Exhibit 10.16

                GAS SALES AND PORTFOLIO ADMINISTRATION AGREEMENT

     This Gas Sales And  Portfolio  Administration  Agreement  ("Agreement")  is
entered  into  the 1st day of  September,  2002,  for  services  to  begin  upon
regulatory  approval  of this  Agreement  as  referenced  below,  by and between
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY,  INC. ("Buyer") and PROLIANCE ENERGY,
LLC ("Seller") (collectively,  the "Parties" or individually "Party"). Buyer and
Seller agree as follows:


                                    RECITALS

     1.   Seller is a limited  liability  company created and existing under the
          laws of the  State of  Indiana,  with  its  registered  office  at 111
          Monument Circle, Suite 2200, Indianapolis, Indiana.

     2.   Buyer is a  corporation  created  and  existing  under the laws of the
          State of Indiana with its principal  place of business at  Evansville,
          Indiana.

     3.   This Agreement  contains the mutual promises and covenants pursuant to
          which Buyer as a purchaser of natural gas and portfolio administration
          services,  and  Seller as a  merchant  of  natural  gas and  portfolio
          administration  services,  shall  perform the  transactions  described
          herein.

     4.   Under this  Agreement,  Seller agrees to provide  natural gas to Buyer
          consistent with the terms and conditions contained herein.

     5.   This  Agreement  contains terms that reflect the terms of a negotiated
          settlement agreement  ("Settlement")  entered into with non-parties to
          this  Agreement.  The Agreement,  as part of the  Settlement,  will be
          reviewed   by  the  Indiana   Utility   Regulatory   Commission   (the
          "Commission"), and will become effective on the first day of the month
          following  issuance of a final order by the Commission in consolidated
          Cause Nos. 37394GCA50S1,  37399GCA50S1,  and 42233 ("GCA50S1") finding
          that the Agreement is in the public interest.

     6.   This Agreement shall be subject to, and interpreted  consistent  with,
          the Settlement.


                                  DEFINITIONS

     The following terms shall have the following definitions for this Agreement
and its Appendices:

     1.   The term "ANR" shall mean ANR Pipeline Company.

     2.   The term "Balancing  Quantities"  shall mean the quantity of Gas which
          satisfies  the  difference  between the Gas  quantities  scheduled for
          delivery to Buyer's  Delivery  Points and the actual  physical flow of
          Gas taken by Buyer at the Delivery Points.

     3.   The term  "Btu"  shall  mean  British  thermal  unit,  as  defined  in
          Transporter's Tariff.

     4.   The term  "Contract  Month"  shall  mean a calendar  month  during the
          effectiveness of this Agreement.

     5.   The term  "Contract  Rates"  shall mean to the demand costs as well as
          the variable costs  associated  with delivery  service as described in
          Appendix C.

     6.   The term "Day"  shall be  defined  as it is  defined in  Transporter's
          Tariff, or as applied by Transporter.

     7.   The term  "Delivery  Points"  shall mean the points of delivery of Gas
          from Seller to Buyer as specified in Appendix A.

     8.   The term "FERC" shall mean the Federal Energy Regulatory Commission.

     9.   The term "Gas" shall mean natural gas.

     10.  The term "GCIM" shall mean the gas cost incentive  mechanism  provided
          for in the Settlement.

     11.  The term "Maximum  Daily  Quantities"  or "MDQ" shall mean the maximum
          quantity of Gas which  Seller  shall be  obligated to supply on a firm
          basis to Buyer's Delivery Points on a particular day.

     12.  The term  "Maximum  Portfolio  Entitlement"  shall  mean  the  maximum
          deliverability that Buyer is entitled to under the Services identified
          on Appendix C.

     13.  The term "Maximum Seasonal Quantities" or "MSQ" shall mean the maximum
          quantity of Gas which  Seller  shall be  obligated to supply on a firm
          basis to Buyer's Delivery Points in a Summer or Winter.

     14.  The term "MGT" shall mean Midwestern Gas Transmission Company.


     15.  The  terms  "MMBtu",  "Dekatherm"  or "DTH"  shall  mean  one  million
          (1,000,000) BTUs.

     16.  The term "Nominated Daily  Quantities"  shall mean the quantity of Gas
          nominated on a particular day for delivery to Buyer's Delivery Points,
          including deliveries to storage for Buyer.

     17.  The term "Portfolio  Services" shall mean all of the Services that may
          be  utilized  to deliver  Gas to Buyer,  and which are  identified  on
          Appendix C.

     18.  The term "Summer" shall mean the summer season months of April through
          October, inclusive.

     19.  The term "TETCO" shall mean Texas Eastern Transmission Corporation.

     20.  The term "Texas Gas" shall mean Texas Gas Transmission Corporation.

     21.  The  term  "Transporter"  shall  mean  the  transporting   pipeline(s)
          interconnected  with Buyer,  including  without  limitation  ANR, MGT,
          TETCO or Texas Gas, as applicable to the transaction involved.

     22.  The term  "Transporter's  Tariff" shall mean the tariff  provisions of
          Transporter,  as approved by the FERC, or any successor  thereto,  and
          Buyer's  or  Seller's   contractual   arrangements  with  Transporter,
          including  changes  to such  tariff and  arrangements  made after this
          Agreement is effective.

     23.  The term  "Winter"  shall mean the winter  season  months of  November
          through March, inclusive.

                                       1
<PAGE>

                              ARTICLE 1-GAS SALES

     1.1.  Seller  represents and warrants that Seller can and shall stand ready
to provide on a firm basis for Buyer's  purchase at Buyer's  Delivery Points the
daily and  seasonal  quantities  of Gas set  forth  herein.  Seller's  marketing
activities  will not be conducted in a manner that  compromises the provision of
reliable and firm service to Buyer.

     1.2  During  the term of this  Agreement,  unless  Seller is unable to meet
Buyer's Gas requirements, Buyer agrees that Seller shall be its supplier of Gas.
However, Buyer shall have and maintain the right to produce,  utilize,  purchase
or sell any and all:

          (a) Gas  produced  in Indiana  which Buyer may be required to purchase
     under Ind. Code Section  8-1-2-87.6 or any successor  provision  thereto of
     the Indiana Code; or

          (b) Propane.

     1.3.  The Maximum  Daily  Quantities,  which  Seller  shall be obligated to
provide on a firm basis at Buyer's Delivery Points, are specified in Appendix B.

     1.4. The Maximum Seasonal Quantities during Winter or Summer,  which Seller
shall be  obligated  to  provide  on a firm basis at the  Delivery  Points,  are
specified in Appendix B.

     1.5. Under this Agreement, Seller may fulfill its obligation to provide Gas
to Buyer  by using  contracts  entered  into by and  between  Seller  and  third
parties,  including  suppliers,  pipelines and other service  providers.  Seller
shall not be obligated to enter into commitments with suppliers,  pipelines,  or
other  service  providers,  which  extend  beyond  the  term  or  scope  of this
Agreement.  If  Seller,  in order to serve  Buyer,  makes any  commitments  with
suppliers,  pipelines,  or other service providers that extend beyond the end of
the term of this Agreement,  to the maximum extent  permitted by law Buyer shall
indemnify  Seller  for all  expenses  and costs  associated  with the  continued
service or cause the replacement  Portfolio  Administration  Service provider to
indemnify Seller for such costs.

     1.6. If FERC should  determine  that  Transporter's  Tariff  shall cease to
apply, in whole or in part, to transactions hereunder, the Parties will promptly
meet to determine and negotiate mutually acceptable  replacement  guidelines and
standards.  In that event,  until an  agreement  is reached,  the most  recently
effective  Transporter's  Tariff shall  continue to apply for all purposes under
this Agreement.  Upon  acceptance of the  replacement  guidelines and standards,
Buyer  and  Seller  agree to apply  the  replacement  guidelines  and  standards
retroactively  to the cessation  date of  Transporter's  Tariff.  Any resolution
shall  be  implemented  within  thirty  (30)  days  of  the  acceptance  of  the
replacement guidelines and standards.

     1.7.  As part of an agreed  upon RFP  process to be used to  determine  the
provider of gas supply  services  after March 31,  2007,  Seller  agrees that it
shall designate the pipeline  transportation  and storage  contracts  consistent
with the timing and  process  set forth in Article I of the  Settlement.  In the
event that the RFP is not conducted or the Seller is not the bidder  selected as
a result  of the RFP  process,  Seller  shall  assign  the  designated  pipeline
transportation  and storage  contracts to the Buyer or the selected  bidder,  as
applicable.

     1.8. To the maximum  extent  permitted by law, Buyer agrees Seller shall be
indemnified  and discharged  for all contracts held by Seller,  which as part of
the process  described in Section 1.7 are assigned either to Buyer or to a third
party who becomes the service  provider to Buyer after March 31, 2007, and shall
no longer impose any  obligations  upon Seller once the assignment is made. As a
precondition to assignment, and as part of the RFP process, any such third party
or Buyer must indemnify Seller, and a discharge and release be provided from the
contract counterparty.


                          ARTICLE 2-GAS SALES CHARGES

     2.1. For all Maximum  Portfolio  Entitlements,  Buyer shall pay Seller each
Contract Month demand charges consistent with Section 2.5 of the Settlement,  as
well as variable costs  (including  without  limitation all volumetric  charges,
GRI, fuel or other variable  costs)  incurred and  associated  with the services
listed in Appendix C.

     2.2.  Buyer shall pay Seller each Contract  Month the  applicable  supplier
reservation costs specified in Appendix D.

     2.3. For all  commodity  quantities,  Buyer shall pay Seller each  Contract
Month  those  amounts  for Gas  priced  in  accordance  with  Appendix  B of the
Settlement  ("GCIM  agreement"),   including  volumes  priced  under  the  price
volatility  mitigation  provisions thereof. All such purchases shall be reported
on a monthly  basis and shall include  documentation  necessary for review under
the GCIM agreement and in Buyer's gas cost adjustment  proceedings under Indiana
Code Section 8-1-2.42(g),

     2.4. Buyer will pay taxes,  including Indiana gross receipts tax, which are
imposed on or incurred by Seller due to this  Agreement or imposed on Buyer with
respect to Gas  delivered  hereunder;  provided,  however,  Buyer  shall have no
obligation  to pay any sales or use taxes  for  which it  delivers  to Seller an
appropriate exemption certificate.

     2.5.  Seller shall  auction  unutilized  pipeline  entitlements  on Buyer's
behalf  consistent  with the process set forth in Section 2.5 of the Settlement.
All revenues  Seller receives on Buyer's behalf shall be reported in detail on a
monthly  basis to Buyer and shall be remitted to Buyer net of reported  expenses
incurred by Seller in implementation  of the auction,  After its receipt of such
revenue, Buyer will disburse its 15% share of such revenue to Seller.


                              ARTICLE 3-BALANCING

     3.1.  Seller shall provide Buyer with  Balancing  Quantities as part of its
gas sales and  portfolio  administration  services.  Seller  and Buyer  shall be
permitted reasonable balancing  tolerances.  Imbalances shall be made up in kind
as agreed to by the Parties.


                  ARTICLE 4-PORTFOLIO ADMINISTRATION SERVICES

     4.1. Seller's provision of portfolio  administration services shall include
without limitation Gas acquisition,  scheduling receipt and delivery  quantities
with Gas  suppliers  and  pipeline  transporters,  scheduling  pipeline  storage
inventory  quantities,   providing  delivered  Gas  supplies,   supply  planning
assistance,  conducting the capacity auction,  and periodic portfolio reporting.
Buyer shall retain  complete  unilateral  control of its physical Gas  delivery,
distribution, storage and transportation facilities.

     4.2.  The  supply  planning  procedures  set  forth  in  Appendix  F to the
Settlement will be followed by the Parties in preparing and implementing  supply
plans.

     4.3. Seller and Buyer shall review periodically Buyer's supply requirements
and  determine the need for  potential  adjustments  to MDQ, MSQ and to delivery
service  requirements.  All  adjustments are subject to Seller and Buyer's prior
approval.

     4.4. Buyer and Seller will review and discuss FERC regulatory  filings that
could reasonably be expected to impact the supply services provided to Buyer.

     4.5. In the event this Agreement is terminated for any reason,  Buyer shall
meet  with  Seller  within  five  (5) days of  notice  of  termination  to reach
agreement on the timely return of capacity rights to Buyer. During such a windup
period,  Seller shall continue to provide Buyer with necessary  supply  services
and portfolio  administration services to fully meet Buyer's MDQ and MSQ. During
the wind up period,  the terms and  effectiveness of this Agreement shall remain
in effect.  The wind up period for  purposes  hereof,  may extend up to eighteen
(18) months.  Unless terminated pursuant to Commission order under IC 8-1-2.5-7,
the  termination  of this  Agreement  shall not relieve  Buyer of its  executory
obligations under Article V of the Settlement.


                                 ARTICLE 5-TERM

     5.1.  Unless  modified  by 5.2  below,  the  term of this  Agreement  shall
commence  on the first day of the month  following  issuance of a final order in
GCA50S1 and end on March 31,  2007.  If for any reason a successor  has not been
chosen to assume  provision  of supply  services to Buyer after March 31,  2007,
Seller shall continue on a  month-to-month  basis until a successor is chosen as
contemplated under the Settlement.

     5.2.  Notwithstanding  5.1 above, this Agreement may be terminated prior to
March 31, 2007 by either  Party in the event of the  failure by either  Party to
perform in any  material  respect any covenant or  obligation  set forth in this
Agreement,  and such  failure is not  excused by force  majeure or cured  within
fifteen (15) business days after written  notice thereof to the Party failing to
perform;  provided,  however, if such failure is incapable of being cured within
such  fifteen  (15)  business  day period and the Party  failing to perform  has
commenced and is diligently  pursuing a cure,  such period shall be extended for
such time as is  reasonably  necessary  to cure such  failure up to ninety  (90)
days.

     5.3. This Agreement is  conditioned on the continued  solvency of Buyer and
Seller.  If one Party becomes  insolvent or seeks bankruptcy  relief,  the other
Party may  prospectively  terminate  this  Agreement  upon prior written  notice
without  further  obligation  other than to pay for  services or Gas  previously
provided. In such a circumstance,  the Parties will implement wind-up provisions
designed to continue reliable provision of service and delivery of Gas.


                        ARTICLE 6-CHANGES TO APPENDICES

     6.1.  The  Parties  agree to make  changes to  Appendices  attached to this
Agreement as necessary to reflect  updates to the Agreement,  Such changes shall
be consistent with the Agreement terms.


                              ARTICLE 7-OPERATIONS

     7.1.  Buyer and Seller agree to accept for purposes of this  Agreement  the
applicable quality,  delivery pressure,  measurement and other applicable rules,
procedures, guidelines, tariff provisions, contractual arrangements and policies
of suppliers or Transporters, as the same may change from time to time.


                            ARTICLE 8-FORCE MAJEURE

     8.1. All  obligations of the Parties to this  Agreement  shall be suspended
while and only for so long as  compliance  is  prevented  by a cause  beyond the
control of the Party claiming  force majeure,  such as an Act of God, war, civil
disturbance,  operational or performance failure or declaration of force majeure
by a supplier,  leased  storage field  operator,  Transporter,  or other service
provider,  operational flow order(s),  federal or state or local law, or binding
order of a court or governmental  agency,  provided the suspension shall be only
to the extent  performance was prevented by the event of force majeure.  A Party
claiming  force  majeure  hereunder  shall have the duty to make all  reasonable
efforts to remedy the force majeure condition as promptly as possible.

     8.2.  Notice  of  force  majeure  must be  provided  with  reasonably  full
particulars  to the other Party at or near the time the Party  becomes  aware of
the force majeure.  Notice shall be provided to the  designated  representatives
for Buyer or Seller designated in Appendix P.


                       ARTICLE 9-TRANSPORTATION PENALTIES

     9.1.  Seller  shall  be  liable  for  all  imbalance  or  other  penalties,
cash-outs,  or other  costs  imposed  on Buyer or  Seller  by any  third  party,
including  without  limitation  Seller's  upstream  or  other  transporters  and
Transporters,  to the extent that such  penalties,  cash-outs or other costs are
caused by Seller's actions or inaction.  Buyer shall be liable for all imbalance
or other penalties,  cash-outs, or other costs imposed on Buyer or Seller by any
third  parties,   including  without  limitation   Seller's  upstream  or  other
transporters and Transporters,  to the extent that such penalties,  cash-outs or
other costs are caused by Buyer's actions or inaction.


                         ARTICLE 10-BILLING AND PAYMENT

     10.1.  Following  each  Contract  Month,  Seller  shall  furnish,  or  have
furnished,  an  itemized  statement  to Buyer  stating  the  amounts  due Seller
pursuant to this Agreement (the "Statement").  Following the receipt of Seller's
Statement, Buyer shall make Payment by the due date. Invoice date, due date, and
payment method shall be as specified in Appendix G.

     10.2.  Interest  shall  accrue  on  all  late  payments  commencing  on the
applicable  due date at the then current  prime rate of Bank One of Indiana,  or
its successor, or the maximum lawful rate, whichever is lower.


                              ARTICLE 11-REMEDIES

     11.1. If Seller fails to deliver  scheduled Gas and such failure to deliver
is not excused under Article 8 of this  Agreement,  then Seller shall  reimburse
Buyer for the amount of increased cost to Buyer of acquiring replacement Gas, as
well as  additional  fees or  penalties  incurred as a result of such failure to
deliver. The amount owed by Seller to Buyer hereunder shall be calculated as the
product  of (a)  the  difference,  if  positive,  between  the  price  paid  for
replacement  Gas including any additional  penalties,  transportation,  fuel and
other  variable  costs  incurred to receive such  replacement  Gas, and the then
applicable  commodity charge,  and (b) the difference  between the scheduled Gas
and the quantity of Gas actually delivered by Seller.  Buyer and Seller agree to
act in good faith with  respect to purchases  of such  replacement  Gas so as to
minimize Seller's obligations to Buyer under this Section.

     11.2.  If Buyer fails to receive  scheduled Gas and such failure to receive
is not excused under  Article 8 of this  Agreement,  then Buyer shall  reimburse
Seller  in an  amount  calculated  as the  product  of (a)  the  difference,  if
positive,  between the then applicable  commodity  charge and the price received
from  a   third   party   purchaser,   including   any   additional   penalties,
transportation, fuel and other variable costs incurred to deliver Gas to a third
party  purchaser,  and (b) the  difference  between  the  scheduled  Gas and the
quantity of Gas actually received by Buyer.  Seller and Buyer agree to cooperate
in good  faith so as to  minimize  Buyer's  obligations  to  Seller  under  this
Section.

     11.3.  Should the Commission  impose  enforcement  penalties on Buyer which
were caused by Seller's intentional  non-compliance with the Settlement,  Seller
shall indemnify and hold harmless Buyer for such penalties, and any costs, fees,
or expenses associated with defending such action.


                           ARTICLE 12-CORRESPONDENCE

     12.1.  Except as provided in Section  8.2,  any notice,  statement  or bill
shall be in  writing  and  shall be duly  delivered  when  (a)  mailed,  postage
prepaid, by registered,  certified,  or first-class mail, or (b) sent by prepaid
overnight delivery to the applicable address,  or (c) sent by hand delivery,  or
(d) sent by facsimile  directed to the appropriate  person and facsimile  number
with hard copy also delivered as in (a), (b), or (c) above. Addresses, telephone
numbers, and facsimile numbers are specified in Appendix F.


                            ARTICLE 13-MISCELLANEOUS

     13.1. This Agreement is subject to all applicable laws, orders,  rules, and
regulations  of any  state  or  federal  governmental  body or  official  having
jurisdiction  and both  Seller and Buyer agree that the  transactions  agreed to
hereunder shall be conditioned upon compliance with all such laws, orders, rules
and regulations.

     13.2.  Seller and Buyer  expressly  agree that laws of the State of Indiana
shall  govern the  validity,  construction,  interpretation,  and effect of this
Agreement.


     13.3. Either Party may pledge,  mortgage, or assign its rights hereunder as
security for  indebtedness.  This Agreement is otherwise  non-assignable  except
with the prior written consent of Buyer and Seller.

     13.4. Notwithstanding any other provisions herein, the Parties hereto waive
any and all rights, claims, or causes of action arising under this Agreement for
incidental,  consequential  or punitive  damages.  Buyer shall have the right to
enforce  any and all  terms of this  Agreement  against  Seller.  To the  extent
performance of this Agreement by either Party conflicts with the Settlement, the
Parties will take  corrective  action in order to ensure that  performance is in
accordance with the Settlement.  The Parties  acknowledge that a failure to take
timely  and  appropriate  corrective  action  may  subject  Buyer to  compliance
measures by third parties pursuant to Article VII of the Settlement.

     13.5. The Parties  acknowledge that their  respective  business records and
information  are  confidential  in nature and may contain  proprietary and trade
secret  information.  Notwithstanding  the  foregoing,  Seller agrees to provide
Buyer access to those records  required to verify Seller's  statements to Buyer.
To the extent access to information is necessary consistent with the Settlement,
appropriate  protection  of  proprietary  and trade secret  information  will be
afforded.

     13.6.  No waiver by either Party of one or more defaults or breaches by the
other in performance  of any of the terms or provisions of this Agreement  shall
operate or be construed as a waiver of any future default or breach,  whether of
a like or of a different character.

     13.7.  The  terms  and  conditions  contained  in  this  Agreement  and its
Appendices herein constitute the full and complete agreement between the Parties
and any change to be made must be  submitted  in writing  and  executed  by both
Parties,  The Parties  acknowledge  that this Agreement is effective and must be
carried out and enforced in a manner consistent with the Settlement.

     13.8.  Each Party  represents that it has all necessary power and authority
to enter into and perform its  obligations  under this  Agreement  and that this
Agreement  constitutes  a legal,  valid and  binding  obligation  of that  Party
enforceable   against  it  in  accordance   with  its  terms,   except  as  such
enforceability  may be  affected by any  bankruptcy  law or the  application  of
principles of equity.

     13.9.  In the event  any of the  terms,  covenants  or  conditions  of this
Agreement,  or any  amendment  hereto,  or the  application  of any such  terms,
covenants or conditions shall be held invalid as to any Party or circumstance by
any court having jurisdiction, all other terms, covenants, or conditions of this
Agreement, or any amendment hereto, and their application, shall not be affected
thereby and shall remain in full force and effect.

     13.10. If any provision of this Agreement is declared or rendered  unlawful
by a court of law or regulatory  authority with  jurisdiction over either of the
parties or deemed unlawful because of a statutory or other change in the law, or
if either  Party  suffers  a  substantial  economic  detriment  due  either to a
determination relating to this Agreement by such an authority, or as a result of
fundamental  changes in the marketplace or other substantial changes in existing
circumstances,  the Parties  will  promptly  meet to determine  and  negotiate a
mutually  acceptable  agreement  on such  replacement  provisions  necessary  to
maintain the benefits and obligations that arise under this Agreement.

     IN WITNESS  WHEREOF,  the Parties  hereto have executed  this  Agreement in
duplicate originals.

                                 "SELLER"
                                 PROLIANCE ENERGY, LLC

                                 By:      /s/ John R. Talley
                                          --------------------------------------
                                          John R. Talley,
                                          President

                                 "BUYER"
                                 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, INC.

                                 By:      /s/ William S. Doty
                                          --------------------------------------
                                 Its:     Senior Vice President
<PAGE>
<TABLE>
<CAPTION>

Gas Sales And Portfolio Administration Agreement


                                APPENDICES INDEX


Appendices will be submitted to the Commission as a compliance  filing following
entry of an Order in  Consolidated  Cause Nos.  37394GCA50S1,  37399GCA50S1,  and
42233.

Title                                              Appendix        Description
-------------------------------------------------- --------------- ---------------------------------------------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Buyer's Primary Delivery Points                    A               Lists  Primary   Delivery  Points  on  appropriate
                                                                   pipelines
-------------------------------------------------- --------------- ---------------------------------------------------
Buyer's Maximum Quantities                         B               Sets forth in Dth,  by month and  season,  Buyer's
                                                                   Maximum Daily Quantities
-------------------------------------------------- --------------- ---------------------------------------------------
Delivery Rights Information                        C               Lists   current   Transportation   Contracts   and
                                                                   applicable demand costs
-------------------------------------------------- --------------- ---------------------------------------------------
Supplier Reservation Costs                         D               Lists  Monthly and Seasonal  Supplier  Reservation
                                                                   Costs
-------------------------------------------------- --------------- ---------------------------------------------------
Commodity Purchases-Gas Cost                       E               Incorporates   the  GCIM   that  is  part  of  the
Incentive Mechanism                                                Settlement Agreement
-------------------------------------------------- --------------- ---------------------------------------------------
Notices                                            F               Contact  information  for  purposes  of  notice to
                                                                   Seller and Buyer
-------------------------------------------------- --------------- ---------------------------------------------------
Invoice/Payment Data                               G               Sets invoice date and payment terms
-------------------------------------------------- --------------- ---------------------------------------------------
"Reserved"                                         H               Reserved for future
-------------------------------------------------- --------------- ---------------------------------------------------
"Reserved"                                         I               Reserved for future
-------------------------------------------------- --------------- ---------------------------------------------------
Portfolio Services                                 J               Specifics on portfolio services
-------------------------------------------------- --------------- ---------------------------------------------------

</TABLE>
<PAGE>


                Gas Sales And Portfolio Administration Agreement

                                APPENDICES INDEX

Buyer's Primary Delivery Points                              A
Buyer's Maximum Quantities                                   B
Delivery Rights Information                                  C
Supplier Reservation Costs                                   D
Commodity Purchases-Gas Cost                                 E
Incentive Mechanism
Notices                                                      F
Invoice/Payment Data                                         G
"Reserved"                                                   H
"Reserved"                                                   I
Portfolio Services                                           J-K



<PAGE>
<TABLE>
<CAPTION>



                                                            SIGECO-Appendix A
Gas Sales And Portfolio Administration Agreement            Original Page No. 1
                                                            September 1, 2002



                  APPENDIX A - Buyer's Primary Delivery Points


Texas Gas Transmission Corporation:
Meter No.                               Meter Station Name:
<S>   <C>
      1810                              SIGECO Shipper Deduct (includes all of the following)
      1811                              Elberfeld
      1812                              Boonville Road
      1813                              Long Road
      1814                              Levee (Evansville)
      1815                              Haubstadt
      1816                              Rural - SIGECO
      1820                              Snake Run
      1735                              Wagner
      1401                              Bicknell
      1402                              Edwardsport
      1403                              Francisco
      1404                              Freelandville
      1405                              Monroe City
      1407                              Oaktown
      1408                              Petersburg
      1410                              Washington Road
      1414                              Rural - Hoosier Gas


Midwestern Gas Transmission:
Meter No.:                              Meter Station Name:
02-7071                                 Chrisney
02-7100                                 Ohio Valley Hub


ANR Gas Pipeline:
Meter No.:                              Meter Station Name:
032410100                                South Chrisney (SIGECO)




</TABLE>
<PAGE>



                                                             SIGECO-Appendix A
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002



Texas Eastern Gas Transmission:
Meter No.:                              Meter Station Name:
70539                                   Ft. Branch, IN
72648                                   Southern Indiana Posey Co., Inc.


Ohio Valley Hub, LLC:
Meter Station Name:
Monroe City Storage Field
9401                                    Texas Gas - Ohio Valley Hub Interconnect


Amendment

     Seller and Buyer  agree that this  Appendix A may be amended as provided in
this  Agreement,  which  amendment  ultimately will be memorialized in a revised
Appendix A.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>

                                                             SIGECO-Appendix B
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002



                     APPENDIX B - Buyer's Maximum Quantities


Maximum Quantities SIGECO (in Dth)
----------------------------------
Month                                     Daily
-----                                     -----
November                                              66,800
December                                             106,800
January                                              106,800
February                                             106,800
March                                                 66,800
April                                                 62,416
May                                                   49,982
June                                                  49,982
July                                                  49,982
August                                                49,982
September                                             49,982
October                                               66,248

Maximum Seasonal Quantities (in Mcf)
Month                                     SIGECO
-----                                     ------
Summer                                             4,663,352
Winter                                            13,978,115

<PAGE>
                                                             SIGECO-Appendix B
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002


Amendment

     Seller and Buyer  agree that this  Appendix B may be amended as provided in
this  Agreement,  which  amendment  ultimately will be memorialized in a revised
Appendix B.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>

                                                             SIGECO-Appendix C
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002



                       APPENDIX C - Portfolio Information

I.   Current Contracts and Contract Rates

     The  applicable  demand costs shall be determined  based upon the rates and
charges specified in each Transporter's Tariff,  including any applicable direct
bills,  surcharges,  or as other costs specified by the sheets identified below,
or other applicable sheets, as all of those sheets may be in effect from time to
time, and costs arising under applicable agreements,  for the applicable term of
these  agreements,  including the agreements  identified  below, as well as this
Agreement.  While Seller and Buyer agree that the  identified  tariff sheets and
agreements are intended to be a complete listing of the applicable tariff sheets
and applicable agreements, they further agree that the omission of the reference
of one or more  sheets or  agreements  from that  list will not  affect  Buyer's
obligation to Seller for rates,  charges and costs  incurred  hereunder.  Seller
shall provide to Buyer all Transporter refunds for the applicable terms that are
received  by  Seller  relative  to the  pipeline  tariff  sheets  listed  below.
Attachment C shall be revised  consistent  with Section 2.5 of the Settlement at
the appropriate time to reflect the adjusted demand rates.

                      Contract No.                    Contract Rate
                      ------------                    -------------
                      800065                          Sheet No. 35
                      99714                           Sheet No. 6
                      WDS 1                           Appendix J.1
                      ADS 1                           Appendix K.I
                      ADS 2                           Appendix K.2
                      ADS 3                           Appendix K.3
                      ADS 4                           Appendix K.4
                      ADS 5                           Appendix K.5
                      ADS 6                           Appendix K.6

Amendment

     Seller  and Buyer  agree that this  Appendix C may be amended  from time to
time by mutual  agreement of the Parties,  which ultimately will be memorialized
in a revised Appendix C.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>
<TABLE>
<CAPTION>



                                                             SIGECO-Appendix D
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002



                     APPENDIX D - Supplier Reservation Costs

                           Supplier Reservation Costs
                    November 1,2001 through October 31, 2002

I.   Reserved Commodity Quantities

     a.   Monthly Baseload Reserved Quantity (Dth/Day)

                                                                       Into
                                         Into TGT                   MGT/OVH/TGT                   Into MGT to
                                         --------                   -----------                   -----------
             Month                      Gulf Coast                   Backhaul                       SIGECO
             -----                      ----------                   --------                       ------
<S>       <C>                                 <C>                      <C>                            <C>
November, 2001                                9,231                    16,202                         10,000
December, 2001                                9,231                    16,202                         10,000
January, 2002                                 9,231                    16,202                         10,000
February, 2002                                9,231                    16,014                         10,000
March, 2002                                   9,231                    10,588                         10,000
April, 2002                                   5,128                     5,063                         10,000
May, 2002                                    11,917                     5,063                         10,000
June, 2002                                   12,144                     5,063                         10,000
July, 2002                                    5,128                    17,476                         10,000
August, 2002                                  5,128                     5,063                         10,000
September, 2002                               5,128                     5,063                         10,000
October, 2002                                 8,523                     5,063                         10,000

Buyer and Seller agree that some portion of the quantities identified as Monthly
Baseload Reserved Quantities may be provided at fixed, collared, or hedged
prices mutually agreed upon pursuant to the GCIM.


</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                             SIGECO-Appendix D
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002

     b.   Daily Swing Reserved Quantity (Dth/Day)

                                                                       Into
                                         Into TGT                   MGT/OVH/TGT                   Into MGT to
                                         --------                   -----------                   -----------
             Month                      Gulf Coast                   Backhaul                       SIGECO
             -----                      ----------                   --------                       ------
<S>       <C>                                 <C>                       <C>                                <C>
November, 2001                                1,026                     9,433                              0
December, 2001                                    0                    12,317                              0
January, 2002                                   723                     9,089                              0
February, 2002                                    0                         0                              0
March, 2002                                       0                         0                              0
April, 2002                                   1,709                     2,302                              0
May, 2002                                     1,654                     9,953                              0
June, 2002                                    1,709                     9,228                              0
July, 2002                                    3,309                    17,692                              0
August, 2002                                  1,654                    11,629                              0
September, 2002                               1,709                    13,557                              0
October, 2002                                 3,309                    13,347                              0


Buyer and Seller agree that some portion of the  quantities  identified as Daily
Swing Reserved Quantities may be provided at fixed,  collared,  or hedged prices
mutually agreed upon pursuant to the GCIM.


II.  Applicable Reservation Rates ($/Dth/Day)

System                    Winter Months (Nov.-Mar.)                      Summery Months (Apr.-Oct.)
                          Monthly                Daily                   Monthly                Daily
                          Index                  Index                   Index                  Index
                          Reserved               Reserved                Reserved               Reserved
                          Quantity               Quantity                Quantity               Quantity


</TABLE>
<PAGE>



                                                             SIGECO-Appendix D
Gas Sales And Portfolio Administration Agreement             Original Page No. 3
                                                             September 1, 2002

Amendment

     Seller  and Buyer  agree that this  Appendix D may be amended  from time to
time by mutual  agreement of the Parties,  which ultimately will be memorialized
in a revised Appendix D.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>



                                                             SIGECO-Appendix E
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002

         APPENDIX E - Commodity Purchases - Gas Cost Incentive Mechanism

     The commodity  purchased by Buyer shall be provided in accordance  with the
Commission  approved Gas Cost Incentive Mechanism described in Appendix E of the
Settlement.  All record  keeping and  reporting  shall be  performed in a manner
consistent  with the terms of the  GCIM,  Seller  agrees  and  acknowledges  the
reasonableness  of the Gas  purchases  made shall be subject to review to ensure
such purchases were made in a manner consistent with the terms of the GCIM.

For Summer Storage Refill:

     For summer  refill of leased  storage,  Buyer shall pay to Seller an amount
based on averaging the seven summer monthly  indices for the  applicable  supply
area,  and based upon presuming  storage  refill  quantities to be equally split
between the summer  months.  For summer refill of company  storage,  the parties
will agree on the extent to which an index  average  method will be used,  after
consideration  of the  operational  scheduling  needs  of  company  storage.  In
addition, all other applicable variable costs as identified below shall apply.

For Storage Withdrawals:

     For quantities of storage  withdrawals  for which Buyer has previously paid
for commodity,  applicable storage withdrawal variable costs as identified below
shall apply.

For Applicable Indices

Contract No.               Contract Rate         Index
800065                     Sheet No. 35          TETCO - (ELA, WLA, ETX, STX)
99714                      Sheet No. 36          ANR - Louisiana
ADS 1                      Appendix K.1          Texas Gas - Zone SL
ADS 2                      Appendix K.2          Texas Gas - Zone SL
ADS 3                      Appendix K.3          Chicago-LDCs, large e-us

<PAGE>
<TABLE>
<CAPTION>

                                                             SIGECO-Appendix E
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002

     The other  variable  costs  applicable to Nominated  Daily  Quantities  and
Balancing  Quantities  shall be  determined  based  upon the rates  and  charges
applicable  under each  transporter's  tariff,  including the sheets  identified
below,  as well as other  applicable  sheets,  as all of those  sheets may be in
effect  from  time to time,  and  costs  arising  under  applicable  agreements,
including the agreements identified below, as well as this Agreement.


SIGECO
ANR                                                          Texas Eastern
Contract No.                    Contract Rate                Contract No.                 Contract Rate
------------                    -------------                ------------                 -------------
<C>                                       <C>                <C>                                    <C>
99714                           Sheet No. 6                  800065                       Sheet No. 36
                                                                                          Sheet No. 126
                                                                                          Sheet No. 127
                                                                                          Sheet No. 128
                                                                                          Sheet No. 129
Texas Gas Z-3                                                Midwestern
Contract No.                    Contract Rate                Contract No.                 Contract Rate
------------                    -------------                ------------                 -------------
WDS 1                           Appendix J.1                 ADS 3                        Appendix K.3
ADS 1                           Appendix K.1
ADS 2                           Appendix K.2                 Ohio Valley Hub
ADS 5                           Appendix K.5                 Contract No.                 Contract Rate
                                                             ------------                 -------------
ADS 6                           Appendix K.6                 ADS 4                        Appendix K.4



                                       2
<PAGE>

                                                             SIGECO-Appendix E
Gas Sales And Portfolio Administration Agreement             Original Page No. 3
                                                             September 1, 2002

     While  Seller  and  Buyer  agree  that the  identified  tariff  sheets  and
agreements are intended to be a complete listing of the applicable tariff sheets
and applicable agreements, they further agree that the omission of the reference
of one or more  sheets or  agreements  from that  list will not  affect  Buyer's
obligation to Seller for rates, charges and costs incurred thereunder.


Amendment

     Seller  and Buyer  agree that this  Appendix E may be amended  from time to
time by mutual  agreement of the Parties,  which ultimately will be memorialized
in a revised Appendix E.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------

</TABLE>
<PAGE>



                                                             SIGECO-Appendix F
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002


                              APPENDIX F - Notices

Invoice Information:
Buyer:                                          Seller:
-----                                           ------
Southern Indiana Gas and Electric Company       D. Short
Gas Supply Department                           ProLiance Energy, LLC
Attn.: Stephanie Willis                         111 Monument Circle
20 NW Fourth Street                             Suite 2200
Evansville, IN 47708                            Indianapolis, IN 46204-5178
(812) 491-4732                                  (317) 231-6808

Payments:
--------

Buyer:                                          Seller:
-----                                           ------
National City Bank                              LaSalle Bank N.A.
For the Account of:                             For the Account of:
   Southern Indiana Gas and Electric Company       ProLiance Energy, LLC
                                                ABA #071000505
                                                ACCT #5800281411
Supply Plans/Operational/Force Majeure:

Buyer:                                          Seller:
-----                                           ------

Supply Plans                                    Supply Plans
------------                                    ------------
Stephanie Willis                                Chris Kershner
(812) 491-4732                                  (317) 231-6952

Operational                                     Operational
-----------                                     -----------
Randy Gary                                      Stephen Miner
(812) 491-4730                                  (317) 231-66828

Force Majeure                                   Force Majeure
-------------                                   -------------
Randy Gary (812) 491-4730                       Chris Kershner -(317) 231-6952
Frank Lindsey (812) 491-4670                    Stephen Miner -(317) 231-6828
Gas Controller on Duty (812) 491-4530           Terry Peak -(317) 231-6804
Southern Indiana Gas and Electric Company       ProLiance Energy, LLC
20 NW Fourth Street                             111 Monument Circle
Evansville, In. 47708                           Suite 2200
(812) 491-4687 (Telecopy)                       Indianapolis, Indiana 46204-5178
                                                (317) 231-6901 (Telecopy)

All Other Notices:

Buyer:                                    Seller:
-----                                     ------
Gas Control Department                    ProLiance Energy , LLC
Attn.: Randy Gary                         Attn: John R. Talley
20 NW Fourth Street                       111 Monument Circle
Evansville, In. 47708                     Suite 2200
                                          Indianapolis, Indiana 46204-5178

<PAGE>

                                                             SIGECO-Appendix F
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002
                              APPENDIX F - Notices
                                  (continued)

Amendment

     Seller  and Buyer  agree that this  Appendix G may be amended  from time to
time  as  provided  in  this  Agreement,  which  amendment  ultimately  will  be
memorialized in a revised Appendix G.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>

                                                             SIGECO-Appendix G
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002

                        APPENDIX G - Invoice/Payment Data

   Invoice Date -   On or before the tenth (10th) day after the Contract Month.

   Due Date -       Ten (10) days after receipt of invoice.

   Payment Method - By wire transfer to account specified on invoice


Amendment

     Seller  and Buyer  agree that this  Appendix G may be amended  from time to
time by mutual  agreement of the Parties,  which  amendment  ultimately  will be
memorialized in a revised Appendix G.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>


                                                             SIGECO-Appendix J.1
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002


                    APPENDIX J.1 - Winter Delivery Service 1

Winter Delivery Service 1 TGT ("WDS 1")

     1.   Starting  September 1, 2002,  consistent  with Buyer's  supply  plans,
          Seller shall  provide  Buyer with WDS 1 with the  following  delivered
          service entitlements:

                                 Max Nominated                   Monthly
Contract Months                  Daily Qty.                      Demand $
November                              0 Dth/day
December                         40,000 Dth/day               $136,400.00
January                          40,000 Dth/day               $136,400.00
February                         40,000 Dth/day               $123,200.00
                                      Leap Year               $127,600.00
March                                 0 Dth/day
April - October                       0 Dth/day

     2.   Unless otherwise agreed upon,  Seller shall provide  entitlements from
          the TGT/Ohio Valley Hub Meter to Buyer's Texas Gas city gate.

     3.   Buyer shall pay Seller as follows:

          a.   For Nominated  Commodity as follows:
               Purchase quantities will be determined jointly by the parties and
               priced pursuant to Appendix E.

          b.   For WDS 1 Variable  Costs:
               Applicable pipeline costs if any as agreed to by both parties.

          c.   For  WDS 1  Demand  Cost:
               As shown in  paragraph 1 and other  applicable  costs,  if any as
               billed.

          d.   For WDS 1 Fuel:
               Fuels under the effective Texas Gas SFT rate schedule.

     4.   WDS 1 service expires March 31, 2003.

     5.   Sellers  provisions  of WDS 1 shall be  subject to the  provisions  of
          service reflected in Texas Gas FT tariffs,  as well as other Texas Gas
          tariffs as may be applicable to the provision of those services.
<PAGE>

                                                             SIGECO-Appendix J.1
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002

Amendment

     Seller and Buyer agree that this  Appendix  J.1 may be amended from time to
time by mutual  agreement  of the Parties  which  amendment  ultimately  will be
memorialized in a revised Appendix J.1.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>
<TABLE>
<CAPTION>


                                                             SIGECO-Appendix K.1
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002

                    APPENDIX K.1 - Annual Delivery Service 1

Annual Delivery Service ("ADS 1")

     1.   Starting  September 1, 2002,  consistent  with Buyer's  supply  plans,
          Seller shall  provide  Buyer with ADS 1 with the  following  delivered
          service entitlements:

                           Max Nominated              Max Unnominated                               Monthly
Contract Months            Daily Qty.                 Daily Qty              Total MDQ              Demand $
---------------            ----------                 ---------              ---------              --------
<S>                                 <C>               <C>                    <C>                    <C>
November                            9,334 Dth/day     19,166 Dth/day         28,500 Dth/day         $324,387.00
December                            9,334 Dth/day     19,166 Dth/day         28,500 Dth/day         $335,199.90
January                             9,334 Dth/day     19,166 Dth/day         28,500 Dth/day         $335,199.90
February                            9,334 Dth/day     19,166 Dth/day         28,500 Dth/day         $302,781.20
                                                                             Leap Year              $313,574.10
March                               9,334 Dth/day     19,166 Dth/day         28,500 Dth/day         $335,199.90
April                              11,682 Dth/day     12,433 Dth/day         24,115 Dth/day         $274,932.21
May                                11,682 Dth/day                            11,682 Dth/day         $137,396.67
June                               11,682 Dth/day                            11,682 Dth/day         $132,964.52
July                               11,682 Dth/day                            11,682 Dth/day         $137,396.67
August                             11,682 Dth/day                            11,682 Dth/day         $137,396.67
September                          11,682 Dth/day                            11,682 Dth/day         $132,964.52
October                            11,682 Dth/day     16,266 Dth/day         27,943 Dth/day         $328,707.61

                                                           Nov. - Mar.          Apr. - Oct.
Maximum Seasonal Qty                                            1,909,405           2,000,044
--------------------

Unnominated Winter Seasonal Qty                                   499,971
-------------------------------


</TABLE>
<PAGE>



                                                             SIGECO-Appendix K.1
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002

     2.   Unless  otherwise  agreed upon,  Seller shall provide  entitlements to
          Buyer's TGT City gate.

     3.   Buyer shall pay Seller as follows:

          a.   For Unnominated Quantities:
               Summer  purchase  quantities  will be  determined  jointly by the
               parties  prior  to  April 1 of each  year to  replace  quantities
               delivered  during the prior  winter  season.  During  each summer
               month,  Buyer shall pay Seller one seventh of the summer purchase
               quantity times the Texas Gas Monthly Index price.

          b.   For Nominated Commodity as follows:
               Purchase quantities will be determined jointly by the parties and
               priced pursuant to Appendix E.

          c.   For ADS 1 Variable Costs:
               Variable  cost  rates  under  the  effective  Texas  Gas NNS rate
               schedule and other applicable costs, if any as billed.

          d.   For ADS 1 Demand Costs:
               As shown in  paragraph 1 and other  applicable  costs,  if any as
               billed.

          e.   For ADS 1 Fuel:
               Fuels under the effective Texas Gas NNS rate schedule.

     4.   This ADS 1 service expires October 31, 2003.

     5.   Sellers  provisions  of ADS 1 shall be  subject to the  provisions  of
          service reflected in Texas Gas NNS tariffs, as well as other Texas Gas
          FERC tariffs as may be applicable to the provision of those services.

Amendment

     Seller and Buyer agree that this  Appendix  K.1 may be amended from time to
time by mutual  agreement  of the Parties  which  amendment  ultimately  will be
memorialized in a revised Appendix K.1.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>

                                                             SIGECO-Appendix K.2
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002



                    APPENDIX K.2 - Annual Delivery Service 2

Annual Delivery Service 2 TGT ("ADS 2")

     1.   Starting  September 1, 2002,  consistent  with Buyer's  supply  plans,
          Seller shall  provide  Buyer with ADS 2 with the  following  delivered
          service entitlements:

                           Max Nominated                  Monthly
Contract Months            Daily Qty.                     Demand $
---------------            ----------                     --------
November                           28,300 Dth/day         $227,447.10
December                           28,300 Dth/day         $291,076.67
January                            28,300 Dth/day         $291,076.67
February                           28,300 Dth/day         $269,097.96
                                        Leap Year         $729,297.53
March                              28,300 Dth/day         $235,028.67
April                              28,300 Dth/day         $227,447.10
May                                28,300 Dth/day         $235,028.67
June                               28,300 Dth/day         $227,447.10
July                               28,300 Dth/day         $235,028.67
August                             28,300 Dth/day         $235,028.67
September                          28,300 Dth/day         $227,447.10
October                            28,300 Dth/day         $235,028.67


                                    Nov. - Mar.          Apr. - Oct.
Maximum Seasonal Qty                     4,301,600           6,056,200
--------------------
<PAGE>



                                                             SIGECO-Appendix K.2
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002


     2.   Unless  otherwise  agreed upon,  Seller shall provide  entitlements to
          Buyer's TGT City gate.

     3.   Buyer shall pay Seller as follows:

          a.   For Nominated Commodity as follows:
               Purchase quantities will be determined jointly by the parties and
               priced pursuant to Appendix E.

          b.   For ADS 2 Variable  Costs:
               The  variable  costs per the  effective  rates under Texas Gas FT
               rate schedule and other applicable costs, if any as billed.

          c.   For ADS 2 Demand Costs:
               As shown in  paragraph 1 and other  applicable  costs,  if any as
               billed.

          d.   For ADS 2 Fuel:
               Fuels under the effective Texas Gas FT rate schedule.

     4.   This ADS 2 service expires October 31, 2003.

     5.   Sellers  provisions  of ADS 2 shall be  subject to the  provisions  of
          service reflected in Texas Gas FT tariffs,  as well as other Texas Gas
          FERC tariffs as may be applicable to the provision of those services.

Amendment

     Seller and Buyer agree that this  Appendix  K.2 may be amended from time to
time by mutual  agreement  of the Parties  which  amendment  ultimately  will be
memorialized in a revised Appendix K.2.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>



                                                             SIGECO-Appendix K.3
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002



                    APPENDIX K.3 - Annual Delivery Service 3

Annual Delivery Service 3 TGT ("ADS 3")

     1.   Starting  September 1, 2002,  consistent  with Buyer's  supply  plans,
          Seller shall  provide  Buyer with ADS 2 with the  following  delivered
          service entitlements:

                           Max Nominated                  Monthly
Contract Months            Daily Qty.                     Demand $
---------------            ----------                     --------
November                   50,000 Dth/day                 $106,047.00
December                   50,000 Dth/day                 $106,047.00
January                    50,000 Dth/day                 $106,047.00
February                   50,000 Dth/day                 $106,047.00
March                      50,000 Dth/day                 $106,047.00
April                      50,000 Dth/day                 $106,047.00
May                        50,000 Dth/day                 $106,047.00
June                       50,000 Dth/day                 $106,047.00
July                       50,000 Dth/day                 $106,047.00
August                     50,000 Dth/day                 $106,047.00
September                  50,000 Dth/day                 $106,047.00
October                    50,000 Dth/day                 $106,047.00


     2.   Unless  otherwise  agreed upon,  Seller shall provide  entitlements to
          Buyer's system.

     3.   Buyer shall pay Seller as follows:

          a.   For Nominated Commodity as follows:
               Purchase quantities will be determined jointly by the parties and
               priced pursuant to Appendix E.

<PAGE>

                                                             SIGECO-Appendix K.3
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002

          b.   For ADS 3 Variable Costs:
               Variable  Cost  Rates  under  the  effective  Midwestern  FT rate
               schedule and other applicable costs, if any as billed.

          c.   For ADS 3 Demand Costs:
               As shown in  paragraph 1 and other  applicable  costs,  if any as
               billed.

          d.   For ADS 3 Fuel:
               Fuels under the effective Midwestern FT rate schedule.

4.   Term:  10,000 Dth/day of Nominated Daily Quantity expires October 31, 2003.
     40,000 Dth/day of Nominated Daily Quantity expires October 31, 2006.

5.   Sellers  provisions of ADS 3 shall be subject to the  provisions of service
     reflected  in  Midwestern  FT  tariffs,  as well as other  Midwestern  FERC
     tariffs as may be applicable to the provision of those services.

Amendment

     Seller and Buyer agree that this  Appendix  K.3 may be amended from time to
time by mutual  agreement  of the Parties  which  amendment  ultimately  will be
memorialized in a revised Appendix K.3.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>
                                                             SIGECO-Appendix K.4
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002



                    APPENDIX K.4 - Annual Delivery Service 4

Winter Delivery Service 4 TGT ("ADS 4")

     1.   Starting  September 1, 2002,  consistent  with Buyer's  supply  plans,
          Seller shall  provide  Buyer with ADS 4 with the  following  delivered
          service entitlements:

                           Max Nominated                  Monthly
Contract Months            Daily Qty.                     Demand $
---------------            ----------                     --------
November                           40,000 Dth/day         $96,000.00
December                           40,000 Dth/day         $99,200.00
January                            40,000 Dth/day         $99,200.00
February                           40,000 Dth/day         $89,600.00
                                        Leap Year         $92,800.00
March                              40,000 Dth/day         $99,200.00
April                              40,000 Dth/day         $96,000.00
May                                40,000 Dth/day         $99,200.00
June                               40,000 Dth/day         $96,000.00
July                               40,000 Dth/day         $99,200.00
August                             40,000 Dth/day         $99,200.00
September                          40,000 Dth/day         $96,000.00
October                            40,000 Dth/day         $99,200.00


     2.   Unless  otherwise  agreed upon,  Seller shall provide  entitlements to
          Buyer's City gate.

     3.   Buyer shall pay Seller as follows:

          a.   For Nominated Commodity as follows:
               Purchase quantities will be determined jointly by the parties and
               priced pursuant to Appendix E.

          b.   For ADS 4 Variable Costs:
               Variable Cost Rate of $.031/Dth and other  applicable  costs,  if
               any as billed.
          c.   For ADS 4 Demand Costs:
               As shown in  paragraph 1 and other  applicable  costs,  if any as
               billed

<PAGE>



                                                             SIGECO-Appendix K.4
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002


     4.   ADS 4 service expires October 31, 2009.

     5.   Sellers  provisions  of ADS 4 shall be  subject to the  provisions  of
          service reflected in Ohio Valley Hub FT tariffs, as well as other Ohio
          Valley Hub  tariffs as may be  applicable  to the  provision  of those
          services.

Amendment

     Seller and Buyer agree that this  Appendix  K.4 may be amended from time to
time by mutual  agreement  of the Parties  which  amendment  ultimately  will be
memorialized in a revised Appendix K.4.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>

                                                             SIGECO-Appendix K.5
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002



                    APPENDIX K.5 - Annual Delivery Service 5

Annual Delivery Service 5 TGT ("ADS 5")

     1.   Starting  September 1, 2002,  consistent  with Buyer's  supply  plans,
          Seller shall  provide  Buyer with ADS 5 with the  following  delivered
          service entitlements:

                           Max Nominated
Contract Months            Daily Qty.
---------------            ----------
November                           40,000 Dth/day
December                                0 Dth/day
January                                 0 Dth/day
February                                0 Dth/day
March                              40,000 Dth/day
April                              20,000 Dth/day
May                                20,000 Dth/day
June                               20,000 Dth/day
July                               20,000 Dth/day
August                             20,000 Dth/day
September                          20,000 Dth/day
October                            20,000 Dth/day


     2.   Unless otherwise agreed upon,  Seller shall provide  entitlements from
          the TGT/Ohio Valley Hub Meter to Buyer's Texas Gas city gate.

     3.   Buyer shall pay Seller as follows:

          a.   For Nominated Commodity as follows:
               Purchase quantities will be determined jointly by the parties and
               priced pursuant to Appendix E.

          b.   For ADS 5 Variable Costs:
               Variable Cost Rate of $.2941/Dth and other  applicable  costs, if
               any as billed.

          c.   For ADS 5 Fuel:
               Fuels under the effective Texas Gas IT rate schedule.

<PAGE>
                                                             SIGECO-Appendix K.5
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002


     4.   ADS 5 service expires October 31, 2009.

     5.   Sellers  provisions  of ADS 5 shall be  subject to the  provisions  of
          service reflected in Texas Gas IT tariffs,  as well as other Texas Gas
          tariffs as may be applicable to the provision of those services.

Amendment

     Seller and Buyer agree that this  Appendix  K.5 may be amended from time to
time by mutual  agreement  of the Parties  which  amendment  ultimately  will be
memorialized in a revised Appendix K.5.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------
<PAGE>



                                                             SIGECO-Appendix K.6
Gas Sales And Portfolio Administration Agreement             Original Page No. 1
                                                             September 1, 2002


                    APPENDIX K.6 - Annual Delivery Service 6

Winter Delivery Service 6 TGT ("ADS 6")

     1.   ADS 6  shall  ADS 6  shall  incorporate  the  Interruptible  features,
          cyclability,   annual  storage   deliverability,   and  other  service
          provisions ("Service  Provisions") reflected in Texas Gas FERC Tariffs
          for ISS.

     2.   Seller shall  provide  Buyer with ADS 6 with the  following  delivered
          service entitlements:

                      Max Nominated                   Monthly
Contract Months       Daily Qty.                      Demand $
---------------       ----------                      --------
November              50,000 Dth/day          1,000,000   Dth  during  any
                                              winter period
December              50,000 Dth/day
January               50,000 Dth/day
February              50,000 Dth/day
March                 50,000 Dth/day
April - October*      50,000 Dth/day


     2.   Unless  otherwise  agreed upon,  Seller shall provide  entitlements to
          Buyer's City gate.

     3.   Buyer shall pay Seller as follows:

          a.   For Nominated  Commodity as follows:
               Purchase quantities will be determined jointly by the parties and
               priced pursuant to Appendix E.

          b.   For ADS 6 Variable Costs:
               Variable  Cost  Rates  under  the  effective  Texas  Gas ISS rate
               schedule.

          c.   For ADS 6 Demand Costs:
               Demand  Cost  Rates  under  the  effective  Texas  Gas  ISS  rate
               schedule.

          d.   For ADS 6 Fuel:
               Fuels under the effective Texas Gas 155 rate schedule.
<PAGE>

                                                             SIGECO-Appendix K.6
Gas Sales And Portfolio Administration Agreement             Original Page No. 2
                                                             September 1, 2002

     1.   ADS 6 service expires October 31, 2009.

     5.   Sellers  provisions  of ADS 6 shall be  subject to the  provisions  of
          service reflected in Texas Gas ISS tariffs, as well as other Texas Gas
          ISS tariffs as may be applicable to the provision of those services.

Amendment

     Seller and Buyer agree that this  Appendix  K.6 may be amended from time to
time by mutual  agreement  of the Parties  which  amendment  ultimately  will be
memorialized in a revised Appendix K.6.

PROLIANCE ENERGY, LLC                      SOUTHERN INDIANA GAS AND
                                           ELECTRIC COMPANY


By:  /s/ Terrence F. Peak                  By:  /s/ William S. Doty
     ---------------------------------          --------------------------------
     Terrence F. Peak                           William S. Doty
     ---------------------------------          --------------------------------
Its: Executive Vice President              Its: Senior Vice President
     ---------------------------------          --------------------------------