UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

December 23, 2009

Date of report (Date of earliest event reported)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

On December 23, 2009, MP Environmental Funding LLC (“MP Environmental”), an indirect wholly owned subsidiary of Allegheny Energy, Inc. (“Allegheny”), and PE Environmental Funding LLC (“PE Environmental”, and each of MP Environmental and PE Environmental, an “Issuing Entity”), an indirect wholly owned subsidiary of Allegheny, issued $85,890,000 aggregate principal amount of Senior Secured ROC Bonds, Environmental Control Series B (the “Offering”). In connection with the Offering, MP Environmental entered into a supplemental indenture, dated as of December 23, 2009 (“MP Series Supplement”) to its Indenture, dated as of April 11, 2007, with U.S. Bank National Association, as Indenture Trustee (the “Indenture Trustee”). PE Environmental entered into a supplemental indenture, dated as of December 23, 2009 (“PE Series Supplement”) to its Indenture, dated as of April 11, 2007, with the Indenture Trustee. The MP Series Supplement and the PE Series Supplement are attached as Exhibits 4.1 and 4.2 to this Current Report on Form 8-K and incorporated herein by reference.

In connection with the Offering, Monongahela Power Company (“Mon Power”), a wholly-owned subsidiary of Allegheny, The Potomac Edison Company (“Potomac Edison”, and each of Mon Power and Potomac Edison, a “Utility”), a wholly owned subsidiary of Allegheny, and MP Environmental and PE Environmental, each (as applicable) entered into the agreements described below. The descriptions of these agreements are qualified in their entirety by reference to the agreements themselves, which are attached hereto as Exhibits 10.1 through 10.4 and are incorporated herein by reference.

Environmental Control Property Sale Agreements

Each Environmental Control Property Sale Agreement provides for the purchase by the applicable Issuing Entity of the related Utility’s environmental control property, which includes the right to impose, collect and receive a nonbypassable environmental control charge (“ECC”) from all existing and future electric service customers in such Utility’s West Virginia service territory. Each Utility, as seller, has agreed to indemnify the applicable Issuing Entity and the Indenture Trustee, on behalf of bondholders, for certain tax matters and for breaches of its representations, warranties and covenants in the related Environmental Control Property Sale Agreement.

Environmental Control Property Servicing Agreements

Each Environmental Control Property Servicing Agreement provides that the related Utility, as servicer, will manage, service, administer and make collections in respect of the related ECCs. Each servicer’s duties include obtaining meter reads, calculating, billing, collecting and remitting the ECCs to the Indenture Trustee and making true-up filings with the Public Service Commission of West Virginia for adjustments to the ECCs as necessary. Each Utility’s annual servicing fee will be 0.05% of the initial principal amount of the respective series of bonds. Each Utility, as servicer, agrees to indemnify the related Issuing Entity and the Indenture Trustee, for itself and on behalf of bondholders, for such servicer’s willful misconduct, bad faith or negligence in the performance of, or reckless disregard of, its duties and for breaches of its representations, warranties and covenants in the related Environmental Control Property Servicing Agreement.

In connection with the Offering, Mon Power, Potomac Edison and MP Environmental and PE Environmental, each (as applicable) entered into the agreements listed under Item 9.01 below and attached as Exhibits 1.1 and 1.2 to this Current Report on Form 8-K.

(d) Exhibits.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX