ALLEGHENY ENERGY SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Exhibit 10.8

ALLEGHENY ENERGY
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(Amended and Restated as of January 1, 2008)

Table of Contents

						Page
1.		INTRODUCTION					1
		1.1		History and Purpose			1
		1.2		Effective Date			1
2.		DEFINITIONS					1
		2.1		Accrued Benefit			1
		2.2		Affiliate			1
		2.3		“Beneficiary” or “Beneficiaries”			1
		2.4		Board of Directors			1
		2.5		Cause			1
		2.6		Code			2
		2.7		Committee			2
		2.8		Company			2
		2.9		Compensation			2
		2.10		Contingent Annuitant Option			2
		2.11		Early Retirement Date			2
		2.12		Eligible Employee			2
		2.13		Employee			3
		2.14		ERISA			3
		2.15		Final Average Compensation			3
		2.16		Normal Retirement Date			3
		2.17		Other Supplemental Plan Reduction			3
		2.18		Participant			3
		2.19		Plan			3
		2.20		Qualified Joint and Survivor Annuity			3
		2.21		Retirement Plan			3
		2.22		Retirement Plan Reduction			3
		2.23		Single Life Annuity			4
		2.24		Surviving Spouse			4
		2.25		Year of Service			4
3.		PARTICIPATION AND ELIGIBILITY					4
		3.1		Current Participants			4
		3.2		New Participants			4
		3.3		Eligibility Requirements			4
		3.4		Termination of Participation			5
		3.5		Additional Age and Service			5
4.		RETIREMENT BENEFITS					6
		4.1		Determination of Accrued Benefit			6
		4.2		Normal Retirement Benefit			6
		4.3		Early Retirement Benefit			6

Table of Contents
(continued)

						Page
		4.4		Timing and Form of Payment for the Accrued Benefit			7
		4.5		Benefit Computation			7
5.		DEATH BENEFITS					7
		5.1		Death Before Commencement of Benefits			7
		5.2		Death After Commencement of Benefits			8
		5.3		Designating a Beneficiary			8
6.		VESTING					8
7.		FUNDED NATURE OF THE PLAN					8
8.		ADMINISTRATION OF THE PLAN					9
		8.1		Authority of the Committee			9
		8.2		Delegation of Authority			9
		8.3		Compensation and Expenses			9
		8.4		Liability of the Committee and Board; Indemnification			9
9.		AMENDMENTS AND TERMINATION					9
10.		CLAIMS PROCEDURES					10
11.		MISCELLANEOUS					11
		11.1		Construction			11
		11.2		Taxes			11
		11.3		Governing Law			11
		11.4		No Right of Employment			11
		11.5		Payment in Satisfaction of Claims			11
		11.6		No Alienation of Benefits			12
		11.7		Incapacity			12
		11.8		Adjustment			12
		11.9		Compliance With Code Section 409A			12
Appendix A							i

1. INTRODUCTION

     1.1 History and Purpose . Allegheny Energy Service Corporation (the “Company”) previously established the Allegheny Energy Supplemental Executive Retirement Plan (the “Plan”), an unfunded supplemental executive retirement plan. The purpose of the Plan is to provide special supplemental retirement benefits to a select group of senior executives of the Company and its Affiliates (as defined below) in order to assist the Company and its Affiliates in attracting, motivating and retaining executives of superior ability, industry and loyalty. It is intended that the Plan shall at all times be maintained on an unfunded basis for federal income tax purposes under the Internal Revenue Code of 1986, as amended, be administered as a “top-hat” plan for a “select group of management or highly compensated employees”, and be exempt from the substantive requirements of the Employee Retirement Income Security Act of 1974, as amended.

     1.2 Effective Date . The Plan was originally established effective as of July 1, 1990 and was amended and restated effective as of February 24, 2006. The Plan is hereby amended and restated effective as of January 1, 2008, to reflect certain changes in the administration and operation of the Plan, to update the Plan for certain changes in applicable law, and to make certain other clarifying changes.

2. DEFINITIONS

     Except as otherwise stated herein, capitalized terms used in this Plan have the meanings set forth below:

     2.1 “Accrued Benefit” means, at any time, the annual benefit payable to a Participant at his Normal Retirement Date in the form of a Single Life Annuity as determined in accordance with Section 4.1, adjusted to the extent applicable in accordance with Section 4.3.

     2.2 “Affiliate” means a parent or subsidiary of the Company.

     2.3 “Beneficiary” or “Beneficiaries” mean the person or persons entitled to receive a Participant’s retirement benefits as designated in accordance with Section 5.3.

     2.4 “Board of Directors” means the Board of Directors of the Company.

     2.5 “Cause” means the definition of “Cause” as set forth in any employment agreement, offer letter, or similar agreement between a Participant and the Company or an Affiliate or, if no such agreement exists, “Cause” means (i) the Employee’s conviction of, or plea of guilty or nolo contendere to, (A) a felony, or (B) a lesser crime or offense which, in the reasonable opinion of the Company, could adversely affect the business or reputation of the Company or its Affiliates, (ii) the Employee’s repeated failure to follow specific lawful directions of the Board of Directors or any officer to whom he reports, (iii) the Employee’s willful misconduct, fraud, embezzlement or dishonesty either in connection with his duties to the Company or its Affiliates or which otherwise causes damage or, in the reasonable opinion of

the Company, is likely to cause damage, to the Company or its Affiliates, (iv) the Employee’s failure to perform a substantial part of his duties following notice and a reasonable opportunity to cure (if such failure is capable of cure), (v) the Employee’s material violation of any policy, procedure or guideline of the Company or its Affiliates following notice and reasonable opportunity to cure (if such violation is capable of cure), (vi) the Employee’s abuse of alcohol or illegal drugs, or (vii) the Employee’s violation of any applicable confidentiality, non-competition or non-solicitation covenants relating to the Company or its Affiliates.

     2.6 “Code” means the Internal Revenue Code of 1986, as amended.

     2.7 “Committee” means the Management Compensation and Development Committee of the Board of Directors, as it shall be constituted from time to time.

     2.8 “Company” means Allegheny Energy Service Corporation and any successor to all or a major portion of the assets or business of Allegheny Energy Service Corporation.

     2.9 “Compensation” means a Participant’s total earnings from the Company and any Affiliate including base pay, overtime, commissions, bonuses and other elements of earnings (whether or not payment thereof is deferred as part of any plan, program or policy of the Company), but excluding (i) any compensation that is designated as “long-term incentive compensation”, (ii) proceeds from the exercise of stock options or stock appreciation rights and earnings from grants of restricted stock, restricted stock units, or other stock-based awards, (iii) moving expenses or other payments made in connection with a relocation, (iv) reimbursements for medical or dental premiums, (v) other reimbursements or allowances for reasonable business-related expenses, including, without limitation, any automobile allowance, (vi) payments made to “gross-up” a Participant for any applicable taxes, (vii) any bonuses that are paid to a Participant for reasons other than the direct performance of services for the Company or its Affiliates, including, without limitation, signing bonuses and retention or stay bonuses, (viii) spot awards, (ix) the imputed value of Company-provided life insurance, (x) the value of any Company-paid educational assistance benefits that are taxable to the Participant, (xi) any separation or severance payments, (xii) any other elements of compensation that are designated by the Committee as not being eligible for purposes of the Plan.

     2.10 “Contingent Annuitant Option” shall mean the optional annuity forms of distribution set forth in the Retirement Plan.

     2.11 “Early Retirement Date” means the date upon which a Participant retires after attaining age 55 and completing ten or more Years of Service, and prior to his Normal Retirement Date.

     2.12 “Eligible Employee” means any Employee who is employed by the Company or an Affiliate as a Vice President or in a more senior position and who is designated for participation in the Plan by the Chief Executive Officer of the Company. Consistent with the authority delegated to him by the Committee, the Chief Executive Officer of the Company may also designate other Employees as Eligible Employees. The Employees who have been

designated as Eligible Employees are set forth in Appendix A to the Plan as amended and updated by the Company from time to time.

     2.13 “Employee” means a person who receives salary, wages or commissions from the Company or an Affiliate that are subject to withholding for purposes of federal income and employment taxes. The term Employee shall not include an independent contractor or any other person who the Committee or its designees determines is not subject to withholding for purposes of federal income and employment taxes, regardless of any contrary governmental or judicial determination relating to such employment or tax withholding status.

     2.14 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

     2.15 “Final Average Compensation” means 12 times the Participant’s highest average monthly Compensation for any 36-consecutive calendar month period. In the event the Participant has less than 36 months of Compensation prior to his termination of employment, Final Average Compensation means 12 times the average of his months of Compensation for his total period of service.

     2.16 “Normal Retirement Date” means the first day of the month following the attainment of age 60.

     2.17 “Other Supplemental Plan Reduction” means the retirement benefit payable to a Participant under any other supplemental pension benefit provided to the Participant by the Company or any other Affiliate for any period of service for which the Participant is receiving a benefit under this Plan.

     2.18 “Participant” means an Eligible Employee who has satisfied the eligibility requirements set forth in Article III.

     2.19 “Plan” means the Allegheny Energy Supplemental Executive Retirement Plan as set forth in this document and in any amendments from time to time made hereto.

     2.20 “Qualified Joint and Survivor Annuity” means an annuity that provides equal monthly installments to a Participant during his lifetime and equal monthly installments, which are one-half of the amount of the installments paid to the Participant, to the Participant’s Surviving Spouse after the Participant’s death.

     2.21 “Retirement Plan” means the Allegheny Energy Retirement Plan.

     2.22 “Retirement Plan Reduction” means the retirement benefit payable to a Participant under the Retirement Plan, excluding any increases in such Retirement Plan benefits that become effective after the Participant has retired from the Company and its Affiliates.

     2.23 “Single Life Annuity” means an annuity that provides equal monthly installments to a Participant for his lifetime and no payments to his Surviving Spouse or any other Beneficiary after his death.

     2.24 “Surviving Spouse” refers to the person who is legally married to the Participant at the time of his death and for the full one year (365 days) period immediately prior to his death.

     2.25 “Year of Service” shall mean a Participant’s “Service” (as that term is defined under the terms of the Retirement Plan) as determined for purposes of calculating the amount of a Participant’s Retirement Plan benefit under Article IV of the Retirement Plan; provided, that for purposes of this Plan, Service shall also include Service with any Affiliate, regardless of whether such Affiliate has adopted the Retirement Plan.

3. PARTICIPATION AND ELIGIBILITY

     3.1 Current Participants . Each individual who was a Participant in the Plan on the date immediately before this amendment and restatement shall be a Participant in the Plan on and after such date; provided, that a Participant must satisfy the eligibility requirements of Section 3.3 in order to receive a benefit from the Plan.

     3.2 New Participants . Each Employee who first becomes an Eligible Employee on or after the date of this amendment and restatement shall become a Participant on the first day of the month in which he first becomes an Eligible Employee or such earlier or later date as the Chief Executive Officer of the Company shall specify; provided, that a Participant must satisfy the eligibility requirements of Section 3.3 in order to receive a benefit from the Plan.

     3.3 Eligibility Requirements . Each individual who satisfies the requirements of Section 3.1 or 3.2 shall be a Participant and shall be eligible to receive a benefit from the Plan upon satisfying the following age and service and other eligibility requirements:

          (a) General Eligibility Requirements . A Participant who is actively employed by the Company or an Affiliate shall be eligible for a benefit from the Plan if (i) he retires when he has ten or more Years of Service, (ii) he retires on or after attaining age 55, and (iii) he elects to commence payment of his Retirement Plan benefits as of the earliest date that such benefits are payable under the Retirement Plan.

          (b) Special Eligibility Rules in the Event of Death Before Retirement . A Participant who is actively employed by the Company or an Affiliate shall be eligible to receive a death benefit from the Plan if he (i) dies after attaining age 55, but before retiring from the Company or an Affiliate, and (ii) has ten or more Years of Service as of the date of his death. Further, a Participant who is actively employed by the Company or an Affiliate shall be eligible to receive a death benefit from the Plan if he (i) dies before age 55 and before retiring from the Company or an Affiliate, and (ii) if he has 15 or more Years of Service as of the date of his death. The death benefits provided under the Plan shall be determined in accordance with Article V and shall be paid to the Participant’s Surviving Spouse.

          (c) Termination for Cause and Other Similar Circumstances . Notwithstanding paragraph (a) hereof and any other provision of the Plan to the contrary,

               (i) a Participant and his Beneficiaries shall not be eligible for a benefit from the Plan if (A) a Participant’s employment with the Company or an Affiliate is terminated for Cause, or (B) the Committee determines that the facts and circumstances surrounding a Participant’s termination of employment (whether characterized as a voluntary or involuntary termination) with the Company or an Affiliate constitute a basis for terminating the Participant for Cause, or

               (ii) benefits being paid to a Participant or his Beneficiaries under the Plan shall immediately cease and all Plan benefits shall be forfeited if (A) based upon material information that was not previously known to the Committee or the senior management of the Company or its Affiliates at the time of a Participant’s termination of employment, the Committee determines that the facts and circumstances surrounding a Participant’s termination of employment (whether characterized as a voluntary or involuntary termination) with the Company or an Affiliate would have constituted a basis for terminating the Participant for Cause, or (B) the Committee determines that the Participant materially breached the terms of any agreement with the Company or its Affiliates including, without limitation, the terms of any employment, separation, covenant not to compete, confidentiality, non-solicitation agreement or other such agreement or covenant.

     3.4 Termination of Participation . The Committee (or t