AMENDMENT NO. 3 TO TAX ALLOCATION AGREEMENT

                                                      EXHIBIT B-4

                FORM OF TAX ALLOCATION AGREEMENT

                       AMENDMENT NO. 3 TO
                    TAX ALLOCATION AGREEMENT



                         By and Between


                      ALLEGHENY ENERGY, INC.

                      and its Subsidiaries



          Amending the Agreement dated as of  December 1, 1994


          AMENDMENT  NO. 3 dated as of ___________,  1999,  among
     ALLEGHENY ENERGY, INC. (hereinafter called the "Parent
     Company")  and the direct and indirect subsidiaries  of  the
     Parent   Company   (hereinafter   called   the   "Subsidiary
     Companies"),  collectively referred to hereinafter  as  "the
     parties hereto".

          WHEREAS,  the  Parent Company and the Subsidiaries  are
     parties  to  an  agreement dated as  of   December  1,  1994
     concerning  their  federal income tax allocation  (the  "Tax
     Allocation Agreement"); and

          WHEREAS, new subsidiary companies have been formed  and
     are joining in the consolidated group for federal income tax
     purposes;

          NOW THEREFORE, the parties hereto hereby mutually agree
     that:

          1.     West Penn Funding Corp., West Penn Funding, LLC,
     Allegheny Energy Supply Company, LLC, West Penn Transferring
     Agent, LLC, Allegheny Enterprises, LLC, and Allegheny Energy
     Unit  1  and Unit 2, LLC are included as parties to the  Tax
     Allocation Agreement as of the date hereof.

          2.    With the  addition  of  the  subsidiaries  above-
     named, the Agreement dated as of December 1, 1994 remains in
     full force and effect.

          IN WITNESS WHEREOF, the parties hereto have caused this
     Amendment to be duly executed.

                                   ALLEGHENY GENERATING COMPANY


                                   By
                                   X. X. Xxxx
                                   President



                                   ALLEGHENY PITTSBURGH COAL COMPANY


                                   By
                                   X. X. Xxxxxxx
                                   Vice President



                                   ALLEGHENY ENERGY SERVICE
                                   CORPORATION (f/k/a Allegheny Power
                                   Service Corporation)

                                   By
                                   X. X. Xxxx
                                   President


                                   ALLEGHENY ENERGY, INC.
                                   (f/k/a Allegheny Power System, Inc.)

                                   By
                                   X. X. Xxxx
                                   President


                                   ALLEGHENY VENTURES, INC.
                                   (f/k/a AYP Capital, Inc.)


                                   By
                                   X. X. Xxxx
                                   President


                                   MONONGAHELA POWER COMPANY


                                   By
                                   X. X. Xxxxxxx
                                   Vice President


                                   THE POTOMAC EDISON COMPANY


                                   By
                                   X. X. Xxxxxxx
                                   Vice President

                                       2




                                   WEST PENN POWER COMPANY


                                   By
                                   X. X. Xxxxxxx
                                   Vice President


                                   WEST PENN WEST VIRGINIA WATER
                                   POWER COMPANY


                                   By
                                   X. X. Xxxxxxx
                                   Vice President


                                   WEST VIRGINIA POWER AND
                                   TRANSMISSION COMPANY


                                   By
                                   X. X. Xxxx
                                   President


                                   ALLEGHENY COMMUNICATIONS
                                   CONNECT, INC.


                                   By
                                   X. X. Xxxx
                                   President


                                   AYP ENERGY, INC.


                                   By
                                   X. X. Xxxx
                                   President


                                   ALLEGHENY ENERGY SOLUTIONS, INC.


                                   By
                                   President or Vice President

                                       3






                                   WEST PENN FUNDING CORP.


                                   By
                                   President or Vice President



                                   WEST PENN FUNDING, LLC


                                   By
                                   President or Vice President


                                   ALLEGHENY ENERGY SUPPLY COMPANY, LLC


                                   By
                                   President or Vice President


                                   WEST PENN TRANSFERRING AGENT, LLC


                                   By
                                   President or Vice President


                                   ALLEGHENY ENTERPRISES, LLC


                                   By
                                   President or Vice President


                                   ALLEGHENY ENERGY XXXX 0 XXX
                                   XXXX 0, LLC


                                   By
                                   President or Vice President


                                       4