SUMMARY

        The following summary contains basic information about us and this exchange offer. It does not contain all of the information that is important to you. For a more complete understanding of this exchange offer, we encourage you to read this entire document, the documents incorporated by reference in this prospectus and the documents to which we have referred you. As used in this prospectus, the terms “Monongahela Power,” “our,” “us” and “we” refer to Monongahela Power Company and its subsidiaries as a combined entity, except where it is made clear that such terms mean only Monongahela Power Company.

Monongahela Power Company

        We are a combined electric and gas utility company that engages in: the generation, transmission and distribution of electric power; the production, transmission and distribution of natural gas in West Virginia; and the transmission, distribution and sale of electric power in Ohio. We were incorporated in 1924 and are an Ohio corporation. We serve approximately 397,000 electric and 226,000 natural gas customers in a service area that covers approximately 14,000 square miles and contains a population of approximately 1,224,000. We are a wholly-owned subsidiary of Allegheny Energy, Inc. (“Allegheny”) and, together with West Penn Power Company and The Potomac Edison Company, operate electric and natural gas transmission and distribution (“T&D”) systems under the Allegheny Power name.

        We recorded revenues of $511.7 million and $718.9 million in the nine months ended September 30, 2004 and the year ended December 31, 2003, respectively. Our businesses are comprised of two business segments: Generation and Marketing, which consists of our electric generation operations, and Delivery and Services, which consists of our regulated electric T&D systems. Our Generation and Marketing segment recorded revenues of $234.1 million and $350.9 million in the nine months ended September 30, 2004 and the year ended December 31, 2003, respectively. Our Delivery and Services segment recorded revenues of $502.4 million and $655.4 million in the nine months ended September 30, 2004 and the year ended December 31, 2003, respectively.

        Our T&D system includes approximately 23,837 miles of distribution lines, 246 miles of 500-kilovolt transmission lines and 261 T&D substations. In addition to our electric services, we also currently conduct a regulated natural gas T&D business, primarily through our Mountaineer Gas Company (“Mountaineer”) subsidiary, which is a regulated public utility natural gas company. Mountaineer also includes Mountaineer Gas Services, Inc. (“MGS”), which operates natural gas-producing properties, natural gas-gathering facilities and intrastate transmission pipelines and is engaged in the sale and marketing of natural gas in the Appalachian basin. MGS owns more than 300 natural gas wells and has a net revenue interest in about 100 additional wells. Our natural gas business in West Virginia owns approximately 4,850 miles of natural gas distribution pipelines. During 2003, we sold or transported 64 billion cubic feet (“Bcf”) of natural gas.

        In August 2004, we signed a definitive agreement to sell our natural gas operations in West Virginia to Mountaineer Gas Holdings Limited Partnership, a partnership composed of IGS Utilities LLC, IGS Holdings LLC and affiliates of ArcLight Capital Partners, LLC, for $141 million in cash and the assumption of approximately $87 million of long-term debt, subject to certain closing adjustments. In addition, the buyer will pay us, over a three-year period, certain amounts due to us from affiliates holding or owning the West Virginia natural gas operations. These amounts will be finally determined at the closing of the transaction. We expect to utilize net proceeds from the sale to reduce debt. Our natural gas operations consist of the natural gas assets of Monongahela, Mountaineer and MGS.

        During the third quarter of 2004, we recorded a charge against earnings to write-down our investment in our natural gas operations to the expected net proceeds from the sale. The write-down resulted in a charge against earnings of $35.1 million, before income taxes ($20.7 million net of income taxes). The agreement is subject to certain closing conditions, third-party consents and state and federal regulatory approvals, including approval of a rate adjustment from the Public Service Commission of West Virginia. The sale is expected to be completed in mid-2005.

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        The rates we charge our customers are regulated by the Public Service Commission of West Virginia and the Public Utilities Commission of Ohio (“PUCO”). In West Virginia, we charge bundled rates for our electric and gas services that are determined through traditional regulated utility ratemaking (cost-based). Our rates in Ohio reflect separate charges based on functional components: a generation (or supply) charge, a restructuring charge and T&D charges.

        Ohio is responsible for approximately 9.5% of our revenues and accounts for approximately 29,000 (7.4%) of our customers. In Ohio, we are required to provide generation through 2005 at capped rates to residential customers who do not choose an alternate electricity supplier, as well as to those residential customers who return to us from alternative suppliers and to our smaller industrial and commercial customers. Our T&D service in Ohio is also subject to rate caps through 2005 for all residential and smaller industrial and commercial customers and, thereafter, will be subject to traditional ratemaking. Our generation and T&D rates for our larger industrial and commercial customers in Ohio were subject to rate caps through 2003 based on a stipulation approved by PUCO, and we are currently disputing with PUCO whether these rate caps have terminated or remain in effect through 2005. As a result of this dispute, we continue to charge our larger industrial and commercial generation and T&D customers in Ohio capped rates. See “Risk Factors - Risks Relating to Regulation” elsewhere in this prospectus.

        We own generating capacity totaling 2,123 megawatts (“MW”) in Virginia, West Virginia and Pennsylvania, of which 1,896 MW (89.3%) are from coal-fired facilities and 227 MW (10.7%) are from pumped-storage hydro facilities. All of our generation facilities are operated for us by our affiliate, Allegheny Energy Supply Company, LLC (“AE Supply”). We transferred our Ohio jurisdictional generating assets to AE Supply in 2001. We have also entered into wholesale power purchase contracts with AE Supply in order to satisfy the generation needs of our Ohio customers.

        The following tables show the nominal operational generating capacity that we own or have acquired under Public Utility Regulatory Policies Act of 1978 (“PURPA”) contracts as of December 31, 2004:

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Recent Developments

        In November 2003, the Federal Energy Regulatory Commission (“FERC”) issued a series of orders related to transmission rate design for the PJM Interconnection, LLC ("PJM") and Midwest Independent Transmission System Operator (“Midwest”) regions. Specifically, FERC found that the payment of multiple and additive (i.e., “pancaked”) rates for movement of power between PJM and the Midwest regions is not just and reasonable. FERC ordered the elimination of pancaked rates and the implementation of a transitional rate design for a two-year period and ordered the parties to develop a long-term rate design solution. In a settlement approved by FERC in March 2004, the parties agreed to continue pancaked rates through December 1, 2004, to forego a transitional rate design and file to implement a long-term rate design solution to be effective on December 1, 2004. Following a series of stakeholder meetings, we filed a long-term regional rate proposal on October 1, 2004 in conjunction with several other transmission owners, in compliance with the settlement. Another group of transmission owners and stakeholders filed a competing proposal. In a November 18, 2004 order, FERC found neither of the proposals to be acceptable as filed and ordered, effective December 1, 2004, the continuation of the existing rate design in the PJM and Midwest regions and the implementation of a transition charge through March 31, 2006 in both regions. Allegheny estimates that the transition charges assessed and the revenues received from the transition charges will not result in additional costs to the Distribution Companies. However, these net transition charges will be subject to FERC-authorized adjustments for the twelve-month period ending March 31, 2006. Allegheny estimates that these adjustments, if ultimately accepted by FERC, will result in net transition charges to the Distribution Companies of approximately $9.7 million for the twelve-month period ending March 31, 2006. See the section entitled "Risk Factors - Risks Relating to Regulation" elsewhere in this prospectus.

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        In Ohio, we are required to provide generation at capped rates through 2005 to residential customers who do not choose an alternative electricity supplier, as well as to residential customers who return to us from alternative suppliers and to our smaller industrial and commercial customers. In addition, our T&D service in Ohio is also subject to rate caps for all residential and smaller industrial and commercial customers through 2005 and, thereafter, will be subject to traditional ratemaking. In Ohio, our generation and T&D rates for our larger industrial and commercial customers were subject to rate caps through 2003 based on a stipulation approved by PUCO, and we are currently disputing with PUCO whether these rate caps have terminated or remain in effect through 2005. As a result of this dispute, we continue to charge our larger industrial and commercial generation and T&D customers in Ohio capped rates. On December 8, 2004, PUCO denied our application for rate relief with respect to these customers. We requested rehearing of the PUCO's ruling on January 7, 2005. On December 30, 2004, the Ohio Supreme Court affirmed PUCO's earlier order extending our rate caps beyond 2003. On January12, 2005, we renewed our request in federal court for a preliminary injunction against PUCO requiring PUCO to allow us to pass through our cost of purchased power to these customers. If this challenge is not successful, however, our current rates for these customer classes are fixed through December 31, 2005.

Principal Executive Offices

        We were incorporated in 1924 and are an Ohio Corporation. Our principal executive offices are located at 1310 Fairmont Avenue, Fairmont, West Virginia 26554, and our telephone number at that address is (304) 366-3000.

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