Document:

Environmental Control Property Sale Agreement - MP Environmental Funding LLC

 Exhibit 10.1 
 Execution Version 
  
  
  
 ENVIRONMENTAL CONTROL PROPERTY 
 SALE AGREEMENT 
 between 
 MP ENVIRONMENTAL FUNDING LLC 
 Issuer 
 and 
 MONONGAHELA
POWER COMPANY 
 Seller 
 Dated as of December 23, 2009 
  
  
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE I Definitions
	  	3
			
	 Section 1.01.
	  	 Definitions
	  	3
	 Section 1.02.
	  	 Other Definitional Provisions
	  	4
		
	 ARTICLE II Conveyance of Environmental Control Property
	  	4
			
	 Section 2.01.
	  	 Conveyance of Environmental Control Property
	  	4
	 Section 2.02.
	  	 Conveyance of Subsequent Environmental Control Property
	  	5
	 Section 2.03.
	  	 Conditions to Conveyance of Environmental Control Property
	  	5
		
	 ARTICLE III Representations and Warranties of Seller
	  	6
			
	 Section 3.01.
	  	 Organization and Good Standing
	  	6
	 Section 3.02.
	  	 Due Qualification
	  	6
	 Section 3.03.
	  	 Power and Authority
	  	6
	 Section 3.04.
	  	 Binding Obligation
	  	6
	 Section 3.05.
	  	 No Violation
	  	7
	 Section 3.06.
	  	 No Proceedings
	  	7
	 Section 3.07.
	  	 Approvals
	  	7
	 Section 3.08.
	  	 The Environmental Control Property
	  	7
	 Section 3.09.
	  	 Solvency of Seller
	  	8
	 Section 3.10.
	  	 Irrevocable; Process Valid; No Litigation; Etc.
	  	8
	 Section 3.11.
	  	 Assumptions
	  	10
	 Section 3.12.
	  	 The Environmental Control Property Rights
	  	10
		
	 ARTICLE IV Covenants of the Seller
	  	10
			
	 Section 4.01.
	  	 Corporate Existence
	  	10
	 Section 4.02.
	  	 No Liens or Conveyances
	  	10
	 Section 4.03.
	  	 Delivery of Collections
	  	11
	 Section 4.04.
	  	 Notice of Liens
	  	11
	 Section 4.05.
	  	 Compliance with Law
	  	11
	 Section 4.06.
	  	 Use of Proceeds
	  	11
	 Section 4.07.
	  	 Covenants Related to Environmental Control Property
	  	11
	 Section 4.08.
	  	 Notice of Indemnification Events
	  	12
	 Section 4.09.
	  	 Protection of Title
	  	12
	 Section 4.10.
	  	 Taxes
	  	13
	 Section 4.11.
	  	 Notice of Breach
	  	13
	 Section 4.12.
	  	 Termination
	  	13
	 Section 4.13.
	  	 Third Parties
	  	13
	 Section 4.14.
	  	 Further Covenants
	  	13

  

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	 ARTICLE V The Seller
	  	14
			
	 Section 5.01.
	  	 Liability of Seller; Indemnities
	  	14
	 Section 5.02.
	  	 Merger or Consolidation of, or Assumption of the Obligations of, Seller
	  	15
	 Section 5.03.
	  	 Limitation on Liability of Seller and Others
	  	16
	 Section 5.04.
	  	 Opinions of Counsel
	  	16
		
	 ARTICLE VI Miscellaneous Provisions
	  	17
			
	 Section 6.01.
	  	 Amendment
	  	17
	 Section 6.02.
	  	 Notices
	  	18
	 Section 6.03.
	  	 Assignment
	  	19
	 Section 6.04.
	  	 Limitations on Rights of Others
	  	19
	 Section 6.05.
	  	 Severability
	  	19
	 Section 6.06.
	  	 Separate Counterparts
	  	19
	 Section 6.07.
	  	 Headings
	  	19
	 Section 6.08.
	  	 GOVERNING LAW
	  	19
	 Section 6.09.
	  	 Assignment to Issuer and to Indenture Trustee
	  	19
	 Section 6.10.
	  	 Nonpetition Covenant
	  	19
	 Section 6.11.
	  	 Perfection
	  	20
	 Section 6.12.
	  	 Limitation of Liability
	  	20

  

			
	Exhibit A	  	Form of Bill of Sale
	Exhibit B	  	Pending Litigation
	Appendix A	  	Master Definitions
	Appendix A-1	  	Supplemental Master Definitions

  

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 ENVIRONMENTAL CONTROL PROPERTY SALE AGREEMENT dated as of December 23, 2009 (as
amended, restated, supplemented or otherwise modified from time to time, “this Agreement”), between MP ENVIRONMENTAL FUNDING LLC, a Delaware limited liability company (the “Issuer”), and MONONGAHELA POWER COMPANY,
an Ohio corporation, and its successors in interest to the extent permitted hereunder, as Seller (the “Seller”). 
 WHEREAS the Issuer desires to purchase from time to time Environmental Control Property; and 
 WHEREAS the Seller is
willing to sell Environmental Control Property to the Issuer; and 
 WHEREAS the Seller intends to sell the Environmental
Control Property to the Issuer and the Issuer intends to purchase the Environmental Control Property from the Seller pursuant to this Agreement; and 
 WHEREAS the Issuer, in order to finance the purchase of the Environmental Control Property, will from time to time issue Environmental Control Bonds under the Indenture; and 
 WHEREAS the Issuer, to secure its obligations under the Environmental Control Bonds and the Indenture, will pledge its right, title and
interest in the Environmental Control Property to the Indenture Trustee for the benefit of the Environmental Control Bondholders; and 
 WHEREAS the Issuer has determined that the transactions contemplated by the Basic Documents are in the best interest of the Issuer and its creditors and represent a prudent and advisable course of action that does not impair the rights and
interests of the Issuer’s creditors; and 
 WHEREAS the PSCWV or its attorney will enforce this Agreement pursuant to the
Financing Order for the benefit of the Customers to the extent permitted by applicable Requirements of Law. 
 NOW, THEREFORE,
in consideration of the premises and the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows: 
 ARTICLE I 
 Definitions 
 Section 1.01. Definitions. Capitalized terms used but not otherwise defined herein have the meanings assigned to them in
Appendix A and Appendix A-1 of this Agreement. To the extent there is a conflict between definitions included in Appendix A and Appendix A-1, the definitions in Appendix A-1 shall control. 
  

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 Section 1.02. Other Definitional Provisions. (a) The words “hereof”,
“herein”, “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in
this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation”. 
 (b) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and
to the masculine as well as to the feminine and neuter genders of such terms. 
 ARTICLE II 
 Conveyance of Environmental Control Property 
 Section 2.01. Conveyance of Environmental Control Property. (a) In consideration of the Issuer’s delivery to or upon the order of the Seller of $61,481,250, subject to the conditions
specified in Section 2.03, the Seller, pursuant to a Bill of Sale, will irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse (subject to the obligations herein), all right, title and interest
of the Seller in and to the Environmental Control Property created pursuant to the Statute and in accordance with the Financing Order (such sale, transfer, assignment, set over and conveyance of the Environmental Control Property will include, to
the fullest extent permitted by the Statute, the assignment of all revenues, collections, claims, rights, payments, money or proceeds of or arising from the Environmental Control Charges related to the Environmental Control Property, as the same may
be adjusted from time to time). Such sale, transfer, assignment, set over and conveyance will be expressly stated to be a sale and, pursuant to Section 24-2-4e(m)(1) of the Statute, shall be treated as an absolute transfer of all of the
Seller’s right, title and interest (as in a true sale), and not as a pledge or other secured transaction, of the Environmental Control Property. The Seller and the Issuer agree and confirm that after giving effect to the sale contemplated by
such Bill of Sale, the Seller has no rights in the Environmental Control Property to which a security interest of creditors of the Seller could attach because it has sold all rights in the Environmental Control Property to the Issuer pursuant to
Section 24-2-4e(m)(1) of the Statute. If such sale, transfer, assignment, setting over and conveyance is held by any court of competent jurisdiction not to be a true sale as provided in Section 24-2-4e(m)(1) of the Statute, then such sale,
transfer, assignment, setting over and conveyance shall be treated as a pledge of the Environmental Control Property and as the creation of a security interest (within the meaning of the Statute and the UCC) in the Environmental Control Property
and, without prejudice to its position that it has absolutely transferred all of its rights in the Environmental Control Property to the Issuer, the Seller hereby grants a security interest in the Environmental Control Property to the Issuer (and,
to the extent necessary to qualify the grant as a security interest under the Statute and the UCC, to the Indenture Trustee for the benefit of the Environmental Control Bondholders to secure the right of the Issuer under the Basic Documents to
receive the Environmental Control Charges and all other Environmental Control Property). 
 (b) Subject to the
conditions specified in Section 2.03, the Issuer, pursuant to a Bill of Sale, will purchase the Environmental Control Property from the Seller for the consideration set forth in paragraph (a) above. 
  

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 (c) The Seller and the Issuer each acknowledge and agree that the purchase
price for the Environmental Control Property sold pursuant to the Bill of Sale is equal to its fair market value at the time of sale. 
 Section 2.02. Conveyance of Subsequent Environmental Control Property. The Seller may from time to time offer to sell additional Environmental Control Property to the Issuer, subject to the conditions specified in
Section 2.03. If any such offer is accepted by the Issuer, such Subsequent Environmental Control Property shall be sold to the Issuer effective on the Subsequent Sale Date specified in the related Addition Notice, subject to the
satisfaction or waiver of the conditions specified in Section 2.03. 
 Section 2.03. Conditions to
Conveyance of Environmental Control Property. The Seller shall be permitted to sell Environmental Control Property to the Issuer only upon the satisfaction or waiver of each of the following conditions: 
 (i) on or prior to the 2009 Sale Date or Subsequent Sale Date, as applicable, the Seller shall have delivered to the Issuer a
duly executed Bill of Sale identifying the Environmental Control Property to be conveyed on that date; 
 (ii) as
of the 2009 Sale Date or the Subsequent Sale Date, as applicable, the Seller was not insolvent and will not have been made insolvent by such sale and the Seller is not aware of any pending insolvency with respect to itself; 
 (iii) as of the 2009 Sale Date or the Subsequent Sale Date, as applicable, no breach by the Seller of its representations,
warranties or covenants in this Agreement shall exist and no Servicer Default shall have occurred and be continuing; 
 (iv) as of the 2009 Sale Date or the Subsequent Sale Date, as applicable, (A) the Issuer shall have sufficient funds available to pay the purchase price for the Environmental Control Property to be conveyed on such date and
(B) all conditions to the issuance of one or more Series of Environmental Control Bonds intended to provide such funds set forth in the Indenture shall have been satisfied or waived; 
 (v) on or prior to the 2009 Sale Date or the Subsequent Sale Date, as applicable, the Seller shall have taken all action
required to transfer to the Issuer ownership of the Environmental Control Property to be conveyed on such date, free and clear of all Liens other than Liens created pursuant to the Basic Documents; and the Issuer or the Servicer, on behalf of the
Issuer, shall have taken any action required for the Issuer to grant the Indenture Trustee a first priority perfected security interest in the Collateral and maintain such security interest as of such date; 
 (vi) in the case of a sale of Subsequent Environmental Control Property only, on or prior to such Subsequent Sale Date, the
Seller shall have provided the Issuer and the Rating Agencies with a timely Addition Notice; 
 (vii) the Seller
shall have delivered to the Rating Agencies and the Issuer (A) an Opinion of Counsel with respect to the transfer of the Environmental Control Property then being conveyed to the Issuer and (B) the Opinion of Counsel required by
Section 5.04(a); 
  

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 (viii) the Seller shall have delivered to the Indenture Trustee and the
Issuer an Officers’ Certificate confirming the satisfaction of each condition precedent specified in this Section 2.03; and 
 (ix) the Seller shall have received the purchase price set forth in Section 2.01(a). 
 ARTICLE III 
 Representations and Warranties of Seller 
 As of the 2009 Sale Date and as of any Subsequent Sale Date, as applicable, the Seller makes the following representations and warranties on
which the Issuer has relied and will rely in acquiring Environmental Control Property. The Seller agrees and acknowledges that the following representations and warranties are also for the benefit of the Indenture Trustee, as collateral assignee of
the Issuer pursuant to the Indenture. The representations and warranties shall survive the sale of Environmental Control Property to the Issuer and the pledges and assignments thereof permitted hereby. 
 Section 3.01. Organization and Good Standing. The Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Ohio, with corporate power and authority to own its properties and conduct its business as currently owned or conducted. 
 Section 3.02. Due Qualification. The Seller is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would not be reasonably
likely to have a material adverse effect on the Seller’s business, operations, assets, revenues or properties). 
 Section 3.03. Power and Authority. The Seller has the requisite corporate power and authority to execute and deliver this Agreement and to carry out its terms; the Seller has full corporate power and authority to own the
Environmental Control Property and sell and assign the Environmental Control Property, in the case of the 2009 Sale Date, and the Subsequent Environmental Control Property, in the case of each Subsequent Sale Date, as applicable, and the Seller has
duly authorized such sale and assignment to the Issuer by all necessary corporate action; and the execution, delivery and performance of this Agreement have been duly authorized by the Seller by all necessary corporate action. 
 Section 3.04. Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms, subject to bankruptcy, receivership, insolvency, fraudulent transfer, reorganization, moratorium or other laws relating to or affecting creditors’ rights generally from time to time in effect and
to general principles of equity (regardless of whether considered in a proceeding in equity or at law). 
  

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 Section 3.05. No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the articles of incorporation or
by-laws of the Seller, or any indenture, agreement or other instrument to which the Seller is a party or by which it shall be bound; nor result in the creation or imposition of any Lien upon any of its properties (other than under this Agreement)
pursuant to the terms of any such indenture, agreement or other instrument (other than may be granted under the Basic Documents or any Liens created by the Issuer pursuant to the Financing Order); nor, to the Seller’s knowledge, violate any
Requirements of Law applicable to the Seller of any Governmental Authority having jurisdiction over the Seller or its properties. 
 Section 3.06. No Proceedings. Except as described in Exhibit B, there are no proceedings or investigations pending or, to the Seller’s best knowledge, threatened, before any Governmental Authority having jurisdiction over
the Seller or its properties (i) asserting the invalidity of the Basic Documents, the Environmental Control Bonds, the Statute or the Financing Order, (ii) seeking to prevent the issuance of the Environmental Control Bonds or the
consummation of any of the transactions contemplated by the Basic Documents (iii) challenging the Seller’s treatment of the Environmental Control Bonds as debt of the Seller for federal and state tax purposes, or (iv) except as
described in Exhibit B, seeking any determination or ruling that could reasonably be expected to materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, the Basic Documents, the
Environmental Control Bonds or the Financing Order. 
 Section 3.07. Approvals. Except for UCC filings or filings
under the Statute, no approval, authorization, consent, order or other action of, or filing with, any Governmental Authority is required in connection with the execution and delivery by the Seller of this Agreement, the performance by the Seller of
the transactions contemplated hereby or the fulfillment by the Seller of the terms hereof, except those that have been obtained or made. 
 Section 3.08. The Environmental Control Property. 
 (a)
All information provided by the Seller to the Issuer in writing with respect to the Environmental Control Property is correct in all material respects. 
 (b) The transfer, sale, assignment and conveyance of the Environmental Control Property constitutes a sale or other absolute transfer of all of the Seller’s right, title and interest in the
Environmental Control Property or the Subsequent Environmental Control Property, as the case may be, to the Issuer, and, upon the execution of this Agreement, Seller will have no right, title or interest in the Environmental Control Property or the
Subsequent Environmental Control Property, as the case may be, and the beneficial interest in and title to the Environmental Control Property or the Subsequent Environmental Control Property, as the case may be, would not be part of the estate of
the Seller as debtor in the event of a filing of a bankruptcy petition. 
 (c) The Seller is the sole owner of
the Environmental Control Property sold to the Issuer on the 2009 Sale Date or Subsequent Sale Date, as applicable, and such sale has been made free and clear of all Liens other than Liens created by the Issuer pursuant to the Indenture.

  

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All actions or filings, including filings with the Secretary of State of West Virginia under the Statute and UCC and with the Delaware Secretary of State under the Delaware UCC, necessary in any
jurisdiction to give the Issuer a valid first priority perfected ownership interest in the Environmental Control Property and to grant the Indenture Trustee a first priority perfected ownership interest in the Environmental Control Property, free
and clear of all Liens of the Seller or anyone claiming through the Seller have been made, other than any such filings (except for filings with the Secretary of State of the State of West Virginia or Delaware, under the Statute and UCC, as
applicable) the absence of which would not have a material adverse impact on (i) the ability of the Servicer to collect Environmental Control Charges with respect to the Environmental Control Property or (ii) the rights of the Issuer with
respect to the Environmental Control Property. 
 Section 3.09. Solvency of Seller. 
 After giving effect to the sale of any Environmental Control Property hereunder, the Seller (i) is solvent and expects to remain
solvent, (ii) is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purposes, (iii) is not engaged in nor does it expect to engage in a business for which its
remaining property represents an unreasonably small amount of capital, (iv) reasonably believes that it will be able to pay its debts as they come due and (v) is able to pay its debts as they mature and does not intend to incur, or believe
that it will incur, indebtedness that it will not be able to repay at its maturity. 
 Section 3.10. Irrevocable;
Process Valid; No Litigation; Etc. 
 (a) The Financing Order has been issued by the PSCWV in accordance with
the Statute and in compliance with all applicable Requirements of Law. The Financing Order became effective pursuant to the Statute, is in full force and effect and is final and nonappealable 
 (b) As of the date of issuance of any Series of Environmental Control Bonds, such Environmental Control Bonds are entitled to
the protections provided by the Statute, the Financing Order is not revocable, and the rights to impose, collect and adjust the Environmental Control Charges are irrevocable and not subject to impairment or adjustment, except for the periodic
True-Up Adjustments to the Environmental Control Charges provided for in the Financing Order. 
 (c) Under the
Statute, the State of West Virginia has pledged (the “State Pledge”) that it will not take or permit any action that impairs the value of the Environmental Control Property or, except as allowed in connection with the True-Up Adjustments,
reduce, alter or impair the Environmental Control Charges that are imposed, collected or remitted for the benefit of the Environmental Control Bondholders, any assignee, and any financing parties until any principal, interest and redemption premium
in respect of the Environmental Control Bonds, all financing costs and all amounts to be paid under any ancillary agreement are paid or performed in full, or other charges incurred or contracts to be performed in connection with the Environmental
Control Bonds are paid or performed in full. 
  

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 (d) Under the Contract Clauses of the Constitutions of the State of West
Virginia and the United States, the State of West Virginia could not, absent a demonstration that such action was necessary to serve a significant and legitimate public purpose, repeal or amend the Statute, nor could the State of West Virginia (or
the PSCWV in exercising its legislative powers) take any action or fail to take any action required by the State Pledge if the repeal or amendment, or the action or inaction, would substantially limit, alter, impair or reduce the value of the
Environmental Control Property or the Environmental Control Charges. 
 (e) Under applicable West Virginia
constitutional principles relating to the impairment of liens, the State of West Virginia could not enact legislation (other than a law passed by the State of West Virginia in the valid exercise of the state’s police power) that repeals the
State Pledge or limits, alters, impairs or reduces the value of the Environmental Control Property or the Environmental Control Charges so as to impair (i) the terms of the Indenture or the Environmental Control Bonds or (ii) the rights
and remedies of the Environmental Control Bondholders (or the Indenture Trustee acting on their behalf) prior to the time that the Environmental Control Bonds are fully paid and discharged if such action would prevent the payment of the
Environmental Control Bonds or would significantly affect the security for the Environmental Control Bonds. 
 (f) There is no order by any court providing for the revocation, alteration, limitation or other impairment of the Statute, Financing Order, Environmental Control Property or Environmental Control Charges, or any rights arising under any of
them, or that seeks to enjoin the performance of any obligations under the Financing Order which is materially adverse to the position of the Environmental Control Bondholders. 
 (g) No other approval, authorization, consent, order or other action of, or filing with, any Governmental Authority is
required in connection with the creation of the Environmental Control Property, except those that have been obtained or made. 
 (h) Except as described in Exhibit B, there are no proceedings or investigations challenging the Financing Order or the Statute pending, or to the best of the Seller’s knowledge, threatened before
any Governmental Authority having jurisdiction over the Seller or its properties. 
 (i) No failure on the 2009
Sale Date or any Subsequent Sale Date or any time thereafter to satisfy any condition imposed by the Statute with respect to the recovery of Environmental Control Costs will have a material adverse affect on the creation or sale hereunder of
Environmental Control Property or the right to collect Environmental Control Charges. 
 (j) The voters of the
State of West Virginia have no right of referendum or initiative to amend, repeal or revoke the Statute in a manner that would impair the security of the Environmental Control Bondholders. 
 Notwithstanding anything in this Agreement to the contrary, the Seller makes no representation that amounts collected will be sufficient to
meet the obligations on the Environmental Control Bonds. 
  

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 Section 3.11. Assumptions. The assumptions used in calculating Environmental
Control Charges are reasonable and made in good faith. 
 Section 3.12. The Environmental Control Property Rights.

 (a) The Environmental Control Property constitutes an existing present property right that will continue to
exist until the Environmental Control Bonds issued pursuant to the Financing Order have been paid in full and all Financing Costs of the Environmental Control Bonds have been recovered in full. 
 (b) The Environmental Control Property consists of (i) the rights and interests of the Seller and the Issuer, as
assignee of the Seller, including the right to impose, charge, collect and receive Environmental Control Charges in the amount necessary to provide for full payment and recovery of all Environmental Control Costs and Financing Costs determined to be
recoverable in the Financing Order (including payment of principal and interest on the Environmental Control Bonds), and any interest in such rights and interests; (ii) the right under the Financing Order to obtain True-Up Adjustments; and
(iii) all revenues, receipts, collections, rights to payment, payments, moneys, claims or other proceeds arising from the rights and interests described in clauses (i) and (ii) above. 
 (c) The Financing Order, including the right to collect Environmental Control Charges, has been declared to be irrevocable by
the PSCWV. 
 (d) The Environmental Control Property does not include any right to any revenues, collections,
claims, rights, payments, money or proceeds of or arising from certain tax charges. 
 ARTICLE IV 
 Covenants of the Seller 
 Section 4.01. Corporate Existence. Subject to Section 5.02, so long as Environmental Control Bonds of any Series remain Outstanding, except in the case of a merger, consolidation, division, asset disposition or other
similar transaction permitted under the terms of this Agreement, the Seller will keep in full force and effect its corporate existence and remain in good standing, in each case under the laws of the jurisdiction of its incorporation, and will obtain
and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement and each other instrument or agreement to which the Seller is a
party necessary to the proper administration of this Agreement and the transactions contemplated hereby. 
 Section 4.02.
No Liens or Conveyances. Except for the conveyances hereunder, the Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on, any of the Environmental Control
Property, whether now existing or hereafter created, or any interest therein. The Seller shall not at any time assert any Lien against or with respect to any Environmental Control Property, and shall defend the right, title

  

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and interest of the Issuer, as assignee of the Seller, and the Indenture Trustee, as collateral assignee of the Issuer, in, to and under the Environmental Control Property, whether now existing
or hereafter created, against all claims of third parties claiming through or under the Seller. 
 Section 4.03.
Delivery of Collections. Subject to the terms of the Servicing Agreement, if the Seller receives collections in respect of the Environmental Control Charges, or in respect of the Environmental Control Property or the proceeds thereof, other
than in its capacity as Servicer, the Seller agrees to pay the Servicer all estimated collections received by the Seller in respect thereof as soon as practicable after receipt is known by the Seller, but in no event later than two Business Days
after such receipt is known by the Seller, and the Seller shall reconcile such estimated collection amounts with the Servicer within 25 Business Days after the estimated collections are paid to the Servicer. 
 Section 4.04. Notice of Liens. The Seller shall notify the Issuer and the Indenture Trustee promptly after becoming aware of any
Lien on any Environmental Control Property other than the conveyances hereunder or under the Indenture or the other Basic Documents. 
 Section 4.05. Compliance with Law. The Seller hereby agrees to comply with its organizational or governing documents and all Requirements of Law applicable to the Seller, except to the extent that failure to so comply would not
have a material adverse affect on the Seller’s, the Issuer’s or the Indenture Trustee’s interests in the Environmental Control Property or under any of the Basic Documents, the timing or amount of Environmental Control Charges payable
by customers or the Seller’s performance of its obligations hereunder or under any of the other Basic Documents to which it is a party. 
 Section 4.06. Use of Proceeds. The Seller will use the proceeds of the sale of the Environmental Control Property in accordance with the Financing Order. 
 Section 4.07. Covenants Related to Environmental Control Property. 
 (a) So long as Environmental Control Bonds of any Series remain Outstanding, the Seller shall treat the Environmental Control
Bonds as debt of the Seller for federal income tax purposes to the extent permitted by applicable Requirements of Law. 
 (b) So long as Environmental Control Bonds of any Series remain Outstanding, the Seller shall (i) treat the Environmental Control Bonds as the debt of the Issuer, except for financial accounting or tax purposes, (ii) clearly
disclose in its financial statements that it is not the owner of the Environmental Control Property and that the assets of the Issuer are not available to pay creditors of the Seller or any of its Affiliates, (iii) not own or purchase any
Environmental Control Bonds, and (iv) clearly disclose the effects of all transactions between the Seller and the Issuer in accordance with GAAP. 
 (c) The Seller agrees that upon the sale by the Seller of the Environmental Control Property to the Issuer pursuant to a Bill of Sale, (i) to the fullest extent permitted by applicable Requirements
of Law, the Issuer shall have all of the rights originally held by the Seller with respect to the Environmental Control Property, including the right to collect any

  

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amounts payable by any Customer or Third Party in respect of such Environmental Control Property, notwithstanding any objection or direction to the contrary by the Seller and (ii) any
payment by any Customer or Third Party to the Issuer shall discharge such Customer’s or such Third Party’s obligations in respect of such Environmental Control Property to the extent of such payment, notwithstanding any objection or
direction to the contrary by the Seller. 
 (d) So long as Environmental Control Bonds of any Series remain
Outstanding, the Seller (i) in all proceedings relating directly or indirectly to the Environmental Control Property, will affirmatively certify and confirm that it has sold all of its rights and interests in and to the Environmental Control
Property (other than for financial accounting or tax purposes), (ii) shall not make any statement or reference in respect of the Environmental Control Property that is inconsistent with the ownership thereof by the Issuer (other than for
financial accounting or tax purposes), (iii) will not take any action in respect of the Environmental Control Property except solely in its capacity as the Servicer thereof pursuant to the Servicing Agreement or as otherwise contemplated by the
Basic Documents and (iv) will not sell Environmental Control Property under a Subsequent Financing Order in connection with the issuance of additional series of Environmental Control Bonds unless the Rating Agency Condition has been satisfied.

 Section 4.08. Notice of Indemnification Events. The Seller shall deliver to the Issuer and the Indenture Trustee
promptly after having obtained knowledge thereof, written notice in an Officers’ Certificate of any Indemnification Event or any event which, with the giving of notice or the passage of time, would become an Indemnification Event. 

Section 4.09. Protection of Title. 
 (a) The Seller shall execute and file such filings, including filings with the PSCWV pursuant to the Statute and the
Financing Order, and cause to be executed and filed such filings, all in such manner and in such places as may be required by applicable Requirements of Law fully to preserve, maintain, and protect the interests of the Issuer, the Indenture Trustee
and the Environmental Control Bondholders in the Environmental Control Property, including all filings required under the Statute relating to the transfer of the ownership or security interest in the Environmental Control Property by the Seller to
the Issuer. 
 (b) The Seller shall deliver (or cause to be delivered) to the Issuer file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available following such filing. 
 (c) The
Seller agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary (i) to protect the
Issuer, the Indenture Trustee and the Environmental Control Bondholders from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation or warranty set forth
in Article III and (ii) to block or overturn any attempts to cause a repeal of, modification of or supplement to the Statute or the Financing Order or the rights of holders of Environmental Control Property by legislative enactment or
constitutional amendment that would be materially adverse to the holders of Environmental Control Property. 
  

 12 

 (d) The Seller will institute any action or proceeding necessary to compel
performance by the PSCWV, the State of West Virginia or any of their respective agents of any of their obligations or duties under the Statute, any Financing Order or any Issuance Advice Letter. The Seller will comply with all filing requirements,
including any post closing filings, in accordance with the Financing Order. 
 The costs of any action or proceeding undertaken by Seller as
described in this Section 4.09 shall be payable from the Collection Account as an Operating Expense in accordance with Section 8.02(e) of the Indenture. The Seller’s obligations pursuant to this Section 4.09 shall
survive and continue notwithstanding that payment of such Operating Expense may be delayed pursuant to the terms of the Indenture it being understood that the Seller may be required initially to advance its own fund to satisfy its obligations
hereunder). 
 Section 4.10. Taxes. So long as Environmental Control Bonds of any Series remain Outstanding, the
Seller shall, and shall cause each of its subsidiaries to, pay all material taxes, including assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or
property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements, result in a lien on the Environmental Control
Property; provided that no such tax need be paid if the Seller or one of its affiliates is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if the Seller or such affiliate has established
appropriate reserves as shall be required in conformity with generally accepted accounting principles. 
 Section 4.11.
Notice of Breach. Promptly after obtaining knowledge of any breach in any material respect of its representations and warranties in this Agreement, the Seller will notify the Issuer and the Rating Agencies of the breach. 
 Section 4.12. Termination. Even if this Agreement or the Indenture is terminated, the Seller will not, prior to the date which
is one year and one day after the termination of the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process of any court or Governmental Authority for the purpose of commencing or sustaining an involuntary case against the
Issuer or any substantial part of the Issuer’s property under any federal or state bankruptcy, insolvency or similar law, appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official, or ordering the
winding up or liquidation of the Issuer’s affairs. 
 Section 4.13. Third Parties. So long as Environmental
Control Bonds of any Series remain Outstanding, the Seller shall not permit any Third Party to bill or collect Environmental Control Charges on behalf of the Issuer except (a) as a subcontractor under the active supervision of the Servicer or
(b) as required by applicable law or regulation and to the extent permitted by applicable law or regulation, after written notice of such arrangement is furnished to the Rating Agencies. 
 Section 4.14. Further Covenants. Upon the Issuer’s request, the Seller will execute and deliver such further instruments
and do such further acts as may be necessary to carry out more effectively the provisions and purposes of this Agreement. 
  

 13 

 ARTICLE V 
 The Seller 
 Section 5.01. Liability of Seller; Indemnities.

 (a) The Seller shall be liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement. 
 (b) The Seller shall indemnify the Issuer and the Indenture
Trustee, for itself and on behalf of the Environmental Control Bondholders and each of their respective affiliates, members, managers, officers, directors, employees and agents, and defend and hold harmless each such Person from and against, any and
all taxes (other than any taxes imposed on Environmental Control Bondholders solely as a result of their ownership of Environmental Control Bonds) that may at any time be imposed on or asserted against any such Person under existing law as of the
2009 Sale Date or Subsequent Sale Date as a result of (i) the sale and assignment of the Environmental Control Property to the Issuer, (ii) the acquisition or holding of the Environmental Control Property by the Issuer or (iii) the
issuance and sale by the Issuer of the Environmental Control Bonds or any other transactions contemplated herein, including any sales, gross receipts, general corporation, single business, personal property, privilege, franchise or license taxes,
but excluding any taxes imposed as a result of a failure of such person to withhold or remit taxes with respect to payments on any Environmental Control Bonds, it being understood that the Environmental Control Bondholders shall be entitled to
enforce their rights against the Seller under this Section 5.01(b) solely through a cause of action brought for their benefit by the Indenture Trustee. 
 (c) The Seller shall indemnify the Issuer, the Indenture Trustee, for itself and on behalf of the Environmental Control
Bondholders, and each of their respective affiliates, members, managers, officers, directors, employees and agents, and defend and hold harmless each such Person from and against, (i) any and all amounts of principal of and interest on the
Environmental Control Bonds not paid when due or when scheduled to be paid in accordance with their terms, (ii) the amount of any deposits to the Issuer required to have been made in accordance with the terms of the Basic Documents or any
Financing Order which are not made when so required, and (iii) any and all other liabilities, obligations, losses, claims, damages, payment, costs or expenses incurred by any of these persons, in each case as a result of the Seller’s
breach of any of its representations, warranties or covenants contained in this Agreement; each of which the Seller will have a 30-day opportunity to cure upon notice from us of a material breach of a covenant. 
 (d) The Seller shall indemnify the Issuer, the Indenture Trustee, for itself and on behalf of the Environmental Control
Bondholders, and each of their respective affiliates, members, managers, officers, directors, employees and agents, and defend and hold harmless each such Person from and against, any and all Losses that may be imposed on, incurred by or asserted
against any such Person as a result of (x) the Seller’s willful misconduct, bad faith or negligence in the performance of its duties or observance of its covenants under this Agreement, (y) the Seller’s reckless disregard of its
obligations and duties under this Agreement or (z) the Seller’s breach of any of its representations or warranties contained in this Agreement (any event

  

 14 

 
described in any of the foregoing clauses (x), (y) or (z), an “Indemnification Event”). Amounts on deposit in the Excess Funds Subaccount, the Capital Subaccount and the
Reserve Account shall not be available to satisfy any Losses for which indemnification is provided in this Agreement. 
 (e) The Seller also will indemnify the PSCWV, for the benefit of Customers, for any and all Losses, including but not limited to Losses in the form of higher Environmental Control Charges, that Customers may incur by reason of (i) any
failure of the Seller’s representations or warranties in this Agreement or (ii) any breach of the Seller’s covenants in this Agreement. 
 (f) The Seller shall indemnify the Indenture Trustee and its officers, directors and agents for, and defend and hold harmless each such Person from and against, any and all Losses that may be imposed
upon, incurred by or asserted against any such Person as a result of the acceptance or performance of the trusts and duties contained herein and in the Basic Documents to which the Indenture Trustee is a party, except to the extent that any such
Loss shall be due to the willful misconduct, bad faith or gross negligence of the Indenture Trustee. Such amounts shall be deposited into the Collection Account and distributed in accordance with the Indenture. 
 (g) The Seller’s indemnification obligations under Sections 5.01(b), (c), (d), (e) and (f) for events
occurring prior to the removal or resignation of the Indenture Trustee or the termination of this Agreement shall survive the resignation or removal of the Indenture Trustee or the termination of this Agreement and shall include reasonable fees and
expenses of investigation and litigation (including the Indenture Trustee’s reasonable attorney’s fees and expenses) and will rank in priority with other general, unsecured obligations of the Seller. Any amounts indemnified by the Seller
pursuant to its obligations under Sections 5.01(b), (c), (d), (e) or (f) shall be deposited into the Collection Account and distributed in accordance with the Indenture. The Seller shall not indemnify any party under this
Section 5.01 for any changes in law after the 2009 Sale Date or the Subsequent Sale Date, as applicable, or as a result of the State of West Virginia’s exercise of its power under the Statute or the State of West Virginia’s
limitation, alteration, impairment or reduction of the value of Environmental Control Property or Environmental Control Charges after any issuance date in breach of the State Pledge. 
 Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, Seller. Any Person (a) into which the Seller
may be merged or consolidated or which succeeds to all or any material part of the Seller’s electric distribution business, (b) which results from the division of the Seller into two or more Persons and which succeeds to all or any
material part of the Seller’s electric distribution business, (c) which may result from any merger or consolidation to which the Seller shall be a party and which succeeds to all or any material part of the Seller’s electric
distribution business, or (d) which may succeed to the properties and assets of the Seller substantially as a whole and which succeeds to all or any material part of the Seller’s electric distribution business, or (e) which may
otherwise succeed to all or any material part of the Seller’s electric distribution business, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Seller under this Agreement, shall
be the successor to the Seller hereunder without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that (i) immediately after

  

 15 

 
giving effect to such transaction, no representation or warranty made pursuant to Article III shall have been breached and no Servicer Default, and no event that, after notice or lapse of time,
or both, would become a Servicer Default, shall have occurred and be continuing, (ii) the Seller shall have delivered to the Issuer and the Indenture Trustee an Officers’ Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with, (iii) the Rating
Agencies shall have received prior written notice of such transaction, (iv) the Seller shall have delivered to the Issuer and the Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all filings,
including filings by the Seller with the PSCWV pursuant to the Statute and UCC filings, have been executed and filed that are necessary fully to preserve and protect the interest of the Issuer and the Indenture Trustee in the Environmental Control
Property and reciting the details of such filings or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests and (v) the Seller shall have delivered to the Issuer and the
Indenture Trustee an Opinion of Counsel from independent tax counsel stating to the effect that, for federal income tax purposes, such consolidation, merger or succession to, and assumption of, the obligations of the Seller will not result in a
material adverse federal income tax consequence to the Issuer, the Seller, the Indenture Trustee or the Environmental Control Bondholders. Notwithstanding anything herein to the contrary, the execution of the above described agreement of assumption
and compliance with clauses (i), (ii), (iii), (iv) and (v) above shall be conditions precedent to the consummation of any transaction referred to in clauses (a), (b), (c), (d) or (e) above. 
 Section 5.03. Limitation on Liability of Seller and Others. The Seller and any director or officer or agent of the Seller, or
any employee of Allegheny Energy Service Corporation, may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person, respecting any matters arising hereunder. Subject to
Section 4.08, the Seller shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or
liability. The Seller will not be liable for any Losses resulting solely from a downgrade in the ratings on the Environmental Control Bonds or any consequential, incidental or indirect damages, including any loss of market value of the Environmental
Control Bonds, resulting from any downgrade of the ratings of the Environmental Control Bonds. 
 Section 5.04. Opinions
of Counsel. The Seller shall deliver to the Issuer and the Indenture Trustee: (a) promptly after the execution and delivery of this Agreement and of each amendment hereto or to the Servicing Agreement and on each Subsequent Sale Date, an
Opinion of Counsel either (i) to the effect that, in the opinion of such counsel, all filings, including filings with the PSCWV pursuant to the Statute, that are necessary to fully preserve and protect the interests of the Issuer in the
Environmental Control Property have been executed and filed, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (ii) to the effect that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interest; and (b) within 90 days after the beginning of each calendar year beginning with the first calendar year beginning more than three months after the 2009 Sale Date, an Opinion of
Counsel, dated as of a date during such 90-day period, either (i) to the effect that, in the opinion of such counsel, all filings with the PSCWV or otherwise

  

 16 

 
pursuant to the Statute, have been executed and filed that are necessary to preserve fully and protect fully the interest of the Issuer in the Environmental Control Property, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such details are given, or (ii) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest. Each Opinion
of Counsel referred to in clause (a) or (b) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve and protect such interest. 
 ARTICLE VI 
 Miscellaneous Provisions 
 Section 6.01. Amendment. 
 (a) Subject to Section 6.01(b) below, this Agreement may be amended by the Seller and the Issuer, with the prior
written consent of the Indenture Trustee and the satisfaction of the Rating Agency Condition. Promptly after the execution of any such amendment and consent, the Issuer shall furnish written notification of the substance of such amendment or consent
to each of the Rating Agencies. Prior to the execution of any amendment to this Agreement, the Issuer and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to in Section 3.10 of the Servicing Agreement. Subject to paragraph (b) below, the Issuer and the Indenture Trustee may, but shall not be obligated to, enter
into any such amendment which affects their own rights, duties or immunities under this Agreement or otherwise. 
 (b) Notwithstanding anything to the contrary in Section 6.01(a), no amendment or modification of this Agreement shall be effective except upon satisfaction of the conditions precedent in this Section 6.01(b).

 (i) PSCWV Condition. At least 16 days prior to the effectiveness of any such amendment or
modification, and after obtaining the other necessary approvals set forth in Section 6.01(a), except for the consent of the Indenture Trustee and the Environmental Control Bondholders if the consent of the Environmental Control
Bondholders is required or sought by the Indenture Trustee in connection with such amendment or modification, the Issuer shall have delivered to the PSCWV’s executive director and general counsel written notification of any proposed amendment
or modification, which notification shall contain: 
 (A) a reference to Case Nos. 05-0402-E-CN and
05-0750-E-PC and any other case number under which a Financing Order has been issued; 
 (B) an Officer’s
Certificate stating that the proposed amendment or modification has been approved by all parties to this Agreement; and 
 (C) a statement identifying the person to whom the PSCWV is to address any response to the proposed amendment or to request additional time. 
  

 17 

 (ii) The PSCWV or its authorized representative shall, within 15 days
of receiving the notification complying with Section 6.01(b)(i) above, either: 
 (A) provide notice
of its determination that the proposed amendment or modification will not under any circumstances have the effect of increasing the ongoing qualified costs related to the Environmental Control Bonds, 
 (B) provide notice of its consent or lack of consent to the person specified in Section 6.01(b)(i)(C) above, or

 (C) be conclusively deemed to have consented to the proposed amendment or modification, 
 unless, within 15 days of receiving the notification complying with Section 6.01(b)(i) above, the PSCWV or its authorized representative
delivers to the office of the person specified in Section 6.01(b)(i)(C) above with a written statement requesting an additional amount of time not to exceed 15 days in which to consider whether to consent to the proposed amendment or
modification. If the PSCWV or its authorized representative requests an extension of time in the manner set forth in the preceding sentence, then the PSCWV shall either provide notice of its consent or lack of consent or notice of its determination
that the proposed amendment or modification will not under any circumstances increase ongoing qualified costs to the person specified in Section 6.01(b)(i)(C) above not later than the last day of such extension of time or be conclusively
deemed to have consented to the proposed amendment or modification on the last day of such extension of time. Any amendment or modification requiring the consent of the PSCWV shall become effective on the later of (i) the date proposed by the
parties to such amendment or modification or (ii) the first day after the expiration of the 15-day period provided for in this Section 6.01(b)(ii), or, if such period has been extended pursuant hereto, the first day after the
expiration of such period as so extended. 
 (c) For the purpose of this Section 6.01, an
“authorized representative” of the PSCWV means any person authorized to act on behalf of the PSCWV, as evidenced by an Opinion of Counsel (which may be the general counsel) to the PSCWV. 
 Section 6.02. Notices. All demands, notices and communications upon or to the Seller, the Issuer, the
Indenture Trustee, the Rating Agencies or the PSCWV under this Agreement shall be in writing, delivered personally, via facsimile, reputable overnight courier or by certified mail, return-receipt requested, and shall be deemed to have been duly
given upon receipt (a) in the case of the Seller, to Monongahela Power Company, 800 Cabin Hill Drive, Greensburg, Pennsylvania 15601, Attention of Amanda J. Skov, Esq., (b) in the case of the Issuer, to MP Environmental Funding LLC,
2215-B Renaissance Drive, Suite #5, Las Vegas, Nevada 89119, Attention of Kristine Eppes, (c) in the case of the Indenture Trustee, at the Corporate Trust Office, (d) in the case of Moody’s, to Moody’s Investors Service,
Inc., Asset Finance Group, 99 Church Street, New York, New York 10007, (e) in the case of Standard & Poor’s, to Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., 55 Water Street, 42
nd Floor, New York, New York 10041-0003, Attention of ABS
Surveillance Group – New Assets, (f) in the case of Fitch, to Fitch Ratings, One State Street Plaza, New York, New York 10004,

  

 18 

 
Attention of ABS Surveillance, and (g) in the case of the PSCWV, to Public Service Commission of West Virginia, 201 Brooks Street, P.O. Box 812, Charleston, West Virginia 25325, Attention of
Executive Secretary; or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. 
 Section 6.03. Assignment. Notwithstanding anything to the contrary contained herein, except as provided in Section 5.02, this Agreement may not be assigned by the Seller. 
 Section 6.04. Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Seller, the
Issuer, the PSCWV and the Indenture Trustee, on behalf of itself and the Environmental Control Bondholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Collateral or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. 
 Section 6.05. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

Section 6.06. Separate Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of
which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 
 Section 6.07. Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 Section 6.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WEST
VIRGINIA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
 Section 6.09. Assignment to Issuer and to Indenture Trustee. 
 The Seller hereby acknowledges and consents to the mortgage, pledge, assignment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Environmental Control Bondholders of all right, title and interest of the Issuer in, to and under the Environmental Control Property and the proceeds thereof and the assignment of
any or all of the Issuer’s rights hereunder to the Indenture Trustee. 
 Section 6.10. Nonpetition Covenant.
Notwithstanding any prior termination of this Agreement or the Indenture, but subject to a court of competent jurisdiction’s rights to order the sequestration and payment of Environmental Control Revenues arising with respect to the
Environmental Control Property upon application by the Issuer or the Indenture Trustee notwithstanding any bankruptcy, reorganization or other insolvency proceedings with respect to

  

 19 

 
the debtor, pledgor or transferor of the Environmental Control Property pursuant to Section 24-2-4e(k)(4) of the Statute, the Seller shall not, prior to the date which is one year and one
day after the termination of the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process of any court or Governmental Authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of the property of the Issuer, or ordering the
winding up or liquidation of the affairs of the Issuer. 
 Section 6.11. Perfection. In accordance with
Section 24-2-4e(m) of the Statute, (i) upon the Financing Order creating the Environmental Control Property becoming effective, (ii) the execution and delivery of this Agreement and the related Bill of Sale, (iii) the receipt of
value and (iv) the filing of a financing statement with the office of the Secretary of State of West Virginia, a transfer of an interest in the Environmental Control Property will be perfected as against all third persons, including any
judicial lien creditors, other than creditors holding a prior security interest, ownership interest or assignment in the Environmental Control Property previously perfected in accordance with the relevant provisions of the Statute. 
 Section 6.12. Limitation of Liability. It is expressly understood and agreed by the parties hereto that this Agreement is
executed and delivered by U.S. Bank National Association, not individually or personally but solely as Indenture Trustee for the benefit of the Environmental Control Bondholders, in the exercise of the powers and authority conferred and vested in
it, and nothing herein contained shall be construed as creating any liability on U.S. Bank National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties who are signatories to this Agreement and by any Person claiming by, through or under such parties; provided, however, that this provision shall not protect U.S. Bank National Association against any liability that
would otherwise be imposed by reason of willful misconduct, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of obligations or duties under this Agreement. 
  

 20 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective officers as of the day and year first above written. 
  

			
	MP ENVIRONMENTAL FUNDING LLC, Issuer
		
	By 	 	/s/ Barry E. Pakenham
	Name:	 	Barry E. Pakenham
	Title:	 	Treasurer

  

			
	MONONGAHELA POWER COMPANY, Seller
		
	By 	 	/s/ Barry E. Pakenham
	Name:	 	Barry E. Pakenham
	Title:	 	Treasurer

 Acknowledged and Accepted: 
 U.S. Bank National Association, not in its 
 individual capacity but solely as Indenture

 Trustee on behalf of the Environmental Control 
 Bondholders. 

			
		
	By 	 	/s/ Melissa A. Rosal
	Name:	 	Melissa A. Rosal
	Title:	 	Vice President

  

 Sale Agreement Signature Page (MP) 

 EXHIBIT A 
 FORM OF BILL OF SALE 
 1. This Bill of Sale is being delivered pursuant to the
Environmental Control Property Sale Agreement, dated as of December 23, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Sale Agreement”), between Monongahela Power Company (the
“Seller”) and MP Environmental Funding LLC (the “Issuer”) and is subject to all of the terms, conditions and limitations contained in the Sale Agreement. All capitalized terms used but not defined herein have the respective
meanings ascribed thereto in the Sale Agreement. 
 2. In consideration of the Issuer’s delivery to or upon the order of
the Seller of $[            ], the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse (subject to the obligations in
the Sale Agreement), all right, title and interest of the Seller in and to the Environmental Control Property created by the Statute and in accordance with the Financing Order related to the Senior Secured ROC Bonds, Environmental Control Series B
and identified on Schedule 1 hereto (the “Environmental Control Property”) (such sale, transfer, assignment, set over and conveyance of the Environmental Control Property includes, to the fullest extent permitted by the Statute, the
assignment of all revenues, collections, claims, rights, payments, money or proceeds of or arising from the Environmental Control Charges related to the Environmental Control Property, as the same may be adjusted from time to time). Such sale,
transfer, assignment, set over and conveyance is hereby expressly stated to be a sale and, pursuant to Section 24-2-4e(m)(1) of the Statute, shall be treated as an absolute transfer of all of the Seller’s right, title and interest (as in a
true sale), and not as a pledge or other secured transaction, of the Environmental Control Property. The Seller agrees and confirms that after giving effect to the sale contemplated hereby, it has no rights in the Environmental Control Property to
which a security interest of creditors of the Seller could attach because it has sold all rights in the Environmental Control Property to the Issuer pursuant to Section 24-2-4e(m)(1) of the Statute. 
 3. The Issuer does hereby purchase the Environmental Control Property from the Seller for the consideration set forth in paragraph 2 above.

 4. The Seller and the Issuer each acknowledge and agree that the purchase price for the Environmental Control Property sold
pursuant to this Bill of Sale and the Sale Agreement is equal to its fair market value at the time of sale. 
 5. The Seller
confirms that each of the representations and warranties on the part of the Seller contained in the Sale Agreement are true and correct in all respects on the date hereof as if made on the date hereof. 
 6. This Bill of Sale may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the same instrument. 
  

 22 

 7. This Bill of Sale shall be construed in accordance with the laws of the State of West
Virginia, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. 
  

 23 

 IN WITNESS WHEREOF, the Seller and the Issuer have duly executed this Bill of Sale as of
this __ day of December, 2009. 
  

			
	MONONGAHELA POWER COMPANY, Seller
		
	by 	 	 
		 	 Name:
 Title:

  

			
	MP ENVIRONMENTAL FUNDING LLC, Issuer
		
	by 	 	 
		 	 Name:
 Title:

  

 24 

 SCHEDULE 1 
 Environmental Control Property and the related Environmental Control Charges with respect to the Senior Secured ROC Bonds, Environmental Control Series B, identified in the Pricing Advice Letter filed
with the PSCWV on December 17, 2009. 

 EXHIBIT B 
 PENDING LITIGATION 
 None. 

 APPENDIX A 
 MASTER DEFINITIONS 

 APPENDIX A-1 
 SUPPLEMENTAL MASTER DEFINITIONSEnvironmental Control Property Servicing Agrmt - MP Environmental Funding LLC

 Exhibit 10.2 
 Execution Version 
  
  
  
 ENVIRONMENTAL CONTROL PROPERTY SERVICING AGREEMENT 
 between 
 MP ENVIRONMENTAL FUNDING LLC 
 and 
 MONONGAHELA
POWER COMPANY 
 Servicer 
 Dated as of December 23, 2009 
  
  
  

 TABLE OF CONTENTS 
  

			
	ARTICLE I     DEFINITIONS	  	1
		
	 SECTION 1.01 Definitions
	  	1
		
	ARTICLE II     APPOINTMENT AND AUTHORIZATION OF SERVICER	  	2
		
	 SECTION 2.01 Appointment of Servicer; Acceptance of Appointment
	  	2
		
	 SECTION 2.02 Authorization
	  	2
		
	 SECTION 2.03 Dominion and Control Over Environmental Control Property
	  	2
		
	ARTICLE III     BILLING SERVICES	  	3
		
	 SECTION 3.01 Duties of Servicer
	  	3
		
	 SECTION 3.02 Collection of Environmental Control Charges
	  	4
		
	 SECTION 3.03 Servicing and Maintenance Standards
	  	4
		
	 SECTION 3.04 Monthly and Quarterly Servicer’s Certificates
	  	4
		
	 SECTION 3.05 Annual Reports on Servicing Compliance and Attestation, Notices of Servicer Defaults
	  	5
		
	 SECTION 3.06 Annual Report by Independent Public Accountants
	  	6
		
	 SECTION 3.07 Additional Servicer Reporting Requirements
	  	6
		
	 SECTION 3.08 Environmental Control Property Documentation
	  	7
		
	 SECTION 3.09 Computer Records; Audits of Documentation
	  	7
		
	 SECTION 3.10 Defending Environmental Control Property Against Claims
	  	8
		
	 SECTION 3.11 Opinions of Counsel
	  	8
		
	ARTICLE IV     TRUE-UP ADJUSTMENTS	  	9
		
	 SECTION 4.01 Routine True-Up Adjustments
	  	9
		
	 SECTION 4.02 Non-Routine True-Up Adjustments
	  	9
		
	ARTICLE V     THE SERVICER	  	10
		
	 SECTION 5.01 Representations and Warranties of Servicer
	  	10
		
	 SECTION 5.02 Indemnities of Servicer; Release of Claims
	  	12
		
	 SECTION 5.03 Merger or Consolidation of, or Assumption of the Obligations of, Servicer
	  	13
		
	 SECTION 5.04 Assignment of Servicer’s Obligations
	  	14
		
	 SECTION 5.05 Limitation on Liability of Servicer and Others
	  	14
		
	 SECTION 5.06 Mon Power Not To Resign as Servicer
	  	15
		
	 SECTION 5.07 Defending Environmental Control Property Against Claims
	  	15

			
	 SECTION 5.08 Servicing Fee
	  	15
		
	 SECTION 5.09 Servicer Advances
	  	16
		
	 SECTION 5.10 Subservicing
	  	16
		
	 SECTION 5.11 Remittances
	  	17
		
	 SECTION 5.12 Payment Date Statements
	  	18
		
	 SECTION 5.13 Schedule Revision Date Schedules
	  	18
		
	 SECTION 5.14 Protection of Title
	  	18
		
	 ARTICLE VI SERVICER DEFAULT
	  	18
		
	 SECTION 6.01 Servicer Default
	  	18
		
	 SECTION 6.02 Notice of Servicer Default
	  	20
		
	 SECTION 6.03 Waiver of Past Defaults
	  	20
		
	 SECTION 6.04 Appointment of Successor
	  	20
		
	 SECTION 6.05 Cooperation with Successor
	  	21
		
	 SECTION 6.06 Servicer Default Under Related Transaction
	  	21
		
	 ARTICLE VII MISCELLANEOUS PROVISIONS
	  	21
		
	 SECTION 7.01 Amendment
	  	21
		
	 SECTION 7.02 Notices
	  	23
		
	 SECTION 7.03 Limitations on Rights of Others
	  	24
		
	 SECTION 7.04 Severability
	  	24
		
	 SECTION 7.05 Separate Counterparts
	  	24
		
	 SECTION 7.06 Headings
	  	24
		
	 SECTION 7.07 GOVERNING LAW
	  	24
		
	 SECTION 7.08 Assignment to Indenture Trustee
	  	24
		
	 SECTION 7.09 Nonpetition Covenants
	  	25
		
	 SECTION 7.10 Termination
	  	25
		
	 SECTION 7.11 Limitation of Liability
	  	25

 EXHIBITS 
  

			
	EXHIBIT A	  	Servicing Obligations
	EXHIBIT B	  	Pending Litigation
	ANNEX 1	  	Form of Routine Adjustment Request
	ANNEX 2	  	Form of Monthly Servicer’s Certificate
	ANNEX 3	  	Form of Quarterly Servicer’s Certificate
	ANNEX 4	  	Form of Officer’s Certificate
	ANNEX 5	  	Form of Assessment of Servicing Criteria
	ANNEX 6	  	Form of Regulation AB Compliance Certification
		
	APPENDIX A	  	Master Definitions
	APPENDIX A-1	  	Supplemental Master Definitions

  

 2 

 ENVIRONMENTAL CONTROL PROPERTY SERVICING AGREEMENT dated as of December 23,
2009, between MP Environmental Funding LLC, a Delaware limited liability company (the “Issuer”), and Monongahela Power Company (“Mon Power”), an Ohio corporation, doing business as Allegheny Power, as the servicer
of the Environmental Control Property (together with each successor to Mon Power (in the same capacity) pursuant to Section 5.03 or 6.04, the “Servicer”).  
 WHEREAS the Servicer is willing to service the Environmental Control Property purchased from the Seller by the Issuer from time to time in
accordance with the Sale Agreement; 
 WHEREAS the Issuer, in connection with ownership of the Environmental Control Property,
desires to engage the Servicer to carry out the functions described herein; 
 WHEREAS the PSCWV or its attorney will enforce
this Agreement pursuant to the Financing Order for the benefit of the Customers to the extent permitted by applicable Requirements of Law; 
 WHEREAS the Environmental Control Bonds will not be “asset-backed securities” within the meaning of Regulation AB, but the Issuer nevertheless has committed to comply with all substantive
ongoing periodic disclosure requirements that would apply under Regulation AB if the Environmental Control Bonds were “asset-backed securities”; and 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 SECTION 1.01 Definitions. 
 (a) “Agreement” means this Environmental Control Property Servicing Agreement, together with all Exhibits,
Annexes and Appendices hereto, as the same may be amended, supplemented or otherwise modified from time to time. 
 (b) Capitalized terms used but not otherwise defined in this Agreement have the meanings assigned to them in Appendix A and Appendix A-1 to this Agreement. To the extent there is a conflict between definitions included in Appendix A and
Appendix A-1, the definitions in Appendix A-1 shall control. 
 (c) Non-capitalized terms used in this Agreement
which are defined in the Statute, as the context requires, have the meanings assigned to such terms in the Statute, but without giving effect to amendments to the Statute after the date hereof which have a material adverse effect on the Issuer or
the Environmental Control Bondholders. 

 (d) All terms defined in this Agreement have the defined meanings when used
in any certificate or document made or delivered pursuant hereto unless otherwise defined herein. 
 (e) The
words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section,
Annex, Schedule and Exhibit references contained in this Agreement are references to Sections, Annexes, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean
“including without limitation.” 
 (f) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. 
 ARTICLE II 
 APPOINTMENT AND AUTHORIZATION OF SERVICER 
 SECTION 2.01 Appointment of Servicer; Acceptance of Appointment. 
 Subject to Section 5.04 and Article VI, the Issuer hereby appoints the Servicer, and the Servicer hereby accepts such
appointment, to perform the Servicer’s obligations pursuant to this Agreement on behalf of and for the benefit of the Issuer in accordance with the terms of this Agreement. This appointment and the Servicer’s acceptance thereof may not be
revoked except in accordance with the express terms of this Agreement. 
 SECTION 2.02 Authorization. 
 With respect to all or any portion of the Environmental Control Property, the Servicer shall be, and hereby is, authorized and empowered by
the Issuer to (a) execute and deliver, on behalf of itself or the Issuer, as the case may be, any and all instruments, documents or notices, and (b) on behalf of itself or the Issuer, as the case may be, make any filing and participate in
proceedings of any kind with any Governmental Authorities, including with the PSCWV. The Issuer shall furnish the Servicer with such documents as have been prepared by the Servicer for execution by the Issuer, and with the other documents as may be
in the Issuer’s possession, as necessary or appropriate to enable the Servicer to carry out its duties hereunder. Upon the written request of the Servicer, the Issuer shall furnish the Servicer with any powers of attorney or other documents
necessary or appropriate to enable the Servicer to carry out its duties hereunder. 
 SECTION 2.03 Dominion and Control Over
Environmental Control Property. 
 Notwithstanding any other provision herein, the Servicer and the Issuer agree that the
Issuer shall have dominion and control over the Environmental Control Property. The Servicer hereby agrees that it shall not take any action that is not authorized by this Agreement or applicable Requirements of Law, that is not consistent with its
customary procedures and practices, or that shall impair the rights of the Issuer in the Environmental Control Property, in each case unless such action is required by applicable Requirements of Law. 
  

 2 

 ARTICLE III 
 BILLING SERVICES 
 SECTION 3.01 Duties of Servicer. The Servicer shall have
the following duties: 
 (a) Duties of Servicer Generally. The Servicer will manage, service, administer
and make collections in respect of the Environmental Control Property. The Servicer’s duties will include (i) calculating and billing the Environmental Control Charges, collecting Environmental Control Charge Payments, and remitting all
Environmental Control Charge Collections to the Indenture Trustee; (ii) responding to inquiries by Customers, Third Parties, the PSCWV, or any Governmental Authority with respect to the Environmental Control Property, including the
Environmental Control Charges; (iii) accounting for Environmental Control Charge Collections, investigating delinquencies, processing and depositing collections and making periodic remittances, furnishing periodic reports to the Issuer, the
Indenture Trustee, the PSCWV and the Rating Agencies; (iv) selling defaulted or written off accounts in accordance with the Servicer’s usual and customary practices; and (v) taking action in connection with True-Up Adjustments
according to the procedures set forth herein and in Exhibit A hereto. Anything to the contrary notwithstanding, the duties of the Servicer set forth in this Agreement shall be qualified in their entirety by applicable Requirements of Law as may be
in effect at the time such duties are to be performed. Without limiting the generality of this Section 3.01(a), in furtherance of the foregoing, the Servicer hereby agrees that it shall also have, and shall comply with, the duties and
responsibilities relating to data acquisition, usage, demand and bill calculation, billing, customer service functions, collections, payment processing and remittance set forth in Exhibit A hereto. 
 (b) Notification of Laws and Regulations. The Servicer shall immediately notify the Issuer, the Indenture Trustee and
the Rating Agencies in writing of Requirements of Law hereafter promulgated that have a material adverse effect on the Servicer’s ability to perform its duties under this Agreement. 
 (c) Other Information. Upon the reasonable request of the Issuer, the Indenture Trustee, the PSCWV or any Rating
Agency, the Servicer shall provide to the Issuer, the Indenture Trustee or such Rating Agency, as the case may be, any public financial information in respect of the Servicer, or any material information regarding the Environmental Control Property
to the extent it is reasonably available to the Servicer, as may be reasonably necessary and permitted by applicable Requirements of Law, for the Issuer, the Indenture Trustee, the PSCWV or such Rating Agency to monitor the performance by the
Servicer hereunder. In addition, so long as any of the Environmental Control Bonds of any Series are Outstanding, the Servicer shall provide the Issuer, the Indenture Trustee and the PSCWV within a reasonable time after written request therefor, any
information available to the Servicer or reasonably obtainable by it that is necessary to calculate the Environmental Control Charges applicable to each Rate Schedule. 
 (d) Preparation of Reports to be Filed with the Commission. The Servicer shall prepare or cause to be prepared any
reports required to be filed by the Issuer under the securities laws, including without limitation, if so required, each Quarterly Servicer’s Certificate

  

 3 

 
described in Section 3.04, the Officer’s Certificate of annual compliance described in Section 3.05, the Annual Accountant’s Report described in
Section 3.06, and any certification required by Section 3.02 of the Sarbanes-Oxley Act of 2002 and Item 601 of Regulation S-K under the Exchange Act. 
 SECTION 3.02 Collection of Environmental Control Charges. 
 (a) The Servicer shall use all reasonable efforts consistent with its customary servicing procedures to collect all amounts
owed in respect of Environmental Control Charges, as and when the same shall become due and shall follow such collection procedures as it follows with respect to collection activities that the Servicer conducts for itself or others. The Servicer
shall not change the amount of or reschedule the due date of any scheduled payment of Environmental Control Charges, except as contemplated in this Agreement or as required by applicable Requirements of Law; provided, however, that the Servicer may
take any of the foregoing actions to the extent that such action would be in accordance with customary billing and collection practices of the Servicer with respect to billing and collection activities that it conducts for itself. 
 (b) Upon a partial payment of amounts billed, including amounts billed under special contracts, such partial payments shall
be allocated first to the Billed Environmental Control Charge, including any past-due Environmental Control Charges. 
 SECTION
3.03 Servicing and Maintenance Standards. 
 The Servicer shall (a) manage, service, administer and make collections
in respect of the Environmental Control Property with reasonable care and in material compliance with applicable Requirements of Law using the same degree of care and diligence that the Servicer exercises with respect to billing and collection
activities that the Servicer conducts for itself and others; (b) follow standards, policies and procedures in performing its duties as Servicer that are customary in the Servicer’s industry; (c) use all reasonable efforts, consistent
with its customary servicing procedures, to enforce and maintain rights in respect of the Environmental Control Property; and (d) calculate Environmental Control Charges in compliance with applicable Requirements of Law, except where the
failure to comply with any of the foregoing would not have a material adverse affect on the Issuer’s or the Indenture Trustee’s interest in the Environmental Control Property. The Servicer shall follow such customary and usual practices
and procedures as it shall deem necessary or advisable in its servicing of all or any portion of the Environmental Control Property, which, in the Servicer’s judgment, may include the taking of legal action pursuant to Section 3.09 hereof
or otherwise. 
 SECTION 3.04 Monthly and Quarterly Servicer’s Certificates. 
 The Servicer will provide to the Issuer, the Indenture Trustee, the PSCWV and each of the Rating Agencies, so long as any Environmental
Control Bonds of any Series are Outstanding, (a) not later than 15 days after the end of each month after the Environmental Control Bonds are issued (excluding December, 2009), or if such day is not a Business Day, the following Business Day, a
written report substantially in the form of Annex 2 hereto (the “Monthly Servicer’s Certificate”); and (b) not later than 15 days following the end of each calendar quarter after the

  

 4 

 
Environmental Control Bonds are issued, a written report substantially in the form of Annex 3 hereto (the “Quarterly Servicer’s Certificate”). 
 SECTION 3.05 Annual Reports on Servicing Compliance and Attestation, Notices of Servicer Defaults. 
 (a) On or before March 31 of each year beginning March 31, 2010, and including the March 31 following the
Final Maturity Date of all Series of Environmental Control Bonds, the Servicer shall deliver: (i) to the Issuer, the Indenture Trustee, the PSCWV and each Rating Agency, an Officers’ Certificate substantially in the form of
Annex 4 attached hereto, stating that (A) a review of the activities of the Servicer during the preceding calendar year (or relevant portion thereof) and of its performance under this Agreement has been made under such
officers’ supervision and (B) to the best of such officers’ knowledge, based on such review, the Servicer has complied with all its obligations under this Agreement in all material respects throughout such period or, if there has been
a Servicer Default, or an act or omission, which with either the passage of time or the giving of notice, could become a Servicer Default, specifying each such event of default or act or omission known to such authorized officer and the nature and
status thereof; (ii) to the Issuer and the PSCWV, a report regarding the Servicer’s assessment of compliance with the servicing criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to the Issuer and the PSCWV and signed by an authorized officer of the Servicer, and shall address each of the servicing criteria specified on a certification
substantially in the form of Annex 5 hereto delivered to the Issuer concurrently with the execution of this agreement; (iii) to the Issuer and the PSCWV, a report of a registered public accounting firm reasonably acceptable to the
Issuer that attests to, and reports on, the assessment of compliance made by the Servicer and delivered pursuant to the preceding clause (ii), as described in Section 3.06 hereof; and (iv) to the Issuer, the Administrator and any
other person that will be responsible for signing the Regulation AB Compliance Certification, a certification in the form attached hereto as Annex 6, as required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of the Issuer. The Servicer acknowledges that the parties identified in this clause (a)(iv) may rely on the certification provided by the Servicer pursuant to such clause in signing a
Sarbanes Certification and filing such with the PSCWV. In addition, pursuant to Section 5.10, the Servicer shall cause each subservicer “participating in the servicing function” within the meaning of Item 1122 of
Regulation AB to deliver to the Issuer an assessment of compliance and accountants’ attestation as and when provided in clauses (ii) and (iii) of this paragraph. 
 The requirements of clauses (ii) through (iv) above shall be applicable only so long as the Issuer is required to make such
filings under the Exchange Act. 
 (b) Each assessment of compliance provided by a subservicer pursuant to
Section 3.05(a) shall address each of the servicing criteria specified on a certification substantially in the form of Annex 5 hereto delivered to the Issuer concurrently with the execution of this Agreement by such subservicer
or, in the case of a subservicer subsequently appointed as such, on or prior to the date of such appointment. An assessment of compliance provided by a subservicer pursuant to Section 3.05(a) need not address any elements of the
servicing criteria other than those specified by the Servicer pursuant to Section 5.10. 
  

 5 

 (c) The Servicer shall deliver to the Issuer, the Indenture Trustee, the
PSCWV and each Rating Agency, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice in an Officers’ Certificate of any Servicer Default and any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under Section 6.01. 
 SECTION 3.06 Annual
Report by Independent Public Accountants. 
 (a) Servicer shall cause a firm of independent certified public
accountants (which may also provide other services to the Servicer, Mon Power or the Seller) to prepare, and the Servicer shall deliver to the Issuer, the Indenture Trustee, the PSCWV and each Rating Agency, on or before March 31 of each year,
beginning March 31, 2010 to and including the March 31 following the Final Maturity Date of all Series of Environmental Control Bonds, a report addressed to the Servicer (the “Annual Accountant’s Report”), which may
be included as part of the Servicer’s customary auditing activities, to the effect that such firm has performed certain procedures agreed to between the Servicer and such firm in connection with the Servicer’s compliance with its
obligations under this Agreement during the preceding calendar year ended December 31 (or, in the case of the first Annual Accountant’s Report, the period of time from the 2009 Sale Date for the Series B Environmental Control Bonds until
December 31, 2009), identifying the results of such procedures and including any exceptions noted. In addition, so long as the Issuer is required to make such filings under the Exchange Act, the Annual Accountant’s Report will include a
report that attests to, and reports on, the assessment made by the Servicer as to its compliance with the servicing criteria set forth in (d) of Item 1122 of Regulation AB hereto and that such attestation of the assessment of compliance
was in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act and was made in accordance with standards for attestation engagements issued or adopted by the Public Company Accounting Oversight
Board. In the event that the accounting firm providing such report requires the Indenture Trustee to agree or consent to the procedures performed by such firm, the Issuer shall direct the Indenture Trustee in writing to so agree; it being understood
and agreed that the Indenture Trustee will deliver such letter of agreement or consent in conclusive reliance upon the direction of the Issuer, and the Indenture Trustee will not make any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of the sufficiency, validity or correctness of, such procedures. 
 (b) The
Annual Accountant’s Report shall also indicate that the accounting firm providing such report is Independent of the Servicer within the meaning of the Code of Professional Conduct of the American Institute of Certified Public Accountants or any
superseding or amended standard adopted by the Public Company Accounting Oversight Board. 
 SECTION 3.07 Additional Servicer
Reporting Requirements. 
 The Servicer shall prepare, procure, deliver and/or file, or cause to be prepared, procured,
delivered or filed, any reports, attestations, exhibits, certificates or other documents required to be delivered or filed with the SEC (and/or any other Governmental Authority) by the Issuer under the federal securities or other applicable laws or
in accordance with the Basic Documents, including, but without limiting the generality of foregoing, filing with the SEC, if applicable, a copy or copies of (i) the Monthly Servicer’s

  

 6 

 
Certificates described in Section 3.04 (under Form 10-D or any other applicable form), (ii) the Payment Date Statements described in Section 3 of Exhibit A hereto (under
Form 10-D or any other applicable form), (iii) the annual statements of compliance, attestation reports and other certificates described in Section 3.05, and (iv) the Annual Accountant’s Report (and any attestation
required under Regulation AB) described in Section 3.06. In addition, the appropriate officer or officers of the Servicer shall (in its separate capacity as Servicer) sign the Sponsor’s annual report on Form 10-K (and any other
applicable SEC or other reports, attestations, certifications and other documents), to the extent that the Servicer’s signature is required by, and consistent with, the federal securities law and/or any other applicable law. 
 SECTION 3.08 Environmental Control Property Documentation. 
 To assure uniform quality in servicing the Environmental Control Property and to reduce administrative costs, the Servicer shall keep on
file, in accordance with its customary procedures, all Environmental Control Property Documentation. 
 SECTION 3.09 Computer
Records; Audits of Documentation. 
 (a) Safekeeping. The Servicer shall maintain accurate and
complete accounts, records and computer systems pertaining to the Environmental Control Property and the Environmental Control Property Documentation in accordance with its standard accounting procedures and in sufficient detail to permit the Annual
Reconciliation between Estimated Environmental Control Charge Collections and Actual Environmental Control Charge Collections in accordance with Section 5.11 and to enable the Issuer to comply with this Agreement and the Indenture. The
Servicer shall conduct, or cause to be conducted, periodic audits of the Environmental Control Property Documentation held by it under this Agreement and of the related accounts, records and computer systems, in such a manner as shall enable the
Issuer and the Indenture Trustee, as pledgee of the Issuer, to verify the accuracy of the Servicer’s record keeping. The Servicer shall promptly report to the Issuer, the PSCWV and the Indenture Trustee any failure on the Servicer’s part
to hold the Environmental Control Property Documentation and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial
review or any periodic review by the Issuer or the Indenture Trustee of the Environmental Control Property Documentation. 
 (b) Maintenance of and Access to Records. The Servicer shall maintain the Environmental Control Property Documentation at 1310 Fairmont Avenue, Fairmont, West Virginia 26554 or at such other
office as shall be specified to the Issuer, the Indenture Trustee and the PSCWV by written notice not later than 30 days prior to any change in location. The Servicer shall permit the Issuer, the Indenture Trustee and the PSCWV or their respective
duly authorized representatives, attorneys, agents or auditors at any time during normal business hours as the Issuer, the Indenture Trustee or the PSCWV shall reasonably request to inspect, audit and make copies of and abstracts from the
Servicer’s records regarding the Environmental Control Property, including the Environmental Control Charges and the Environmental Control Property Documentation. The failure of the Servicer to provide access to such information as a result of
an obligation or applicable Requirements of Law prohibiting disclosure of information regarding customers shall not constitute a breach of this Section 3.09(b). 
  

 7 

 SECTION 3.10 Defending Environmental Control Property Against Claims. 
 The Servicer, on behalf of the Environmental Control Bondholders, shall institute any action or proceeding necessary to compel performance
by the PSCWV or the State of West Virginia of any of their obligations or duties under the Statute or the Financing Order with respect to the Environmental Control Property. The costs of any such action shall be payable from the Collection Account
as an Operating Expense in accordance with the priorities set forth in Section 8.02(e) of the Indenture at the time such costs are incurred. The Servicer’s obligations pursuant to this Section 3.10 shall survive and
continue notwithstanding the fact that the payment of Operating Expenses pursuant to the priorities set forth in Section 8.02(e) of the Indenture may be delayed (it being understood that the Servicer shall not be required to advance its
own funds to satisfy its obligations hereunder). 
 SECTION 3.11 Opinions of Counsel. 
 With respect to the Series B Environmental Control Bonds, the Servicer shall deliver to the Issuer, the PSCWV and the Indenture Trustee:

 (a) promptly after the execution and delivery of this Agreement and of each amendment hereto, promptly after
the execution of the Sale Agreement and of each amendment thereto, and on the 2009 Sale Date, an Opinion of Counsel either (i) to the effect that, in the opinion of such counsel, all filings, including filings with the PSCWV pursuant to the
Statute, that are necessary to fully preserve and protect the interests of the applicable Indenture Trustee in the Environmental Control Property have been executed and filed, and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (ii) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest; and 
 (b) within 90 days after the beginning of each calendar year beginning with the first calendar year beginning more than three
months after the 2009 Sale Date, an Opinion of Counsel, dated as of a date during such 90-day period, either (i) to the effect that, in the opinion of such counsel, all filings with the PSCWV pursuant to the Statute, have been executed and
filed that are necessary to preserve fully and protect fully the interest of the applicable Indenture Trustee in the Environmental Control Property, and reciting the details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (ii) to the effect that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest. 
 Each Opinion of Counsel referred to in clause (a) or (b) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve and protect such
interest. 
  

 8 

 ARTICLE IV 
 TRUE-UP ADJUSTMENTS 
 SECTION 4.01 Routine True-Up Adjustments. 

(a) With respect to each series of Environmental Control Bonds, the Servicer shall file a True-Up Adjustment Filing with
the PSCWV at the following times: (i) at least 15 days prior to each Semi-Annual True-Up Adjustment Date; and (ii) at least 15 days prior to each Quarterly True-Up Adjustment Date and each Monthly True-Up Adjustment Date.

 (b) For the purpose of filing any Semi-Annual True-Up Adjustment Filing, the Servicer shall (i) update
assumptions of projected future usage and demand of electricity by Customers, expected delinquencies and Write-offs and future expenses relating to Environmental Control Property and the Environmental Control Bonds; (ii) calculate the Periodic
Bond Payment Requirement based upon such updated assumptions; and (iii) determine the Environmental Control Charge to be charged on and after the applicable True-Up Adjustment Date. 
 (c) Each True-Up Adjustment Filing shall be substantially in the form of Annex 1 to this Servicing Agreement. 
 (d) The Servicer shall (i) take all reasonable actions and make all reasonable efforts in order to effectuate any
Routine True-Up Adjustment to the Environmental Control Charge and (ii) promptly send to the Indenture Trustee copies of all material notices and documents relating to such Routine True-Up Adjustment. 
 (e) On the same date that the Servicer files any True-Up Adjustment Filing with the PSCWV, if the Routine True-Up Adjustment
is intended to result in an increase in the amount of the Environmental Control Charge, the Servicer shall give public notice through the publication of a Class I legal advertisement in Kanawha County, will respond to any comments to such
publication and will attend any hearing held in connection with any such True-Up Adjustment Filing. 
 SECTION 4.02
Non-Routine True-Up Adjustments. 
 (a) Whenever the Servicer determines that the existing True-Up
Mechanism should be amended or revised to more accurately project and generate adequate collections of Environmental Control Charge Payments, the Servicer shall file a Non-Routine True-Up Adjustment Filing with the PSCWV designating the adjustments
to such True-Up Mechanism and any corresponding adjustments to the Environmental Control Charges, subject to the review and approval of the PSCWV pursuant to the Financing Order, and the Servicer shall notify the Rating Agencies as promptly as
possible of the filing of any such Non-Routine True-Up Adjustment Filing. Subject to clause (c) below, the Servicer shall also file for a Non-Routine True-Up Adjustment Filing at the direction of the PSCWV. 
 (b) The Servicer shall take all reasonable actions and make all reasonable efforts to secure any Non-Routine True-Up
Adjustments. 
  

 9 

 (c) The Servicer shall implement any resulting adjustments to the True-Up
Mechanism and any resulting revised Environmental Control Charges as of the effective date of the Non-Routine True-Up Adjustment Filing. If any Non-Routine True-Up Adjustment Filing is denied by the PSCWV, the Servicer shall notify the Issuer, the
Indenture Trustee and the Rating Agencies (not later than five days after the Servicer’s receipt of the PSCWV’s order denying such Non-Routine True-Up Adjustment Filing). 
 (d) The Servicer shall notify the Issuer, the Indenture Trustee and the Rating Agencies of any request for a Non-Routine
True-Up Adjustment initiated by the PSCWV within five days of receipt of such request and shall take all necessary actions to prevent the implementation of such an adjustment if it would violate the State Pledge. 
 ARTICLE V 
 THE
SERVICER 
 SECTION 5.01 Representations and Warranties of Servicer. 
 The Servicer makes the following representations and warranties as of the 2009 Sale Date relating to the Series B Environmental Control
Bonds, on which the Issuer and the PSCWV (on behalf of the Customers) has relied and will rely in acquiring the Environmental Control Property. The representations and warranties shall survive the sale of any of the Environmental Control Property to
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. 
 (a) Organization and
Good Standing. The Servicer is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, with the corporate power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted, and has the power, authority and legal right to service the Environmental Control Property. 
 (b) Due Qualification. The Servicer is duly qualified to do business as a foreign corporation in good standing or
equivalent status, and has obtained all necessary licenses and approvals in, all foreign jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Environmental Control Property as
required by this Agreement) requires such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would not be reasonably likely to have a material adverse effect on the Servicer’s
business, operations, assets, revenues, properties or prospects or materially and adversely affect the servicing of the Environmental Control Property). 
 (c) Power and Authority. The Servicer has the corporate power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Servicer by all necessary corporate action. 
 (d) Binding
Obligation. This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with its terms subject to

  

 10 

 
bankruptcy, receivership, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors’ rights generally from time to time in effect and to general
principles of equity (regardless of whether considered in a proceeding in equity or at law). 
 (e) No
Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or by-laws of the Servicer, or any other material indenture, agreement or other instrument to which the Servicer is a party or by which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (except as contemplated in the Indenture and as set forth in the Sale Agreement); nor violate any law or any order, rule or
regulation applicable to the Servicer of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or its properties. 
 (f) Approvals. Except for filings with the PSCWV for revised Environmental Control Charges, pursuant to Article IV and
Annex 1 hereto and the filing of financing statements or continuation statements under the UCC, no approval, authorization, consent, order or other action of, or filing with, any court, federal or state regulatory body, administrative agency or
other governmental instrumentality is required in connection with the execution and delivery by the Servicer of this Agreement, the performance by the Servicer of the transactions contemplated hereby or the fulfillment by the Servicer of the terms
hereof, except those that have been obtained or made. 
 (g) No Proceedings. Except as described in
Exhibit B, to the Servicer’s knowledge, there are no proceedings or investigations pending or, to the Servicer’s best knowledge, threatened before any court, federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties: (i) seeking to prevent issuance of the bonds or the consummation of the transactions contemplated by this Agreement, any other Basic Document or, if applicable, any
Additional Indenture or subsequent sale agreement, (ii) seeking any determination or ruling that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability against the
Servicer of, this Agreement, any other Basic Document or, if applicable, any Additional Indenture or subsequent sale agreement, or (iii) relating to the Servicer and which might have a material adverse affect on the federal or state income,
gross receipts or franchise tax attributes of the Environmental Control Bonds. 
 (h) Reports and
Certificates. Each report and certificate delivered in connection with any filing made to the PSCWV by the Servicer on behalf of the Issuer with respect to Environmental Control Charges or True-Up Adjustments will constitute a representation and
warranty by the Servicer that each such report or certificate, as the case may be, is true and correct in all material respects; provided, however, that to the extent any such report or certificate is based in part upon or contains assumptions,
forecasts or other predictions of future events, the representation and warranty of the Servicer with respect thereto will be limited to the representation and warranty that such assumptions, forecasts or other predictions of future events are
reasonable based upon historical performance and the facts known to the Servicer on the date such report or certificate is delivered. 
  

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 SECTION 5.02 Indemnities of Servicer; Release of Claims. 
 (a) The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the
Servicer under this Agreement. 
 (b) The Servicer shall indemnify the Issuer and the Indenture Trustee, for
itself and on behalf of the Environmental Control Bondholders for which it acts as Indenture Trustee, and each of their respective managers, members, officers, directors, employees and agents for, and defend and hold harmless each such Person from
and against, any and all Losses that may be imposed upon, incurred by or asserted against any such Person as a result of (i) the Servicer’s willful misconduct, bad faith or negligence in the performance of its duties under this Agreement
or (ii) the Servicer’s material breach of any of its obligations, duties, representations or warranties that results in a Servicer Default under this Agreement and (iii) litigation and related expenses relating to its status and
obligations as Servicer. 
 The Servicer shall not be liable for any Losses resulting from the willful misconduct, bad faith or
negligence of any Person indemnified pursuant to this Section 5.02 (each, an “Indemnified Party”) or resulting from a breach of a representation or warranty made by such Indemnified Party in any of the Basic Documents
that gives rise to the Servicer’s breach. The Environmental Control Bondholders shall be entitled to enforce their rights and remedies against the Servicer under this Section 5.02 solely through a case of action brought for their
benefit by the Indenture Trustee. The Servicer’s indemnification under this Section 5.02(b) shall survive the termination of this Agreement, and any amounts paid with respect thereto shall be remitted and deposited with the
Indenture Trustee for deposit into the Collection Account. 
 (c) The Servicer shall indemnify the PSCWV, on
behalf of the Customers, for any Losses they incur by reason of the Servicer’s willful misconduct, bad faith or negligence including without limitation Losses attributable to higher Environmental Control Charges imposed on customers by reason
of additional Operating Expenses, for example the Issuer’s higher Servicing Fees payable to a Successor Servicer. The PSCWV shall be entitled to enforce Section 5.02(c) for the benefit of Customers, and Customers may not enforce
this indemnity. The Servicer’s indemnification under this Section 5.02(c) shall survive the termination of this Agreement, and any amounts paid with respect thereto shall be remitted and deposited with the Indenture Trustee for
deposit into the Collection Account, unless otherwise directed by the PSCWV. 
 (d) The Servicer shall indemnify
the Indenture Trustee and its officers, directors and agents for, and defend and hold harmless each such Person from and against, any and all Losses that may be imposed upon, incurred by or asserted against any such Person as a result of the
acceptance or performance of the trusts and duties contained herein and in the other Basic Documents to which the Indenture Trustee is a party, except to the extent that any such Loss shall be due to the willful misconduct, bad faith or negligence
of the Indenture Trustee. The foregoing indemnity is extended to the Indenture Trustee solely in its individual capacity and not for the benefit of the Environmental Control Bondholders or any other Person. Such amounts shall be deposited and
distributed in accordance with the Indenture. 
  

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 (e) The Servicer’s indemnification obligations under Sections
5.02(b),(c) and (d) for events occurring prior to the removal or resignation of the Indenture Trustee, or the termination of this Agreement with respect to the Issuer, shall survive the resignation or removal of the Indenture
Trustee or the termination of this Agreement with respect to the Issuer, and shall include reasonable costs, fees and expenses of investigation and litigation (including the Issuer’s and the Indenture Trustee’s reasonable attorneys’
fees and expenses). 
 (f) Except to the extent expressly provided for in this Agreement or the other Basic
Documents (including the Servicer’s claims with respect to the Servicing Fees and the Seller’s claim for payment of the purchase price of the Environmental Control Property), the Servicer hereby releases and discharges the Issuer
(including its respective managers, members, officers, directors and agents, if any) and the Indenture Trustee (including its officers, directors and agents) (collectively, the “Released Parties”) from any and all actions, claims
and demands whatsoever, which the Servicer, in its capacity as Servicer, shall or may have against any such Person relating to the Environmental Control Property or the Servicer’s activities with respect thereto other than any actions, claims
and demands arising out of the willful misconduct, bad faith or negligence of the Released Parties. 
 (g) If any
action, claim, demand or proceeding (including any governmental investigation) shall be brought or asserted against an Indemnified Party entitled to any indemnification provided for under this Section 5.02, such Indemnified Party shall
promptly notify the Servicer in writing; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Servicer shall have been actually prejudiced as a result of such
failure. 
 SECTION 5.03 Merger or Consolidation of, or Assumption of the Obligations of, Servicer. 
 Any Person (a) into which the Servicer may be merged or consolidated and which succeeds to any material part of the electric
distribution business of the Servicer, (b) which results from the division of the Servicer into two or more Persons and which succeeds to any material part of the electric distribution business of the Servicer, (c) which may result from
any merger or consolidation to which the Servicer shall be a party and which succeeds to any material part of the electric distribution business of the Servicer, (d) which may succeed to the properties and assets of the Servicer substantially
as a whole and which succeeds to any material part of the electric distribution business of the Servicer or (e) which may otherwise succeed to any material part of the electric distribution business of the Servicer, which Person in any of the
foregoing cases executes an agreement of assumption to perform every obligation of the Servicer hereunder, shall be the successor to the Servicer under this Agreement without further act on the part of any of the parties to this Agreement; provided,
however, that (i) immediately after giving effect to such transaction, no representation and warranty made pursuant to Section 5.01 shall have been breached and no Servicer Default, and no event which, after notice or lapse of time,
or both, would become a Servicer Default, shall have occurred and be continuing, (ii) the Servicer shall have delivered to the Issuer, the PSCWV and the Indenture Trustee an Officers’ Certificate

  

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and an Opinion of Counsel stating that such consolidation, merger or succession and such agreement of assumption comply with this Section 5.03 and that all conditions precedent
provided for in this Agreement relating to such transaction have been complied with, (iii) the Rating Agencies shall have received prior written notice of such transaction, (iv) the Servicer shall have delivered to the Issuer, the
Indenture Trustee, the PSCWV and each Rating Agency an Opinion of Counsel either stating that, in the opinion of such counsel, (A) all filings, including filings with the PSCWV pursuant to the Statute, have been executed and filed that are
necessary to preserve fully and protect fully the interests of the Issuer in the Environmental Control Property and reciting the details of such filings or (B) no such action shall be necessary to preserve and protect such interests.
Notwithstanding anything herein to the contrary, the execution of the above referenced agreement of assumption and compliance with clauses (i), (ii), (iii) and (iv) above shall be conditions precedent to the consummation of the
transactions referred to in clause (a), (b), (c), (d) or (e) above. 
 SECTION 5.04 Assignment of Servicer’s
Obligations. 
 The Servicer may not assign its obligations hereunder to any successor unless either (i) the Rating
Agency Condition has been satisfied and the PSCWV has approved such assignment, or (ii) the Servicer is replaced by a Successor Servicer pursuant to Section 6.04. 
 SECTION 5.05 Limitation on Liability of Servicer and Others. 
 (a) Neither the Servicer nor any of its directors, officers, employees or agents shall be liable to the Issuer or its
managers, the Indenture Trustee, the Environmental Control Bondholders, the PSCWV or any other Person, except as provided under this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that this provision shall not protect either the Servicer or any other Person against any liability that would otherwise be imposed by reason of willful misconduct, bad faith or negligence in the performance of
its duties or by reason of reckless disregard of obligations and duties under this Agreement and provided further that nothing in this Section 5.05 shall limit the Servicer’s liabilities or obligations of the Servicer to indemnify
as set forth in Section 5.02 of this Agreement. The Servicer and any of its directors, officers, employees or agents may rely in good faith on the advice of counsel reasonably acceptable to the Indenture Trustee or on any document of any
kind, prima facie properly executed and submitted by any Person, respecting any matters arising under this Agreement. 
 (b) The Servicer acknowledges that the PSCWV has authority to enforce all provisions of this Agreement for the benefit of Customers, including without limitation the enforcement of Section 5.02(c), provided that such enforcement
is consistent with the State Pledge. 
 (c) Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that is not incidental to its duties to service the Environmental Control Property in accordance with this Agreement or related to its obligation to pay indemnification, and that in
its reasonable opinion may cause it to incur any expense or liability. 
  

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 SECTION 5.06 Mon Power Not To Resign as Servicer. 
 Subject to the provisions of Sections 5.03 and 5.04, Mon Power shall not resign from the obligations and duties hereby imposed
on it as Servicer under this Agreement except upon a determination that the performance of its duties under this Agreement shall no longer be permissible under applicable Requirements of Law. Notice of any such determination permitting the
resignation of Mon Power shall be communicated to the Issuer, the PSCWV, the Indenture Trustee and each Rating Agency at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest
practicable time), and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered to the Issuer, the PSCWV and the Indenture Trustee concurrently with or promptly after such notice. No such resignation shall become
effective until a Successor Servicer has been approved by the PSCWV and shall have assumed the servicing obligations and duties hereunder of Mon Power in accordance with Section 6.04. 
 SECTION 5.07 Defending Environmental Control Property Against Claims. 
 The Servicer shall institute any action or proceeding necessary to compel performance by each Third Party (at the earliest possible time) of
any of their respective obligations or duties under applicable Requirements of Law with respect to the Environmental Control Property. In addition, the Servicer shall institute any action or proceeding necessary to compel performance by the PSCWV or
the State of West Virginia, or any political subdivision, agency or other instrumentality of the State of West Virginia, of any of their respective obligations or duties under applicable Requirements of Law with respect to the Environmental Control
Property. The Servicer further agrees to take such legal or administrative actions, including without limitation defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be
reasonably necessary to block or overturn any attempts to cause a repeal of, modification of or supplement to the Statute or any Financing Order. In any of the aforementioned actions or proceedings, the Servicer shall not be required to advance its
own funds to institute any such actions or proceedings and the Servicer’s obligations pursuant to this Section 5.07 shall continue for only so long as the Servicer is being reimbursed on a current basis for its costs and expenses
incurred in undertaking such obligations. In any proceedings related to the exercise of the power of eminent domain by any municipality to acquire a portion of Mon Power’s electric distribution facilities, the Servicer shall assert that the
court ordering such condemnation must treat such municipality as a successor to Mon Power under the Statute and Financing Order. The costs and expenses of any action described in this Section 5.07 shall be payable from the Collection
Account as an Operating Expense in accordance with Section 8.02(e) of the Indenture. 
 SECTION 5.08 Servicing
Fee. 
 (a) Issuer agrees to pay the Servicer, solely to the extent amounts are available therefor in
accordance with the Indenture, the Servicing Fee with respect to the Series B Environmental Control Bonds issued by the Issuer. The Servicing Fee with respect to a Series for a Payment Date shall be as follows: so long as Mon Power acts as the
Servicer, the Servicing Fee will be 0.05% per annum of the initial principal balance of the Environmental Control Bonds, payable semi-annually, in arrears; if a Successor Servicer is appointed, the Servicing Fee will be based on an amount
approved by the PSCWV, but not in excess of a per annum rate equal to 1.25% of the initial principal balance of the Environmental Control Bonds. 
  

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 (b) The Servicing Fee set forth in Section 5.08(a) above and the
expenses provided for in Section 5.08(c) below shall be paid to the Servicer by the Indenture Trustee, on each Payment Date in accordance with the priorities set forth in Section 8.02(e) of the Indenture, by wire transfer of
immediately available funds from the Collection Account to an account designated by the Servicer. Any portion of the Servicing Fee not paid on such date shall be added to the Servicing Fee payable on the subsequent Payment Date. 
 (c) The Issuer shall pay all expenses incurred by the Servicer in connection with its activities hereunder (including any
fees to and disbursements by accountants, counsel, or any other Person, any taxes imposed on the Servicer (other than taxes based on the Servicer’s net income) and any expenses incurred in connection with reports to Environmental Control
Bondholders, subject to the priorities set forth in Section 8.02(e) of the Indenture). Except for filing fees and fees and expenses for attorneys, accountants, printing or other professional services retained by the Issuer, (or procured by the
Servicer on behalf of the Issuer) to meet the Issuer’s obligations under the Basic Documents, the Servicer shall be required to pay all expenses incurred by the Servicer in performing its activities hereunder from the Servicer’s own
resources, without additional reimbursement as Operating Expenses in accordance with Section 8.02(e) of the Indenture. 
 SECTION 5.09 Servicer Advances. 
 The Servicer shall not make any advances of interest on or principal of any
series of the Bonds. 
 SECTION 5.10 Subservicing. 
 The Servicer may at any time appoint a subservicer to perform all or any portion of its obligations as Servicer hereunder; provided,
however, that the Servicer shall not permit any Third Party to bill or collect Environmental Control Charges on behalf of the Issuer except (a) as a subcontractor under the active supervision of the Servicer or (b) as required by
applicable Requirement of Law and to the extent permitted by applicable Requirement of Law or regulation, after written notice of such appointment is furnished to the Rating Agencies; provided further, however, that the Servicer shall remain
obligated and be liable to the Issuer, the Indenture Trustee, and the Environmental Control Bondholders and the PSCWV for the servicing and administering of the Environmental Control Property in accordance with the provisions hereof without
diminution of such obligation and liability by virtue of the appointment of such subservicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Environmental Control Property.
The fees and expenses of the subservicer shall be as agreed between the Servicer and its subservicer from time to time, and none of the Issuer (or its members or managers), the Indenture Trustee, any Environmental Control Bondholder or the PSCWV
shall have any responsibility therefor. 
  

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 SECTION 5.11 Remittances. 
 (a) Subject to Section 5.11(b), the Servicer shall remit daily all Estimated Environmental Control Charge
Collections (from whatever source) and all proceeds of other Collateral of the Issuer, if any, received by the Servicer to the Indenture Trustee under the Indenture, for deposit pursuant to the Indenture. 
 (b) Notwithstanding the foregoing clause (a), as long as (i) Mon Power or any successor to Mon Power’s electric
distribution business remains the Servicer, (ii) no Servicer Default has occurred and is continuing and (iii) (A) Mon Power or such successor maintains a long-term rating of “A+” or better by Standard & Poor’s,
a long-term rating of “A2” or better by Moody’s and a long-term rating of “A” or better by Fitch, if rated by Fitch, or a short-term rating of “A-1” by Standard & Poor’s, a short-term rating of
“P-1” by Moody’s and a short-term rating of “F1” by Fitch, if rated by Fitch or (B) the Rating Agency Condition shall have been satisfied with respect to all Rating Agencies (to which prior written notice will be sent)
(and any conditions or limitations imposed by such Rating Agencies in connection therewith are complied with), the Servicer need not make the daily remittances required by such clause (a), but in lieu thereof, shall remit all Estimated Environmental
Control Charge Collections (from whatever source) and all proceeds of other Collateral of such Issuer, if any, received by the Servicer during any Collection Period to the Indenture Trustee, for deposit pursuant to the Indenture, not later than the
Business Day immediately preceding the 25th day of each month. 
 (c) On or before each Remittance Date where the
Servicer is not remitting a fixed sum on each date during the Billing Period, the Servicer will prepare and furnish to the Issuer and the Indenture Trustee a statement setting forth the aggregate amount remitted or to be remitted by the Servicer to
the Indenture Trustee for deposit on such Remittance Date pursuant to this Section 5.11 and the Indenture. 
 (d) On or before each Reconciliation Date, the Servicer will reconcile Actual Environmental Control Charge Collections with Estimated Environmental Control Charge Collections in respect of the immediately preceding Reconciliation Period.
The Servicer shall calculate the amount of any Remittance Shortfall or Excess Remittance for the immediately preceding Reconciliation Period, shall allocate such Remittance Shortfall or Excess Remittance to each outstanding Series ratably based on
the Environmental Control Charges billed for such Series for such Reconciliation Period, and (A) if a Remittance Shortfall exists, the Servicer shall make a supplemental remittance, to the applicable General Subaccount of the applicable
Collection Account for each Series within two (2) Servicer Business Days, or (B) if an Excess Remittance exists, the Servicer shall be entitled either (i) to reduce the amount of (A) each Daily Remittance, or, (B) if Mon
Power has satisfied the conditions of Section 5.11(b), each Monthly Remittance, which the Servicer subsequently remits to the applicable General Subaccount of the applicable Collection Account for application to the amount of such Excess
Remittance until the balance of such Excess Remittance has been reduced to zero, the amount of such reduction becoming the property of the Servicer or (ii) so long as such withdrawal would not cause the amounts on deposit in the applicable
General Subaccount or the applicable Excess Funds Subaccount for any Series to be insufficient for the payment of the next installment of interest on the Environmental Control Bonds or principal due at maturity on the next Payment Date or upon
acceleration on or before the next Payment Date, to be paid immediately from such General Subaccount or Excess Funds Subaccount such Series’ allocable share of the amount of such Excess Remittance, such payment becoming the property of the
Servicer. If there is a

  

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Remittance Shortfall, the amount which the Servicer remits to the applicable General Subaccounts of the applicable Collection Accounts on the relevant date set forth above shall be increased by
the amount of such Remittance Shortfall, provided that remittance of such increase will be the sole financial responsibility of the Servicer and shall neither be considered an Operating Expense nor be paid out of the Collection Account or
included in the calculation of True-Up Adjustments. 
 SECTION 5.12 Payment Date Statements. 
 At least three Business Days before each Payment Date with respect to each Series of Environmental Control Bonds, the Servicer shall prepare
and furnish to the Issuer and the Indenture Trustee a statement setting forth the amounts to be paid to Environmental Control Bondholders of such Series pursuant to Section 8.02(e) of the Indenture, as well as all other amounts to be paid
pursuant to Section 8.02(e) of the Indenture, including the Capital Equity Return to be paid to the Seller. 
 SECTION 5.13
Schedule Revision Date Schedules. 
 Prior to each Schedule Revision Date, the Servicer shall deliver to the Issuer
replacement Schedules A and replacement Schedules B to each Series Supplement to which such Schedule Revision Date applies, adjusted to reflect the event giving rise to such Schedule Revision Date and setting forth the Expected Sinking
Fund Schedule for each Payment Date applicable thereto. 
 SECTION 5.14 Protection of Title. 
 The Servicer shall execute and file such filings, including filings with the PSCWV pursuant to the Statute, and cause to be executed and
filed such filings, all in such manner and in such places as may be required by law fully to preserve, maintain, and protect the interests of the Issuer in the Environmental Control Property, including all filings required under the Statute relating
to the transfer of the ownership or security interest in the Environmental Control Property by the Seller to the Issuer or any security interest granted by the Issuer in the Environmental Control Property. The Servicer shall deliver (or cause to be
delivered) to the Issuer file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. 
 ARTICLE VI 
 SERVICER DEFAULT 
 SECTION 6.01 Servicer Default. 
 If any one of the following events (a “Servicer Default”) shall occur and be continuing: 
 (a) any failure by the Servicer to remit to the Indenture Trustee on behalf of the Issuer any required remittance that shall continue unremedied for a period of five Business Days after written notice of
such failure is received by the Servicer from the Issuer or Indenture Trustee; or 
  

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 (b) any failure by the Servicer or, so long as the Seller and the Servicer
are the same Person, the Seller, as applicable, duly to observe or perform in any material respect any other covenant or agreement of the Servicer or the Seller, as the case may be, set forth in this Agreement or any other Basic Document to which it
is a party, which failure shall (i) materially and adversely affect the Environmental Control Property or the rights of Environmental Control Bondholders and (ii) continue unremedied for a period of 60 days after written notice of
such failure shall have been given to the Servicer, the PSCWV or the Seller, as the case may be, by the Issuer or the Indenture Trustee or after discovery of such failure by an officer of the Servicer, the PSCWV or the Seller, as the case may be; or

 (c) any representation or warranty made by the Servicer in this Agreement shall prove to have been incorrect
in a material respect when made, which has a material adverse effect on the Issuer or the Environmental Control Bondholders and which material adverse effect continues unremedied for a period of 60 days after the date on which written notice thereof
shall have been given to the Servicer by the Issuer, the PSCWV or the Indenture Trustee; or 
 (d) an Insolvency
Event occurs with respect to the Servicer; 
 then, and in each and every case, so long as the Servicer Default shall not have been remedied,
the Indenture Trustee, as assignee of the Issuer, may, or at the direction of the Environmental Control Bondholders of a majority of the Outstanding principal amount of the Environmental Control Bonds of all Series or by the PSCWV, by notice then
given in writing to the Servicer (a “Termination Notice”) shall terminate all the Servicer’s rights and obligations (other than the indemnification obligations set forth in Section 5.02 hereof and the
Servicer’s obligation under Section 6.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Agreement. In addition, upon a Servicer Default described in
Section 6.01(a), the Issuer or the Indenture Trustee may apply to the PSCWV or any court of competent jurisdiction to order the sequestration and payment of Environmental Control Charge Collections arising with respect to the
Environmental Control Property for the benefit of the Environmental Control Bondholders, the Issuer, the Indenture Trustee, and any other assignee and financing parties (each as defined in the Statute). The Trustee shall not give a Termination
Notice upon instruction of the PSCWV unless the Rating Agency Condition is satisfied. 
 On or after the receipt by the Servicer
of a Termination Notice, all authority and power of the Servicer under this Agreement, whether with respect to the Environmental Control Property, including the Environmental Control Charges, or otherwise, shall, upon appointment of a Successor
Servicer pursuant to Section 6.04, without further action, pass to and be vested in such Successor Servicer and, without limitation, the Indenture Trustee is hereby authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, including, but not
limited to, completing the transfer of the Environmental Control Property Documentation and related documents. The predecessor Servicer shall cooperate with the Successor Servicer, the Indenture Trustee and the Issuer in effecting the termination of
the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the Successor Servicer for administration by it of all cash amounts that are then held by the predecessor Servicer for remittance to the
Collection Account or the Seller, or that are thereafter be received by it. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Environmental Control Property Documentation to the Successor
Servicer. 
  

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 All reasonable costs and expenses (including attorneys fees and expenses) incurred in
connection with transferring the Environmental Control Property Documentation to the Successor Servicer and amending this Agreement to reflect such succession as Servicer pursuant to this Section shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses. Termination of Mon Power as Servicer shall not terminate Mon Power’s rights or obligations as Seller under the Sale Agreement. 
 SECTION 6.02 Notice of Servicer Default. 
 The Servicer shall deliver to the Issuer, the PSCWV, a Responsible Officer of the Indenture Trustee and each Rating Agency promptly after having obtained knowledge thereof, but in no event later than five
Business Days thereafter, written notice in an Officers’ Certificate of any event or circumstance (such as a breach of any representation or warranty made by the Servicer in this Agreement) which, if not remedied, would become a Servicer
Default under Section 6.01. 
 SECTION 6.03 Waiver of Past Defaults. 
 The Indenture Trustee, with the written consent of the PSCWV and the Environmental Control Bondholders of a majority of the Outstanding
principal amount of the Environmental Control Bonds of all Series, may waive, in writing, any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in making any required remittances to the
Indenture Trustee of Environmental Control Charge Collections from Environmental Control Property in accordance with Section 5.11 of this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any
Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. 
 SECTION 6.04 Appointment of Successor. 
 (a) In the event of the Servicer’s termination hereunder, the Indenture Trustee, as assignee of the Issuer, at the direction of the Environmental Control Bondholders of a majority of the outstanding
principal amount of the Environmental Control Bonds or the PSCWV, shall appoint a Successor Servicer, and the Successor Servicer shall accept its appointment by a written assumption in form acceptable to the Issuer and the Indenture Trustee. If,
within 30 days after the delivery of the Termination Notice, a Successor Servicer shall not have been appointed and accepted such appointment, the Indenture Trustee may petition a court of competent jurisdiction to appoint a Successor Servicer under
this Agreement. A Person shall qualify as a Successor Servicer only if (i) such Person is permitted under PSCWV Regulations to perform the duties of the Servicer pursuant to the Statute, the Financing Order and this Agreement, (ii) the
Rating Agency Condition has been satisfied with respect to all Rating Agencies, (iii) such Person enters into a servicing agreement with the Issuer having substantially the same provisions as this Agreement, and (iv) if applicable, its
compensation is approved or acquiesced to by the PSCWV pursuant to Section 5.08(a) hereof. 
  

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 (b) Notwithstanding the Servicer’s receipt of a Termination Notice,
pursuant to Section 6.01 or the Servicer’s resignation in accordance with the terms of this Agreement, the predecessor Servicer shall continue to perform its functions as Servicer under this Agreement and shall be entitled to
receive the requisite portion of the Servicing Fees, until a Successor Servicer shall have assumed, in writing, the obligations of the Servicer hereunder as described below. 
 (c) Upon appointment, the Successor Servicer shall be the successor in all respects to the predecessor Servicer and shall be
subject to all the responsibilities, duties and liabilities arising thereafter relating thereto placed on the predecessor Servicer and shall be entitled to the Servicing Fees and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement. 
 (d) The Successor Servicer may not resign unless it is prohibited from serving
as such by applicable Requirements of Law. 
 SECTION 6.05 Cooperation with Successor. 
 The Servicer covenants and agrees with the Issuer that it will, on an ongoing basis, cooperate with the Successor Servicer and provide
whatever information is, and take whatever actions are, reasonably necessary to assist the Successor Servicer in performing its obligations hereunder. 
 SECTION 6.06 Servicer Default Under Related Transaction. 
 If a
“servicer default” shall occur under the Environmental Control Property Servicing Agreement dated as of December 23, 2009, between The Potomac Edison Company, as servicer, and PE Environmental Funding LLC, as issuer, and it becomes
necessary to find a successor servicer under such agreement, the Servicer agrees to assume such role as successor servicer under such servicing agreement in accordance with the terms thereof, including, for avoidance doubt, for the same servicing
fee provided for thereunder. 
 ARTICLE VII 
 MISCELLANEOUS PROVISIONS 
 SECTION 7.01 Amendment. 
 (a) Subject to Section 7.01(b) below, this Agreement may be amended by the Servicer and the Issuer, with the
consent of the Indenture Trustee and the satisfaction of the Rating Agency Condition. Promptly after the execution of any such amendment and consent, the Issuer shall furnish written notification of the substance of such amendment or consent to each
of the Rating Agencies. Prior to the execution of any amendment to this Agreement, the Issuer and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the

  

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Opinion of Counsel referred to in Section 3.10. Subject to paragraph (b) below, the Issuer and the Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects their own rights, duties or immunities under this Agreement or otherwise. 
 (b)
Notwithstanding anything to the contrary in Section 7.01(a), nor any waiver required by Section 6.03 hereof, no amendment or modification of this Agreement shall be effective except upon satisfaction of the conditions
precedent in this Section 7.01(b). 
 (i) PSCWV Condition. At least 16 days prior to the
effectiveness of any such amendment or modification, and after obtaining the other necessary approvals set forth in Section 7.01(a), except for the consent of the Indenture Trustee and the Environmental Control Bondholders if the consent
of the Environmental Control Bondholders is required or sought by the Indenture Trustee in connection with such amendment or modification, the Issuer shall have delivered to the PSCWV’s executive director and general counsel written
notification of any proposed amendment or modification, which notification shall contain: 
 (A) a reference to
Case Nos. 05-0402-E-CN and 05-0750-E-PC and any other case number under which a Financing Order has been issued; 
 (B) an Officer’s Certificate stating that the proposed amendment or modification has been approved by all parties to this Agreement; and 
 (C) a statement identifying the person to whom the PSCWV is to address any response to the proposed amendment or to request additional time. 
 (ii) The PSCWV or its authorized representative shall, within 15 days of receiving the notification complying with
Section 7.01(b)(i) above, either: 
 (A) provide notice of its determination that the proposed
amendment or modification will not under any circumstances have the effect of increasing the ongoing qualified costs related to the Environmental Control Bonds, 
 (B) provide notice of its consent or lack of consent to the person specified in Section 7.01(b)(i)(C) above, or

 (C) be conclusively deemed to have consented to the proposed amendment or modification, 
 unless, within 15 days of receiving the notification complying with Section 7.01(b)(i) above, the PSCWV or its authorized representative
delivers to the office of the person specified in Section 7.01(b)(i)(C) above with a written statement requesting an additional amount of time not to exceed 15 days in which to consider whether to consent to the proposed amendment or

  

 22 

 
modification. If the PSCWV or its authorized representative requests an extension of time in the manner set forth in the preceding sentence, then the PSCWV shall either provide notice of its
consent or lack of consent or notice of its determination that the proposed amendment or modification will not under any circumstances increase ongoing qualified costs to the person specified in Section 7.01(b)(i)(C) above not later than
the last day of such extension of time or be conclusively deemed to have consented to the proposed amendment or modification on the last day of such extension of time. Any amendment or modification requiring the consent of the PSCWV shall become
effective on the later of (i) the date proposed by the parties to such amendment or modification or (ii) the first day after the expiration of the 15-day period provided for in this Section 7.01(b)(ii), or, if such period has
been extended pursuant hereto, the first day after the expiration of such period as so extended. 
 (c) For the
purpose of this Section 7.01, an “authorized representative” of the PSCWV means any person authorized to act on behalf of the PSCWV, as evidenced by an Opinion of Counsel (which may be the general counsel) to the PSCWV.

 SECTION 7.02 Notices. 
 (a) All demands, notices and communications upon or to the Servicer, the Issuer, the Indenture Trustee or the Rating Agencies under this Agreement shall be in writing, delivered personally, via facsimile,
reputable overnight courier or by first class mail, postage prepaid, and shall be deemed to have been duly given upon receipt, 
 (i) in the case of the Servicer, to Monongahela Power Company, 800 Cabin Hill Drive, Greensburg, Pennsylvania 15601, Attention of Amanda J. Skov, Esq.; 
 (ii) in the case of the Issuer or the Indenture Trustee, at the address provided for notices or communications to such Person
in the Indenture; 
 (iii) in the case of Moody’s, to Moody’s Investors Service, Inc., ABS Monitoring
Department, 99 Church Street, New York, New York 10007; 
 (iv) in the case of
Standard & Poor’s, to Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., 55 Water Street, 42nd Floor, New York, New York 10041, Attention of Asset Backed Surveillance Department; 
 (v) in the case of Fitch, to Fitch Ratings, One State Street Plaza, New York, New York 10004, Attention of ABS Surveillance;
or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties; and 
 (vi) in the case of the PSCWV, Public Service Commission of West Virginia, 201 Brooks Street, Charleston, West Virginia 25323, Attention: Executive Secretary. 
  

 23 

 SECTION 7.03 Limitations on Rights of Others. 
 The provisions of this Agreement are solely for the benefit of the Servicer, the Seller, the Issuer (including its managers and members),
the Indenture Trustee, on behalf of itself and the Environmental Control Bondholders, and the PSCWV, on behalf of itself and the Customers, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in any Collateral or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. Notwithstanding anything to the contrary contained herein, for the avoidance of doubt,
any right, remedy or claim to which any Customer may be entitled pursuant to the Financing Order and this Agreement may be asserted or exercised only by the PSCWV for the benefit of such Customer. 
 SECTION 7.04 Severability. 
 Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 
 SECTION 7.05 Separate Counterparts. 
 This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but
one and the same instrument. 
 SECTION 7.06 Headings. 
 The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof. 
 SECTION 7.07 GOVERNING LAW. 
 THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WEST VIRGINIA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
 SECTION 7.08 Assignment to Indenture Trustee. 
 The Servicer hereby acknowledges and consents to the mortgage,
pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Environmental Control Bondholders of all right, title and interest of the Issuer in, to and under the
Environmental Control Property owned by the Issuer and the proceeds thereof and of any and all of the Issuer’s rights hereunder to the Indenture Trustee. In no event shall the Indenture Trustee have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer, hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. 

 

 24 

 SECTION 7.09 Nonpetition Covenants. 
 Notwithstanding any prior termination of this Agreement or the Indenture, but subject to a court of competent jurisdiction’s rights,
upon application by the Issuer or the Indenture Trustee, to order the sequestration and payment of Environmental Control Revenues arising with respect to the Environmental Control Property, notwithstanding any bankruptcy, reorganization or other
insolvency proceedings with respect to the debtor, pledgor or transferor of the Environmental Control Property pursuant to Section 24-2-4e(k)(4) of the Statute, the Servicer shall not, prior to the date which is one year and one day after the
termination of the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining an involuntary case against the Issuer under the federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of the property of the Issuer, or ordering the winding up or
liquidation of the affairs of the Issuer. 
 SECTION 7.10 Termination. 
 This Agreement shall terminate when all Environmental Control Bonds issued by the Issuer have been retired, redeemed or defeased in full,
and all Operating Expenses and other amounts owed by the Issuer under the Indenture have been paid in full. 
 SECTION 7.11
Limitation of Liability. 
 It is expressly understood and agreed by the parties hereto that this Agreement is executed
and delivered by U.S. Bank National Association, not individually or personally but solely as Indenture Trustee for the benefit of the Environmental Control Bondholders, in the exercise of the powers and authority conferred and vested in it, and
nothing herein contained shall be construed as creating any liability on U.S. Bank National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly
waived by the parties who are signatories to this Agreement and by any Person claiming by, through or under such parties; provided, however, that this provision shall not protect U.S. Bank National Association against any liability that would
otherwise be imposed by reason of willful misconduct, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations or duties under this Agreement. 
  

 25 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective officers as of the day and year first above written. 
  

			
	 MP ENVIRONMENTAL FUNDING LLC,
 Issuer

		
	by 	 	/s/ Barry E. Pakenham
		 	Name: Barry E. Pakenham
		 	Title:   Treasurer

  

			
	 MONONGAHELA POWER COMPANY,
 Servicer

		
	by 	 	/s/ Barry E. Pakenham
		 	Name: Barry E. Pakenham
		 	Title:   Treasurer

 Acknowledged and Accepted: 
  

			
	U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee on behalf of the Environmental Control Bondholders.
		
	by 	 	/s/ Melissa A. Rosal
		 	Name: Melissa A. Rosal
		 	Title:   Vice President

  

 Servicing Agreement Signature Page (MP) 
 26 

 EXHIBIT A 
 SERVICING OBLIGATIONS 
 The Servicer agrees to comply
with the following with respect to MP Environmental Funding LLC, as Issuer: 
 SECTION 1. Definitions. 
 Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Appendix A to the Indenture dated as of
April 11, 2007 between the Issuer and U.S. Bank National Association, as Indenture Trustee. 
 SECTION 2. Indenture
Trustee and Servicer Payment Date Statements. 
 At least three Business Days before each date on which distributions to the
Indenture Trustee and Servicer are to be made pursuant to Sections 8.02(e) and (h) of the Indenture, the Servicer shall provide the Indenture Trustee with a statement setting forth the amounts to be distributed to each of the Indenture Trustee
and Servicer pursuant to such Sections. 
 SECTION 3. Payment Date Statements. 
 At least three Business Days before each Payment Date, the Servicer shall provide to the Issuer, the Indenture Trustee and each Rating
Agency, a statement indicating: 
  

	 	1.	the amount to be paid to Environmental Control Bondholders of each Series and Class in respect of principal on such Payment Date in accordance with Section 8.02 of
the Indenture and each Series Supplement thereto; 

  

	 	2.	the amount to be paid to Environmental Control Bondholders of each Series and Class in respect of interest on such Payment Date in accordance with Section 8.02 of
the Indenture and each Series Supplement thereto; 

  

	 	3.	the Environmental Control Bond Balance and the Projected Environmental Control Bond Balance for each Series and Class as of that Payment Date (in each case, after
giving effect to the payments on such Payment Date); 

  

	 	4.	the amount on deposit in the General Subaccount for each Series and the Scheduled Funding for each Series, as of that Payment Date (after giving effect to the transfers
to be made from or into the General Subaccount on such Payment Date); 

  

	 	5.	the amount on deposit in the Capital Subaccount for each Series as of that Payment Date (after giving effect to the transfers to be made from or into the Capital
Subaccount on such Payment Date); 

  

 Exhibit A-1 

	 	6.	the amount on deposit in the Reserve Subaccount for each Series as of that Payment Date (after giving effect to the transfers to be made from or into the Reserve
Subaccount on such Payment Date); 

  

	 	7.	the amount, if any, on deposit in the Excess Funds Subaccount as of that Payment Date (after giving effect to the transfers to be made from or into the Reserve
Subaccount on such Payment Date); 

  

	 	8.	the amounts paid to the Indenture Trustee since the preceding Payment Date pursuant to Section 8.02(e) of the Indenture; 

  

	 	9.	the amounts paid to the Servicer since the preceding Payment Date pursuant to Section 8.02(e) of the Indenture; and 

  

	 	10.	the amount of any other transfers and payments to be made on such Payment Date pursuant to Sections 8.02(d), (e), (f), (g) and (i) of the Indenture; and

  

	 	11.	the then-current Environmental Control Charge for each rate class. 

 SECTION 4. Remittance Date Statements. 
 At least one Business Day before
each Remittance Date, and in the case of Daily Remittances, on the last Remittance Date of such month, the Servicer shall prepare and furnish to the Issuer and the Indenture Trustee a statement setting forth the aggregate amount remitted or to be
remitted by the Servicer to the Indenture Trustee (net of any payments owed to the Servicer in accordance with Section 5.11(d) of the Servicing Agreement) for deposit on such Remittance Date pursuant to the Indenture. 
 SECTION 5. True-Up Adjustments. 
  

	 	(a)	Prior to each Calculation Date, the Servicer shall calculate 

  

	 	(i)	the Environmental Control Bond Balance as of such Calculation Date (a written copy of which shall be delivered by the Servicer to the Indenture Trustee within five
Business Days following such Calculation Date) and 

  

	 	(ii)	the revised Environmental Control Charge with respect to the Environmental Control Property in respect of each True-Up Adjustment Date such that the Servicer projects
that Environmental Control Charge Collections therefrom allocable to the Issuer will be sufficient so that: 

  

	 	(A)	the Environmental Control Bond Balance on the Payment Date immediately preceding the next True-Up Adjustment Date will equal the Projected Environmental Control Bond
Balance as of such date or, if earlier with respect to any Series or Class of Environmental Control Bonds, as of the Payment Date immediately preceding the Expected Final Payment Date therefor; 

  

 Exhibit A-2 

	 	(B)	the amount on deposit in the General Subaccount on the Payment Date immediately preceding the next True-Up Adjustment Date will equal the Periodic Bond Payment
Requirement for such date or, if earlier with respect to any Series or Tranche of Environmental Control Bonds, as of the Payment Date immediately preceding the Expected Final Payment Date therefor; 

  

	 	(C)	the amount on deposit in the Reserve Subaccount on the Payment Date immediately preceding the next True-Up Adjustment Date will equal its required level for such date
or, if earlier with respect to any Series or Tranche of Environmental Control Bonds, as of the Payment Date immediately preceding the Expected Final Payment Date therefor; 

  

	 	(D)	the amount on deposit in the Capital Subaccount on the Payment Date immediately preceding the next True-Up Adjustment Date will equal its required level for such date
or, if earlier with respect to any Series or Tranche of Environmental Control Bonds, as of the Payment Date immediately preceding the Expected Final Payment Date therefor; 

  

	 	(E)	the amount on deposit in the Excess Funds Subaccount on the Payment Date immediately preceding the next True-Up Adjustment Date, will equal zero; and

  

	 	(F)	the Environmental Control Charge Collections will provide for (i) amortization of the remaining outstanding principal balance of each Series in accordance with the
Expected Sinking Fund Schedule therefor, (ii) payment of all Operating Expenses of the Issuer when due in accordance with the Indenture and (iii) deposits to the General Subaccount such that the balance therein will equal the Periodic Bond
Payment Requirement on each Payment Date. 

  

	 	(b)	On each Semi-Annual Calculation Date, the Servicer shall file a Semi-Annual True-Up Adjustment Filing with the PSCWV. On each Quarterly Calculation Date and Monthly
Calculation Date, the Servicer may file a Quarterly True-Up Adjustment Filing or Monthly True-Up Adjustment Filing, as the case may be, if necessary. Each True-Up Adjustment Filing shall include the data specified in the Statute and the Financing
Order. 

  

 Exhibit A-3 

	 	(c)	On each True-Up Adjustment Date, the Servicer shall 

  

	 	(i)	take all reasonable actions and make all reasonable efforts to effectuate all adjustments to the Environmental Control Charge either approved by the PSCWV or effective
on an interim basis pending final approval and 

  

	 	(ii)	promptly send to the Indenture Trustee copies of all material notices and documents relating to such adjustments. 

  

	 	(d)	If deemed appropriate by the Servicer to protect Environmental Control Bondholders and to remedy a significant and recurring variance between Actual Environmental
Control Charge Collections and Estimated Environmental Control Charge Collections, as authorized by the Financing Order, the Servicer shall file Non-Routine True-Up Adjustments to the Environmental Control Charge (as defined in the Financing Order)
to accommodate material changes to the True-Up Mechanism. Such filings shall be made at least 90 days prior to the proposed effective date of the proposed adjustments. The Servicer shall provide notice of such non-routine adjustment and resulting
change to the Environmental Control Charge to Fitch. 

  

 Exhibit A-4 

 ATTACHMENT A 
 SERVICING PROCEDURES 
 The Servicer agrees to comply with the following servicing
procedures to assess its compliance with applicable servicing criteria. 
 SECTION 1. Definitions. 
 (a) Whenever used in this Attachment A, the following words and phrases shall have the following meanings: 
 Applicable MDMA means, with respect to each Customer, the meter data management agent or Third Party, if any, providing meter reading
services for that Customer’s account. 
 Applicable Third Party means, with respect to each Customer, the Third
Party, if any, providing billing or metering services to that Customer. 
 Billed Environmental Control Charges means the
amounts billed to Customers pursuant to the Environmental Control Charge, whether billed directly to such Customers by the Servicer or indirectly through a Third Party. 
 Bills means each of the periodic bills and the Closing Bills issued to Customers or Third Parties by Mon Power. 
 Budget Billing Plan means a levelized payment plan offered by Mon Power, which, if elected by a Customer, provides for level monthly Bill charges to such Customer. For residential Customers, this
charge is calculated by calculating actual electricity charges for the previous year and dividing this amount by twelve. The number which results from this calculation is charged to the residential Customer each month. In the twelfth month, Mon
Power bills the residential Customer for actual use in that month, adjusted for any excess or deficit the Customer has paid Mon Power over the prior eleven months. If the Customer owes Mon Power $4 or more over the normal budget amount, that
Customer has the option of repaying the full amount in the twelfth month, or spreading the amount of this deficit in equal installments over the first four months of the Customer’s next budget year. The procedure is similar for small industrial
and commercial Customers. 
 Closing Bill means the final bill issued to a Customer at the time service is terminated.

 Environmental Control Charge Effective Date means the date on which the initial Environmental Control Charge goes into
effect pursuant to the Financing Order. 
 Net Write-Off Percent means the number (expressed as a percent) equal to

  

	 	•	 	 the amount by which Write-Offs attributable to a particular billing period exceed Write-Off recoveries attributable to such billing period, divided by

  

	 	•	 	 the total billed revenue attributable to such billing period. 

  

 Attachment A-1 

 Servicer Policies and Practices means, with respect to the Servicer’s duties
under this Exhibit A, the policies and practices of the Servicer applicable to such duties that the Servicer follows with respect to comparable assets that it services for itself. 
 True-Up Adjustment Filing has, with respect to the Issuer, the meaning given to such term in Appendix A. 
 Variables includes the following variables used in calculating True-Up Adjustments: 
  

	 	•	 	 the estimated Net Write-Off Percent; and 

  

	 	•	 	 the projected billed consumption to which the Environmental Control Charge applies. 

 Write-Offs means arrears that remain unpaid by Customers generally as of 45 days after the issuance of the Closing Bills containing
such charges, unless payment arrangements are made and are being kept. 
 SECTION 2. Data Acquisition. 
  

	 	(a)	Installation and Maintenance of Meters. Except to the extent that a Third Party is responsible for such services, the Servicer shall use its best efforts to
cause to be installed, replaced and maintained meters in such places and in such condition as will enable the Servicer to obtain usage measurements for each Customer approximately every thirty days or as provided in the applicable tariff.

  

	 	(b)	Meter Reading. At least once each calendar month, the Servicer shall obtain usage measurements from the Applicable MDMA for each Customer; provided, however,
that the Servicer may determine any Customer’s usage on the basis of estimates in accordance with applicable PSCWV Regulations. 

  

	 	(c)	Cost of Metering. The Issuer shall not be obligated to pay any costs associated with the metering duties set forth in this Section 2, including, but not
limited to, the costs of installing, replacing and maintaining meters, nor shall the Issuer be entitled to any credit against the Servicing Fee for any cost savings realized by the Servicer or any Third Party as a result of new metering and/or
billing technologies. 

 SECTION 3. Usage and Bill Calculation. 
 The Servicer shall obtain a calculation of each Customer’s usage (which may be based on data obtained from such
Customer’s meter read or on usage estimates determined in accordance with applicable PSCWV Regulations) at least once each calendar month and shall determine therefrom each Customer’s individual charge relating to the Environmental Control
Charge to be included on such Customer’s Bill pursuant to the Financing Order and PSCWV Regulations. 
  

 Attachment A-2 

 SECTION 4. Billing. 
 The Servicer shall implement the Environmental Control Charge as of the Environmental Control Charge Effective Date and shall
thereafter bill each Customer or the Applicable Third Party for the respective Customer’s outstanding current and past due charges relating to the Environmental Control Charge, accruing until all payments of principal and interest on each
Series of Environmental Control Bonds and all other costs and expenses related to such Series have been paid in accordance with the Indenture, all in accordance with the following: 
  

	 	(a)	Frequency of Bills; Billing Practices. In accordance with the Servicer’s then-existing Servicer Policies and Practices, as such Servicer Policies and
Practices may be modified from time to time, the Servicer shall generate and issue a Bill to each Customer, or to an Applicable Third Party, for such Customer’s respective Environmental Control Charge as a general practice once approximately
every 60 days or such other time period as allowed by the PSCWV, at the same time, with the same frequency and on the same Bill as that containing the Servicer’s own charges to such Customer or Third Party, as the case may be. In the event that
the Servicer makes any material modification to these practices, it shall notify the Issuer, the Indenture Trustee and the Rating Agencies as soon as practicable, and in no event later than 60 Business Days after such modification goes into effect;
provided, however, that 

  

	 	(i)	the Servicer may not make any modification that will materially adversely affect the Environmental Control Bondholders and 

  

	 	(ii)	the Rating Agencies shall receive prior notice of any modification that would change the frequency with which Bills are issued or would change any tariff charged.

  

	 	(b)	Format. 

  

	 	(i)	Each Bill to a Customer shall contain the charge corresponding to the Environmental Control Charge owed by such Customer for the billing period. The Customer’s
Bill will contain in text or in a footnote, text substantially to the effect that a portion of the monthly charge representing that Environmental Control Property is being collected on behalf of the Issuer as owner of the Environmental Control
Property. 

  

	 	(ii)	The Servicer shall deliver to the Applicable Third Party itemized charges for such Customer including the amount of such Customer’s Environmental Control Charge to
be remitted by the Servicer to the Issuer. 

  

 Attachment A-3 

	 	(iii)	The Servicer shall conform to such requirements in respect of the format, structure and text of Bills delivered to Customers and Third Parties as applicable PSCWV
Regulations shall from time to time prescribe. To the extent that Bill format, structure and text are not prescribed by the Statute, other applicable Requirements of Law, the Servicer shall, subject to clauses (i) and (ii) above, determine
the format, structure and text of all Bills in accordance with its reasonable business judgment, its Servicer Policies and Practices with respect to its own charges and prevailing industry standards. 

  

	 	(c)	Delivery. The Servicer shall deliver all Bills to Customers 

  

	 	(i)	by United States mail in such class or classes as are consistent with the Servicer Policies and Practices followed by the Servicer with respect to its own charges or

  

	 	(ii)	by any other means, whether electronic or otherwise, that the Servicer may from time to time use to present its own charges to its Customers. 

In the case of Customers that have elected Consolidated Third Party Billing, the Servicer shall deliver all Bills to the Applicable Third
Parties by such means as are prescribed by applicable PSCWV Regulations, or, if not prescribed by applicable PSCWV Regulations, by such means as are mutually agreed upon by the Servicer and the Applicable Third Party and are consistent with PSCWV
Regulations. The Servicer or a Third Party, as applicable, shall pay from its own funds all costs of issuance and delivery of all Bills, including but not limited to printing and postage costs as the same may increase or decrease from time to time.

 SECTION 5. Customer Service Functions. 
 The Servicer shall handle all Customer inquiries and other Customer service matters according to the same procedures it uses
to service Customers with respect to its own charges. 
 SECTION 6. Collections; Payment Processing; Remittance.

  

	 	(a)	Collection Efforts; Policies; Procedures. 

  

	 	(i)	The Servicer shall use reasonable efforts to collect all Billed Environmental Control Charges from Customers and Third Parties as and when the same become due and shall
follow such collection procedures as it follows with respect to comparable assets that it services for itself or others, including, as follows: 

  

	 	(A)	The Servicer shall prepare and deliver overdue notices to Customers and Third Parties in accordance with applicable PSCWV Regulations and the Servicer Policies and
Practices. 

  

 Attachment A-4 

	 	(B)	The Servicer shall apply late payment charges to outstanding Customer and Third Party balances in accordance with applicable PSCWV Regulations. All late payment charges
collected shall be payable to and retained by the Servicer as a component of its compensation under the Servicing Agreement, and the Issuer shall not have any right to share in the same. 

  

	 	(C)	The Servicer shall deliver verbal and written final call notices in accordance with applicable PSCWV Regulations and Servicer Policies and Practices.

  

	 	(D)	The Servicer shall adhere to and carry out disconnection policies in accordance with the Competition Act, other applicable law and PSCWV Regulations and Servicer
Policies and Practices. 

  

	 	(E)	The Servicer may employ the assistance of collections agents in accordance with applicable PSCWV Regulations and Servicer Policies and Practices.

  

	 	(F)	The Servicer shall apply Customer and Third Party deposits, Customers’ letters of credit and Customer posted surety bonds to the payment of delinquent accounts in
accordance with applicable PSCWV Regulations and Servicer Policies and Practices and according to the priorities set forth in Sections 6(b)(ii), (iii) and (iv) of this Exhibit A. 

  

	 	(G)	The Servicer shall promptly take all necessary action in accordance with applicable PSCWV Regulations to terminate billing of Environmental Control Charges by Third
Parties whose payments are 30 or more days delinquent, or as the then current PSCWV Regulations and any billing services agreements allow, and to resume, prospectively, to collect the Billed Environmental Control Charges directly from the applicable
Customers. At such time, the Servicer will apply the Third Party’s security deposit to satisfy charges billed previously by the Third Party which remain outstanding, including outstanding Environmental Control Charges. 

 

	 	(ii)	The Servicer shall not waive any late payment charge or any other fee or charge relating to delinquent payments, if any, or waive, vary or modify any terms of payment
of any amounts payable by a Customer, in each case unless such waiver or action: 

  

	 	(A)	would be in accordance with the Servicer’s customary practices or those of any Successor Servicer with respect to comparable assets that it services for itself and
for others; 

  

 Attachment A-5 

	 	(B)	would not materially adversely affect the rights of the Environmental Control Bondholders; and 

  

	 	(C)	would comply with applicable Requirements of Law; 

 provided, however, that notwithstanding anything in the Servicing Agreement or this Exhibit A to the contrary, the Servicer is authorized to write off any Billed Environmental Control Charges in
accordance with its Servicer Policies and Practices. 
  

	 	(iii)	The Servicer shall accept payment from Customers in respect of Billed Environmental Control Charges in such forms and methods and at such times and places as it accepts
for payment of its own charges. The Servicer shall accept payment from Third Parties in respect of Billed Environmental Control Charges in such forms and methods and at such times and places as the Servicer and each Third Party shall mutually agree
in accordance with applicable PSCWV Regulations. 

  

	 	(b)	Payment Processing; Allocation; Priority of Payments. 

  

	 	(i)	The Servicer shall post all payments received to Customer accounts as promptly as practicable, and, in any event, substantially all payments shall be posted no later
than two Business Days after receipt. 

  

	 	(ii)	Subject to clause (iii) below, the Servicer shall apply payments received to each Customer’s or Third Party’s account in proportion to the charges
contained on the outstanding Bill to such Customer or Third Party. 

  

	 	(iii)	Any amounts collected by the Servicer that represent partial payments of the total Bill to a Customer or Third Party shall be allocated in accordance with the
priorities set forth in Section 3.02(b) of the Servicing Agreement. 

  

	 	(iv)	The Servicer shall hold all over-payments for the benefit of the Issuer and shall apply such funds to future Bill charges in accordance with clauses (ii) and
(iii) above as such charges become due. 

  

 Attachment A-6 

	 	(v)	For Customers on a Budget Billing Plan, the Servicer shall treat Environmental Control Charge Collections received from such Customers as if such Customers had been
billed for the Environmental Control Charge in the absence of the Budget Billing Plan. Partial payment of a Budget Billing Plan payment shall be allocated according to clause (iii) above, and overpayment of a Budget Billing Plan payment shall
be allocated according to clause (iv) above. 

  

	 	(c)	Accounts; Records. 

  

	 	(i)	The Servicer shall maintain accounts and records as to the Environmental Control Property accurately and in accordance with its standard accounting procedures and in
sufficient detail to permit reconciliation between payments or recoveries with respect to the Environmental Control Property and the amounts from time to time remitted to the Collection Account in respect of the Environmental Control Property.

  

	 	(ii)	The Servicer shall maintain accounts and records as to Third Parties performing billing for Customers accurately and in accordance with its standard accounting
procedures and in sufficient detail to permit reconciliation between payments or recoveries with respect to the Environmental Control Property and amounts owed by such Customers in respect of the Environmental Control Charge.

  

	 	(d)	Investment of Environmental Control Charge Collections. Any and all interest accrued on Environmental Control Charge Collections prior to the remittance of such
Environmental Control Charge Collections to the Issuer or Indenture Trustee shall be remitted by the Servicer to the Indenture Trustee for deposit in the Excess Funds Subaccount. 

  

	 	(e)	Calculation of Collections; Determination of Aggregate Remittance Amount. 

  

	 	(i)	On or before each Remittance Date, the Servicer shall calculate the Estimated Environmental Control Charge Collections received by the Servicer from or on behalf of
Customers during prior Collection Periods in respect of all previously Billed Environmental Control Charges. 

  

	 	(ii)	In accordance with Section 4.01 of the Servicing Agreement and Annex 1, the Servicer shall update the Variables and shall prepare True-Up Adjustment Filings
to reflect the updated Variables when required to do so pursuant to Annex 1. 

  

 Attachment A-7 

	 	(f)	Remittances. 

  

	 	(i)	The Servicer shall make remittances to the Issuer in accordance with Section 5.11 of the Servicing Agreement. 

  

	 	(ii)	In the event of any change of account or change of institution affecting the remittances, the Issuer shall provide written notice thereof to the Servicer by the earlier
of 

  

	 	•	 	 five Business Days from the effective date of such change, or 

  

	 	•	 	 five Business Days prior to the next applicable Remittance Date. 

  

 Attachment A-8 

 EXHIBIT B 
 PENDING LITIGATION 
 None. 
  

 Exhibit B-1 

 ANNEX 1 
 FORM OF ROUTINE ADJUSTMENT REQUEST 
 DATE: 
 [Executive Secretary] 
 Public Service Commission
of West Virginia 
 201 Brooks Street, P.O. Box 812 
 Charleston, WV 25323 
  

	 	Re:	Case Nos. 05-0402-E-CN and 05-0750-E-PC 

 Dear
                                : 
 As required by Section 24-2-4e(e) of the West Virginia Code §§ 24-2-4e(a) through and including 24-2-4e(v) and pursuant to
the orders dated April 7, 2006, June 13, 2006, January 17, 2007 and September 30, 2009 in Case Nos. 05-0402-E-CN and 05-0750-E-PC (the “Financing Order”), Monongahela Power Company (the
“Company”) as Servicer (or any Successor Servicer) of the Environmental Control Property, and on behalf of the Indenture Trustee under the Indenture, dated as of April 11, 2007 between the Issuer and the Indenture Trustee, as
amended, modified or supplemented from time to time, as assignee of MP Environmental Funding LLC hereby proposes an adjustment to the Environmental Control Charges (the “ECC” or “Environmental Control Charges”).
Capitalized terms used but not otherwise defined herein have the meanings given such terms in the Servicing Agreement dated as of December 23, 2009 between the Issuer and the Company, as amended, modified or supplemented from time to time, or
in Appendix A thereto. 
 This proposed adjustment is intended to satisfy Section 24-2-4e(e) and the Financing Order by
ensuring that the ECC will recover amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the Environmental Control Bonds during the upcoming Remittance Period. 
 Using the formula approved by the Public Service Commission of West Virginia (the “PSCWV”) in the Financing Order, this
filing modifies the variables used in the ECC and provides the resulting adjusted ECC. Attachments B-1 [and B-2] hereto show the resulting values of the ECC, as calculated in accordance with the Joint Stipulation, as modified by the Financing Order,
such modified Environmental Control Charges to be effective as of the first day of the upcoming Remittance Period. The calculations of these values are appended to the Attachments hereto. 
 In accordance with the Financing Order, the proposed adjustments to the charges will be effective automatically on the first day of the
upcoming Remittance Period. In the event that, prior to the first day of the upcoming Remittance Period, it is determined by the PSCWV that a mathematical error in the application of the formula-based mechanism exists, the Company shall correct such
error and make any necessary corrections to the adjustments of the Environmental Control Charges. These adjusted Environmental Control Charges, as corrected, shall in any

  

 Annex 1-1 

 
event take effect on the first day of the upcoming Remittance Period. [For Quarterly True-Up Adjustments and Monthly True-Up Adjustments, on the fifteenth day of the quarter or month next
succeeding the date of the Routine Adjustment Request.] 
 Respectfully submitted, 
 Attachment 
  

 Annex 1-2 

 ATTACHMENT A TO ANNEX 1 
 Table I below shows the current assumptions for each of the variables used in the Environmental Control Charge calculation. 
 INPUT VALUES FOR ENVIRONMENTAL CONTROL CHARGE 
  

	(a)	Measure Date 

  

	(b)	For each Rate Schedule: 

  

	 	(i)	Weighted average days outstanding data 

  

	 	(ii)	Estimated Net Write-Off Percent 

  

	 	(iii)	Projected billed revenue to which Environmental Control Charges apply 

  

	 	(iv)	Annual class generation level MWh energy 

  

	 	(v)	Forecasted annual class customer level MWh energy 

  

	 	(vi)	Annual class generation level 12 CP MW demand 

  

	 	(vii)	Forecasted annual class customer level demand 

  

	(c)	Retail energy weighting ratio 

  

	(d)	Retail demand weighting ratio 

  

	(e)	Total generation level MWh energy (excl. wholesale) 

  

	(f)	Total generation level 12 CP MW demand (excl. wholesale) 

  

	(g)	Expected annual Write-Offs 

  

	(h)	Annual ongoing transaction expenses 

  

	(i)	Current Environmental Control Bonds outstanding balance 

  

	(j)	Expected Environmental Control Bonds outstanding balance as of __/__/__ 

  

	(k)	Accrued but unpaid Environmental Control Bonds interest 

  

	(l)	Deferred unpaid Environmental Control Bonds principal 

  

	(m)	Unpaid ongoing transaction cost 

  

	(n)	Capital Subaccount balance as of __/__/__ 

  

	(o)	Reserve Subaccount balance as of __/__/__ 

  

	(p)	Available True-Up Excess Funds Amount 

  

	(q)	Accrued but unpaid Capital Equity Return 

  

	(r)	federal corporate income tax rate 

  

	(s)	Applicable state and local tax rates 

  

 Attachment A-1 to Annex 1 

 ANNEX 2 
 FORM OF MONTHLY SERVICER’S CERTIFICATE 
 MP Environmental Funding
LLC 
 $64,380,000 Senior Secured ROC Bonds, Environmental Control Series B 
 Pursuant to Section 3.04 of the Servicing Agreement dated as of December 23, 2009 (as the same may be amended, supplemented or
otherwise modified from time to time, the “Servicing Agreement”) between Monongahela Power Company, as Servicer, and MP Environmental Funding LLC, as Issuer, the Servicer does hereby certify as follows: 
 Capitalized terms used in this Monthly Servicer’s Certificate have their respective meanings as set forth in the Servicing Agreement.
References herein to certain sections and subsections are references to the respective sections of the Servicing Agreement. 
 Billing Period: [                    ] 
  

							
	1.	  	Current Billing Period	  	 	[___________	] 
		  	CUSTOMER CLASS [ ] of [ ]: [                    ]	  			
	2.	  	Rate Schedule #[ ] kWh Billed	  	 	[___________	] 
	3.	  	Rate Schedule #[ ] Weighted Average	  	 	[___________	] 
		  	Environmental Control Charge	  			
		  	Billed Environmental Control Charge Collections	  			
	4.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
		  	Estimated Environmental Control Charge Collections	  			
	5.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	6.	  	 Total Residential Net Write-offs
 as % of Billed Environmental Control Charge Collections
 [ ] CUSTOMER CLASS [ ] OF [ ]:
[                    ]
	  	 	[__________	]% 
	7.	  	Rate Schedule #[ ] kWh Billed	  	 	[___________	] 
	8.	  	Rate Schedule #[ ] Weighted Average	  	 	[___________	] 
		  	Environmental Control Charge	  			
	9.	  	Rate Schedule #[ ] kWh Billed	  	 	[___________	] 
	10.	  	Rate Schedule #[ ] Weighted Average	  	 	[___________	] 
		  	Environmental Control Charge	  			
	11.	  	Rate Schedule #[ ] kWh Billed	  	 	[___________	] 
	12.	  	Rate Schedule #[ ] Weighted Average	  	 	[___________	] 
		  	Environmental Control Charge	  			
	13.	  	Rate Schedule #[ ] kWh Billed	  	 	[___________	] 
	14.	  	Rate Schedule #[ ] Weighted Average	  	 	[___________	] 
		  	Environmental Control Charge	  			
		  	Billed Environmental Control Charge Collections	  			

  

 Annex 2-1 

							
	15.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	16.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	17.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	18.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	19.	  	Total Commercial Billed Environmental Control Charge Collections	  	$	[__________	] 
		  	Estimated Environmental Control Charge Collections	  			
	20.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	21.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	22.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	23.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	24.	  	Total Commercial Environmental Control Charge Collections	  	$	[__________	] 
	25.	  	 Total Commercial Net Write-offs as
 a% of Billed Revenues [ ]
 CUSTOMER CLASS [ ] OF [ ]: [__________]
	  	 	[__________	]% 
	26.	  	Rate Schedule #[ ] kWh Billed	  	 	[__________	] 
	27.	  	Rate Schedule #[ ] Weighted Average	  	 	[__________	] 
		  	Environmental Control Charge	  			
	28.	  	Rate Schedule #[ ] kWh Billed	  	 	[__________	] 
	29.	  	Rate Schedule #[ ] Weighted Average	  	 	[__________	] 
		  	Environmental Control Charge	  			
	30.	  	Rate Schedule #[ ] kWh Billed	  	 	[__________	] 
	31.	  	Rate Schedule #[ ] Weighted Average	  	 	[__________	] 
		  	Environmental Control Charge	  			
	32.	  	Rate Schedule #[ ] kWh Billed	  	 	[__________	] 
	33.	  	Rate Schedule #[ ] Weighted Average	  	 	[__________	] 
		  	Environmental Control Charge	  			
	34.	  	Rate Schedule #[ ] kWh Billed	  	 	[__________	] 
	35.	  	Rate Schedule #[ ] Weighted Average	  	 	[__________	] 
		  	Environmental Control Charge	  			
	36.	  	Rate Schedule #[ ] kWh Billed	  	 	[__________	] 
	37.	  	Rate Schedule #[ ] Weighted Average	  	 	[__________	] 
		  	Environmental Control Charge	  			
	38.	  	Street Lighting Rate Schedules	  	 	[__________	] 
	39.	  	Street Lighting Weighted Average	  	 	[__________	] 
		  	Environmental Control Charge	  			
		  	Billed Environmental Control Charge Collections	  			
	40.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	41.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	42.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	43.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	44.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	45.	  	Rate Schedule #[ ] Billed Environmental Control Charge Collections	  	$	[__________	] 
	46.	  	Street Lighting Rate Schedules Billed Environmental Control Charge Collections	  	$	[__________	] 
		  		  	 	 	 
	47.	  	Total Industrial Billed Environmental Control Charge Collections	  	$	[__________	] 
		  	Estimated Environmental Control Charge Collections	  			

  

 Annex 2-2 

							
	48.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	49.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	50.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	51.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	52.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	53.	  	Rate Schedule #[ ] Environmental Control Charge Collections	  	$	[__________	] 
	54.	  	Street Lighting Rate Schedules Environmental Control Charge Collections	  	$	[__________	] 
		  		  	 	 	 
	55.	  	Total Industrial Environmental Control Charge Collections	  	$	[__________	] 
	56.	  	 Total Industrial Net Write-offs as
 a% of Billed Environmental Control Charge Collections [ ]
	  	 	[__________	]% 
		  	AGGREGATE ESTIMATED ENVIRONMENTAL CONTROL CHARGE COLLECTIONS	  			
		  	Aggregate Environmental Control Charge Remittances for [Month, Year] Billing Period	  	$	[__________	] 
		  	Aggregate Environmental Control Charge Remittances for [Month, Year] Billing Period	  	$	[__________	] 
		  	Aggregate Environmental Control Charge Remittances for [Month, Year] Billing Period	  			
		  	Aggregate Environmental Control Charge Remittances for [Month, Year] Billing Period	  			
		  		  	 	 	 
		  	Aggregate Environmental Control Charge Remittances to Date	  	$	[__________	] 

 IN WITNESS HEREOF, the undersigned has duly executed and delivered this Monthly
Servicer’s Certificate this [__] day of [                    ]. 
  

	
	
	  
	 Name:
 Title:

  

 Annex 2-3 

 ANNEX 3 
 FORM OF QUARTERLY SERVICER’S CERTIFICATE 
 Quarterly Servicer’s
Certificate 
 MP Environmental Funding LLC 
 $64,380,000 Senior Secured ROC Bonds, Environmental Control Series B (“Series B Environmental Control Bonds”) 
 Pursuant to Section 3.04 of the Servicing Agreement dated as of December 23, 2009 (as the same may be amended, supplemented or
otherwise modified from time to time, the “Servicing Agreement”) between Monongahela Power Company, as Servicer, and MP Environmental Funding LLC, as Issuer, the Servicer does hereby certify as follows: 
 Capitalized terms used in this Quarterly Servicer’s Certificate have their respective meanings as set forth in the Servicing Agreement.
References herein to certain sections and subsections are references to the respective sections of the Servicing Agreement. 
 Billing Periods: [                    ] 
 Payment Date: [                    ] 
  

											
	1.	  	Collections Allocable and Aggregate Amounts Available for the Current Payment Date:	  
		  	i.	  	 Balance of Remittances for the [            ]
Collection Period
	  	$	[________	] 
		  	ii.	  	 Remittances for the [            ] Collection Period

	  	$	[________	] 
		  	iii a.	  	 Remittances for the [            ] Collection Period

	  	$	[________	] 
		  	iii b.	  	 Part [            ] Remittance for ‘Daily
Remittance Provision’
	  	$	[________	] 
		  	iv.	  	 Net Earnings on General Subaccount
	  	$	[________	] 
		  	v.	  	 Net Earnings on Capital Subaccount
	  	$	[________	] 
		  	vi.	  	 Net Earnings on Reserve Subaccount
	  	$	[________	] 
		  	vii.	  	 Net Earnings on True-Up Excess Funds Subaccount
	  	$	[________	] 
		  	viii.	  	 General Subaccount Balance
	  	$	[________	] 
		  	ix.	  	 True-Up Excess Funds Subaccount Balance
	  	$	[________	] 
		  	x.	  	 Reserve Subaccount Balance
	  	$	[________	] 
		  	xi.	  	 Capital Subaccount Balance
	  	$	[________	] 
		  	xii.	  	 Collection Account Balance
	  	$	[________	] 
	2.	  	Outstanding Principal Balance and Collection Account Balance as of Prior Payment Date:	  
		  	v.	  	 Series B Environmental Control Bond Principal Balance
	  	$	[________	] 
		  	vi.	  	 General Subaccount Balance
	  	$	[________	] 

  

 Annex 3-1 

											
		  	vii.	  	 True-Up Excess Funds Subaccount Balance
	  	$	[________	] 
		  	viii.	  	 Capital Subaccount Balance
	  	$	[________	] 
		  	ix.	  	 Reserve Subaccount Balance
	  	$	[________	] 
		  	x.	  	 Collection Account Balance
	  	$	[________	] 
	3.	  	Required Funding/Payments as of Current Payment Date:	  			
		  	v.	  	 Projected Environmental Control Bond Balance
	  	$	[________	] 
		  	vi.	  	 Required Series B Coupon (5.127% per annum rate)
	  	$	[________	] 
		  	x.	  	 Required Capital Subaccount Funding
	  	$	[________	] 
		  	xi.	  	 Required Reseve Subaccount Funding
	  	$	[________	] 
	4.	  	Allocation of Remittances as of Current Payment Date Pursuant to Section 8.02(d) of the Indenture:	  
		  	i.	  	 Cumulative Monthly Administration Fee during Relevant Quarter
	  	$	[________	] 
		  	ii.	  	 Indenture Fees and Expenses
	  	*	  	$	[________	] 
		  	iii.	  	 Independent Director’s Fee
	  	**	  	$	[________	] 
		  	iv.	  	 Servicing Fee
	  	$	[________	] 
		  	v.	  	 Operating Expenses (subject to $[ ] cap)
	  	$	[________	] 
		  	vi.	  	 Quarterly Interest
	  	$	[________	] 
		  		  	 1.     Series B Environmental Control Bond Coupon Payment
	  	$	[________	] 
		  	vii.	  	 Principal Due and Payable
	  	$	[________	] 
		  	viii.	  	 Scheduled Quarterly Principal
	  	$	[________	] 
		  		  	 1.     Series B Environmental Control Bond Principal Payment
	  	$	[________	] 
		  	ix.	  	 Operating Expenses (in excess of $[ ])
	  	$	[________	] 
		  	x.	  	 Funding of Capital Subaccount (to required level)
	  	$	[________	] 
		  	xi.	  	 Funding of Reserve Subaccount (to required level)
	  	$	[________	] 
		  	xii.	  	 Required Dividend Distributions to [ ]
	  	$	[________	] 
		  	xiii.	  	 Deposits to True-Up Excess Funds Subaccount
	  	$	[________	] 
		  	xiv.	  	 Released to Issuer upon Series Retirement: Collection Account
	  	$	[________	] 
	5.	  	Outstanding Principal Balance and Collection Account Balance as of Current Payment Date: (after giving effect to payments to be made on such payment date):
	     
		  	i.	  	 Series B Environmental Control Bond Principal Balance
	  	$	[________	] 
		  	ii.	  	 True-Up Excess Funds Subaccount Balance
	  	$	[________	] 

  

 Annex 3-2 

											
		  	iii.	  	 Capital Subaccount Balance
	  	$	[________	] 
		  	iv.	  	 Reserve Subaccount Balance
	  	$	[________	] 
		  	v.	  	 General Subaccount Balance
	  	$	[________	] 
		  	vi.	  	 Collection Account Balance
	  	$	[________	] 
		  	 *       $[ ] per quarter, in advance plus expenses, in arrears.

	           

		  	 **     Independent Director’s Fee is paid in advance, first quarter.
([Quarter/Year], directly by Issuer to directors)
	         

	6.	  	Subaccount Draws as of Current Payment Date (if applicable, pursuant to Section 8.02(d) of the Indenture):	  
		  	i.	  	 True-Up Excess Funds Subaccount
	  	$	[________	] 
		  	ii.	  	 Capital Subaccount
	  	$	[________	] 
		  	iii.	  	 Reserve Subaccount
	  	$	[________	] 
		  	iv.	  	 Total Draws
	  	$	[________	] 
	7.	  	Shortfalls In Interest and Principal Payments as of Current Payment Date:	  
		  	i.	  	 Quarterly Interest
	  	$	[________	] 
		  		  	 1.     Series B Environmental Control Bond Coupon Payment
	  	$	[________	] 
		  	ii.	  	 Quarterly Principal
	  	$	[________	] 
		  		  	 1.     Series B Environmental Control Bond Principal Payment
	  	$	[________	] 
	8.	  	Shortfalls in Required Subaccount Levels as of Current Payment Date:	  
		  	i.	  	 Capital Subaccount
	  	$	[________	] 
		  	ii.	  	 Reserve Subaccount
	  	$	[________	] 
	9.	  	Additional Customer Data	  
		  	i.	  	 Number of Ratepayers*
	  			
		  	ii.	  	 Aging of Receivables*
	   

		  	iii.	  	 Variances from Forecast for Individual, Industrial and Commercial Customer Classes**
	   

		  	*  	  	 To be provided semi-annually.
	   

		  	**	  	 To be provided annually.
	   

 IN WITNESS HEREOF, the undersigned has duly executed and delivered this Quarterly
Servicer’s Certificate this [__] day of [                    ]. 
  

	
	
	  
	 Name:
 Title:

  

 Annex 3-3 

 ANNEX 4 
 FORM OF OFFICER’S CERTIFICATE 
 $64,380,000 
 MP Environmental Funding LLC 
 SENIOR SECURED ROC BONDS, ENVIRONMENTAL CONTROL SERIES B 
 MONONGAHELA POWER
COMPANY 
 OFFICER’S CERTIFICATE 
 Pursuant to Section 3.05(a) of the Servicing Agreement dated as of December 23, 2009 between MP Environmental Funding LLC, as Issuer, and Monongahela Power Company (the “Company”), as
Servicer (as the same may be amended, supplemented or otherwise modified from time to time, the “Servicing Agreement”; capitalized terms used but not defined herein have the meanings assigned thereto in the Servicing Agreement), each of
the undersigned, [Authorized Officer], the duly elected [                    ] of and [Authorized Officer], the
[                    ] of the Company, having carefully examined the Servicing Agreement including Section 3.05 thereof, and the
definitions in the Servicing Agreement relating thereto and certain other corporate documents and records, and having made such examination or investigation as they consider necessary to enable the undersigned to express any informed opinion,
certifies that: 
 (i) a review of the activities of the Company during the period from January 1,
[            ] through December 31, [            ] and of its performance under the Servicing Agreement has
been made under the supervision of the undersigned, and 
 (ii) to the best of the knowledge of the undersigned,
based on such review, the Company has complied with all conditions and covenants under the Servicing Agreement throughout such period [or, if there has been an Event of Default, or an act or omission, which with either the passage of time or the
giving of notice, could become an Event of Default, specify such event of default or act or omission known to such authorized officer and the nature and status thereof]. 
 IN WITNESS WHEREOF, the undersigned have executed this certificate this [__] day of
[                    ]. 
  

			
		
	By: 	 	 
		 	 Name:
 Title:

		
	By: 	 	 
		 	 Name:
 Title:

  

 Annex 4-1 

 ANNEX 5 
 FORM OF ASSESSMENT OF SERVICING CRITERIA 
 I,
                                         
                                         
                  , the
                                         
            of the Servicer, am responsible for assessing the Servicer’s compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB [that would apply if the
Bonds were “asset-backed securities” under Item 1101(c) of Regulation AB] (the “Servicing Criteria”). 
 With respect to each of the Servicing Criteria, I have made the following assessment of the Servicing Criteria in accordance with Item 1122(d) of Regulation AB, with such discussion regarding the performance of such Servicing Criteria
during the fiscal year covered by the Issuer’s Form 10-K Report (such fiscal year, the “Assessment Period”): 
 [N.B.: the descriptions are for reference as to how the form will be used on an ongoing basis for filing with the SEC] 
  

					
	 	  	 Servicing Criteria
	  	 Applicable Servicing Criteria

	 Reference
	  	 Criteria
	  	 
		  	General Serving Considerations	  	
			
	1122(d)(1)(i)	  	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	  	Applicable; assessment below. [Assessment: cover true-up compliance here]
			
	1122(d)(1)(ii)	  	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such
servicing activities.	  	Not applicable; no servicing activities were outsourced.
			
	1122(d)(1)(iii)	  	Any requirements in the transaction agreements to maintain a back-up servicer for the environmental control property are maintained.	  	Not applicable; documents do not provided for a back-up servicer.
			
	1122(d)(1)(iv)	  	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required
by and otherwise in accordance with the terms of the transaction agreements.	  	Not applicable; rules of the Commission govern performance requirements of persons handling customer collections. [Utility to confirm bonding requirements under current rules and
regulations.]

  

 Annex 5-1 

					
	 	  	 Servicing Criteria
	  	 Applicable Servicing Criteria

	 Reference
	  	 Criteria
	  	 
		  	Cash Collection and Administration	  	
			
	1122(d)(2)(i)	  	Payments on environmental control property are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following
receipt, or such other number of days specified in the transaction agreements.	  	Applicable; assessment below [Assessment: estimated collections were remitted from the Servicer to the Trustee each business day in accordance with Section 5.10 of the
Servicing Agreement.]
			
	1122(d)(2)(ii)	  	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	  	Applicable; assessment below.[Assessment: Wire transfers to the Trustee were made by authorized personnel.]
			
	1122(d)(2)(iii)	  	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.	  	Applicable, but no current assessment required; no advances by the Servicer or the Trustee are permitted under the transaction documents.
			
	1122(d)(2)(iv)	  	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to
commingling of cash) as set forth in the transaction agreements.	  	Applicable, but no current assessment is required; no reserve accounts are held by the Servicer. Excess funds and other transaction accounts are maintained and applied by the
Trustee in accordance with the Indenture.
			
	1122(d)(2)(v)	  	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally
insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.	  	Applicable, but no current assessment required; all “custodial accounts” were maintained by the Trustee and invested in accordance with indenture
requirements.
			
	1122(d)(2)(vi)	  	Unissued checks are safeguarded so as to prevent unauthorized access.	  	Not applicable; all transfers made by wire transfer.
			
	1122(d)(2)(vii)	  	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the
person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction
agreements.	  	Partially applicable; reconciliations of estimated environmental control charge collections with actual environmental control charge collections are made on an annual basis as
required by Section 5.11 of the Servicing Agreement; assessment below.

  

 Annex 5-2 

					
	 	  	 Servicing Criteria
	  	 Applicable Servicing Criteria

	 Reference
	  	 Criteria
	  	 
		  	Investor Remittances and Reporting	  	
			
	1122(d)(3)(i)	  	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pledged assets serviced by the Servicer.	  	Applicable; assessment below.
			
	1122(d)(3)(ii)	  	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	  	Applicable; assessment below. [Assessment: Servicer has provided applicable instructions to the trustee to allocate and remit funds to investors.]
			
	1122(d)(3)(iii)	  	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.
	  	Not applicable; transaction documents do not permit Servicer to disburse payments to investors.
			
	1122(d)(3)(iv)	  	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	  	Not applicable; bondholders are paid by the Indenture Trustee in accordance with terms of the Indenture.
			
		  	Asset Administration	  	
			
	1122(d)(4)(i)	  	Collateral or security on environmental control property is maintained as required by the transaction agreements or related documents.	  	Applicable; assessment below. [Assessment: Servicer has performed true-up adjustments of Environmental Control Charges in accordance with Section 4.01 of the Servicing
Agreement.]
			
	1122(d)(4)(ii)	  	Environmental control property and related documents are safeguarded as required by the transaction agreements.	  	Applicable; assessment below. [Assessment: Servicer has maintained custody over all environmental control property records in accordance with Section 3.08 of the Servicing
Agreement.]

  

 Annex 5-3 

					
	 	  	 Servicing Criteria
	  	 Applicable Servicing Criteria

	 Reference
	  	 Criteria
	  	 
	1122(d)(4)(iii)	  	Any additions, removals or substitutions to the assets are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	  	Applicable but no current assessment required; no removals or substitutions of pledged assets are contemplated or allowed under the transaction documents.
			
	1122(d)(4)(iv)	  	Payments on pledged assets, including any payoffs, made in accordance with the related environmental control property documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the environmental control
transaction documents.	  	Applicable; assessment below. [Assessment: The Servicer posted substantially all environmental control charge payments to customer accounts within two business days as required by
Section 6(b) of Exhibit A—Payment Processing: Allocation; Priority of Payments]
			
	1122(d)(4)(v)	  	The Servicer’s records regarding the environmental control property agree with the Servicer’s records with respect to an obligor’s unpaid principal
balance.	  	Not applicable; because underlying obligation (environmental control charge) is not an interest bearing instrument
			
	1122(d)(4)(vi)	  	Changes with respect to the terms or status of an obligor’s environmental control property are made, reviewed and approved by authorized personnel in accordance with the
transaction agreements and related asset documents.	  	Applicable; assessment below [Assessment: Servicer has not waived or modified term of payment except in accordance with Section 6(a)(ii) of Exhibit A-Servicing
Procedures]
			
	1122(d)(4)(vii)	  	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	  	Applicable; assessment below. [Assessment: Loss mitigation or recovery actions have been conducted in accordance with Section 6(a) of Exhibit A— Collections: Payment
Processing; Remittance]
			
	1122(d)(4)(viii)	  	Records documenting collection efforts are maintained during the period any pledged asset is delinquent in accordance with the transaction agreements. Such records are maintained on
at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent environmental control charges including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	  	Applicable, but does not require assessment. No explicit documentation requirement with respect to delinquent accounts are imposed under the transactional documents due to
availability of “true-up” mechanism; and any such documentation is maintained in accordance with applicable PSCWV rules and regulations.
			
	1122(d)(4)(ix)	  	Adjustments to interest rates or rates of return for environmental control property with variable rates are computed based on the related environmental control property documents.
	  	Not applicable; environmental control charges are not interest bearing instruments.

  

 Annex 5-4 

					
	 	  	 Servicing Criteria
	  	 Applicable Servicing Criteria

	 Reference
	  	 Criteria
	  	 
	1122(d)(4)(x)	  	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s environmental control property
documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable environmental control property documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related environmental control property, or such other number of days specified in the transaction agreements.	  	Applicable, but does not require assessment; Servicer maintains customer deposits in accordance with the PSCWV rules and regulations.
			
	1122(d)(4)(xi)	  	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has been received by the Servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	  	Not applicable.
			
	1122(d)(4)(xii)	  	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer’s funds and not charged to the obligor, unless the late
payment was due to the obligor’s error or omission.	  	Not applicable; Servicer cannot make advances of its own funds on behalf of customers under the transactional documents.
			
	1122(d)(4)(xiii)	  	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the Servicer, or such other number of days specified in
the transaction agreements.	  	Not applicable; Servicer cannot make advances of its own funds on behalf of customers to pay principal or interest on the bonds. [See Section 5.09. these costs are borne by the
Servicer, not advanced by the Servicer.]
			
	1122(d)(4)(xiv)	  	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	  	Applicable; assessment below. [Assessment: Servicer has reconciled actual collections of environmental control charges and estimated remittances on or before March 1 of the
following year, per Section 5.11 of the Servicing Agreement [need to include]. Servicer has applied partial payments in accordance with Section 3.02(b) and Section 6(b) of Exhibit A—Payment Processing: Allocation; Priority of
Payments]
			
	1122(d)(4)(xv)	  	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction
agreements.	  	Not Applicable: No external credit support or derivatives were employed [or: Applicable; assessment below.]

  

 Annex 5-5 

 With respect to each of the applicable Servicing Criteria, I have made the following
assessment in accordance with Item 1122(d) of Regulation AB, with such discussion regarding the performance of such Servicing Criteria during the fiscal year covered by the Issuer’s Form 10-K Report (such fiscal year the “Assessment
Period”). 
 1. Item 1122(d)(1)(i) : [include narrative of assessment] 
 2. [Continue enumeration of applicable Servicing Criteria with appropriate narrative of assessment] 
 Based on the aforementioned Servicing Criteria, I find that the Servicer has fulfilled all of the applicable servicing obligations under the
Servicing Agreement in all material respects through the Assessment Period, with the exception of the following instance(s) of material noncompliance: 
 1. [Include narrative of any material noncompliance with servicing obligations] 
 A registered public accounting firm has issued an attestation report on the party’s assessment of compliance with the applicable servicing criteria as of and for the period ending the end of the Assessment Period. 
  

			
	Date:
		
	By: 	 	 
		 	Name:

  

 Annex 5-6 

 ANNEX 6 
 FORM OF REGULATION AB COMPLIANCE CERTIFICATION 
  

	 	Re:	Servicing Agreement dated as of December 23, 2009 (the “Servicing Agreement”), between MP Environmental Funding LLC, as issuer (the “Issuer”),
and Monongahela Power Company (the “Servicer”). 

 I,
                                         
                                       , the
                                         
                                    of the Servicer, certify to Issuer
and the Administrator, [and other required parties] and their officers, with the knowledge and intent that they will rely upon this certification, that: 
 1. I have reviewed the servicer compliance statement of the Servicer provided in accordance with Item 1123 of Regulation AB as it would apply if the Environmental Control Bonds were
“asset-backed securities” under Item 1101(c) of Regulation AB (the “Compliance Statement”) and Section 3.05(a)(iv) of the Servicing Agreement, the report on assessment of the Company’s compliance with the servicing
criteria set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122 of
Regulation AB (the “Servicing Assessment”), the registered public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB (the
“Attestation Report”), and all servicing reports, officer’s certificates and other information relating to the servicing of the Environmental Control Property during 20[ ] that were delivered by the Servicer to the [Issuer]
[Administrator] [Indenture Trustee] pursuant to the Agreement (collectively, the “Servicing Information”); 
 2. Based
on my knowledge, the Servicing Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which such
statements were made, not misleading with respect to the period of time covered by the company Servicing Information; 
 3.
Based on my knowledge, all of the Servicing Information required to be provided by the Servicer under the Agreement has been provided to the [Issuer] [Administrator] [Indenture Trustee]; 
 4. I am responsible for reviewing the activities performed by the Servicer as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement and except as disclosed in the Compliance Statement, the Servicing Assessment or the Attestation Report, the Servicer has fulfilled its obligations under the Agreement in all
material respects; and 
  

 Annex 6-1 

 5. The Compliance Statement required to be delivered by the Servicer pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to be provided by the Servicer and by any subservicer pursuant to the Agreement, have been provided to the [Issuer] [Administrator] [Indenture Trustee]. Any material instances
of noncompliance described in such reports have been disclosed to the [Issuer] [Administrator] [Indenture Trustee]. Any material instance of noncompliance with the Servicing Criteria has been disclosed in such reports. 
  

			
	Date:
		
	By: 	 	 
		 	 Name:
 Title:

  

 Annex 6-2 

 APPENDIX A 
 to 
 SERVICING AGREEMENT 
 Master Definitions 
  

 Appendix A-1 

 APPENDIX A-1 
 to 
 SERVICING AGREEMENT 
 Supplemental Master Definitions 
  

 Appendix A-1-1

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