UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549


 FORM 10-Q

(Mark One)
(X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1996

                                        OR

( )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from               to             

     Commission        Registrant, State of Incorporation,     I.R.S. Employer
     File Number         Address, and Telephone Number      Identification No.

       1-11377                   CINERGY CORP.                  31-1385023
                          (A Delaware Corporation)
                           139 East Fourth Street
                           Cincinnati, Ohio 45202
                                (513) 381-2000

       1-1232       THE CINCINNATI GAS & ELECTRIC COMPANY       31-0240030
                           (An Ohio Corporation)
                          139 East Fourth Street
                          Cincinnati, Ohio 45202
                              (513) 381-2000

       1-3543                  PSI ENERGY, INC.                 35-0594457
                          (An Indiana Corporation)
                            1000 East Main Street
                         Plainfield, Indiana 46168
                              (317) 839-9611

       2-7793      THE UNION LIGHT, HEAT AND POWER COMPANY      31-0473080
                         (A Kentucky Corporation)
                         139 East Fourth Street
                         Cincinnati, Ohio 45202
                            (513) 381-2000

Indicate by check mark whether the registrants (1) have filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrants were required to file such reports), and (2) have been subject to 
such filing requirements for the past 90 days.  
Yes  X   No    

This combined Form 10-Q is separately filed by Cinergy Corp., The Cincinnati 
Gas & Electric Company, PSI Energy, Inc., and The Union Light, Heat and Power 
Company.  Information contained herein relating to any individual registrant 
is filed by such registrant on its own behalf.  Each registrant makes no 
representation as to information relating to the other registrants.

The Union Light, Heat and Power Company meets the conditions set forth in 
General
Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing its company 
specific information with the reduced disclosure format.

As of October 31, 1996, shares of Common Stock outstanding for each registrant 
were as listed: 

               Company                                               Shares   
Cinergy Corp., par value $.01 per share                            157,679,129
The Cincinnati Gas & Electric Company, par value $8.50 per share    89,663,086
PSI Energy, Inc., without par value, stated value $.01 per share    53,913,701 
The Union Light, Heat and Power Company, par value $15.00 per share    585,333 
<PAGE>
                                TABLE OF CONTENTS


 Item                                                               Page
Number                                                             Number

       Glossary of Terms . . . . . . . . . . . . . . . . . . .        

                         PART I.  FINANCIAL INFORMATION

  1    Financial Statements
       Cinergy Corp.
         Consolidated Balance Sheets . . . . . . . . . . . . .        
         Consolidated Statements of Income . . . . . . . . . .        
         Consolidated Statements of Changes in Common
           Stock Equity. . . . . . . . . . . . . . . . . . . .        
         Consolidated Statements of Cash Flows . . . . . . . .        
         Results of Operations . . . . . . . . . . . . . . . .        
       The Cincinnati Gas & Electric Company
         Consolidated Balance Sheets . . . . . . . . . . . . .        
         Consolidated Statements of Income . . . . . . . . . .        
         Consolidated Statements of Cash Flows . . . . . . . .        
         Results of Operations . . . . . . . . . . . . . . . .        
       PSI Energy, Inc.
         Consolidated Balance Sheets . . . . . . . . . . . . .        
         Consolidated Statements of Income . . . . . . . . . .        
         Consolidated Statements of Cash Flows . . . . . . . .        
         Results of Operations . . . . . . . . . . . . . . . .        
       The Union Light, Heat and Power Company
         Balance Sheets. . . . . . . . . . . . . . . . . . . .        
         Statements of Income. . . . . . . . . . . . . . . . .        
         Statements of Cash Flows. . . . . . . . . . . . . . .        
         Results of Operations . . . . . . . . . . . . . . . .        
       Notes to Financial Statements . . . . . . . . . . . . .        
  2    Management's Discussion and Analysis of Financial
         Condition and Results of Operations . . . . . . . . .        

PART II.  OTHER INFORMATION

  1    Legal Proceedings . . . . . . . . . . . . . . . . . . .        
  4    Submission of Matters to a Vote of Security Holders . .        
  5    Other Information . . . . . . . . . . . . . . . . . . .        
  6    Exhibits and Reports on Form 8-K. . . . . . . . . . . .        
       Signatures. . . . . . . . . . . . . . . . . . . . . . .        
<PAGE>
GLOSSARY OF TERMS

The following abbreviations or acronyms used in the text of this combined Form 
10-Q are defined below:

    TERM                                   DEFINITION_________________________

1995 Form         Combined 1995 Annual Report on Form 10-K filed separately by 
  10-K              Cinergy, as amended, CG&E, PSI, and ULH&P

AEP               American Electric Power Company, Inc.

Articles          Amended Articles of Incorporation

Avon Energy       Avon Energy Partners Holdings, an Unlimited Liability 
                    Company and its wholly-owned subsidiary Avon Energy
                    Partners PLC, a Limited Liability Company

Bankruptcy Court  United States Bankruptcy Court for the Southern District of
                    Indiana

Bruwabel          Beheer-En Belegginsmaatschappij Bruwabel B.V., a subsidiary 
                    of Power International

CAC               Citizens Action Coalition of Indiana, Inc.

CG&E              The Cincinnati Gas & Electric Company (a subsidiary of 
                    Cinergy)

Cinergy or        Cinergy Corp.
  Company

Cinergy U.K.      Formerly M.E. Holdings, Inc., (a subsidiary of Investments) 
                    which holds Cinergy's 50% investment in Avon Energy

Clean Coal        A joint arrangement by PSI and Destec Energy, Inc. for a 
  Project           262-mw clean coal power generating facility located at 
                    Wabash River Generating Station, which was placed in 
                    service in November 1995

CWIP              Construction work in progress

D&P               Duff & Phelps Credit Rating Co.

DSM               Demand-side management

Eagle             Eagle Coal Company

Exxon             Exxon Coal and Minerals Company

FASB              Financial Accounting Standards Board

February 1995     An IURC order issued in February 1995
  Order 

FERC              Federal Energy Regulatory Commission

FERC Order 888    FERC order which promotes wholesale competition through 
                    open access non-discriminatory transmission services by 
                    public utilities and recovery of stranded costs by public
                    utilities and transmitting utilities

FERC Order 889    FERC order which provides for open access same-time
                    information system 
<PAGE>
GLOSSARY OF TERMS (Continued)

    TERM                                   DEFINITION_________________________

Fitch             Fitch Investors Service, Inc.

Gibson            Gibson Generating Station

GPU               General Public Utilities Corporation

IBEW              International Brotherhood of Electrical Workers

Investments       Cinergy Investments, Inc. (a subsidiary of Cinergy)

IURC              Indiana Utility Regulatory Commission

IUU               Independent Utilities Union

KO Transmission   KO Transmission Company, a subsidiary of CG&E

KPSC              Kentucky Public Service Commission

kwh               Kilowatt-hour

May 1992 Order    A PUCO order issued in May 1992

Mcf               Thousand cubic feet 

Mega-NOPR         FERC's notice of proposed rulemaking which resulted in FERC 
                    Order 888 and 889

Merger Costs      Merger transaction costs and costs to achieve merger savings

Merger Order      The FERC's order approving the merger of CG&E and Resources 
                    to form Cinergy

Miami Fort        Miami Fort Generating Station

Midlands          Midlands Electricity plc

Money Pool        Cinergy system companies with surplus short-term funds, 
                    whether from internal or external sources, provide short-
                    term loans to other system companies at rates that reflect
                    (1) the actual costs of the external borrowing and/or (2) 
                    the costs of the internal funds which are set at the 30-
                    day Federal Reserve "AA" industrial commercial paper 
                    composite rate.

Moody's           Moody's Investors Service

mw                Megawatt

NOPR              A FERC Notice of Proposed Rulemaking

Order 636         FERC order regarding gas purchases and transportation

Power 
  International   Power International, Inc., a subsidiary of Investments

PSI               PSI Energy, Inc. (a subsidiary of Cinergy)

PSI Recycling     PSI Recycling, Inc. (a subsidiary of Investments)

PUCO              Public Utilities Commission of Ohio
<PAGE>
GLOSSARY OF TERMS (Continued)

    TERM                                   DEFINITION_________________________

PUHCA             Public Utility Holding Company Act of 1935

RUS               Rural Utilities Service, previously called the Rural 
                    Electrification Administration

S&P               Standard & Poor's 

SEC               Securities and Exchange Commission

September 1996    An IURC order issued in September 1996
  Order

Statement 121     Statement of Financial Accounting Standards No. 121,
                    "Accounting for the Impairment of Long-Lived Assets and 
                    for Long-Lived Assets to be Disposed Of", issued in March 
                    1995 by the FASB, is a new accounting standard requiring 
                    impairment losses on long-lived assets to be recognized 
                    when an asset's book value exceeds its expected future 
                    cash flows

UCC               The Indiana Office of the Utility Consumer Counselor

ULH&P             The Union Light, Heat and Power Company (a wholly-owned 
                    subsidiary of CG&E)

USWA              United Steelworkers of America

Woodsdale         Woodsdale Generating Station

WVPA              Wabash Valley Power Association, Inc.

Zimmer            William H. Zimmer Generating Station


<PAGE>









CINERGY CORP.
AND SUBSIDIARY COMPANIES               

<PAGE>

CINERGY CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)

ASSETS
                                              September 30        December 31
                                                  1996               1995
                                                   (dollars in thousands)

Utility Plant - Original Cost
  In service
    Electric                                   $8 741 872          $8 617 695
    Gas                                           699 566             680 339 
    Common                                        185 339             184 694 
                                                9 626 777           9 482 728 
  Accumulated depreciation                      3 537 840           3 367 432 
                                                6 088 937           6 115 296 

  Construction work in progress                   164 553             135 852 
        Total utility plant                     6 253 490           6 251 148 

Current Assets
  Cash and temporary cash investments              28 622              35 052 
  Restricted deposits                               1 720               2 336 
  Accounts receivable less accumulated 
    provision for doubtful accounts of 
    $12,415 at September 30, 1996, and 
    $10,360 at December 31, 1995                  105 568             371 150 
  Materials, supplies, and fuel - at average
    cost
      Fuel for use in electric production          81 654             122 409 
      Gas stored for current use                   37 215              21 493 
      Other materials and supplies                 86 584              85 076 
  Property taxes applicable to subsequent year     29 206             116 822 
  Prepayments and other                            26 299              32 347 
                                                  396 868             786 685 

Other Assets
  Regulatory assets
    Amounts due from customers - income taxes     380 519             423 493 
    Post-in-service carrying costs and 
      deferred operating expenses                 188 370             187 190 
    Phase-in deferred return and depreciation      96 469             100 388 
    Coal contract buyout costs                    137 686                -   
    Deferred DSM costs                            134 832             129 400 
    Deferred merger costs                          96 339              56 824 
    Unamortized costs of reacquiring debt          71 921              73 904 
    Other                                          95 393              74 911 
  Investment in Avon Energy                       512 747                -   
  Other                                           233 927             136 121 
                                                1 948 203           1 182 231 

                                               $8 598 561          $8 220 064 

The accompanying notes as they relate to Cinergy Corp. are an integral part of 
these consolidated financial statements.
<PAGE>
CINERGY CORP.

CAPITALIZATION AND LIABILITIES

                                              September 30        December 31
                                                  1996                1995
                                                   (dollars in thousands)

Common Stock Equity 
  Common stock - $.01 par value; authorized
    shares - 600,000,000; outstanding shares
    - 157,679,129 at September 30, 1996, and 
    157,670,141 at December 31, 1995           $    1 577          $    1 577 
  Paid-in capital                               1 592 393           1 597 050 
  Retained earnings                               993 039             950 216 
  Cumulative foreign currency translation 
    adjustment                                       (584)               -___
      Total common stock equity                 2 586 425           2 548 843 

Cumulative Preferred Stock of Subsidiaries
  Not subject to mandatory redemption             194 235             227 897 
  Subject to mandatory redemption                    -                160 000 

Long-term Debt                                  2 383 827           2 530 766 
      Total capitalization                      5 164 487           5 467 506 

Current Liabilities
  Long-term debt due within one year              140 400             201 900 
  Notes payable                                   817 454             165 800 
  Accounts payable                                262 180             268 139 
  Litigation settlement                            80 000              80 000 
  Accrued taxes                                   227 728             317 185 
  Accrued interest                                 46 269              55 995 
  Other                                            60 082              57 202 
                                                1 634 113           1 146 221 

Other Liabilities
  Deferred income taxes                         1 120 145           1 120 900 
  Unamortized investment tax credits              177 959             185 726 
  Accrued pension and other postretirement
    benefit costs                                 205 112             171 771 
  Other                                           296 745             127 940 
                                                1 799 961           1 606 337 

                                               $8 598 561          $8 220 064 
<PAGE>

<TABLE>
<CAPTION>
CINERGY CORP.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

                                            Quarter Ended              Year to 
Date              Twelve Months Ended
                                            September 30               
September 30                  September 30
                                          1996        1995           1996         
1995            1996         1995 
                                                          (in thousands, 
except per share amounts)
<S>                                  <C>          <C>            <C>          
<C>

Operating Revenues
  Electric                            $  724 917   $  731 903     $2 060 471   
$1 973 393      $2 699 657   $2 550 913
  Gas                                     40 787       33 591        306 062      
265 777         451 137      376 978 
                                         765 704      765 494      2 366 533    
2 239 170       3 150 794    2 927 891 

Operating Expenses
  Fuel used in electric production       184 093      190 445        539 350      
545 548         710 556      718 907 
  Gas purchased                           17 133       13 155        150 313      
130 235         226 328      189 469 
  Purchased and exchanged power           37 020       15 685         95 443       
32 992         110 083       39 346 
  Other operation                        129 009      131 453        423 769      
371 983         572 376      550 039 
  Maintenance                             45 903       39 851        137 709      
127 834         192 055      184 931 
  Depreciation                            70 811       68 680        211 603      
210 351         281 011      286 304 
  Amortization of phase-in deferrals       3 399        3 409         10 198        
5 682          13 607        5 682 
  Post-in-service deferred operating 
    expenses - net                          (930)         (71)        (2 637)      
(2 140)         (2 997)      (3 500)
  Income taxes                            65 456       69 952        172 459      
173 170         220 718      191 224 
  Taxes other than income taxes           63 549       64 380        196 095      
192 066         259 562      251 241 
                                         615 443      596 939      1 934 302    
1 787 721       2 583 299    2 413 643 

Operating Income                         150 261      168 555        432 231      
451 449         567 495      514 248 

Other Income and Expenses - Net
  Allowance for equity funds used 
    during construction                      358       (1 159)         1 206          
726           2 444          153 
  Post-in-service carrying costs             391          602          1 228        
3 183           1 231        6 205 
  Phase-in deferred return                 2 093        2 135          6 279        
6 403           8 413        8 349 
  Income taxes                             2 677        2 366          7 963        
5 950           9 371       10 425 
  Other - net                              4 117          707         (6 815)      
(2 224)         (7 642)     (21 306)
                                           9 636        4 651          9 861       
14 038          13 817        3 826 

Income Before Interest and Other 
  Charges                                159 897      173 206        442 092      
465 487         581 312      518 074 

Interest and Other Charges
  Interest on long-term debt              46 522       54 154        143 678      
160 654         196 935      215 645 
  Other interest                          10 305        5 392         18 497       
16 520          22 803       22 989 
  Allowance for borrowed funds used 
    during construction                   (1 455)      (2 027)        (4 235)      
(6 324)         (5 976)      (9 191)
  Preferred dividend requirements of
    subsidiaries                           6 495        6 770         19 941       
24 084          26 710       32 742 
                                          61 867       64 289        177 881      
194 934         240 472      262 185 

Net Income                            $   98 030   $  108 917     $  264 211   
$  270 553      $  340 840   $  255 889 

Costs of reacquisition of preferred
  stock of subsidiary (Note 6)           (18 175)        -           (18 175)        
-            (18 175)        -___

Net Income Applicable to Common Stock $   79 855   $  108 917     $  246 036   
$  270 553      $  322 665   $  255 889 

Average Common Shares Outstanding        157 679      156 945        157 678      
156 324         157 633      154 797 

Earnings Per Common Share
Net Income                                $  .63         $.69         $ 1.68        
$1.73          $ 2.17        $1.62 

Costs of reacquisition of preferred
  stock of subsidiary (Note 6)              (.12)         -             (.12)         
-              (.12)         -__

Net Income Applicable to Common Stock     $  .51         $.69         $ 1.56        
$1.73          $ 2.05        $1.62 

Dividends Declared Per Common Share       $  .43         $.43         $ 1.29        
$1.29          $ 1.72        $1.65
<FN>
The accompanying notes as they relate to Cinergy Corp. are an integral part of 
these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

CINERGY CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK EQUITY
(unaudited)

                                                                                     
Cumulative
                                                                                       
Foreign
                                                                                      
Currency
                                             Common      Paid-in       
Retained      Translation       Total Common
                                              Stock      Capital       
Earnings       Adjustment       Stock Equity
                                                                  (dollars in 
thousands)
<S>                                         <C>       <C>             <C>               
<C>             <C>
Quarter Ended September 30, 1996
Balance July 1, 1996                         $1 577    $1 594 920      $ 981 
003         $(567)          $2 576 933
Net income                                                                98 
030                             98 030 
Dividends on common stock (see page 9 for
  per share amounts)                                                     (67 
802)                           (67 802)
Translation adjustments                                                                    
(17)                 (17)
Costs of reacquisition of preferred stock
  of subsidiary (Note 6)                                                 (18 
175)                           (18 175)
Other                                        ______        (2 527)           
(17)        _____               (2 544)
Balance September 30, 1996                   $1 577    $1 592 393      $ 993 
039         $(584)          $2 586 425 

Quarter Ended September 30, 1995
Balance July 1, 1995                         $1 566    $1 570 873      $ 900 
094         $               $2 472 533 
Net income                                                               108 
917                            108 917 
Issuance of 572,455 shares of common 
  stock - net                                     6        14 597                                            
14 603 
Common stock issuance expenses                                 (2)                                               
(2)
Dividends on common stock (see page 9 for
  per share amounts)                                                     (67 
359)                           (67 359)
Other                                                           2      
_________         _____                    2 
Balance September 30, 1995                   $1 572    $1 585 470      $ 941 
652         $               $2 528 694 

Nine Months Ended September 30, 1996
Balance January 1, 1996                      $1 577    $1 597 050      $ 950 
216         $               $2 548 843 
Net income                                                               264 
211                            264 211 
Issuance of 8,988 shares of common 
  stock - net                                                 311                                               
311 
Dividends on common stock (see page 9 for
  per share amounts)                                                    (203 
402)                          (203 402)
Translation adjustments                                                                   
(584)                (584)
Costs of reacquisition of preferred stock
  of subsidiary (Note 6)                                                 (18 
175)                           (18 175)
Other                                        ______        (4 968)           
189         _____               (4 779)
Balance September 30, 1996                   $1 577    $1 592 393      $ 993 
039         $(584)          $2 586 425 

Nine Months Ended September 30, 1995

Balance January 1, 1995                      $1 552    $1 535 658      $ 877 
061         $               $2 414 271 
Net income                                                               270 
553                            270 553 
Issuance of 1,941,748 shares of common 
  stock - net                                    20        48 734                                            
48 754 
Common stock issuance expenses                               (191)                                             
(191)
Dividends on common stock (see page 9 for 
  per share amounts)                                                    (201 
251)                          (201 251)
Other                                        ______         1 269         (4 
711)        _____               (3 442)
Balance September 30, 1995                   $1 572    $1 585 470      $ 941 
652         $               $2 528 694 

Twelve Months Ended September 30, 1996
Balance October 1, 1995                      $1 572    $1 585 470      $ 941 
652         $               $2 528 694 
Net income                                                               340 
840                            340 840 
Issuance of 539,343 shares of common 
  stock - net                                     5        11 920                                            
11 925 
Common stock issuance expenses                                (38)                                              
(38)
Dividends on common stock (see page 9 for
  per share amounts)                                                    (271 
002)                          (271 002)
Translation adjustments                                                                   
(584)                (584)
Costs of reacquisition of preferred stock
  of subsidiary (Note 6)                                                 (18 
175)                           (18 175)
Other                                        ______        (4 959)          
(276)        _____               (5 235)
Balance September 30, 1996                   $1 577    $1 592 393      $ 993 
039         $(584)          $2 586 425 

Twelve Months Ended September 30, 1995
Balance October 1, 1994                      $1 473    $1 359 477      $ 945 
679         $               $2 306 629 
Net income                                                               255 
889                            255 889 
Issuance of 9,705,354 shares of common 
  stock - net                                    99       230 000                                           
230 099 
Common stock issuance expenses                             (5 298)                                           
(5 298)
Dividends on common stock (see page 9 for
  per share amounts)                                                    (255 
637)                          (255 637)
Other                                                       1 291         (4 
279)        _____               (2 988)
Balance September 30, 1995                   $1 572    $1 585 470      $ 941 
652         $               $2 528 694 
<FN>
The accompanying notes as they relate to Cinergy Corp. are an integral part of 
these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

CINERGY CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

                                               Year to Date          Twelve 
Months Ended
                                               September 30             
September 30
                                             1996        1995         1996        
1995
                                                          (in thousands)
<S>                                      <C>          <C>         <C>         
<C>
Operating Activities
  Net income                              $ 264 211    $ 270 553   $ 340 840   
$ 255 889
  Items providing (using) cash currently
    Depreciation                            211 603      210 351     281 011     
286 304 
    Deferred income taxes and investment
      tax credits - net                      34 061       27 836      34 636      
28 590 
    Allowance for equity funds used 
      during construction                    (1 206)        (726)     (2 444)       
(153)
    Regulatory assets - net                 (27 444)         (55)    (26 363)    
(13 294)
    Changes in current assets and 
      current liabilities
        Restricted deposits                    (357)           8      (1 400)      
8 633 
        Accounts receivable, net of
          reserves on receivables sold      227 237       32 034     123 562      
(1 880)
        Materials, supplies, and fuel        23 525       26 217      48 522      
22 677 
        Accounts payable                     (5 959)     (93 413)     89 126     
(28 370)
        Accrued taxes and interest           (8 734)      28 223      19 678      
56 040 
    Other items - net                       (43 003)     (15 531)    (15 336)       
(976)
        Net cash provided by (used in)
          operating activities              673 934      485 497     891 832     
613 460 

Financing Activities
  Issuance of common stock                      311       48 563      11 887     
224 801 
  Issuance of long-term debt                   -         344 280        -        
344 280 
  Funds on deposit from issuance of 
    long-term debt                              973      (75 316)     86 276     
(68 630)
  Retirement of preferred stock of 
    subsidiaries                           (209 559)     (93 458)   (209 567)    
(93 474)
  Redemption of long-term debt             (207 583)    (298 553)   (307 863)   
(298 988)
  Change in short-term debt                 651 654       55 100     533 454     
(41 514)
  Dividends on common stock                (203 402)    (201 251)   (271 002)   
(255 637)
        Net cash provided by (used in)
          financing activities               32 394     (220 635)   (156 815)   
(189 162)

Investing Activities
  Construction expenditures (less 
    allowance for equity funds used 
    during construction)                   (203 977)    (231 943)   (296 939)   
(386 233)
  Deferred DSM costs - net                   (5 432)     (17 356)    (13 349)    
(34 697)
  Investment in Avon Energy                (503 349)        -       (503 349)       
- 
  Equity investment in Argentine 
    utility                                    -            -         19 799         
(32)
        Net cash provided by (used in)
          investing activities             (712 758)    (249 299)   (793 838)   
(420 962)

Net increase (decrease) in cash and
  temporary cash investments                 (6 430)      15 563     (58 821)      
3 336 

Cash and temporary cash investments at
  beginning of period                        35 052       71 880      87 443      
84 107 

Cash and temporary cash investments at
  end of period                           $  28 622    $  87 443   $  28 622   
$  87 443 
<FN>
The accompanying notes as they relate to Cinergy Corp. are an integral part of 
these consolidated financial statements.
</TABLE>
<PAGE>


CINERGY CORP.

Below is information concerning the consolidated results of operations for 
Cinergy for the quarter, nine months, and twelve months ended September 30, 
1996.  For information concerning the results of operations for each of the 
other registrants for the same quarter and nine months ended, see the 
discussion under the heading RESULTS OF OPERATIONS following the financial 
statements of each company.

RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1996

Kwh Sales

Kwh sales increased 2.2% for the quarter ended September 30, 1996, from the 
comparable period of last year primarily reflecting increased activity in 
Cinergy's power marketing operations which led to higher non-firm power sales 
for resale.  Also, increased industrial sales primarily reflected growth in 
the primary metals sector.  These increases were partially offset by a return 
to more normal weather for the third quarter of 1996, resulting in decreased 
residential and commercial sales.

Mcf Sales and Transportation

Mcf gas sales and transportation volumes for the third quarter of 1996 
increased 13.2% as compared to the same period in 1995.  Increased residential 
and commercial gas sales reflected, in part, increases in the average number 
of customers.  Higher gas transportation volumes reflected the continuing 
trend of industrial customers purchasing gas directly from suppliers, using 
transportation services provided by CG&E.  The increase in transportation 
volumes mainly reflects demand for gas transportation services in the primary 
metals sector.

Operating Revenues

Electric Operating Revenues

Electric operating revenues for the quarter ended September 30, 1996, 
decreased $7 million (1.0%) as compared to the same period last year primarily 
as a result of the decreased residential and commercial kwh sales previously 
discussed.  This decrease was almost wholly offset by increased activity in 
Cinergy's power marketing operations which led to higher non-firm power sales 
for resale as previously discussed.

An analysis of electric operating revenues is shown below:

                                                              Quarter
                                                         Ended September 30
                                                           (in millions)	

Electric operating revenues - September 30, 1995               $732
Increase (Decrease) due to change in:
  Price per kwh
    Sales for resale
      Firm power obligations                                     (3)
      Non-firm power transactions                                (1)
  Total change in price per kwh                                  (4)

  Kwh sales
    Retail                                                      (19)
    Sales for resale
      Firm power obligations                                     (2)
      Non-firm power transactions                                17
  Total change in kwh sales                                      (4)

  Other                                                           1

Electric operating revenues - September 30, 1996               $725

Gas Operating Revenues

Gas operating revenues increased $7 million (21.4%) in the third quarter of 
1996, when compared to the same period last year.  This increase was primarily 
a result of the operation of fuel adjustment clauses reflecting a higher 
average cost of gas purchased and the previously discussed changes in gas 
sales and transportation volumes.

Operating Expenses  

Gas Purchased

Gas purchased for the quarter ended September 30, 1996, increased $4 million 
(30.2%) when compared to the same period last year reflecting a higher average 
cost per Mcf of gas purchased.

Purchased and Exchanged Power

Purchased and exchanged power increased $21 million for the quarter ended 
September 30, 1996, when compared to the same period last year, primarily 
reflecting increased purchases of non-firm power for resale to others as a 
result of increased activity in Cinergy's power marketing operations.

Maintenance

The $6 million (15.2%) increase in maintenance expenses for the third quarter 
of 1996 as compared to the same period of 1995 is primarily due to increased 
maintenance on CG&E's electric production and transmission facilities.

Other Income and Expenses - Net

Other - net

Other - net increased $3 million for the three months ended September 30, 
1996, from the same period of 1995 primarily due to Cinergy's equity in 
earnings of Avon Energy.  The effects of expenses associated with CG&E's and 
ULH&P's sales of accounts receivables in 1996 and interest received in 1995 
associated with a refund of an overpayment of Federal income taxes related to 
prior years partially offset this increase.

Interest and Other Charges

Interest on Long-term Debt

Interest charges on long-term debt decreased $8 million (14.1%) for the three 
months ended September 30, 1996, from the same period of 1995 primarily due to 
the redemption of $161.5 million of long-term debt by CG&E and ULH&P during 
the period from January 1996 through May 1996 and the redemption of $110 
million by PSI during the period from August 1995 through July 1996.  

Other Interest

Other interest increased $5 million (91.1%) for the third quarter of 1996, as 
compared to the same period last year, primarily reflecting increased interest 
expense on short-term borrowings used to fund Cinergy's investment in Avon 
Energy.  

Costs of Reacquisition of Preferred Stock of Subsidiary

Costs of reacquisition of preferred stock of subsidiary represents the 
difference between the par value of preferred stock of CG&E tendered pursuant 
to Cinergy's tender offer in September of 1996 and the purchase price paid 
(including tender fees paid to dealer managers) by Cinergy for these shares. 
(See Note 6 of the "Notes to Financial Statements" in "Part I.  Financial 
Information.")

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996

Kwh Sales

Kwh sales increased 8.4% for the nine months ended September 30, 1996, from 
the comparable period of last year primarily reflecting increased activity in 
Cinergy's power marketing operations which led to higher non-firm power sales 
for resale.  The higher kwh sales levels reflected increased sales to all 
retail customer classes.  The increase to retail sales reflects a higher 
average number of residential and commercial customers, while industrial sales 
increased primarily due to growth in the primary metals sector.  These 
increases were partially offset by the return to more normal weather in the 
third quarter of 1996.

Mcf Sales and Transportation

Mcf gas sales and transportation volumes for the first nine months of 1996 
increased 13.9% as compared to the same period in 1995.  Colder weather during 
the winter heating season, cooler than normal weather early in the second 
quarter of 1996, and increases in the average number of customers led to 
increased gas sales to residential and commercial customers.  Industrial sales 
decreased as customers continued to purchase gas directly from suppliers, 
using transportation services provided by CG&E.  The increase in 
transportation volumes mainly reflects demand for gas transportation services 
in the primary metals sector.
 .
Operating Revenues

Electric Operating Revenues

Compared to the same period last year, electric operating revenues for the 
nine months ended September 30, 1996, increased $87 million (4.4%) reflecting 
the increased kwh sales, as previously discussed.  In addition, PSI's 4.3% 
retail rate increase approved in the February 1995 Order and a 1.9% increase 
for carrying costs on CWIP property which was approved by the IURC in March 
1995 contributed to the increase.  The return of approximately $13 million to 
PSI's customers in accordance with the February 1995 Order, which requires all 
retail operating income above a certain rate of return to be refunded to 
customers, slightly offset these increases.

An analysis of electric operating revenues is shown below:

                                                     Nine Months
                                                  Ended September 30
                                                    (in millions)

Electric operating revenues - September 30, 1995        $1 973
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                                 (14)
    Sales for resale 
      Firm power obligations                                (5)
      Non-firm power transactions                            3
  Total change in price per kwh                            (16)

  Kwh sales
    Retail                                                  51
    Sales for resale
      Firm power obligations                                 6
      Non-firm power transactions                           46
  Total change in kwh sales                                103
 
Electric operating revenues - September 30, 1996        $2 060

Gas Operating Revenues

Gas operating revenues increased $40 million (15.2%) in the first nine months 
of 1996, when compared to the same period last year.  This increase was 
primarily a result of the previously discussed changes in gas sales and 
transportation volumes.  Also contributing to the increase was the operation 
of fuel adjustment clauses reflecting a higher cost of gas purchased.

Operating Expenses

Gas Purchased

Gas purchased for the nine months ended September 30, 1996, increased $20 
million (15.4%) when compared to the same period last year.  This increase was 
attributable to an increase in volumes purchased and a higher average cost per 
Mcf of gas purchased as previously discussed.

Purchased and Exchanged Power

Purchased and exchanged power increased $62 million for the nine months 
ended September 30, 1996, when compared to the same period last year, 
primarily reflecting increased purchases of non-firm power for resale to 
others as a result of increased activity in Cinergy's power marketing 
operations.

Other Operation

Other operation expenses for the nine months ended September 30, 1996, 
increased $52 million (13.9%), as compared to the same period last year.  This 
increase is due to a number of factors, including increased transmission 
expenses and higher administrative and general expenses reflecting, in part, 
charges of $17.4 million for early retirement and severance programs.  Other 
factors include the recognition by PSI of postretirement benefit costs on an 
accrual basis, an increase in the ongoing level of DSM expenses, and the 
amortization of deferred postretirement benefit costs and deferred DSM costs, 
which are being recovered in revenues pursuant to the February 1995 Order.

Maintenance

The $10 million (7.7%) increase in maintenance expenses for the nine months 
ended September 30, 1996, as compared to the same period last year, is 
primarily attributable to increased maintenance on CG&E's electric production 
facilities.  Maintenance on the Clean Coal Project which began commercial 
operation in November 1995 and increased transmission and distribution 
expenses also contributed to the higher level of maintenance expenses.

Amortization of Phase-in Deferrals

Amortization of phase-in deferrals reflects the PUCO-ordered phase-in plan for 
Zimmer included in the May 1992 Order.  In the first three years of the phase-
in plan, rates charged to customers did not fully recover depreciation expense 
and return on investment.  This deficiency was deferred and is being recovered 
over a seven-year period that began in May 1995.

Other Income and Expenses - Net

Post-in-service Carrying Costs

Post-in-service carrying costs decreased $2 million (61.4%) for the nine 
months ended September 30, 1996, from the comparable period of 1995 as a 
result of PSI's discontinuing the accrual of post-in-service carrying costs on 
qualified environmental projects upon the inclusion in rates of the costs of 
the projects pursuant to the February 1995 Order.

Other - net

Other - net decreased $5 million from the same period in 1995 due to a number 
of factors, including the effects of interest received in 1995 on an income 
tax refund related to prior years and expenses associated with CG&E's and 
ULH&P's sales of accounts receivables in 1996, as previously mentioned.  These 
decreases were partially offset by Cinergy's equity in the earnings of Avon 
Energy.

Interest and Other Charges

Interest on Long-term Debt

Interest charges on long-term debt decreased $17 million (10.6%) for the nine 
months ended September 30, 1996, from the same period of 1995 primarily due to 
the refinancing by CG&E and ULH&P of over $330 million of long-term debt 
during the period from March 1995 through November 1995, the redemption of 
$161.5 million by CG&E and ULH&P during the period from January 1996 through 
May 1996, and the redemption of $110 million by PSI during the period from 
August 1995 through July 1996.

Other Interest

Other interest increased $2 million (12.0%) for the nine months ended 
September 30, 1996, as compared to the same period of 1995, primarily 
reflecting increased interest expense on short-term borrowings used to fund 
Cinergy's investment in Avon Energy.  

Preferred Dividend Requirements of Subsidiaries

The decrease in the preferred dividend requirement of $4 million (17.2%) for 
the nine months ended September 30, 1996, from the same period of 1995 was due 
to the early redemption in July 1995 of all 400,000 shares and 500,000 shares 
of CG&E's 7.44% Series and 9.15% Series $100 par value cumulative preferred 
stock, respectively.

Costs of Reacquisition of Preferred Stock of Subsidiary

Costs of reacquisition of preferred stock of subsidiary represents the 
difference between the par value of preferred stock of CG&E tendered pursuant 
to Cinergy's tender offer in September of 1996 and the purchase price paid 
(including tender fees paid to dealer managers) by Cinergy for these shares.  
(See Note 6 of the "Notes to Financial Statements" in "Part I.  Financial 
Information.")


RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1996

Kwh Sales

Kwh sales increased 9.1% for the twelve months ended September 30, 1996, from 
the comparable period of last year partially reflecting increased activity in 
Cinergy's power marketing operations which led to higher non-firm power sales 
for resale.  Also contributing to the higher kwh sales levels were increased 
sales to residential and commercial customers as a result of colder weather 
during the fourth quarter of 1995 and the first quarter of 1996, and cooler 
than normal weather during the second quarter of 1996.  Additionally, the 
increase reflects a higher average number of residential and commercial 
customers, while industrial sales increased primarily due to growth in the 
primary metals sector.  These increases were partially offset by the return to 
more normal weather in the third quarter of 1996.

Mcf Sales and Transportation

Mcf gas sales and transportation volumes for the twelve months ended September 
30, 1996, increased 18.8% as compared to the same period in 1995.  Colder 
weather during the winter heating season and cooler than normal weather early 
in the second quarter of 1996 primarily contributed to this increase.  
Industrial sales decreased as customers continued to purchase gas directly 
from suppliers, using transportation services provided by CG&E.  The increase 
in transportation volumes, which more than offset the decline in industrial 
sales, mainly reflects demand for gas transportation services in the primary 
metals sector.

Operating Revenues

Electric Operating Revenues

Compared to the same period last year, electric operating revenues for the 
twelve months ended September 30, 1996, increased $149 million (5.8%), 
reflecting increased kwh sales and PSI's rate increases, as previously 
discussed.  The return of approximately $16 million to customers in accordance 
with the February 1995 Order, which requires all retail operating income above 
a certain rate of return to be refunded to customers, slightly offset these 
increases.

An analysis of electric operating revenues is shown below:

                                                    Twelve Months
                                                  Ended September 30
                                                    (in millions)

Electric operating revenues - September 30, 1995        $2 551
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                                 (10)
    Sales for resale 
      Firm power obligations                                (9)
      Non-firm power transactions                            7
  Total change in price per kwh                            (12)

  Kwh sales
    Retail                                                 100
    Sales for resale
      Firm power obligations                                 8
      Non-firm power transactions                           53
  Total change in kwh sales                                161
 
Electric operating revenues - September 30, 1996        $2 700

Gas Operating Revenues

Gas operating revenues increased $74 million (19.7%) for the twelve months 
ended September 30, 1996, when compared to the same period last year.  This 
increase was primarily a result of the previously discussed changes in gas 
sales and transportation volumes.

Operating Expenses

Gas Purchased

Gas purchased for the twelve months ended September 30, 1996, increased $37 
million (19.5%) when compared to the same period last year.  This increase 
reflects higher volumes purchased and an increase in the average cost per Mcf 
of gas purchased.

Purchased and Exchanged Power

Purchased and exchanged power increased $71 million for the twelve months 
ended September 30, 1996, when compared to the same period of last year, 
primarily reflecting increased purchases of non-firm power for resale to 
others as a result of increased activity in Cinergy's power marketing 
operations.

Amortization of Phase-in Deferrals

As previously discussed, amortization of phase-in deferrals reflect the PUCO-
ordered phase-in plan for Zimmer included in the May 1992 Order.

Other Income and Expenses - Net

Post-in-service Carrying Costs

Post-in-service carrying costs decreased $5 million (80.2%) for the twelve 
months ended September 30, 1996, from the comparable period of last year.  
This decrease is a result of PSI's discontinuing the accrual of post-in-
service carrying costs on qualified environmental projects upon the inclusion 
in rates of the costs of the projects pursuant to the February 1995 Order.  
Partially offsetting the decrease is the accrual of the aforementioned costs 
on the Clean Coal Project which began commercial operation in November 1995.

Other - net

Other - net increased $14 million (64.1%) for the twelve months ended 
September 30, 1996, from the comparable period of 1995, reflecting a $10 
million gain on the sale of an Argentine utility, Cinergy's equity in the 
earnings of Avon Energy, and charges of $14 million in the fourth quarter of 
1994 for merger-related and other expenditures which cannot be recovered from 
customers.  These items were partially offset by a number of factors, 
including the effects of charges associated with winding-down certain non-
utility activities during 1995, interest received in 1995 on an income tax 
refund related to prior years, and expenses associated with CG&E's and ULH&P's 
sales of accounts receivables in 1996.

Interest and Other Charges

Interest on Long-term Debt

Interest charges on long-term debt decreased $19 million (8.7%) for the twelve 
months ended September 30, 1996, from the same period of 1995 primarily due to 
the refinancing of over $330 million of long-term debt by CG&E and ULH&P 
during the period from March 1995 through November 1995, the redemption of 
$161.5 million by CG&E and ULH&P during the period from January 1996 through 
May 1996, and the redemption of $110 million by PSI during the period from 
August 1995 through July 1996.  

Preferred Dividend Requirements of Subsidiaries

The decrease in the preferred dividend requirement of $6 million (18.4%) for 
the twelve months ended September 30, 1996, from the same period of 1995 was 
due to the early redemption in July 1995 of all 400,000 shares and 500,000 
shares of CG&E's 7.44% Series and 9.15% Series $100 par value cumulative 
preferred stock, respectively.

Costs of Reacquisition of Preferred Stock of Subsidiary

Costs of reacquisition of preferred stock of subsidiary represents the 
difference between the par value of preferred stock of CG&E tendered pursuant 
to Cinergy's tender offer in September of 1996 and the purchase price paid 
(including tender fees paid to dealer managers) by Cinergy for these shares.
(See Note 6 of the "Notes to Financial Statements" in "Part I.  Financial 
Information.")
<PAGE>











THE CINCINNATI GAS & 
 ELECTRIC COMPANY
   AND SUBSIDIARY COMPANIES                        

<PAGE>
                    THE CINCINNATI GAS & ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
(unaudited)

ASSETS
                                               September 30       December 31
                                                   1996              1995
                                                   (dollars in thousands)

Utility Plant - Original Cost
  In service
    Electric                                    $4 624 135         $4 564 711 
    Gas                                            699 566            680 339 
    Common                                         184 067            183 422 
                                                 5 507 768          5 428 472 
  Accumulated depreciation                       1 838 745          1 730 232 
                                                 3 669 023          3 698 240 

  Construction work in progress                     84 915             77 661 
        Total utility plant                      3 753 938          3 775 901 

Current Assets
  Cash and temporary cash investments               16 718              6 612 
  Restricted deposits                                1 171              1 144 
  Notes receivable from affiliated companies        54 480             24 715 
  Accounts receivable less accumulated 
    provision for doubtful accounts of 
    $12,042 at September 30, 1996, and 
    $9,615 at December 31, 1995                     47 531            292 493 
  Accounts receivable from affiliated companies      5 970             17 162 
  Materials, supplies, and fuel - at average 
    cost
      Fuel for use in electric production           28 636             40 395 
      Gas stored for current use                    37 215             21 493 
      Other materials and supplies                  53 804             55 388 
  Property taxes applicable to subsequent year      29 206            116 822 
  Prepayments and other                             22 981             30 572 
                                                   297 712            606 796 

Other Assets
  Regulatory assets
    Amounts due from customers - income taxes      347 670            397 155 
    Post-in-service carrying costs and deferred
      operating expenses                           143 198            148 316 
    Phase-in deferred return and depreciation       96 469            100 388 
    Deferred DSM costs                              29 628             19 158 
    Deferred merger costs                           18 706             14 538 
    Unamortized costs of reacquiring debt           39 338             39 428 
    Other                                           25 483             41 025 
  Other                                            102 695             54 691 
                                                   803 187            814 699 

                                                $4 854 837         $5 197 396 

The accompanying notes as they relate to The Cincinnati Gas & Electric Company 
are an integral part of these consolidated financial statements.
<PAGE>
THE CINCINNATI GAS & ELECTRIC COMPANY

CAPITALIZATION AND LIABILITIES

                                               September 30       December 31 
                                                   1996               1995 
                                                   (dollars in thousands)

Common Stock Equity
  Common stock - $8.50 par value; authorized
    shares - 120,000,000; outstanding shares -
    89,663,086 at September 30, 1996, and 
    December 31, 1995                           $  762 136         $  762 136 
  Paid-in capital                                  536 128            339 101 
  Retained earnings                                264 297            427 226 
      Total common stock equity                  1 562 561          1 528 463 

Cumulative Preferred Stock
  Not subject to mandatory redemption               21 145             40 000 
  Subject to mandatory redemption                     -               160 000 

Long-term Debt                                   1 564 868          1 702 650 
      Total capitalization                       3 148 574          3 431 113 

Current Liabilities
  Long-term debt due within one year               130 000            151 500 
  Notes payable                                     82 100               -   
  Notes payable to affiliated companies              1 500               -   
  Accounts payable                                 125 503            138 735 
  Accounts payable to affiliated companies              91             20 468 
  Accrued taxes                                    164 402            250 189 
  Accrued interest                                  32 611             31 299 
  Other                                             43 836             40 409 
                                                   580 043            632 600 

Other Liabilities
  Deferred income taxes                            782 084            795 385 
  Unamortized investment tax credits               124 307            129 372 
  Accrued pension and other postretirement 
    benefit costs                                  142 625            117 641 
  Other                                             77 204             91 285 
                                                 1 126 220          1 133 683 

                                                $4 854 837         $5 197 396 
<PAGE>

<TABLE>
<CAPTION>

THE CINCINNATI GAS & ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

                                              Quarter Ended            Year to 
Date
                                               September 30            
September 30
                                             1996        1995        1996         
1995 
                                                          (in thousands)
<S>                                      <C>         <C>          <C>         
<C>
Operating Revenues
  Electric
    Non-affiliated companies              $  382 718  $  399 472   $1 109 300  
$1 070 892
    Affiliated companies                       7 634       1 702       27 889      
16 761 
  Gas
    Non-affiliated companies                  40 787      33 591      306 062     
265 777 
    Affiliated companies                           4        -               5        
-___
                                             431 143     434 765    1 443 256   
1 353 430 

Operating Expenses
  Fuel used in electric production            82 449      84 101      267 007     
252 638 
  Gas purchased                               17 133      13 155      150 313     
130 235 
  Purchased and exchanged power 
    Non-affiliated companies                  10 355       4 228       24 021       
6 924 
    Affiliated companies                       5 821      10 866       14 576      
29 587 
  Other operation                             66 786      69 834      235 513     
204 557 
  Maintenance                                 22 844      18 994       68 745      
63 973 
  Depreciation                                40 322      39 836      120 557     
119 060 
  Amortization of phase-in deferrals           3 399       3 409       10 198       
5 682 
  Amortization of post-in-service 
    deferred operating expenses                  786         823        2 431       
2 468 
  Income taxes                                41 675      40 730      115 902     
108 293 
  Taxes other than income taxes               49 820      50 358      154 733     
151 345 
                                             341 390     336 334    1 163 996   
1 074 762 

Operating Income                              89 753      98 431      279 260     
278 668 

Other Income and Expenses - Net
  Allowance for equity funds used 
    during construction                          358         269        1 206       
1 146 
  Phase-in deferred return                     2 093       2 135        6 279       
6 403 
  Income taxes                                   819         (31)       4 299       
2 796 
  Other - net                                 (1 505)      4 446       (6 095)      
4 851 
                                               1 765       6 819        5 689      
15 196 

Income Before Interest                        91 518     105 250      284 949     
293 864 

Interest 
  Interest on long-term debt                  30 304      36 507       93 392     
107 108 
  Other interest                                 522         679        1 466       
2 926 
  Allowance for borrowed funds used 
    during construction                         (813)       (894)      (2 598)     
(2 774)
                                              30 013      36 292       92 260     
107 260 

Net Income                                    61 505      68 958      192 689     
186 604 

Preferred Dividend Requirement                (3 475)     (3 475)     (10 423)    
(14 199)

Costs of Reacquisition of Preferred 
  Stock (Note 6)                             (18 175)       -         (18 175)       
-

Net Income Applicable to Common Stock     $   39 855  $   65 483   $  164 091  
$  172 405 
<FN>
The accompanying notes as they relate to The Cincinnati Gas & Electric Company 
are an integral part of these consolidated 
financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CINCINNATI GAS & ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

                                                            Year to Date
                                                            September 30
                                                         1996          1995   
                                                           (in thousands)
<S>                                                  <C>           <C>
Operating Activities
  Net income                                          $ 192 689     $ 186 604
  Items providing (using) cash currently
    Depreciation                                        120 557       119 060 
    Deferred income taxes and investment tax 
      credits - net                                      31 408        24 597 
    Allowance for equity funds used during 
      construction                                       (1 206)       (1 146)
    Regulatory assets - net                              21 626        10 260 
    Changes in current assets and current 
      liabilities
        Restricted deposits                                 (27)           (3)
        Accounts and notes receivable, net of
          reserves on receivables sold                  201 972        54 133 
        Materials, supplies, and fuel                    (2 379)        9 499 
        Accounts payable                                (33 609)      (41 110)
        Accrued taxes and interest                        5 974        25 114 
    Other items - net                                    (9 326)      (30 186)
          Net cash provided by (used in) 
            operating activities                        527 679       356 822 

Financing Activities
  Issuance of long-term debt                               -          344 280 
  Funds on deposit from issuance of long-term debt         -          (84 000)
  Retirement of preferred stock                            -          (93 450)
  Redemption of long-term debt                         (157 583)     (238 498)
  Change in short-term debt                              83 600        12 000 
  Dividends on preferred stock                          (10 423)      (14 199)
  Dividends on common stock                            (327 020)     (162 950)
          Net cash provided by (used in) 
            financing activities                       (411 426)     (236 817)

Investing Activities
  Construction expenditures (less allowance
    for equity funds used during construction)          (95 677)      (99 661)
  Deferred DSM costs - net                              (10 470)       (6 315)
          Net cash provided by (used in)
            investing activities                       (106 147)     (105 976)

Net increase (decrease) in cash and 
  temporary cash investments                             10 106        14 029 

Cash and temporary cash investments at
  beginning of period                                     6 612        52 516 

Cash and temporary cash investments at 
  end of period                                       $  16 718     $  66 545 
<FN>

The accompanying notes as they relate to The Cincinnati Gas & Electric Company 
are an integral part of these consolidated 
financial statements.
</TABLE>
<PAGE>


THE CINCINNATI GAS & ELECTRIC COMPANY
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1996

Kwh Sales

Kwh sales for the quarter ended September 30, 1996, decreased 2.5% from the 
same period of 1995.  A return to more normal weather for the third quarter of 
1996 resulted in decreased residential and commercial sales.  These decreases 
were partially offset by increased industrial sales reflecting growth in the 
primary metals sector and increased activity in Cinergy's power marketing 
operations which led to higher non-firm power sales for resale.  

Mcf Sales and Transportation

Mcf gas sales and transportation volumes for the third quarter of 1996 
increased 13.2% as compared to the same period in 1995.  Increased residential 
and commercial gas sales reflected, in part, increases in the average number 
of customers.  Higher gas transportation volumes reflected the continuing 
trend of industrial customers purchasing gas directly from suppliers, using 
transportation services provided by CG&E.  The increase in transportation 
volumes mainly reflects demand for gas transportation services in the primary 
metals sector.

Operating Revenues

Electric Operating Revenues

Electric operating revenues decreased $11 million (2.7%) for the quarter ended 
September 30, 1996, from the comparable period of 1995.  This decrease was 
primarily attributable to the lower kwh sales as previously discussed.  

An analysis of electric operating revenues is shown below:

                                                     Quarter
                                               Ended September 30
                                                  (in millions)

Electric operating revenues - September 30, 1995       $401
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                               (5)
    Sales for resale
      Non-firm power transactions                         6
  Total change in price per kwh                           1

  Kwh sales
    Retail                                              (12)
  Total change in kwh sales                             (12)

Electric operating revenues - September 30, 1996       $390

Gas Operating Revenues

Gas operating revenues increased $7 million (21.4%) in the third quarter of 
1996, when compared to the same period last year.  This increase was primarily 
a result of the operation of fuel adjustment clauses reflecting a higher 
average cost of gas purchased and the previously discussed changes in gas 
sales and transportation volumes.

Operating Expenses

Gas Purchased

Gas purchased for the quarter ended September 30, 1996, increased $4 million 
(30.2%) when compared to the same period last year reflecting a higher average 
cost per Mcf of gas purchased.

Purchased and Exchanged Power

Purchased and exchanged power for the quarter ended September 30, 1996, 
increased $1 million (7.2%) over the comparable period of 1995 reflecting 
increased purchases of non-firm power for resale to others as a result of 
increased activity in Cinergy's power marketing operations.  This increase is 
partially offset by decreased power purchases from PSI.

Maintenance

The $4 million (20.3%) increase in maintenance expenses for the third quarter 
of 1996, as compared to the same period of 1995, is primarily due to increased 
maintenance on electric production and transmission facilities. 

Other Income and Expenses - Net

Other - net

Other - net decreased $6 million primarily as a result of the effects of 
expenses associated with the CG&E's and ULH&P's sales of accounts receivables 
in 1996 and interest received in 1995 associated with a refund of an 
overpayment of Federal income taxes related to prior years.  
 
Interest

Interest on Long-term Debt

Interest charges decreased $6 million (17.0%) for the quarter ended September 
30, 1996, from the same period of 1995 primarily due to the redemption of 
$161.5 million of long-term debt during the period from January 1996 through 
May 1996.

Costs of Reacquisition of Preferred Stock

Costs of reacquisition of preferred stock represents the difference between 
the par value of preferred stock of CG&E tendered pursuant to Cinergy's tender 
offer in September 1996 and the purchase price paid (including tender fees 
paid to dealer managers) by Cinergy for these shares. (See Note 6 of the 
"Notes to Financial Statements" in "Part I.  Financial Information.")


RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996

Kwh Sales

Kwh sales for the nine months ended September 30, 1996, increased 7.3% over 
the same period of 1995.  This increase reflected higher kwh sales to all 
customer classes.  Increased activity in Cinergy's power marketing operations 
led to higher non-firm power sales for resale, while an increase in the 
average number of residential and commercial customers and higher industrial 
sales, primarily reflecting growth in the primary metals sector, also 
contributed to the increase.  These increases were partially offset by the 
return to more normal weather in the third quarter of 1996.

Mcf Sales and Transportation

Mcf gas sales and transportation volumes for the first nine months of 1996 
increased 13.9% as compared to the same period in 1995.  Colder weather during 
the winter heating season, cooler than normal weather early in the second 
quarter of 1996, and increases in the average number of customers led to 
increased gas sales to residential and commercial customers.  Industrial sales 
decreased as customers continued to purchase gas directly from suppliers, 
using transportation services provided by CG&E.  The increase in 
transportation volumes mainly reflects demand for gas transportation services 
in the primary metals sector.

Operating Revenues

Electric Operating Revenues

Electric operating revenues increased $49 million (4.6%) for the nine months 
ended September 30, 1996, over the comparable period of 1995.  This increase 
primarily reflects the higher kwh sales discussed above.

An analysis of electric operating revenues is shown below:

                                                  Nine Months
                                               Ended September 30
                                                 (in millions)

Electric operating revenues - September 30, 1995      $1 088
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                                (3)
    Sales for resale
      Firm power transactions                             (3)
  Total change in price per kwh                           (6)

  Kwh sales
    Retail                                                40
    Sales for resale
      Non-firm power transactions                         15
  Total change in kwh sales                               55

Electric operating revenues - September 30, 1996      $1 137

Gas Operating Revenues

Gas operating revenues increased $40 million (15.2%) in the first nine months 
of 1996, when compared to the same period last year.  This increase was 
primarily a result of the previously discussed changes in gas sales and 
transportation volumes.  Also contributing to the increase was the operation 
of fuel adjustment clauses reflecting a higher cost of gas purchased.

Operating Expenses

Fuel Used in Electric Production

Fuel costs, CG&E's largest operating expense, increased $14 million (5.7%) for 
the nine months ended September 30, 1996, when compared to the same period 
last year as a result of an increase in kwh generation.
Gas Purchased

Gas purchased for the nine months ended September 30, 1996, increased $20 
million (15.4%) when compared to the same period last year.  This increase was 
attributable to an increase in volumes purchased and a higher average cost per 
Mcf of gas purchased as previously discussed.

Purchased and Exchanged Power

Purchased and exchanged power for the nine months ended September 30, 1996, 
increased $2 million (5.7%) over the comparable period of 1995.  This increase 
primarily reflects increased purchases of non-firm power for resale to others 
as a result of increased activity in Cinergy's power marketing operations.  
This increase is partially offset by a decrease in purchases from PSI.

Other Operation

For the nine months ended September 30, 1996, other operation expenses 
increased $31 million (15.1%) due to a number of factors, including higher 
administrative and general expenses reflecting, in part, $16.2 million of 
early retirement and severance program costs and increased transmission 
expenses resulting from the formation of KO Transmission.

Maintenance

The $5 million (7.5%) increase in maintenance expenses for the nine months 
ended September 30, 1996, is primarily due to increased maintenance on 
electric production facilities.

Amortization of Phase-in Deferrals

Amortization of phase-in deferrals reflects the PUCO-ordered phase-in plan for 
Zimmer included in the May 1992 Order.  In the first three years of the phase-
in plan, rates charged to customers did not fully recover depreciation expense 
and return on investment.  This deficiency was deferred and is being recovered 
over a seven-year period that began in May 1995.

Other - net

Other - net decreased $11 million from the same period in 1995 due to a number 
of factors, including the effects of expenses associated with the sales of 
accounts receivables in 1996 and interest received in 1995 associated with a 
refund of an overpayment of Federal income taxes related to prior years, as 
previously mentioned.

Interest

Interest on Long-term Debt

Interest charges decreased $14 million (12.8%) for the nine months ended 
September 30, 1996, from the same period of 1995 primarily due to the 
refinancing of over $330 million of long-term debt during the period from 
March 1995 through November 1995 and the redemption of $161.5 million of long-
term debt during the period from January 1996 through May 1996. 

Preferred Dividend Requirement

The decrease in the preferred dividend requirement of $4 million (26.6%) for 
the nine months ended September 30, 1996, from the same period of 1995 was due 
to the early redemption in July 1995 of all 400,000 shares and 500,000 shares 
of the 7.44% Series and 9.15% Series $100 par value cumulative preferred 
stock, respectively.

Costs of Reacquisition of Preferred Stock

Costs of reacquisition of preferred stock represents the difference between 
the par value of preferred stock of CG&E tendered pursuant to Cinergy's tender 
offer in September of 1996 and the purchase price paid (including tender fees 
paid to dealer managers) by Cinergy for these shares.  (See Note 6 of the 
"Notes to Financial Statements" in "Part I.  Financial Information.")
<PAGE>











PSI ENERGY, INC.
AND SUBSIDIARY COMPANIES                         

<PAGE>
                               PSI ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

ASSETS
                                              September 30        December 31
                                                  1996               1995
                                                   (dollars in thousands)

Electric Utility Plant - Original Cost
  In service                                   $4 117 737          $4 052 984 
  Accumulated depreciation                      1 698 969           1 637 169 
                                                2 418 768           2 415 815 

  Construction work in progress                    76 999              58 191 
        Total electric utility plant            2 495 767           2 474 006 

Current Assets
  Cash and temporary cash investments              14 202              15 522 
  Restricted deposits                                 549               1 187 
  Notes receivable from affiliated companies        1 400                -   
  Accounts receivable less accumulated 
    provision for doubtful accounts of $202
    at September 30, 1996, and $468 at 
    December 31, 1995                              53 121              73 419 
  Accounts receivable from affiliated companies     2 499              20 568 
  Materials, supplies, and fuel - at average 
    cost
      Fuel                                         53 018              82 014 
      Other materials and supplies                 32 779              29 462 
  Prepayments and other                             2 871               1 234 
                                                  160 439             223 406 

Other Assets
  Regulatory assets
    Amounts due from customers - income taxes      32 849              26 338 
    Post-in-service carrying costs and 
      deferred operating expenses                  45 172              38 874 
    Coal contract buyout costs                    137 686                - 
    Deferred DSM costs                            105 204             110 242 
    Deferred merger costs                          77 633              42 286 
    Unamortized costs of reacquiring debt          32 583              34 476 
    Other                                          69 910              33 886 
  Other                                           128 178              92 056 
                                                  629 215             378 158 

                                               $3 285 421          $3 075 570 

The accompanying notes as they relate to PSI Energy, Inc. are an integral part 
of these consolidated financial statements.
<PAGE>
PSI ENERGY, INC.

CAPITALIZATION AND LIABILITIES

                                              September 30        December 31 
                                                  1996                1995 
                                                   (dollars in thousands)

Common Stock Equity
  Common stock - without par value; $.01
    stated value; authorized shares - 
    60,000,000; outstanding shares - 
    53,913,701 at September 30, 1996, and 
    December 31, 1995                          $      539          $      539 
  Paid-in capital                                 402 945             403 253 
  Accumulated earnings subsequent to November 
    30, 1986, quasi-reorganization                627 354             625 275 
      Total common stock equity                 1 030 838           1 029 067 

Cumulative Preferred Stock
  Not subject to mandatory redemption             173 090             187 897 

Long-term Debt                                    818 959             828 116 
      Total capitalization                      2 022 887           2 045 080 

Current Liabilities
  Long-term debt due within one year               10 400              50 400 
  Notes payable                                   209 354             165 800 
  Notes payable to affiliated companies            52 677              32 731 
  Accounts payable                                128 455             116 817 
  Accounts payable to affiliated companies          5 420                -   
  Litigation settlement                            80 000              80 000 
  Accrued taxes                                    65 419              65 851 
  Accrued interest                                 12 661              24 696 
  Other                                            16 246              16 000 
                                                  580 632             552 295 

Other Liabilities
  Deferred income taxes                           347 227             331 876 
  Unamortized investment tax credits               53 652              56 354 
  Accrued pension and other postretirement 
    benefit costs                                  62 487              54 130 
  Other                                           218 536              35 835 
                                                  681 902             478 195 

                                               $3 285 421          $3 075 570 
<PAGE>

<TABLE>
<CAPTION>

PSI ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

                                               Quarter Ended             Year 
to Date
                                                September 30             
September 30
                                              1996        1995         1996        
1995
                                                            (in thousands) 
<S>                                        <C>         <C>          <C>         
<C>
Operating Revenues
  Non-affiliated companies                  $342 199    $332 431     $951 171    
$902 501 
  Affiliated companies                         5 856      10 866       14 691      
29 587 
                                             348 055     343 297      965 862     
932 088 

Operating Expenses
  Fuel                                       101 644     106 344      272 343     
292 910 
  Purchased and exchanged power
    Non-affiliated companies                  26 665      11 457       71 422      
26 068 
    Affiliated companies                       7 669       1 702       28 004      
16 761 
  Other operation                             62 434      61 595      188 443     
167 354 
  Maintenance                                 23 059      20 857       68 964      
63 861 
  Depreciation                                30 489      28 844       91 046      
91 291 
  Post-in-service deferred operating 
    expenses - net                            (1 716)       (894)      (5 068)     
(4 608)
  Income taxes                                23 445      29 222       55 597      
64 877 
  Taxes other than income taxes               13 729      14 022       41 361      
40 721 
                                             287 418     273 149      812 112     
759 235 

Operating Income                              60 637      70 148      153 750     
172 853 

Other Income and Expenses - Net
  Allowance for equity funds used during 
    construction                                -         (1 428)        -           
(420)
  Post-in-service carrying costs                 391         602        1 228       
3 183 
  Income taxes                                (2 438)        705       (3 332)        
751 
  Other - net                                  3 280         545        1 420      
(1 751)
                                               1 233         424         (684)      
1 763 

Income Before Interest                        61 870      70 572      153 066     
174 616 

Interest
  Interest on long-term debt                  16 218      17 647       50 286      
53 546 
  Other interest                               3 790       4 162       10 386      
12 035 
  Allowance for borrowed funds used during
    construction                                (642)     (1 133)      (1 637)     
(3 550)
                                              19 366      20 676       59 035      
62 031 

Net Income                                    42 504      49 896       94 031     
112 585 

Preferred Dividend Requirement                (3 020)     (3 295)      (9 518)     
(9 885)

Net Income Applicable to Common Stock       $ 39 484    $ 46 601     $ 84 513    
$102 700 
<FN>
The accompanying notes as they relate to PSI Energy, Inc. are an integral part 
of these consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                            PSI ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

                                                            Year to Date
                                                            September 30
                                                         1996          1995
                                                           (in thousands)
<S>                                                  <C>           <C>
Operating Activities
  Net income                                          $  94 031     $ 112 585
  Items providing (using) cash currently:
    Depreciation                                         91 046        91 291 
    Deferred income taxes and investment tax
      credits - net                                       5 145         5 342 
    Allowance for equity funds used during
      construction                                         -              420 
    Regulatory assets - net                             (49 070)      (10 315)
    Changes in current assets and current
      liabilities
        Restricted deposits                                (335)           16 
        Accounts and notes receivable, net 
          of reserves on receivables sold                23 039       (35 442)
        Materials, supplies, and fuel                    25 679        16 310 
        Accounts payable                                 17 058       (50 642)
        Accrued taxes and interest                      (12 467)        4 490 
    Other items - net                                      (810)       12 150 
          Net cash provided by (used in)
            operating activities                        193 316       146 205 

Financing Activities
  Funds on deposit from issuance of long-term debt          973         8 684 
  Retirement of preferred stock                         (15 114)           (8)
  Redemption of long-term debt                          (50 000)      (60 055)
  Change in short-term debt                              63 500        42 927 
  Dividends on preferred stock                           (9 609)       (9 885)
  Dividends on common stock                             (82 363)         -    
  Capital contribution from parent company                 -           12 721 
          Net cash provided by (used in)
            financing activities                        (92 613)       (5 616)

Investing Activities
  Construction expenditures (less allowance
    for equity funds used during construction)         (107 061)     (132 282)
  Deferred DSM costs - net                                5 038       (11 041)
          Net cash provided by (used in)
            investing activities                       (102 023)     (143 323)

Net increase (decrease) in cash and
  temporary cash investments                             (1 320)       (2 734)

Cash and temporary cash investments at
  beginning of period                                    15 522         6 341 

Cash and temporary cash investments at 
  end of period                                       $  14 202     $   3 607 
<FN>
The accompanying notes as they relate to PSI Energy, Inc. are an integral part 
of these consolidated financial statements.
</TABLE>
<PAGE>


PSI ENERGY, INC.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1996

Kwh Sales

Kwh sales for the third quarter of 1996 decreased 1.9% as a return to more 
normal weather resulted in a decline in residential and commercial kwh sales, 
when compared to the same period last year.  Partially offsetting the decrease 
was increased activity in Cinergy's power marketing operations which led to 
higher non-firm power sales for resale.  An increase in industrial sales 
primarily reflects growth in the transportation equipment, bituminous coal 
mining and primary metals sectors. 

Operating Revenues

Total operating revenues increased $5 million (1.4%) for the quarter ended 
September 30, 1996, when compared to the same period last year, reflecting, in 
part, the increased activity in Cinergy's power marketing operations 
previously discussed.  Partially offsetting this increase was the previously 
mentioned decline in residential and commercial sales.

An analysis of operating revenues is shown below:

                                                  Quarter
                                             Ended September 30
                                               (in millions)

Operating revenues - September 30, 1995             $343
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                             5
    Sales for resale
      Firm power obligations                          (3)  
      Non-firm power transactions                     10
  Total change in price per kwh                       12

  Kwh sales
    Retail                                            (7)
    Sales for resale
      Firm power obligations                          (2)
      Non-firm power transactions                      1
  Total change in kwh sales                           (8) 

  Other                                                1

Operating revenues - September 30, 1996             $348

Operating Expenses

Fuel 

Fuel costs, PSI's largest operating expense, decreased $4 million (4.4%) for 
the third quarter of 1996 as compared to the same period last year.

An analysis of fuel costs is shown below:

                                                 Quarter
                                            Ended September 30
                                               (in millions)

Fuel expense - September 30, 1995                   $106
Increase (Decrease) due to change in:
  Price of fuel                                        9
  Kwh generation                                     (13)
Fuel expense - September 30, 1996                   $102
      
Purchased and Exchanged Power

For the quarter ended September 30, 1996, purchased and exchanged power 
increased $21 million, as compared to the same period last year, due, in part, 
to increased purchases of non-firm power for resale to others as a result of 
increased activity in Cinergy's power marketing operations and increased 
purchases from CG&E as a result of the coordination of PSI's and CG&E's 
electric dispatch systems.

Maintenance

The $2 million (10.6%) increase in maintenance expenses for the third quarter 
of 1996, as compared to the same period of 1995, is due, in part, to 
maintenance on the Clean Coal Project which began commercial operation in 
November 1995.

Depreciation

Depreciation expense increased $2 million (5.7%) for the quarter ended
September 30, 1996, as compared to the third quarter of last year.  This 
increase primarily reflects additions to utility plant in service.

Post-in-service Deferred Operating Expenses - Net

Post-in-service deferred operating expenses - net reflects the deferral of 
depreciation on certain major projects, primarily environmental in nature, 
from the in-service date until the related projects are reflected in retail 
rates, net of amortization of these deferrals as they are recovered.

Other Income and Expenses - Net

Other - net

The increase of $3 million for other - net for the quarter ended September 30, 
1996, as compared to the same period of 1995, is primarily attributable to 
amounts allowed by the IURC in its September 1996 Order which were not 
previously recorded.

Interest

Interest on Long-term Debt

Interest on long-term debt decreased $1 million (8.1%) for the third quarter 
of 1996, as compared to the third quarter of 1995, primarily due to the 
redemption of $110 million of long-term debt during the period from August 
1995 through July 1996.  

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996

Kwh Sales

For the nine months ended September 30, 1996, kwh sales increased 8.8% when 
compared to the same period last year due, in large part, to increased 
activity in Cinergy's power marketing operations which led to higher 
non-firm power sales for resale.  Also contributing to the total kwh sales 
levels were increased sales to all retail customer classes resulting from an 
increase in the average number of residential and commercial customers while 
increased industrial sales reflects growth in the food products, primary 
metals, and transportation equipment sectors.  These increases were partially 
offset by the return to more normal weather in the third quarter of 1996.

Operating Revenues

Total operating revenues increased $34 million (3.6%) for the nine months 
ended September 30, 1996, when compared to the same period last year.  This 
increase primarily reflects the increase in kwh sales previously discussed.  
Also contributing to the increase was a 4.3% retail rate increase approved in 
the February 1995 Order and a 1.9% rate increase for carrying costs on CWIP 
property which was approved by the IURC in March 1995.  Partially offsetting 
these increases was the return of approximately $13 million to customers in 
accordance with the February 1995 Order which requires all retail operating 
income above a certain rate of return to be refunded to customers.

An analysis of operating revenues is shown below:

                                                             Nine Months
                                                         Ended September 30 
                                                            (in millions)

Operating revenues - September 30, 1995                           $932
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                                         (14)
    Sales for resale
      Firm power obligations                                        (4)
      Non-firm power transactions                                    3
  Total change in price per kwh                                    (15)

  Kwh sales
    Retail                                                          14
    Sales for resale
      Firm power obligations                                         6
      Non-firm power transactions                                   29
  Total change in kwh sales                                         49
 

Operating revenues - September 30, 1996                           $966

Operating Expenses

Fuel 

Fuel costs for the nine months ended September 30, 1996, decreased $21 million 
(7.0%) when compared to the same period last year.

An analysis of fuel costs is shown below:

                                                              
                                                            Nine Months
                                                        Ended September 30
                                                           (in millions)


Fuel expense - September 30, 1995                               $293
Increase (Decrease) due to change in:
  Price of fuel                                                   (9) 
  Kwh generation                                                 (12)
 
Fuel expense - September 30, 1996                               $272

Purchased and Exchanged Power

For the nine months ended September 30, 1996, purchased and exchanged power 
increased $57 million, as compared to the same period last year, due, in part, 
to increased purchases of non-firm power for resale to others as a result of 
increased activity in Cinergy's power marketing operations and increased 
purchases from CG&E as a result of the coordination of PSI's and CG&E's 
electric dispatch systems.

Other Operation

Other operation expenses increased $21 million (12.6%) for the nine months 
ended September 30, 1996, as compared to the same period last year.  This 
increase was due to a number of factors, including the recognition of 
postretirement benefit costs on an accrual basis, an increase in the ongoing 
level of DSM expenses, and the amortization of deferred postretirement benefit 
costs and deferred DSM costs, all of which are being recovered in revenues 
pursuant to the February 1995 Order.  Increased transmission expenses also 
contributed to the higher level of other operation expenses.

Maintenance

Maintenance expenses for the first nine months of 1996, as compared to the 
same period last year, increased $5 million (8.0%) partially as a result of 
maintenance on the Clean Coal Project which began commercial operation in 
November 1995.  Increased transmission and distribution expenses also 
contributed to the higher level of maintenance expenses.

Other Income and Expenses - Net

Post-in-service Carrying Costs

Post-in-service carrying costs decreased $2 million (61.4%) for the nine 
months ended September 30, 1996, from the comparable period of 1995 as a 
result of discontinuing the accrual of post-in-service carrying costs on 
qualified environmental projects upon the inclusion in rates of the costs of 
the projects pursuant to the February 1995 Order.

Other - net

The increase of $3 million for other - net for the nine months ended September 
30, 1996, as compared to the same period of 1995, is primarily attributable to 
amounts allowed by the IURC in its September 1996 Order which were not 
previously recorded.

Interest

Interest on Long-term Debt

Interest on long-term debt decreased $3 million (6.1%) for the nine months 
ended September 30, 1996, as compared to the same period of 1995, due in part 
to the redemption of $110 million of long-term debt during the period from 
August 1995 through July 1996.  
<PAGE>






THE UNION LIGHT, HEAT AND POWER COMPANY
<PAGE>
THE UNION LIGHT, HEAT & POWER COMPANY
BALANCE SHEETS
(unaudited)

ASSETS
                                             September 30         December 31
                                                 1996                1995
                                                  (dollars in thousands)

Utility Plant - original cost
  In service
    Electric                                   $193 903             $188 508 
    Gas                                         146 286              140 604 
    Common                                       19 026               19 068 
                                                359 215              348 180 
  Accumulated depreciation                      120 500              112 812 
                                                238 715              235 368 

  Construction work in progress                   7 936                7 863 
        Total utility plant                     246 651              243 231 

Current Assets
  Cash and temporary cash investments             2 787                1 750 
  Notes receivable from affiliated companies      1 501                 -   
  Accounts receivable less accumulated 
    provision for doubtful accounts of 
    $1,623 at September 30, 1996, and $1,140
    at December 31, 1995                          3 466               37 895 
  Accounts receivable from affiliated 
    companies                                        14                 -   
  Materials, supplies, and fuel - at average 
    cost
      Gas stored for current use                  6 887                4 513 
      Other materials and supplies                1 462                1 215 
  Property taxes applicable to subsequent year      587                2 350 
  Prepayments and other                             499                  485 
                                                 17 203               48 208 

Other Assets
  Regulatory assets
    Deferred merger costs                         1 785                1 785 
    Unamortized costs of reacquiring debt         3 803                2 526 
    Other                                         2 468                2 548 
  Other                                           6 439                1 499 
                                                 14 495                8 358 

                                               $278 349             $299 797 

The accompanying notes as they relate to The Union Light, Heat and Power 
Company are an integral part of these financial statements.

THE UNION LIGHT, HEAT & POWER COMPANY

CAPITALIZATION AND LIABILITIES
                                            September 30          December 31 
                                                1996                 1995 
                                                  (dollars in thousands)

Common Stock Equity
  Common stock - $15.00 par value; 
    authorized shares - 1,000,000; 
    outstanding shares - 585,333 at 
    September 30, 1996, and December 31,
    1995                                      $  8 780             $  8 780 
  Paid-in capital                               18 839               18 839 
  Retained earnings                             94 621               82 863 
      Total common stock equity                122 240              110 482 

Long-term Debt                                  44 604               54 377 
      Total capitalization                     166 844              164 859 

Current Liabilities
  Long-term debt due within one year              -                  15 000 
  Notes payable to affiliated companies         21 593               23 043
  Accounts payable                               5 120               11 057 
  Accounts payable to affiliated companies      16 139               21 665 
  Accrued taxes                                  2 311                1 993 
  Accrued interest                                 940                1 549 
  Other                                          6 159                5 505 
                                                52 262               79 812 

Other Liabilities
  Deferred income taxes                         31 247               23 728 
  Unamortized investment tax credits             4 867                5 079 
  Accrued pension and other postretirement
    benefit costs                               12 915               12 202 
  Income taxes refundable through rates          5 017                4 717 
  Other                                          5 197                9 400 
                                                59 243               55 126 

                                              $278 349             $299 797 




<TABLE>
<CAPTION>

THE UNION LIGHT, HEAT & POWER COMPANY
STATEMENTS OF INCOME
(unaudited)

                                               Quarter Ended            Year 
to Date
                                                September 30            
September 30
                                              1996        1995        1996        
1995
                                                           (in thousands)
<S>                                        <C>         <C>         <C>        
<C>
Operating Revenues
  Electric                                  $ 52 704    $ 57 171    $147 970   
$144 553
  Gas                                          5 660       5 995      50 794     
45 870 
                                              58 364      63 166     198 764    
190 423 

Operating Expenses
  Electricity purchased from parent
    company for resale                        39 850      42 124     109 337    
109 099 
  Gas purchased                                2 129       2 168      26 252     
23 884 
  Other operation                              7 268       7 428      23 664     
22 481 
  Maintenance                                  1 093         903       3 445      
3 040 
  Depreciation                                 3 013       2 907       8 887      
8 553 
  Income taxes                                 1 067       1 612       7 824      
5 573 
  Taxes other than income taxes                  986         986       3 092      
2 965 
                                              55 406      58 128     182 501    
175 595 

Operating Income                               2 958       5 038      16 263     
14 828 

Other Income and Expense - Net
  Allowance for equity funds used during 
    construction                                  42          22          21         
78 
  Income taxes                                     4         (10)         31        
(48)
  Other - net                                   (436)         (8)     (1 079)        
59 
                                                (390)          4      (1 027)        
89 

Income Before Interest                         2 568       5 042      15 236     
14 917 

Interest
  Interest on long - term debt                   881       1 721       3 135      
5 674 
  Other interest                                 167         157         433        
376 
  Allowance for borrowed funds used during
    construction                                 (26)        (24)        (90)      
(120)
                                               1 022       1 854       3 478      
5 930 

Net Income                                  $  1 546    $  3 188    $ 11 758   
$  8 987 
<FN>
The accompanying notes as they relate to The Union Light, Heat and Power 
Company are an integral part of these financial 
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

THE UNION LIGHT, HEAT AND POWER COMPANY
STATEMENTS OF CASH FLOWS
(unaudited)

                                                                      Year to 
Date
                                                                      
September 30
                                                                   1996          
1995
                                                                     (in 
thousands)
<S>                                                             <C>           
<C>
Operating Activities
  Net income                                                     $ 11 758      
$  8 987
  Items providing (using) cash currently
    Depreciation                                                    8 887         
8 553 
    Deferred income taxes and investment tax
      credits - net                                                 7 607         
1 147 
    Allowance for equity funds used during 
      construction                                                    (21)          
(78)
    Regulatory assets                                                  80           
128 
    Changes in current assets and current liabilities
      Accounts and notes receivable, net of reserves on 
        receivables sold                                           29 590         
5 066 
      Materials, supplies, and fuel                                (2 621)          
608 
      Accounts payable                                            (11 463)          
248 
      Accrued taxes and interest                                    1 446        
(1 515)
    Other items - net                                              (3 866)        
1 969 
          Net cash provided by (used in)
            operating activities                                   41 397        
25 113 

Financing Activities
  Issuance of long-term debt                                         -           
14 704 
  Redemption of long-term debt                                    (26 083)      
(37 036)
  Change in short-term debt                                        (1 450)       
12 000 
          Net cash provided by (used in)
            financing activities                                  (27 533)      
(10 332)

Investing Activities
  Construction expenditures (less allowance
    for equity funds used during construction)                    (12 827)      
(14 350)
          Net cash provided by (used in) 
            investing activities                                  (12 827)      
(14 350)

Net increase (decrease) in cash and
  temporary cash investment                                         1 037           
431 

Cash and temporary cash investments at
  beginning of period                                               1 750         
1 071 

Cash and temporary cash investments at
  end of period                                                  $  2 787      
$  1 502 

<FN>
The accompanying notes as they relate to The Union Light, Heat and Power 
Company are an integral part of these financial 
statements.
</TABLE>
<PAGE>



THE UNION LIGHT, HEAT AND POWER COMPANY
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 1996


Kwh Sales

Kwh sales for the quarter ended September 30, 1996, decreased 6.4% from the 
comparable period of 1995.  A return to more normal weather in the third 
quarter of 1996 resulted in a decline in residential and commercial sales.  An 
increase in the average number of residential and commercial customers 
partially offset the decline in sales.  

Operating Revenues

Electric Operating Revenues

Electric operating revenues decreased $4.5 million (7.8%) for the quarter 
ended September 30, 1996, from the comparable period of 1995.  This decrease 
primarily reflects the previously discussed decline in kwh sales.  Also, on 
July 3, 1996, the KPSC issued an order authorizing a decrease in electric 
rates of approximately $1.8 million annually to reflect a reduction in the 
cost of electricity purchased from CG&E.

Gas Operating Revenues

An increasing trend of industrial customers purchasing gas directly from 
producers and utilizing ULH&P facilities to transport the gas continues to put 
downward pressure on gas operating revenues.  When ULH&P sells gas, the sales 
price reflects the cost of gas purchased by ULH&P to support the sale plus the 
costs to deliver the gas.  When gas is transported, ULH&P does not incur any 
purchased gas costs but delivers gas the customer has purchased from other 
sources.  Since providing transportation services does not necessitate 
recovery of gas purchased costs, the revenue per Mcf transported is less than 
the revenue per Mcf sold.  As a result, a higher relative volume of gas 
transported to gas sold translates into lower gas operating revenues.

Gas operating revenues declined $.3 million (5.6%) in the third quarter of 
1996, when compared to the same period of last year.  This decrease was the 
result of the aforementioned trend toward increased transportation services. 
This decrease was slightly offset by the operation of adjustment clauses 
reflecting a higher average cost of gas purchased. 

Operating Expenses

Electricity Purchased from Parent Company for Resale

Electricity purchased expense, ULH&P's largest operating expense, decreased 
$2.3 million (5.4.%) for the quarter ended September 30, 1996, as compared to 
the same period last year.  This decrease reflects the aforementioned 
reduction in the cost of electricity purchased from CG&E.

Maintenance

The $.2 million (21.0%) increase in maintenance expenses for the third quarter 
of 1996, as compared to the same period of 1995, is primarily due to increased 
maintenance expenses associated with gas and electric distribution facilities.

Other Income and Expenses - Net

Other - net

The change of $.4 million for other - net for the quarter ended September 30, 
1996, as compared to the same period of 1995, is primarily attributable to 
expenses associated with the sales of accounts receivables in 1996.

Interest

Interest on Long-term Debt

Interest charges decreased $.8 million (48.8%) for the quarter ended September 
30, 1996, as compared to the same period of 1995, primarily due to the 
redemption of $25 million of long-term debt from January 1996 to May 1996.


RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996

Kwh Sales

Kwh sales for the nine months ended September 30, 1996, increased 5.3% as 
compared to the same period of 1995.  This increase was due to higher kwh 
sales to all customer classes.  Residential and commercial sales reflected an 
increase in the average number of customers.  Industrial sales increased due 
to growth in the food products sector.  These increases were partially offset 
by the return to more normal weather in the third quarter of 1996.

Mcf Sales and Transportation

Mcf gas sales and transportation volumes for the nine months ended September 
30, 1996, increased 13.8% as compared to the same period in 1995.  Colder 
weather during the winter heating season, cooler than normal weather early in 
the second quarter of 1996, and increases in the average number of customers 
led to increases in gas sales to residential and commercial customers. 
Industrial sales decreased as customers continued to purchase gas directly 
from suppliers using transportation services provided by ULH&P.  The increase 
in transportation volumes, which more than offset the decline in industrial 
sales, was primarily a result of growth in the primary metals sector.

Operating Revenues

Electric Operating Revenues

Electric operating revenues increased $3.4 million (2.4%) for the nine months 
ended September 30, 1996, over the comparable period of 1995.  This increase 
primarily reflects the previously discussed increase in kwh sales.  Partially 
offsetting this increase is a lower average cost of electricity purchased due, 
in part, to the aforementioned reduction in the cost of electricity purchased 
from CG&E retroactive to July 3, 1995.

Gas Operating Revenues

Gas operating revenues increased $4.9 million (10.7%) for the first nine 
months of 1996 when compared to the same period of last year.  This increase 
was primarily a result of the previously discussed changes in gas sales 
volumes.  

Operating Expenses

Gas Purchased

Gas purchased increased $2.4 million (9.9%) for the nine months ended 
September 30, 1996, as compared to the prior year.  This increase reflects 
higher volumes purchased.  

Other Operation

The increase in other operation expenses of $1.2 million (5.3%) for the nine 
months ended September 30, 1996, from the same period of 1995 is due to a 
number of factors, including increased gas distribution expenses and higher 
administrative and general expenses.

Maintenance

Maintenance expenses for the nine months ended September 30, 1996, increased 
$.4 million (13.3%) when compared to the nine months ended September 30, 1995. 
This increase was due, in part, to higher expenses associated with gas 
distribution facilities.

Other Income and Expenses - Net

Other - net

The change of $1.1 million for other - net for the nine months ended September 
30, 1996, as compared to the same period of 1995, is primarily attributable to 
expenses associated with the sales of accounts receivables in 1996.

Interest

Interest on Long-term Debt

Interest charges decreased $2.5 million (44.7%) for the nine months ended 
September 30, 1996, from the same period of 1995, primarily due to the 
redemption of $25 million during the period from January 1996 to May 1996.
<PAGE>
NOTES TO FINANCIAL STATEMENTS

Cinergy, CG&E, PSI, and ULH&P
1.    These Financial Statements reflect all adjustments (which include only 
normal, recurring adjustments) necessary in the opinion of the 
registrants for a fair presentation of the interim results.  These 
statements should be read in conjunction with the Financial Statements 
and the notes thereto included in the combined 1995 Form 10-K of the 
registrants.  Certain amounts in the 1995 Financial Statements have been 
reclassified to conform to the 1996 presentation.

Cinergy, CG&E, and ULH&P
2.    In May 1996, ULH&P redeemed the entire $10 million principal amount of 
its 9 1/2% Series First Mortgage Bonds due December 1, 2008, at the 
redemption price of 104.35%.

Cinergy and PSI
      PSI redeemed $50 million principal amount of its 9 3/4% Series First 
Mortgage Bonds on the maturity date of August 1, 1996.

Cinergy and PSI
      A portion of PSI's 7.44% Series Cumulative Preferred Stock (591,000 
shares representing 15%), totaling $15 million, was reacquired by PSI at 
per share prices of $25.50 and $25.65 in May 1996.

Cinergy and PSI
3.  On September 12, 1996, PSI's shelf registration for $250 million of debt 
securities was made effective by the SEC.

On November 7, 1996, the City of Princeton, Indiana loaned the proceeds 
from the sale of its $24,600,000 Pollution Control Revenue Refunding 
Bonds, 1996 Series to PSI.  The purpose of the sale is to refund the 
$19,600,000 City of Princeton, Indiana Pollution Control Revenue Bonds, 
1973 Series and the $5,000,000 City of Princeton, Indiana Pollution 
Control Revenue Bonds, 1979 Series which were originally issued to 
finance PSI's costs of acquiring and constructing certain pollution 
control facilities at Gibson.  These refunded bonds will be redeemed on 
December 16, 1996 at a price of 100% of the principal amount thereof, 
plus accrued interest to the redemption date.  

The 1996 Series bonds bear interest at a variable rate and will mature 
March 1, 2019, subject to redemption prior to maturity, including a 
mandatory sinking fund redemption of $19,600,000 aggregate principal 
amount on January 1, 2014.  Pursuant to the loan agreement between PSI 
and Princeton, PSI will make loan payments sufficient to pay when due the 
principal of and interest on the 1996 Series bonds. 

Cinergy and PSI
4.    As discussed in Cinergy's and PSI's 1995 Form 10-K, RUS requested a 
rehearing on the affirmation by the Seventh Circuit Court of Appeals of 
WVPA's plan of reorganization which had been approved by the United 
States Bankruptcy Court for the Southern District of Indiana and upheld 
by the United States District Court for the Southern District of Indiana.  
In April 1996, the Seventh Circuit Court of Appeals denied RUS' request 
for rehearing.  RUS' request that the United States Supreme Court accept 
the appeal of this decision was denied November 4, 1996.  There is a 
short period for reconsideration of the denial.  PSI cannot predict 
whether RUS will request reconsideration of the denial or the outcome of 
any such request.  If the United States Supreme Court denies 
reconsideration, or no reconsideration is requested by RUS, then Cinergy 
and WVPA will commence implementation of the settlement agreement upon 
final certification of the plan of reorganization by the Bankruptcy 
Court.

Cinergy, CG&E, PSI, and ULH&P
5.    In March 1995, the FASB issued Statement 121, which became effective in 
January 1996 for Cinergy and its subsidiaries.  Statement 121, which 
addresses the identification and measurement of asset impairments for all 
enterprises, is particularly relevant for electric utilities as a result 
of the potential for deregulation of the generation segment of the 
business.  Statement 121 requires recognition of impairment losses on 
long-lived assets when book values exceed expected future cash flows. 
Based on the regulatory environment in which Cinergy's utility 
subsidiaries currently operate, compliance with the provisions of 
Statement 121 has not had nor is it expected to have an adverse effect on 
their financial condition or results of operations.  However, this 
conclusion may change in the future as competitive pressures and 
potential restructuring influence the electric utility industry.

Cinergy and CG&E
6.  An amendment to the Articles of CG&E was adopted at a special meeting of 
shareholders of CG&E, held on September 18, 1996.  The amendment removes 
a provision of the Articles that limits CG&E's ability to issue unsecured 
debt, including short-term debt.  Concurrently with the solicitation of 
proxies for the special meeting, Cinergy commenced an offer to purchase, 
for cash, any and all outstanding shares of preferred stock of CG&E.  The 
tender offer, which commenced August 20, 1996, and expired September 18, 
1996, was conditioned upon, among other things, the proposed amendment 
being approved and adopted at the special meeting.  Approximately 90% 
(1,788,544 of 2,000,000 shares) of the outstanding shares of preferred 
stock of CG&E was tendered pursuant to Cinergy's offer.  The source of 
funds for Cinergy's purchase of the tendered shares was a special cash 
dividend paid by CG&E to Cinergy on September 24, 1996.  Cinergy made a 
capital contribution to CG&E of all the shares it acquired and CG&E 
canceled these shares.  The difference between the par value of the 
preferred stock tendered and the purchase price paid (including tender 
fees paid to dealer managers) by Cinergy totaled $18.2 million, which is 
reflected in "Costs of Reacquisition of Preferred Stock of Subsidiaries" 
in the Consolidated Statements of Income.

The shares tendered and purchase price paid by Cinergy for each series of 
preferred stock are as follows:

                Series                            Shares       Price Per
       (Par value $100 per share)                Tendered        Share__

4%     Series Cumulative Preferred Stock          100,165      $ 64.00
4.75%  Series Cumulative Preferred Stock           88,379      $ 80.00
7.875% Series Cumulative Preferred Stock          800,000      $116.00
7.375% Series Cumulative Preferred Stock          800,000      $110.00
                                                1,788,544

As a result of the tender offer and the subsequent cancellation of shares 
by CG&E, CG&E currently has a total of 211,456 shares of preferred stock 
outstanding, consisting of 169,835 shares of the 4% Series and 41,621 
Shares of the 4.75% Series.  The 4.75% Series no longer meets certain 
listing requirements of the New York Stock Exchange and has been 
delisted.  (See "Part II - Other Information" - "Item 4.  Submission of 
Matters to a Vote of Security Holders.") 

Cinergy, CG&E, PSI, and ULH&P
7.    During 1996, Cinergy completed voluntary workforce reduction programs.  
Under these programs, 418 Cinergy exempt and non-bargaining unit 
employees and 201 PSI bargaining unit employees elected to terminate 
their employment with Cinergy.  These elections resulted in a pre-tax 
cost for the non-bargaining unit program of approximately $38.2 million 
(allocated $19.1 million to CG&E and its subsidiaries, including ULH&P, 
and $19.1 million to PSI) and a pre-tax cost for the PSI bargaining unit 
program of approximately $14 million.  Consistent with the merger savings 
sharing mechanisms previously approved by regulators, Cinergy has 
classified these costs as costs to achieve merger savings which resulted 
in approximately $14.6 million (pre-tax), allocable to Ohio electric 
jurisdictional customers, being charged to earnings in the second quarter 
of 1996.  The remaining costs have been deferred for future recovery 
through rates as an offset against merger savings.  A significant portion 
of these benefits is eligible for funding from qualified retirement plan 
assets.

Additionally, voluntary workforce reduction programs similar to the 
programs described above have been announced for bargaining unit 
employees of CG&E and its subsidiaries, including ULH&P.  Under these 
programs, there are 232 bargaining unit employees who meet certain age 
and service requirements that are eligible for enhanced retirement 
benefits. Eligible employees who do not meet age and service requirements 
will receive severance benefits upon resignation from their employment.  
Program costs will not be known until after the participation election 
periods end in December 1996.  The costs will be treated as costs to 
achieve merger savings, with the majority being charged to fourth quarter 
earnings and the remaining portion being deferred for future recovery.

Cinergy and PSI
8.    On September 27, 1996, the IURC approved an overall average retail 
electric rate increase for PSI of 7.6% ($75.7 million annually).  PSI had 
requested a retail rate increase of 10.5% ($104.8 million annually). 
Among other things, the IURC authorized a return on equity of 11.0% 
(before the 100 basis points additional common equity return allowed as a 
merger savings sharing mechanism) with an 8.21% overall rate of return on 
net original cost rate base, and the inclusion in rates of the Clean Coal 
Project, an ongoing level of DSM costs of $23 million, and a scrubber at 
Gibson.  Consideration of the Company's requested increase in the ongoing 
level of DSM costs to $39 million was deferred to a separate currently 
pending proceeding specifically established to review PSI's current and 
proposed DSM programs.  On October 17, 1996, the UCC and CAC filed with 
the IURC a Joint Petition for Reconsideration and Rehearing of the IURC's 
September 1996 Order.  PSI has filed a response in opposition to the 
requested rehearing and reconsideration.  PSI cannot predict what action 
the IURC may take with respect to the requested rehearing and 
reconsideration.
 
Cinergy and CG&E
9.    In October 1996, the PUCO concluded hearings on CG&E's gas rate increase 
request of 7.8% ($26.7 million annually).  The increase is being 
requested, in part, to recover capital investments made since CG&E's last 
gas rate increase in 1993.  In July 1996, the Staff of the PUCO issued 
its Report of Investigation on the rate request recommending that CG&E 
receive an annual increase in gas revenues ranging from $3.5 million to 
$6.3 million.  The differences between the Staff's recommendation and 
CG&E's request are primarily attributable to a decrease in working 
capital allowance, a lower rate of return, and the disallowance of 
certain capitalized information systems development costs and deferred 
merger costs.  An order in the rate proceeding is anticipated by the end 
of the first quarter of 1997; however, Cinergy cannot predict what action 
the PUCO may take with respect to the proposed rate increase.

Cinergy and CG&E 
10.   On November 1, 1996, CG&E entered into a sale-leaseback agreement for 
certain equipment at Woodsdale.  The lease is a capital lease with an 
initial lease term of five years.  At the end of the initial lease term, 
the lease may be renewed at mutually agreed upon terms or the equipment 
may be repurchased by CG&E at the original sale amount.  The monthly 
lease payment, comprised of interest only, will be based on the 
applicable LIBOR rate plus .30% and, therefore, the capital lease 
obligation will not be amortized over the initial lease term.  The 
property under the capital lease will continue to be depreciated at the 
same rate as if the property were still owned by CG&E. CG&E will record a 
capital lease obligation of $21.6 million.

Cinergy
11.   Avon Energy, a 50/50 joint venture between Cinergy and GPU, completed 
its acquisition of all of the outstanding common stock of Midlands during 
the third quarter of 1996.  The total consideration paid by Avon Energy 
was approximately $2.6 billion.  The funds for the acquisition were 
obtained from Cinergy's and GPU's investment in Avon Energy of 
approximately $500 million each, with the remainder being obtained by 
Avon Energy through the issuance of non-recourse debt.  Cinergy has used 
debt to fund its entire investment in Avon Energy.  Based on a 
preliminary allocation of the purchase price, Avon Energy has recorded 
goodwill of approximately $1.9 billion in connection with this 
acquisition.

Cinergy accounts for its investment in Avon Energy under the equity 
method.  Avon Energy's results for the quarter ended September 30, 1996, 
include 100% of Midlands' results for the quarter as substantially all of 
the Midlands' stock had been acquired by Avon Energy as of the beginning 
of the quarter.  Cinergy's equity in Avon Energy's earnings is 50%, the 
same as its ownership share.

The pro forma financial information presented below assumes 100% of 
Midlands was acquired on the first day of each respective period.  The 
pro forma adjustments include recognition of equity in the estimated 
earnings of Avon Energy, an adjustment for interest expense on debt 
associated with Cinergy's investment in Avon Energy, and related income 
taxes.  The estimated earnings of Avon Energy include the historical 
earnings of Midlands prior to its acquisition by Avon Energy, adjusted 
for the estimated effect of purchase accounting (including the 
amortization of goodwill) and conversion to United States generally 
accepted accounting principles, interest expense on debt issued by Avon 
Energy associated with the acquisition, and related income taxes.  Sales 
of electricity are affected by seasonal weather patterns and, therefore, 
the results of Avon Energy/Midlands will not be distributed evenly during 
the year.  (Equity in earnings of Avon Energy has been converted using 
the average exchange rates for the nine month and twelve month periods of 
$1.549/, and $1.556/, respectively.)

                        Nine Months Ended            Twelve Months Ended
                        September 30, 1996           September 30, 1996
                         Net     Earnings            Net      Earnings
                       Income    Per Share*        Income     Per Share*
                     (millions)                  (millions)

                                         (unaudited)

Cinergy                 $264      $1.56 (1)         $341       $2.05 (1)
Pro forma adjustments:
  Equity in Earnings
    of Avon Energy        31                          54
  Interest expense       (14)                        (23)
  Income taxes            (6)                        (11)            

Pro forma result        $275      $1.63             $361       $2.18

  * Based on the average number of common shares outstanding for the 
    period.

  (1) Earnings per share after a charge of $.12 per share for the cost of 
reacquiring preferred stock of CG&E through a tender offer.

Cinergy and PSI
12.   On August 7, 1996, PSI entered into a coal supply agreement with Eagle 
for the supply of approximately 3 million tons of coal per year.  The 
agreement (which runs through 
December 31, 2000) provides for the payment by PSI of a buy-out fee of 
$179 million (including interest).  This represents the fee paid by Eagle 
to Exxon to buy out the coal supply agreement between PSI and Exxon.  
Pursuant to the terms of the agreements, the price of coal paid by PSI 
will include a monthly buy-out charge which will be paid to Eagle through 
December 2000.

      As a result of the new coal supply agreement with Eagle, on the same 
day, PSI and the UCC entered into a settlement agreement which provides, 
in part, for PSI to recover the retail electric portion of the buy-out 
fee through the quarterly fuel adjustment clause, with carrying costs on 
unrecovered amounts, through December 2002.  PSI and the UCC have filed a 
joint petition with the IURC for approval of this settlement agreement.  
In, addition, PSI filed a petition with the FERC for waiver of fuel adjustment 
clause 
regulations.  PSI cannot predict what actions the IURC or the FERC may 
take with respect to these petitions.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS

FINANCIAL CONDITION

Recent Developments

Cinergy
Joint Venture  In May 1996, Cinergy, GPU, and Midlands announced the terms of 
a recommended cash offer for Midlands to be made by Avon Energy.  Cinergy and 
GPU each own 50% of Avon Energy.  Midlands, one of 12 regional electric 
companies in the United Kingdom, is headquartered in Birmingham, England.  
Midlands' principal business is the distribution of electricity to 
approximately 2.2 million customers.  Avon Energy commenced the offer to 
acquire all of the shares of Midlands on the terms and subject to conditions 
set out in an offering document.  On June 6, 1996, Cinergy and GPU announced 
that Avon Energy declared the cash offer wholly unconditional in all respects 
and thereby was committed to purchase all outstanding shares of Midlands.  
During the third quarter of 1996, Avon Energy completed the acquisition of all 
outstanding shares of Midlands.  The total acquisition price of Midlands is 
approximately (Pound Sterling) 1.7 billion (or approximately $2.6 billion - 
U.S.).  For further information, reference is made to Cinergy's Current 
Reports on Form 8-K dated May 7, 1996, and June 6, 1996, as amended.

See Note 11 of the "Notes to Financial Statements" in "Part I.  Financial 
Information" for pro forma financial information relating to the acquisition 
of Midlands.

Cinergy, CG&E, PSI, and ULH&P
Securities Ratings  Following the announcement of the potential acquisition of 
Midlands, major credit rating agencies, D&P, Fitch, and S&P, affirmed the 
current ratings of Cinergy's operating subsidiaries, after their consideration 
of the effects of the potential acquisition.  The other major credit rating 
agency, Moody's, placed the credit ratings of Cinergy's operating 
subsidiaries, CG&E, PSI, and ULH&P, under review for possible downgrade.  
Moody's indicated that its review will focus on the likelihood of the 
transaction being completed and will assess the operating strategies of the 
combined companies and the anticipated benefits of the transaction.  It will 
also focus on the financial impact the transaction will have on Cinergy and 
its operating subsidiaries, including the credit implications.  Cinergy cannot 
predict the outcome of this review.  

On September 27, 1996, Fitch raised its ratings of PSI's first mortgage bonds, 
secured medium-term notes, and secured pollution control revenue bonds to A 
from A- and PSI's unsecured pollution control notes to A- from BBB+.  
Additionally, the preferred stock ratings were reaffirmed at BBB+.  Fitch 
stated that these ratings reflect PSI's competitive profile, which is based 
upon various factors that has prepared it to compete effectively in an 
unregulated electric marketplace. 

Cinergy, CG&E, PSI, and ULH&P
Competitive Pressures  As discussed in the 1995 Form 10-K, the primary factor 
influencing the future profitability of Cinergy is the changing competitive 
environment for energy services, including the impact of emerging 
technologies, and the related commoditization of electric power markets.  
Changes in the industry include increased competition in wholesale power 
markets and ongoing pressure for "customer choice" by large industrial 
customers, and ultimately, by all retail customers.  Cinergy supports 
increased competition in the electric utility industry and has chosen to take 
a leadership role in state and Federal debates on industry reform.
As the electric utility industry moves toward a competitive environment, 
Cinergy is reassessing its corporate structure, including the issue of whether 
to remain vertically integrated.  As a first step toward "unbundling" the 
business for a competitive environment, Cinergy has reorganized into strategic 
business units.  This functional reorganization separated Cinergy's utility 
businesses into an energy services business unit, an energy delivery business 
unit, and an energy commodities business unit.  Cinergy continues to analyze 
what benefits, if any, may exist in the future for its various stakeholders of 
separating the business units into different corporations.

Cinergy, CG&E, PSI, and ULH&P
Contract Negotiations  As previously reported, members of IBEW Local No. 1393 
ratified a new labor agreement with PSI effective May 24, 1996, and expiring 
April 30, 1999.  Additionally, members of IBEW Local No. 1347, USWA Local Nos. 
12049 and 14214, and the IUU approved new contracts with CG&E expiring April 
1, 2001, May 15, 2002, and April 1, 2001, respectively.  

Regulatory Matters

Cinergy, CG&E, PSI, and ULH&P
FERC Orders 888 and 889  In April 1996, the FERC issued final orders relating 
to its previously issued mega-NOPR.  The unanimously-passed final rules, which 
contain essentially the same provisions as the mega-NOPR, provide for 
mandatory filing of open access/comparability transmission tariffs, provide 
for functional unbundling of all services, require utilities to use the filed 
tariffs for their own bulk power transactions, establish an electronic 
bulletin board for transmission availability and pricing information, and 
establish a contract-based approach to recovering any potential stranded costs 
as a result of customer choice at the wholesale level.  The FERC expects the 
rules to "accelerate competition and bring lower prices and more choices to 
energy customers."  The final rules became effective in July 1996.  CG&E, PSI, 
and ULH&P have made compliance filings with the FERC and are now operating 
under open access/comparability tariffs.

Concurrent with the issuance of the final orders, the FERC also issued a 
related NOPR which establishes a new system for utilities to use in reserving 
capacity on their own and others' transmission systems.  Cinergy has filed 
formal comments with the FERC which, generally, support several of the broad 
policy goals 
of the NOPR but raise implementation and prioritization issues.  The FERC 
proposed in the NOPR that a capacity reservation tariff replace open access 
tariffs by December 31, 1997.

Cinergy and CG&E
Legislation  On June 18, 1996, House Bill 476 (HB 476) was signed into law by 
the Governor of Ohio.  HB 476 addresses regulatory reform of the natural gas 
industry at the state level and thus, is an extension of Order 636 for local 
distribution companies.  The Ohio law, among other things, provides that 
natural gas commodity sales services may be exempted from PUCO regulation and 
that the PUCO allow alternative ratemaking methodologies in connection with 
other regulated services.  The PUCO has initiated a rulemaking proceeding to 
promulgate administrative rules necessary to implement the law.

Cinergy and PSI
PSI's Retail Rate Proceeding  See Note 8 of the "Notes to Financial 
Statements" in "Part I.  Financial Information." 

Cinergy and CG&E
CG&E's Gas Rate Proceeding  See Note 9 of the "Notes to Financial Statements" 
in "Part I.  Financial Information."  

Accounting Issues

Cinergy, CG&E, PSI, and ULH&P
New Accounting Standard  See Note 5 of the "Notes to Financial Statements" in 
"Part I.  Financial Information."

CAPITAL REQUIREMENTS

Cinergy and CG&E
Preferred Stock Tender Offer  See Note 6 of the "Notes to Financial 
Statements" in "Part I.  Financial Information."

Other Commitments

Cinergy and PSI
WVPA Litigation  See Note 4 of the "Notes to Financial Statements" in "Part I. 
Financial Information."

Cinergy, CG&E, PSI, and ULH&P
1996 Voluntary Workforce Reduction Programs  See Note 7 of the "Notes to 
Financial Statements" in "Part I.  Financial Information."

CAPITAL RESOURCES

Cinergy, CG&E, PSI, and ULH&P
Long-term Debt and Preferred Stock  For information regarding recent 
securities redemptions, see Notes 2, 3, and 6 of the "Notes to Financial 
Statements" in "Part I.  Financial Information."

Cinergy, CG&E, PSI, and ULH&P
Short-term Debt  The operating subsidiary companies of Cinergy have the 
following short-term debt authorizations and lines of credit:

                                                Committed           Unused
                              Authorized          Lines__            Lines
                                              (in millions)

    Cinergy & Subsidiaries       $838              $280               $64
    CG&E & Subsidiaries           435                80                11
    PSI                           400               200                53
    ULH&P                          35                -                 -

Additionally, Cinergy has established a $600 million credit facility, which 
expires in May 2001, of which $96 million remained unused as of November 11, 
1996.  This new credit facility was established, in part, to fund the 
acquisition of Midlands through Avon Energy ($500 million has been designated 
for this purpose) with the remaining portion available for general corporate 
purposes.  The prior $100 million credit facility, which would have expired in 
September 1997, has been terminated.

In addition, Cinergy U.K. entered into a $40 million non-recourse credit 
agreement, of which $27 million is outstanding as of November 11, 1996.  This 
new credit agreement was also used to fund the acquisition of Midlands.

Cinergy has borrowed approximately $500 million under the two agreements to 
fund its equity investment in Avon Energy.

Cinergy, CG&E, PSI, and ULH&P
Sales of Accounts Receivables  As discussed in each registrant's 1995 Form 10-
K, in January 1996, CG&E, PSI, and ULH&P entered into an agreement to sell, on 
a revolving basis, undivided percentage interests in certain of their accounts 
receivables.  Under the agreement, the companies have the authority to sell up 
to an aggregate maximum of $350 million of which $257 million has been sold as 
of October 31, 1996. 

RESULTS OF OPERATIONS

Cinergy, CG&E, PSI, and ULH&P
Reference is made to "ITEM 1. FINANCIAL STATEMENTS" in "PART I.  FINANCIAL 
INFORMATION."  

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Cinergy, CG&E, and PSI
Merger Litigation  The United States Court of Appeals for the District of 
Columbia Circuit will hear oral arguments in connection with AEP's petition 
for review of the FERC's Merger Order.  AEP has objected to the Merger Order 
alleging that the post-merger operations of Cinergy would require the use of 
AEP's transmission facilities on a continuous basis without compensation.  AEP 
contends that the FERC, in issuing the Merger Order, did not adequately 
evaluate the impact on AEP or whether the need to use AEP's transmission 
facilities would interfere with Cinergy achieving merger benefits.  In 
addition, AEP claims that the FERC failed to evaluate the extent to which the 
merged facilities' operations would be consistent with the integrated public 
utility concept of the PUHCA.  CG&E and PSI have intervened in this action.  
At this time, Cinergy, CG&E, and PSI cannot predict the outcome of the appeal.

Additionally, see Notes 4, 8, 9, and 12 of the "Notes to Financial 
Statements" in "Part I.  Financial Information."


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
CG&E
(a)  A special meeting of shareholders of CG&E was held September 18, 1996   
in Cincinnati, Ohio.  

(c) An amendment to CG&E's Articles was approved.  The amendment removes a 
    provision of the Articles that limited the amount of unsecured debt, 
    including short-term debt, that could be incurred by CG&E.  There were 
    89,663,086 common shares that voted for the amendment.  There were 
    1,800,315 affirmative votes of preferred stock, 35,677 negative votes, 
    and 21,077 abstentions.  A two-thirds affirmative vote of both common 
    and preferred shares, each voting as a separate class, was required to 
    approve the amendment. 
<PAGE>
ITEM 5.  OTHER INFORMATION

Cinergy
On June 25, 1996, Power International sold its ownership interest in Bruwabel 
and its subsidiaries, including Power Development s.r.o. which owns the 
Vytopna Kromeriz Heating Plant.  Power International (formerly Enertech 
Associates International, Inc.) had acquired Bruwabel and its subsidiaries in 
July 1994 for the purpose of pursuing design, engineering, and development 
work involving energy privatization projects, primarily in the Czech Republic.

Cinergy, CG&E, and ULH&P
KO Transmission acquired a 32.67% interest in a 90-mile interstate natural gas 
pipeline and began flowing gas June 1, 1996, from southeast Kentucky northward 
to the service territories of CG&E and ULH&P.  

Cinergy, CG&E, and PSI
In August 1996, Cinergy sold its ownership interests in PSI Recycling which 
recycled metal from CG&E and paper, metal, and other materials from PSI.

Cinergy and CG&E 
In October 1996, Cinergy sold certain electric generating equipment for 
removal from Miami Fort.

Cinergy, CG&E, PSI, and ULH&P
Additionally, refer to the "Recent Developments" and "Regulatory Matters" 
sections in "Management's Discussion and Analysis of Financial Condition 
and Results of Operations" in "Part I.  Financial Information" for 
information concerning new contracts between CG&E (including ULH&P), PSI 
and certain of the union organizations, Cinergy's Joint Venture, the status 
of the CG&E gas rate proceeding, and the Company's functional 
restructuring.
<PAGE>
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

  (a)  The following exhibits are filed herewith:

       Exhibit
     Designation                        Nature of Exhibit                 


CG&E 
          3-a            Amended Articles of Incorporation of CG&E
                         effective October 23, 1996.

PSI
          3-b            By-laws of PSI, as amended on October 22, 1996.

Cinergy and PSI
          4-a            Loan Agreement between PSI and the City of 
                         Princeton, Indiana dated November 7, 1996.

Cinergy
         10-a            Amendment to Cinergy's Stock Option Plan, adopted 
                         on October 22, 1996. 

         10-b            Amendment to Cinergy's Performance Shares Plan, 
                         adopted on October 22, 1996. 

         10-c            Amendment to Cinergy's 1996 Long-Term Incentive 
                         Compensation Plan adopted on October 22, 1996. 

         10-d            Amendment to Cinergy's Employee Stock Purchase 
                         and Savings Plan, adopted on October 22, 1996. 

         10-e            Amendment to Cinergy's Directors' Deferred 
                         Compensation Plan, adopted on October 22, 1996. 

Cinergy, CG&E, PSI, and ULH&P 
         27              Financial Data Schedules (included in
                         electronic submission only).

Cinergy
  (b)  No reports on Form 8-K were filed during the quarter.
<PAGE>

	SIGNATURES

Certain information and footnote disclosures normally included in financial 
statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted pursuant to such rules and 
regulations, although Cinergy, CG&E, PSI, and ULH&P believe that the 
disclosures are adequate to make the information presented not misleading.  In 
the opinion of Cinergy, CG&E, PSI, and ULH&P, these statements reflect all 
adjustments (which include only normal, recurring adjustments) necessary to 
reflect the results of operations for the respective periods.  The unaudited 
statements are subject to such adjustments as the annual audit by independent 
public accountants may disclose to be necessary.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange 
Act of 1934, the Registrants have duly caused this report to be signed by an 
officer and the chief accounting officer on their behalf by the undersigned 
thereunto duly authorized.

 CINERGY CORP.              
                                      THE CINCINNATI GAS & ELECTRIC COMPANY  
PSI ENERGY, INC.             
THE UNION LIGHT, HEAT AND POWER COMPANY
Registrants               




Date:  November 12, 1996                           J. Wayne Leonard  _________
                                                Duly Authorized Officer 


Date:  November 12, 1996                           Charles J. Winger        __
                                               Chief Accounting Officer