Exhibit 10.20

     THIS COAL  SUPPLY  AGREEMENT  ("Agreement")  entered  into this 19th day of
January, 2000 by and between SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, a public
utility  organized and existing under the laws of Indiana  ("Buyer") and SIGCORP
FUELS, INC., an Indiana corporation ("Seller").

                              W I T N E S S E T H:

     WHEREAS, Buyer is an electric utility which desires to purchase a supply of
fuel of the quality  hereafter  described for use in its Generating  Stations at
Yankeetown,  Warrick County, Indiana, and West Franklin,  Posey County, Indiana;
and

     WHEREAS, Seller desires to sell fuel to Buyer and Buyer desires to buy such
fuel from Seller for the purposes of and in  accordance  with the  provisions of
this Agreement.

     NOW THEREFORE,  in consideration of the mutual covenants  contained herein,
Seller  agrees to sell and  deliver  and Buyer  agrees to  purchase  and  accept
delivery  of fuel of the  quality  and  quantity  hereinafter  described  and in
accordance with the terms and conditions set forth herein as follows:


SECTION 1. TERM

     Section 1.1 Term.  This  Agreement  shall  commence on the date first above
written, or upon Contract filing with the Indiana Utility Regulatory  Commission
("IURC") and the Federal Energy Regulatory  Commission ("FERC") (and inaction or
approval by the IURC and FERC,)  whichever  occurs  earlier,  and unless  sooner
terminated as provided herein,  shall continue until and including  December 31,
2003.

     Buyer  and  Seller  acknowledge  that a  primary  source  of the fuel to be
furnished  under  this  Agreement  is a new mine  operation  (Prosperity)  to be
developed subsequent to the execution of this Agreement.  It is anticipated that
the  production  of coal  from  Prosperity  will  begin in  mid-2000  with  full
production  during the fourth  quarter of 2000. The provisions of this Agreement
shall be effective on July 1, 2000. Any coal produced from Mine properties owned
or  controlled  by Seller  prior to July 1, 2000,  which fully meets all quality
specifications of this Agreement, including development tonnage from Prosperity,
may be sold to SIGECO at the pricing  provided  for under this  Agreement.  Such
tonnage not to exceed 300,000 tons in the aggregate.

     Buyer shall have the right, but not the obligation, to renew this Agreement
for an additional five (5) year period,  such right to be exercised by notice in
writing to Seller no later than six (6) months  prior to the  expiration  of the
initial  term of this  Agreement  and  subject  to a revised  purchase  price as
provided in section 6.2


SECTION 2. QUANTITY, ANNUAL PRICE REVISION, DELIVERIES

     Section 2.1 Quantity.  Except as adjusted  under Section 2.3,  Seller shall
sell and deliver and Buyer shall purchase and accept delivery of 167,000 tons (a
"ton" being 2,000 lbs.  avoirdupois) at Buyer's Generating  Stations,  per month
("Quantity").

     Section 2.2 Rate of Shipment.  The Quantity  shall be shipped in accordance
with a quarterly  delivery  schedule,  itemized  by month,  supplied by Buyer to
Seller as further  provided in Section 2.3.  Time is of the essence with respect
to the  schedule  so  established  and  failure  by Seller to  deliver in timely
fashion shall constitute a default.

     Section 2.3 Notification.

          (a)  Quarterly  Delivery  Schedule - By October 1 of each year,  Buyer
               shall specify by written notice to Seller the monthly  quantities
               to be delivered  in the  following  calendar  year subject to the
               limitation  contained in subparagraph  (b).  Quantities  shall be
               specified on  quarterly  schedules.  Revisions  to any  quarterly
               schedule  shall be made by  Buyer  no  later  than the 1st of the
               month preceding the start of that quarter. (E.g., March 1 for the
               second quarter, etc.).

          (b)  Modification  of  Quantity  - On or before  October  1, Buyer may
               change the Quantity to be delivered in any month of the following
               year  within  a range  of +/- 10% of the  Quantity  specified  in
               Section 2.1 above.


SECTION 3. SOURCE AND DELIVERY.

     Section 3.1 Source - It is the  intention  of the Seller or an affiliate of
Seller to develop a new  mining  property,  located  in Pike and Knox  Counties,
Indiana, known as the Prosperity Mine ("Prosperity"). Prosperity is the intended
source  for a  significant  portion  of  the  coal  to be  supplied  under  this
Agreement.

     Other  sources  of the fuel to be  provided  under this  arrangement  would
include coal reserves owned or otherwise  controlled by SFI, coal purchased from
third parties for resale to SIGECO,  petroleum  coke used as a partial blend and
fuels from other sources as determined by SFI. Any source may be provided as the
sole source of fuel or may be furnished in combination  with other sources or in
a blend with other sources. All sources and blends are subject to:

          (a)  the quality specifications of this Agreement,

          (b)  the Buyer's right to test the coal and perform a reasonable  test
               burn,

          (c)  the Buyer's unilateral right to reject any coal source which does
               not  perform  satisfactorily.  The  Buyer  and  Seller  agree  to
               cooperate with each other in testing  alternative  fuels and fuel
               blends,  including but not limited to petroleum  coke, so long as
               the use of such fuels does not increasethe net cost of generation
               at the Buyer's Generating Stations, nor increase the cost of fuel
               delivered under this Agreement.

     Section 3.2  Substitute  Fuel. It is  anticipated  that most fuel delivered
under the Second Affiliate  Agreement will originate from coal reserves owned or
controlled by Seller. From time to time,  problems  encountered in the mining of
coal (either  quantity or quality  related) or opportunities in the various fuel
markets  may result in Seller  acquiring  a portion of the fuel to be  furnished
under this Second  Affiliate  Agreement  from sources not owned or controlled by
Seller.  Any fuel acquired from  non-owned or controlled  sources will be termed
"Substitute Fuel."

     The parties  acknowledge that the pricing pursuant to Section 6.1 hereof is
based upon  production  from reserves  owned or  controlled by Seller,  and this
agreement is the subject of a separate  Letter  Agreement with the Office of the
Utility Consumer Counselor (OUCC). The parties hereby agree that, so long as the
OUCC Letter  Agreement is in effect,  if Substitute Fuel is provided  hereunder,
the pricing of such fuel shall be adjusted as follows:

          (a)  If the cost to Seller of  Substitute  Fuel  exceeds the  contract
               price per Section  6.1,  Buyer shall be charged only the contract
               price.  Any resulting  loss on such purchase and resale by Seller
               is to be for Seller's account.

          (b)  If the cost to Seller of Substitute  Fuel delivered to Buyer,  is
               less than the contract  price per Section 6.1, any profit  earned
               from the purchase and resale to Buyer of Substitute  Fuel will be
               shared between Buyer and Seller by reducing the price to Buyer by
               33%  of the  difference  between  the  cost  to  Seller  of  such
               Substitute Fuel,  delivered to the appropriate Buyer's generating
               station, and the contract price per Section 6.1, hereof.

     Section 3.3 Truck or Rail Delivery,  Title,  Risk of Loss. Buyer and Seller
hereby select truck or rail  transportation as the method of shipment to Buyer's
A.B. Brown Generating Station and truck transportation as the method of shipment
for all fuel shipped to its Culley or Warrick Generating Stations.  Fuel will be
delivered FOB Buyer's Generating Station,  and title to and risk of loss of fuel
will  pass to Buyer  when  the fuel is  unloaded  at the  respective  Generating
Station's coal stockpile (the "Delivery Point"). Seller will contact and pay for
transportation from the source to the Generating Stations and for unloading from
trucks onto Buyer's stockpile.

     Section 3.4 Alternative  Delivery Mode.  Buyer shall be entitled,  upon one
hundred  twenty  days  (120)  days  prior to notice  to  Seller,  to change  the
specified  mode of delivery at its option for all or a portion of the  Quantity.
In the event any such  change  will result in an  adjustment  to Seller's  costs
(increase or decrease),  Seller shall give Buyer prompt written notice  thereof,
such notice to include a detailed  statement and itemization of such costs,  and
Buyer and Seller shall jointly make an adjustment to the Base Price of fuel sold
hereunder  if Buyer  agrees to the  adjustment,  otherwise  the mode of delivery
shall not change.


SECTION 4.  QUALITY

     Section   4.1  The  fuel   delivered   hereunder   shall   conform  to  the
specifications in Exhibit A attached hereto. The specifications in Exhibit A are
hereby made a part of, are a fundamental basis of this Agreement,  and create an
express  warranty by Seller that the fuel shall  conform in every respect to all
specifications.  The  fuel  shall  have a top  size of not  larger  than two (2)
inches.  Intermediate sizes shall not be removed. Not more than 55% by weight of
each delivery  shall be less than 1/4 inch in size. The fine content of the fuel
shall be that  resulting  from the normal mining and  preparation  sizing of the
fuel,  and no fine  screenings  or  slurry  shall be  added.  The fuel  shall be
substantially  uniform  in quality  and  physical  appearance  and shall be free
flowing and substantially free from excess water and impurities such as, but not
limited to, rock, bone, wood, slate, earth, or metal.

     Section  4.2  Change  in  Specification.   Seller  may,  with  the  written
permission  of Buyer,  deliver  fuel or fuel blends  which do not conform to the
foregoing  Section 4.1 and the  specification sin Exhibit A, provided that Buyer
shall have the right to take such  reasonable  measures  and  precautions  as it
deems necessary to assure itself that any divergence in specifications  does not
adversely impact the costs or operation of Buyer's Generating Stations.

     Section 4.3 Rejection.

          (a)  A "Shipment"  is defined as the entire  quantity of fuel prepared
               for delivery for which  sampling and analysis has been  performed
               pursuant to Section  5.2. A shipment  shall not include more than
               10,000 tons.

          (b)  Seller  shall  notify  Buyer  prior  to  Buyer's  receipt  of any
               shipment if such shipment fails to conform to the  specifications
               in  Exhibit  A.  Buyer  shall  then have the  option to accept or
               reject such  shipment  (a  "Nonconforming  Shipment").  If Seller
               fails to notify Buyer of a Nonconforming Shipment, then Buyer may
               reject  a   Nonconforming   Shipment  at  any  time  or,  if  the
               Nonconforming  Shipment of coal is burnt,  then Seller  shall pay
               Buyer all costs,  expenses and damages therefor,  including,  but
               not limited to, environmental costs, damages and expenses.

          (c)  In the event Buyer  rejects  any  Nonconforming  Shipment,  Buyer
               shall return the fuel to Seller or, at Seller's  request,  divert
               such fuel to Seller's  designee,  all at Seller's cost. Buyer may
               request  replacement  of the rejected  fuel by Seller within five
               (5) working  days with fuel at least equal to the  specifications
               in  Section  4.1 and  Exhibit A. If Seller  fails to replace  the
               rejected  fuel within five (5)  working  days or the  replacement
               fuel is  rejected,  Buyer may  purchase an  equivalent  amount of
               conforming  specification  fuel from  another  source in order to
               replace the rejected  fuel and Seller shall  reimburse  Buyer for
               any  amount by which the  total  delivered  cost to Buyer of such
               conforming  fuel  purchased  from another source exceeds the then
               current delivered cost of fuel under this Agreement. Seller shall
               reimburse  Buyer  for  any  and  all  freight  or  transportation
               expenses that it incurs for rejected fuel.

          (d)  After receipt of notice from Seller of a Nonconforming  Shipment,
               or upon buyer's own discovery of a Nonconforming Shipment,  Buyer
               may,  by  notice  to  Seller,   voluntarily  elect  to  accept  a
               Nonconforming   Shipment.   If  Buyer  accepts  a   Nonconforming
               Shipment,  the  price  therefor  shall be  reduced  by an  amount
               mutually agreed upon by Buyer and Seller,  and the quantity Buyer
               is  obligated to purchase  from Seller,  shall be reduced in each
               calendar  year  by  the  amount  of any  Nonconforming  Shipments
               voluntarily   accepted  by  Buyer.

     Section 4.4 Suspension and Termination.

          (a)  Buyer may, upon notice in writing,  suspend  future  shipments if
               sampling and analysis  pursuant to Section 5.2 of this  Agreement
               indicates  that a  shipment  of fuel  fails  to  meet  any of the
               specifications  in Section  4.1 and in Exhibit A.  Seller  shall,
               within 15 days,  provide Buyer with  reasonable  assurances  that
               subsequent   deliveries   of  fuel  shall  meet  or  exceed  such
               specifications. If Seller fails to provide such assurances within
               said 15 day  period,  or  provides  such  assurance  but does not
               correct the  violation(s)  prior to the next  scheduled  shipment
               after  giving  such  assurance,  Buyer  may  on 15  days  notice,
               terminate this Agreement without any cost or penalty to Buyer. If
               Seller   provides   such   assurances   to   Buyer's   reasonable
               satisfaction,  shipments  hereunder  shall resume and any tonnage
               deficiencies  resulting from suspension may be made up by Seller,
               with  Buyer's  approval,  in  accordance  with a mutually  agreed
               schedule. Buyer shall not unreasonably withhold its acceptance of
               Seller's assurances, or delay the resumption of shipments.

          (b)  Notwithstanding  any other  provisions of this Agreement,  if the
               fuel  specifications  set forth in Exhibit A are  adjusted at any
               time due to new or revised applicable laws, rules or regulations,
               Seller and Buyer agree to enter into  negotiations  in good faith
               to arrive at a mutually  agreeable price  adjustment  under which
               Seller can  continue to supply coal that  conforms  with such new
               laws, rules or regulations and meets the adjusted specifications.
               The parties shall also negotiate an agreement as to any necessary
               lead time to permit the receipt and  delivery of coal  conforming
               to the new specifications.  If mutually agreeable terms cannot be
               negotiated,  either  party may on not less than thirty (30) days'
               notice, terminate this Agreement.

     Section 4.5 Remedies. Seller shall be responsible for all costs incurred by
Buyer resulting from Seller's  failure to comply with this Agreement.  Buyer, at
its option,  may allow  Seller to supply  replacement  fuel at the Base Price as
adjusted  pursuant to Section 6; however,  Buyer may procure fuel to replace all
of any part of the  quantity  of fuel which  Seller has failed to  deliver.  The
Seller  shall be liable to Buyer for the excess  delivered  cost  occasioned  by
Buyer's  purchase  of  replacement  fuel and any other  loss or damage  directly
caused by the Seller's breach of this Agreement.  Buyer may also recover damages
for all losses  sustained as a result of Seller's breach of Agreement based upon
any applicable legal theory, including, but not limited to, environmental costs,
expenses, penalties, losses and damages. Buyer may deduct the excess cost, loss,
or damage from any amount due Seller under this Agreement and, if such amount is
insufficient,  Buyer shall recover the balance due from Seller directly  through
appropriate legal action.

     Remedies  provided under this Agreement shall be cumulative and in addition
to other remedies provided by law or in equity.


SECTION 5. WEIGHING, SAMPLING AND ANALYSIS

     Section 5.1 Weights.  The weight of the coal delivered  hereunder  shall be
determined on a per shipment basis by Buyer on the basis of scale weights at the
generating station unless another method is mutually agreed upon by the parties.
Such  scales  shall be duly  certified  by an  appropriate  testing  agency  and
maintained in an accurate  condition.  Seller shall have the right,  at Seller's
expense and upon reasonable  notice,  to have the scales checked for accuracy at
any reasonable time or frequency. If the scales are found to be inaccurate, over
or under a  tolerance  range of 0.5%,  either  party  shall pay to the other any
amounts owed due to such  inaccuracy for a period not to exceed thirty (30) days
before the time any inaccuracy of scales is determined.

     Section 5.2 Sampling and Analysis.  Unless otherwise  mutually agreed,  the
sampling  and  analysis of the fuel  delivered  hereunder  shall be performed at
Seller's  expense at the Mine by an independent  commercial  testing  laboratory
("Independent  Lab") mutually selected by Buyer and Seller.  The results thereof
shall be  accepted  and used for the  quality  and  characteristics  of the fuel
delivered  under this  Agreement.  All analyses shall be made in accordance with
American Society of Testing  Materials  ("A.S.T.M.") or other mutually agreed to
specifications.  Samples for analysis shall be taken in accordance with A.S.T.M.
standards, may be composited, and shall be taken with a frequency and regularity
sufficient to provide  accurate  representative  samples of the deliveries  made
hereunder.

     Each sample shall be divided into 3 parts and put into airtight containers,
properly  labeled  and  sealed.  One  part  shall be used  for  analysis  by the
Independent Lab, one part shall be made available to Buyer as a check sample, if
Buyer in its sole judgment  determines it is necessary,  and one part  ("Referee
Sample:) shall be retained for a period of 30 days.  Buyer shall be given timely
and routine copies of all analyses made by the Independent  Lab. Seller will fax
results and relevant  coal quality  information  to Buyer's  designee and to its
Plant Manager, 24 hours prior to shipment. Buyer, on reasonable notice to Seller
shall have the right to have a  representative  present to observe the  sampling
and analysis.  Unless Buyer requests a Referee Sample analysis,  the Independent
Lab  analysis  shall be used to  determine  the  quality  of the coal  delivered
hereunder.

     If any dispute  arises within 30 days of the date of sampling,  the Referee
Sample shall be submitted for analysis to another independent commercial testing
laboratory  ("Second  Lab")  selected by Buyer.  The  analysis of the Second Lab
shall control to the extent provided in this Section.  A dispute shall be deemed
not to exist and the  Independent  Lab analysis  shall  prevail if such analysis
differs  from the  analysis of the Second Lab by an amount equal to or less than
any of the following ("as received"):

          (i)  0.50%  moisture  or
          (ii) 0.50% ash or
          (iii) 100 Btu/lb. or
          (iv) 0.25% sulfur

     The cost of the analysis  made by the Second Lab shall be borne by Buyer if
the  Independent  Lab  analysis  prevails  and by Seller if the  analysis of the
Second Lab prevails.


SECTION 6. PRICE

     Section 6.1 Price.  The Base Price of fuel per million  BTU;s  delivered to
Buyer's  Generating  Stations  during  the  initial  four (4)  year  term of the
Agreement is as follows:

                                      Price
                  Year              Per MMBTU
                  ----              ---------
                  2000                  98 cents
                  2001                  99 cents
                  2002                  99 cents
                  2003                 100 cents

     Section 6.2 Revised  Renewal  Period  Price.  The parties agree to commence
negotiations  to establish the price of fuel to be provided  during each year of
the renewal period (the "Revised Renewal Period Price"),  not later than January
1, 2003,  with July 1,  2003,  as the agreed  upon  deadline  to agree upon such
Revised Renewal Period Prices.

     Section 6.3  Government  Impositions.  The Base Price and  Revised  Renewal
Period Price is inclusive of all federal, state, municipal and local taxes, fees
and costs of any kind whether arising from  government law, rule,  regulation or
otherwise, including, without limitation, all costs of conforming to federal and
state mining and  reclamation  laws,  rules and regulations and all other and/or
additional  mining and operating costs and expenses  incurred during the term of
this  Agreement.  Price  adjustment  may be made under this  Agreement for costs
occasioned by changes in any statute,  rule or regulation,  and any governmental
imposition(s)  enacted or promulgated  after the date of this Agreement,  or the
effective date of any Revised  Renewal Period Price,  or for costs of compliance
with  requirements of entirely new regulatory  statues,  rules and  regulations,
which  are  enacted  or  promulgated  after  the date of this  Agreement  or the
effective date of any Revised Renewal Period Price. The Base Price shall be firm
and not subject to  adjustment  except as provided in this  section and Sections
6.2, 8.4, 8.5 and 11.


SECTION 7. INVOICES, BILLING AND PAYMENT

     Section 7.1 Invoice  Procedures  for Coal  Shipments.  Seller shall invoice
Buyer  weekly at the current  Base Price for all fuel  unloaded in the  previous
calendar week. In order to facilitate  monthly record keeping for both Buyer and
Seller,  Seller shall separately invoice Buyer for coal delivered in any partial
week at the beginning or end of each calendar month.

     Section  7.2  Payment  Procedures  for  Coal  Shipments.  Payment  for fuel
unloaded  shall be mailed  within 10 days  after  receipt of invoice in form and
detail  satisfactory to Buyer. Buyer shall mail all payments to Seller's account
as directed by Seller.

     Section  7.3  Withholding.  Buyer  shall  have the right to  withhold  from
payment of any billing or  billings  the amount of any sums which it is not able
in good faith to verify or which it otherwise in good faith disputes, such right
to withhold to continue  for the duration of the dispute or inability to verify.
Buyer shall  notify  Seller  promptly in writing of any such issue,  stating the
basis of its claim and the amount it intends to withhold,  and the parties agree
to review the matter in detail  within ten (10) days after  Seller's  receipt of
such  notice.  In the event and to the extent that any  dispute or  verification
issue is resolved in Seller's  favor,  Seller shall add the unpaid amount to the
next invoice,  plus interest at the prime rate of borrowed funds as published in
the most recently  published  edition of the Wall Street  Journal for the period
between  the date on which the  amount  would  normally  be paid and the  actual
payment  date,  and Buyer  shall pay such extra  amount in  accordance  with the
procedures  hereof.  In  the  event  and to  the  extent  that  any  dispute  or
verification  issue is resolved in Buyer's favor,  Seller shall promptly issue a
credit memorandum covering the amount in question.

     Payment by Buyer, whether knowing or inadvertent,  of any amount in dispute
shall not be deemed a waiver of any  claims or rights by Buyer  with  respect to
any disputed amounts or payments made.


SECTION 8. FORCE MAJEURE

     Section 8.1 EVENTS OF FORCE  MAJEURE.  Performance  of the  obligations  of
either party hereto except as to any  obligation by either party to make payment
to the other  shall be  excused  to the  extent  prevented  by an event of Force
Majeure.  As used herein,  an event of Force  Majeure  shall mean an act of God;
strike,  lockout or other labor dispute;  sabotage;  fire;  flood;  war; riot or
insurrection;  explosion;  accident;  embargo;  blockade;  inability  to  secure
supplies,  fuel,  power,  governmental  authorization or permit;  unscheduled or
forced outages at the generating  station (see Section 8.5 below);  breakdown of
or damage to  machinery,  plants  or  equipment;  interruption  or  shortage  of
transportation arrangements or equipment;  regulation,  rule, law, order, act or
restraint of any civil or military authority; or any other event, whether of the
kind herein enumerated or otherwise,  which is beyond the reasonable control and
without the fault or negligence of the party  affected  thereby and which wholly
or partially prevents,  interrupts or delays performance hereunder.  An event is
beyond the reasonable control of a party if it cannot be prevented or eliminated
by the  exercise of due  diligence or its  prevention  or  elimination  would be
accomplished only at an excessive or unreasonable cost.

     The party  claiming  excuse  hereunder  shall give the other  party  prompt
notice of such event. As used herein,  the term "Seller" shall include any party
mining, preparing, hauling, loading or transporting fuel to Seller for resale to
Buyer under this Agreement.  The party  experiencing the Force Majeure shall use
its best efforts to remedy the Force Majeure as soon as practicable.

     Section 8.2 Notice and Suspension. If because of Force Majeure either Buyer
or Seller is unable to carry out its  obligations  under  this  Agreement,  such
party shall  promptly give the other party written  notice of the Force Majeure,
whereupon the  obligations  and  liabilities of the party giving such notice and
the  corresponding  obligations  of the other  party shall be  suspended  to the
extent made necessary by and during the continuance of such Force Majeure.

     Subject  to the  provisions  of this  Section if (a) a  condition  of Force
Majeure  occurs,  (b) mutual  obligations  are suspended as  contemplated by the
paragraph  next  hereinabove,  (c) such  condition  (alone or  extended by other
conditions of Force  Majeure)  continues so that the mutual  obligations  remain
suspended  for a period of six months,  and (d) at the end of said six months or
at any time  thereafter  either party,  in the exercise of reasonable  judgment,
concludes  that  there  is no  likelihood  of  ending  the  condition(s)  in the
immediate  future,  then  either  party may  terminate  this  Agreement  without
liability  to the other party by giving to the other 90 days'  notice in writing
of its intention to terminate.

     Section 8.3 Deficiencies in Shipments. In the event Seller is prevented, in
whole or in part, from  producing,  processing or shipping fuel hereunder due to
Force Majeure, deficiencies in shipments so resulting may be added to subsequent
shipments of like fuel but only if Seller is  requested  to do so by Buyer,  and
then pursuant to a reasonable schedule provided to Seller by Buyer.

     Section 8.4 Environmental Force Majeure. The parties recognize that, during
the  continuance  of this  Agreement,  legislative  or regulatory  bodies or the
courts may adopt laws, regulations, policies and/or restrictions relating to air
pollution  or other  environmental  matters  which  will make it  impossible  or
commercially  impracticable  for Buyer to utilize  this or like kind and quality
coal  which  thereafter  would be  delivered  hereunder.  If as a result  of the
adoption of such laws, regulations,  policies, or restrictions, or change in the
interpretation or enforcement thereof,  Buyer decides that it will be impossible
or  commercially  impracticable  (uneconomical)  for Buyer to utilize such fuel,
Buyer shall so notify  Seller,  and  thereupon  Buyer and Seller shall  promptly
consider whether  corrective  actions can be taken in the mining and preparation
of the fuel  and/or  in the  handling  and  utilization  of the fuel at  Buyer's
generating  station;  and if in Buyer's  judgment such actions will not, without
unreasonable expense to Buyer, make it possible and commercially practicable for
Buyer to so utilize fuel which thereafter would be delivered  hereunder  without
violating any applicable law, regulation,  policy or order, Buyer shall have the
right, upon the later of 60 days' notice to Seller or the effective date of such
restriction, to terminate this Agreement without further obligation hereunder on
the part of either  party.  Any expense  contemplated  by this Section  shall be
deemed  unreasonable and the alternative  under  consideration  shall thereby be
deemed impossible or commercially  impracticable,  if it would result in a total
cost to Buyer  (including  the cost of any equipment  amortized  over its useful
life), in using Seller's fuel, in excess of the total cost of using  competitive
fuels including,  without  limitation,  fuel from alternative  sources which are
then reasonably  available to Buyer and which can be utilized in conformity with
all such  restrictions  (including the cost of any addition or  modification  to
Buyer's  generating  station necessary to permit the delivery and utilization of
such fuel).  The cost of using such fuels over the remainder of the term of this
Agreement,  including  anticipated increases in the price of such other fuel and
of any required  modifications,  adjustments or additions to Buyer's  generating
station, shall be considered for purposes of this Section. Buyer's decisions and
opinions  with  respect to this  Section  8.4 shall be final and not  subject to
question or dispute by Seller.

     Section 8.5  Redirection of Coal.  Notwithstanding  any other  provision of
this section, Buyer will have the absolute right and discretion, but in no event
any  obligation,  during any period of Force Majeure,  to redirect  shipments of
fuel delivered under this Agreement to any of its generating stations,  provided
that Buyer  agrees to  reimburse  Seller for any  additional  transportation  or
handling costs that are incurred by Seller to effect such redirected deliveries.


SECTION 9. AUDIT AND INSPECTION

     Buyer  shall have the right to inspect,  review,  and audit (or to have its
representatives  inspect, review, and audit) at any time during regular business
hours,  and upon  reasonable  notice so as not to disrupt  any part of  Seller's
operations,   including,   without  limitation  the  source  of  Seller's  fuel,
management, and/or processes by which fuel is mined, handled, processed, hauled,
sampled, analyzed and loaded hereunder.

     Buyer shall maintain,  and cause its representatives to maintain,  all data
and information  discovered pursuant to this Section in confidence except to the
extent that disclosure thereof may be required by law.


SECTION 10. NOTICES

     Section  10.1 Form and Place of Notice.  Any official  notice,  request for
approval or other document required to be given under this Agreement shall be in
writing,  unless  otherwise  provided  herein,  and shall be deemed to have been
sufficiently given if delivered in person,  transmitted by telegraph,  telex, or
telecopier,  or  dispatched  in the United  States mail,  postage  prepaid,  for
mailing by first class,  certified, or registered mail, return receipt requested
and addressed as follows:

         If to Seller:
                  President
                  SIGCORP Fuels, Inc.
                  20 N.W. Fourth Street
                  Evansville, IN 47741

         If to Buyer:

                  President
                  Southern Indiana Gas and Electric Company
                  20 N.W. Fourth Street
                  Evansville, Indiana 47741

     Section  10.2  Change of Person or  Address.  Either  party may  change the
person or address  specified above upon giving notice to the other party of such
change.


SECTION 11. RIGHTS TO USE

     Buyer  shall have the  unqualified  right to use any of the fuel  purchased
under this  Agreement in any of its generating  stations  including the transfer
from one plant to another, all in its absolute  discretion,  provided that Buyer
agrees to reimburse Seller for any additional  transportation  or handling costs
incurred by Seller to effect such deliveries.


SECTION 12. LIABILITY

     Section  12.1  Indemnity - Seller  agrees to  indemnify  and save  harmless
Buyer,  its  officers,   directors,   employees  and  representatives  from  any
responsibility and liability for any and all claims,  demands, losses (including
reasonable  attorney's fees) arising out of or resulting from any failure of the
fuel  sold  hereunder  to  comply  with any  laws,  regulations  or  ordinances,
including,  without limitation,  any laws, regulations or ordinances relating to
air quality or emissions standards,  or which otherwise arise out of the acts or
omissions of Seller in the performance of this Agreement.  Seller further agrees
to indemnify,  defend and hold Buyer and its agents and employees  harmless from
any claims, demands or liability of any kind or nature for injuries or damage to
any person or property  arising out of or resulting from the  performance of the
Agreement.

     Section  12.2  Consequential  Damages - In no event shall  either  party be
liable  to the  other  or to any  third  party  for  any  indirect,  special  or
consequential  damages  including,  without  limitation,  those based on loss of
revenue,  profit or  business  opportunity,  whether or not either  party had or
should have had any knowledge,  actual or constructive,  that such damages might
be incurred.


SECTION 13. STATUS AND RELIANCE OF BUYER

         Seller recognizes that Buyer is a public utility which has power sales
contracts with other utilities and provides electrical service to customers
within the State of Indiana. Throughout this Agreement, Buyer, its customers and
such other utilities will be relying on the continued operation of the
generating station as a source of electricity for their various needs. Seller
further acknowledges that an adequate and continuous fuel supply to the
generating station, at prices reasonably in conformity to then prevailing market
prices for fuel comparable in quality to that sold hereunder, are essential to
Buyer's ability to provide electricity and services at affordable rates. By
signing this Agreement Buyer is placing reliance upon Seller to furnish a
significant portion of its fuel supply at competitive prices. Seller agrees, in
meeting its obligations hereunder, to give due consideration to the status and
reliance of Buyer and Buyer's customers.


SECTION 14. TERMINATION FOR DEFAULT

     In the event of the  failure of either  party to comply  with any  material
obligation  of this  Agreement,  either  party shall have the right to terminate
this Agreement at any time by giving to the other 120 days' notice in writing of
its intention to do so, specifying the default  complained of. At the expiration
of said 120 days, unless the party in default shall have made good such default,
the party not in default shall have the right at its election to terminate  this
Agreement forthwith.

     This right shall be in addition to the rights  provided to either  party in
other portions of this Agreement and by law, or in equity.


SECTION 15. CONSTRUCTION OF AGREEMENT

     Section 15.1  Applicable Law. This Agreement shall be deemed to be executed
in the State of Indiana and shall be interpreted  and enforced  according to the
laws of the State of Indiana.

     Only the courts in the State of Indiana shall have  jurisdiction  over this
Agreement and any controversies arising out of the Agreement.  Any controversies
arising out of this Agreement shall be submitted only to the courts of the State
of Indiana.

     Seller  hereby  submits to the  jurisdiction  of the courts in the State of
Indiana for the purposes of interpretation and enforcement of this Agreement.

     Section 15.2 Headings.  The paragraph  headings appearing in this Agreement
are for convenience only and shall not affect the meaning or  interpretation  of
the Agreement.

     Section  15.3  Waiver.  The  failure  of  either  party to insist on strict
performance  of any  provision of this  Agreement,  or to take  advantage of any
rights hereunder, shall not be construed as a waiver of such provision or right.

     Section 15.4 Remedies  Cumulative.  Remedies  provided under this Agreement
shall be cumulative and in addition to other remedies provided by law.

     Section 15.5  Severability.  If any  provision  of this  Agreement is found
contrary to law or unenforceable  by any court of law, the remaining  provisions
shall be severable and enforceable in accordance  with their terms,  unless such
unlawful or unenforceable provision is material to the transactions contemplated
hereby,  in which case the parties  shall  negotiate  in good faith a substitute
provision.

     Section 15.6 Binding  Effect.  This  Agreement  shall bind and inure to the
benefit of the parties and their successors and assigns.

     Section 15.7  Assignment.  Neither  party may assign this  Agreement or any
rights or obligations  hereunder  without the prior written consent of the other
party,  which consent shall not be  unreasonably  withheld or denied;  provided,
however,  that Buyer shall have the right,  without consent of Seller, to assign
all or any part of this Agreement to any company, controlling, controlled by, or
under common control with Buyer.

     Section  15.8  Entire  Agreement.   This  instrument  contains  the  entire
Agreement between the parties as to fuel to be delivered and sold hereunder, and
there are no  representations,  understanding  or  agreements,  oral or written,
which are not included herein.

     Section  15.9  Amendments.   Except  as  otherwise  provided  herein,  this
Agreement  may not be amended,  supplemented  or  otherwise  modified  except by
written instrument signed by parties hereto.


SECTION 16. INDEPENDENT CONTRACTOR

     Seller shall be an  independent  contractor  with respect to the work to be
performed hereunder. Neither Seller nor its subcontractors, nor the employees of
either, shall be deemed to be the servants, employees or agents of Buyer.


SECTION 17. PERMITS AND LICENSES

     Both parties shall, at their own expense,  obtain any necessary permits and
licenses in connection  with the  performance  of their work,  unless  otherwise
specified in this Agreement, and shall be responsible for conducting the work in
accordance with the provisions of such permits and licenses.


SECTION 18. CONFIDENTIALITY

     Subject to Buyer's  obligation  of  disclosure to AMAX Coal Company under a
pre-existing  agreement,  Seller and Buyer  agree to retain in  confidence  this
Agreement  and  any  information   obtained  as  a  result  of  negotiation  and
performance  of this  Agreement  which either party  identifies  to the other as
being  proprietary in nature.  It is agreed and understood,  however,  that such
information may be disclosed when requested by a court or government  agency, to
consultants  or  subcontractors  of either of the  parties  subject  to the same
conditions of  confidentiality  as provided herein, or as otherwise  provided by
law, regulation, or administrative requirement.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed as of the date first above written.

                                       SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                                   By: /s/ Ronald Jochum
                                       -----------------------------------------
                                       Ronald Jochum

                                   Its: Vice President, Power Supply for SIGECO
ATTEST:

/s/ Susan Fester
-------------------
Susan Fester
                                       SIGCORP FUELS, INC.


                                   By: /s/ Kent Stump
                                       -----------------------------------------
                                       Kent Stump

                                   Its: President


ATTEST:

/s/ Kimberly Snow
-------------------
Kimberly Snow


<PAGE>



                                    EXHIBIT A
                               SIGCORP FUELS, INC.
                               COAL SPECIFICATIONS


                              MONTHLY                     PER SHIPMENT
                             GUARANTEED                 REJECTION LIMITS
                           "As Received"                 "As Received"
--------------------------------------------------------------------------------
BTU/LB                      11,000 Min.                   10,700 Min.

SO2LBS/mmBTU                  7.5 Max                       8.0 Max.

MOISTURE %                    15 Max.                       16 Max.

ASH %                         13 Max.                       14 Max.

ASH SOFTENING TEMP           2,100 Min.                    2,100 Min.
(Reducing) H=1/2W)

GRINDABILITY                  53 Min.                      51.5 Min.

SIZE                        2" x 0 Max.                   2" x 0 Max.

FINES (1/4" x 0")               50%                           55%

CHLORINE                     .05 Max %                     0.1 Max %



A  shipment  shall  consist  of all of the fuel  delivered  to Buyer  under this
agreement in a given day. Unless otherwise mutually agreed, a shipment shall not
include more than 15,000 tons.