments.Item 1115(b). Certain Derivative Instruments.Item 1117. Legal Proceedings.Item 1119. Affiliations and Certain Relationships and Related Transactions.SIGNATURESExhibit IndexEX-31.1EX-33.1EX-33.2EX-34.1EX-34.2EX-35.1    Table of Contents  
 Part I
 
 Item 1. Business.
  
 Item 1A. Risk Factors.
  
 Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
  
 Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Part II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities.
  
 Item 6. Selected Financial Data.
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  
 Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
  
 Item 8. Financial Statements and Supplementary Data.
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
  2




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Item 9A. Controls and Procedures.
  
 Item 9B. Other Information.
  
 Part III
 
 Item 10. Directors and Executive Officers of the Registrant.
  
    
    an employee, director, stockholder, manager, partner or officer of the Company or
an employee, director, manager, stockholder, partner or officer of any affiliate of
the Company, other than his or her service as independent manager;
    
    a customer or supplier of the Company, or a customer or supplier of any of the
Companys affiliates, except that an independent manager may be an employee of a
supplier of corporate related services to the Company or any of its affiliates; or
    
    any member of the immediate family of a person described in either of the above
bullets.
  Name
    
    Age
    
    Title
    
    BackgroundPaul J. Evanson
    
    66
    
    
    Chief Executive
Officer and Manager
    
    Mr. Evanson has been
Chairman of the
Board, President and
Chief Executive
Officer of Allegheny
Energy, Inc. since
June 2003. Prior to
joining Allegheny
Energy, Inc., Mr.
Evanson was
President of Florida
Power & Light
Company, the
principal subsidiary
of FPL Group, Inc.,
and a director of
FPL Group Inc.David E. Flitman
    
    43
    
    
    Manager
    
    Mr. Flitman has been
President of
Allegheny Power,
Allegheny Energy,
Inc.s energy
delivery business,
since July 2006.
Mr. Flitman joined
Allegheny Energy,
Inc. in February
2005 as Vice
President,
Distribution. Prior
to joining Allegheny
Energy, Inc., Mr.
Flitman spent nearly
20 years with E.I.
du Pont de Nemours
and Company, most
recently as Global
Business Director
for the Nonwovens
Business Group.
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Name
    
    Age
    
    Title
    
    BackgroundPhilip L. Goulding
    
    48
    
    
    Vice President and
Manager
    
    Mr. Goulding has
been Senior Vice
President and Chief
Financial Officer
of Allegheny
Energy, Inc. since
July 2006. Mr.
Goulding joined
Allegheny Energy,
Inc. in October
2003 as Vice
President,
Strategic Planning
and Chief
Commercial Officer
of Allegheny
Energy, Inc. Prior
to joining
Allegheny Energy,
Inc., Mr. Goulding
led the North
American energy
practice of L.E.K.
Consulting.William F. Wahl
    
    48
    
    
    Controller
    
    Mr. Wahl has been
Vice President,
Controller and
Chief Accounting
Officer of AYE
since May 2007. He
joined AYE in 2003
and served as
Assistant
Controller,
Corporate
Accounting from
February 2005 to
May 2007. From 2002
to 2003, Mr. Wahl
was employed by PNC
Financial Services
Group, Inc. Prior
to that, he was
employed by
Dominion Resources,
Inc.Kari L. Johnson
    
    47
    
    
    Independent Manager
    
    Ms. Johnson is
currently serving
as Director,
Passive Investment
Services of CSC
Entity Services,
LLC, which, among
other things,
provides management
services to
entities involved
in securitizations.
Prior to joining
CSC Entity
Services, LLC in
October, 1997, Ms.
Johnson served as
Credit and Accounts
Receivable Manager
at Raychem
Corporation.Darryl E. Smith
    
    50
    
    
    Independent Manager
    
    Mr. Smith has been
Vice President,
Client Services of
CSC Entity
Services, LLC since
July 2004. Prior to
joining CSC Entity
Services, LLC, Mr.
Smith worked for
two years at
Wachovia
Corporation as Vice
President and
Relationship
Manager. Before
joining Wachovia
Corporation, Mr.
Smith worked for 16
years at Wilmington
Trust SP in various
capacities,
including as Vice
President and
Business Manager.
 Code of Business Conduct and Ethics
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Item 11. Executive Compensation.
   
 Item 12. Security Ownership of Certain Beneficial Owners and Management.
  
 Item 13. Certain Relationships and Related Transactions.
  Sale Agreement
  Servicing Agreement
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Item 14. Principal Accountant Fees and Services.
  
 PART IV
 
 Item 15. Exhibits, Financial Statement Schedules.
 (a) The following documents are filed as part of this report:
 (1) Financial Statements:
  (2) Financial Statement Schedules:
  (3) Exhibits:
  
 Item 1112 (b). Significant Obligors of Pool Assets.
  
 Item 1114(b)(2). Credit Enhancement and other Support, Except for Certain Derivative Instruments.
  
 Item 1115(b). Certain Derivative Instruments.
  
 Item 1117. Legal Proceedings.
  
 Item 1119. Affiliations and Certain Relationships and Related Transactions.
  6




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SIGNATURES
 th
 MP Environmental Funding LLCBy:

/s/
Barry E. PakenhamBarry E. Pakenham, Treasurer 7




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Exhibit Index
 Exhibit No.
    
    Description of Exhibit3.1
    
    Amended Certificate of Formation of MP Environmental Funding
LLC (filed with the Companys Registration Statement on Form
S-3, dated January 5, 2007).3.2
    
    Amended and Restated Limited Liability Company Agreement of MP
Environmental Funding LLC, dated as of April 11, 2007 (filed
with the Companys Current Report on Form 8-K, dated as of
April 17, 2007).4.1
    
    Indenture, dated as of April 11, 2007, including the form of
the bonds (filed with the Companys Current Report on Form
8-K, dated April 17, 2007).4.2
    
    Series Supplement, dated as of April 11, 2007 (filed with the
Companys Current Report on Form 8-K, dated April 17, 2007).10.1
    
    Transferred Environmental Control Property Servicing
Agreement, dated as of April 11, 2007 (filed with the
Companys Current Report on Form 8-K, dated April 17, 2007).10.2
    
    Administration Agreement, dated as of April 11, 2007 (filed
with the Companys Current Report on Form 8-K, dated April 17,
2007).10.3
    
    Environmental Control Property Transfer Agreement, dated as of
April 11, 2007 (filed with the Companys Current Report on
Form 8-K, dated April 17, 2007).10.4
    
    Transferred Environmental Control Property Sale Agreement,
dated as of April 11, 2007 (filed with the Companys Current
Report on Form 8-K, dated April 17, 2007).31.1
    
    Rule 13a-14(d)/15d-14(d) certification (filed herewith).33.1
    
    Report on assessment of compliance with servicing criteria for
asset-backed securities (filed herewith).33.2
    
    Report on assessment of compliance with servicing criteria for
asset-backed securities (filed herewith).34.1
    
    Attestation report on assessment of compliance with servicing
criteria for asset-backed securities (filed herewith).34.2
    
    Attestation report on assessment of compliance with servicing
criteria for asset-backed securities (filed herewith).35.1
    
    Servicers Compliance Statement
 8