Allegheny Energy Inc. said yesterday that two of its subsidiaries have received monthlong extensions on default waivers granted by lenders, giving the company more time to work out its financial troubles.

The Hagerstown company said waivers granted Nov. 4 to Allegheny Energy Supply Co. LLC and Allegheny Generating Co. have been extended to Dec. 31. The waivers, which ended a technical default, initially had been granted through Nov. 29.

The company has been struggling with a liquidity crunch, a weakened wholesale energy market and problems associated with its trading business.

Downgrades by credit rating agencies triggered requests for Allegheny to post additional collateral. Allegheny declined and was forced into the default.

"We asked for waivers in the interim to get additional financing," said Cynthia A. Shoop, Allegheny's vice president of corporate communications. "It's a matter of negotiating with our banks to get additional borrowing capacity. We're in that process now. Our lenders know that, so, therefore, they granted the waivers."

The Securities and Exchange Commission gave Allegheny Energy Supply permission last month to borrow up to $2 billion on a secured basis.

Analysts said Allegheny, like many other energy companies, has been hit hard by turmoil in the industry. It has moved to improve its finances by trimming its work force, reducing capital spending and decreasing its reliance on wholesale energy trading.

But the company still has faced problems. It delayed releasing third-quarter earnings after discovering accounting errors in previous financial statements. One energy analyst said the extension shows the banks are willing to cooperate.

"It shows the lenders are willing to work with them," said Joan T. Goodman, an energy analyst for the Pershing division of Donaldson, Lufkin & Jenrette Securities Corp. "They're certainly not wanting to force this company into a real bind."

Allegheny stock closed yesterday at $7.05, up 5 cents.