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                                PSI ENERGY, INC.

                                       AND

                                FIFTH THIRD BANK,

                                     Trustee

                                ----------------

                         Seventh Supplemental Indenture

                          Dated as of October 20, 1999

                                       To

                                    Indenture

                          Dated as of November 15, 1996

                                ----------------


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                            7.85% Debentures Due 2007



      SEVENTH SUPPLEMENTAL INDENTURE, dated as of October 20, 1999, between
PSI Energy, Inc., a corporation duly organized and existing under the laws of
the State of Indiana (herein called the "Company"), having its principal
office at 1000 East Main Street, Plainfield, Indiana 46168, and Fifth Third
Bank, an Ohio banking corporation, as Trustee (herein called the "Trustee")
under the Indenture dated as of November 15, 1996 between the Company and the
Trustee, as supplemented (the "Indenture").

                             Recitals of the Company

      The Company has executed and delivered the Indenture to the Trustee to
provide for the issuance from time to time of its unsecured debentures, notes
or other evidences of indebtedness (the "Securities"), to be issued in one or
more series as provided in the Indenture.

      Pursuant to the terms of the Indenture, the Company desires to provide
for the establishment of a new series of its Securities to be known as its
7.85% Debentures Due 2007 (herein called the "Debentures"), in this Seventh
Supplemental Indenture.

      All things necessary to make this Seventh Supplemental Indenture a
valid agreement of the Company have been done.

      Now, Therefore, This Seventh Supplemental Indenture Witnesseth:

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      For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Debentures, as follows:

                             ARTICLE ONE

                       Terms of the Debentures

      Section 101. There is hereby authorized a series of Securities
designated the "7.85% Debentures Due 2007", limited in aggregate principal
amount to $265,000,000 (except as provided in Section 301(2) of the
Indenture). The Debentures shall mature and the principal shall be due and
payable together with all accrued and unpaid interest thereon on October 15,
2007 and shall be issued in the form of a registered Global Security without
coupons, registered in the name of Cede & Co., as nominee of The Depository
Trust Company (the "Depositary").

      Section 102. The provisions of Section 305 of the Indenture applicable
to Global Securities shall apply to the Debentures.

      Section 103. Interest on each of the Debentures shall be payable
semiannually on April 15 and October 15 in each year (each an "Interest
Payment Date"), commencing on April 15, 2000, at the rate per annum specified
in the form of Debentures, from October 20, 1999, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the Person in whose name such Debenture
(or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
Business Day immediately

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preceding such Interest Payment Date. The amount of interest payable for
any period will be computed on the basis of a 360-day year of twelve 30-day
months. As used herein, "Business Day" means any day other than a Saturday
or Sunday or a day which banking institutions in New York, New York are
authorized or obligated by law or executive order to be closed.

      Section 104. Subject to agreements with or the rules of the Depositary
or any successor book-entry security system or similar system with respect to
Global Securities, payments of interest will be made by check mailed to the
Holder of each Debenture at the address shown in the Security Register, and
payments of the principal amount of each Debenture will be made at maturity
by check against presentation of the Debenture at the office or agency of the
Trustee.

      Section 105. The Debentures shall be issued in denominations of $1,000
or any integral multiple of $1,000.

      Section 106. Principal and interest on the Debentures shall be payable
in the coin or currency of the United States of America, which, at the time
of payment, is legal tender for public and private debts.

      Section 107. The Debentures shall be subject to defeasance and covenant
defeasance, at the Company's option, as provided for in Sections 1302 and
1303 of the Indenture.

      Section 108. Subject to the terms of Article Eleven of the Indenture,
the Company shall have the right to redeem the Debentures, at any time in
whole or from time to time in part, until maturity (such redemption, a
"Make-Whole Redemption," and the date thereof, the "Redemption Date"), upon
not less than 30

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nor more than 60 days notice to the holders, at a redemption price equal to
the sum of (i) the principal amount of the Debentures being redeemed plus
accrued and unpaid interest thereon to the Redemption Date, and (ii) the
Make-Whole Amount (as defined below), if any, with respect to the
Debentures being redeemed. Unless the Company defaults in payment of the
redemption price, on and after any Redemption Date, interest will cease to
accrue on the Debentures or portions thereof called for redemption.

      "Make-Whole Amount" means, in connection with any Make-Whole Redemption
of any Debentures, the excess, if any, of (i) the sum, as determined by a
Quotation Agent (as defined herein) of the present value of the principal
amount of such Debentures, together with scheduled payments of interest from
the Redemption Date to October 15, 2007, in each case discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined herein) over
(ii) 100% of the principal amount of the Debentures to be redeemed.

      "Adjusted Treasury Rate" means, with respect to any Redemption Date for
a Make-Whole Redemption, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such
Redemption Date, calculated on the third business day preceding the
Redemption Date, plus in each case .25% (25 basis points).

      "Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining

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term from the Redemption Date to the Stated Maturity of the Debentures
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the Debentures.

      "Quotation Agent" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company. "Reference Treasury Dealer"
means a primary U.S. Government securities dealer.

      "Comparable Treasury Price" means, with respect to any Redemption Date
for a Make-Whole Redemption, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third business day preceding such Redemption Date,
as set forth in the daily statistical release designated "H.15" (or any
successor release) published by the Board of Governors of the Federal Reserve
System or (ii) if such release (or any successor release) is not published or
does not contain such prices on such business day, (A) the average of the
Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of such Quotations.

      "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date for a Make-Whole
Redemption, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury

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Dealer at 5:00 p.m., New York City time, on the third business day
preceding such Redemption Date.

                               ARTICLE TWO

                         Form of the Debentures

      Section 201. The Debentures are to be substantially in the following
form and shall include substantially the legend shown so long as the
Debentures are Global Securities:

                      (FORM OF FACE OF DEBENTURE)

No. R-                                                         $_________
---------
CUSIP No.

                           PSI ENERGY, INC.

                      7.85% DEBENTURES DUE 2007

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


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       PSI ENERGY, INC., a corporation duly organized and existing under the
laws of the State of Indiana (herein called the "Company", which term
includes any successor Person under the Indenture hereafter referred to), for
value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of and No/100 Dollars ($) on October 15, 2007, and to pay
interest thereon from October 20, 1999, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for,
semiannually, on April 15, and October 15, in each year, commencing April 15,
2000, at the rate of 7.85% per annum, until the principal hereof is paid or
made available for payment. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Record Date for
such interest, which shall be the Business Day immediately preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose  name this Security
(or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful  manner not inconsistent
with the requirements of any securities exchange on which the Securities of

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this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.

       Payment of the principal of (and premium, if any) and interest on this
Security will be made at the corporate trust office of the Trustee maintained
for that purpose in the City of Cincinnati, in such coin or currency of the
United States of America as at the time of payment is legal  tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made by check  mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register.

       Any payment on this Security due on any day which is not a Business
Day in the City of New York need not be made on such day, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the due date and no interest shall accrue for the period from and after such
date, unless such payment is a payment at maturity or upon redemption, in
which case interest shall accrue thereon at the stated rate for such
additional days.

       As used herein, "Business Day" means any day other than a Saturday or
Sunday or a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to be closed.

       Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

       Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this

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Security shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.



       In Witness Whereof, the Company has caused this instrument to be duly
executed.

                              PSI ENERGY, INC.

                              By.............

                         CERTIFICATE OF AUTHENTICATION

Dated:

       This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

                              FIFTH THIRD BANK,

                               as Trustee

                              By...............
                              Authorized Signatory

                             (FORM OF REVERSE OF DEBENTURE)

This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of November 15, 1996 (as
supplemented, herein called the "Indenture", which term shall have the
meaning assigned to it in such instrument), between the Company and Fifth
Third Bank, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture),

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and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face
hereof, limited in aggregate principal amount to $265,000,000.

The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and
Events of Default with respect to this Security upon compliance with
certain conditions set forth in the Indenture.

The Securities of this series are subject to optional redemption at any time
in whole or from time to time in part, until maturity, (such
redemption, a "Make-Whole Redemption," and the date thereof, the
"Redemption Date"), upon not less than 30 nor more than 60 days' notice to
the holders, at a redemption price equal to the sum of (i) the principal
amount of the Debentures being redeemed plus accrued and unpaid interest
thereon to the Redemption Date, and (ii) the Make-Whole Amount (as defined
below), if any, with respect to the Debentures being redeemed.

"Make-Whole Amount" means, in connection with any Make-Whole Redemption of
any Debentures, the excess, if any, of (i) the sum, as determined by a
Quotation Agent (as defined herein) of the present value of the principal
amount of such Debentures, together with scheduled payments of interest
from the Redemption Date to October 15, 2007, in each case discounted to
the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months)


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at the Adjusted Treasury Rate (as defined herein) over (ii) 100% of
the principal amount of the Debentures to be redeemed.

"Adjusted Treasury Rate" means, with respect to any Redemption Date
for a Make-Whole Redemption, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury
Price for such Redemption Date, calculated on the third business day
preceding the Redemption Date, plus in each case .25% (25 basis points).

"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term from the Redemption Date to the Stated Maturity of the
Debentures that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of
the Debentures.

"Quotation Agent" means the Reference Treasury Dealer selected by the
Trustee after consultation with the Company. "Reference Treasury Dealer"
means a primary U.S. Government securities dealer.

"Comparable Treasury Price" means, with respect to any Redemption Date
for a Make-Whole Redemption, (i) the average of the bid and asked prices
 for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third business day preceding
such Redemption Date, as set forth in the daily statistical release
designated "H.15" (or any successor release) published by the Board of
Governors of the Federal Reserve System or


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(ii) if such release (or any successor release) is not published or does
not contain such prices on such business day, (A) the average of the
Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of such Quotations.

"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date for a Make-Whole
Redemption, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case
as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m., New York City time, on
the third business day preceding such Redemption Date.

If an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Securities of each
series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of a majority
in principal amount of the Securities of each series at the time
outstanding, on behalf of the


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Holders of all Securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by
the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee
or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of
Default with respect to the Securities of this series, the Holders of not
less than 35% in principal amount of the Securities of this series at the
time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and
offered the Trustee reasonably satisfactory indemnity, and the Trustee
shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute
any such proceeding, for 60 days after receipt of such notice, request and
offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of


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this Security for the enforcement of any payment of principal hereof or
any premium or interest hereon on or after the respective due dates
expressed herein.

No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at
the office or agency of the Company in any place where the principal of
and any premium and interest on this Security are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like
tenor of a different authorized denomination, as requested by the
Holder surrendering the same.


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No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.

All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

                            ARTICLE THREE

                     Original Issue of Debentures

       Section 301. Debentures in the aggregate principal amount of
$265,000,000, may, upon execution of this Seventh Supplemental Indenture, or
from time to time thereafter, be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures upon a Company Order without any further action by
the Company.

                            ARTICLE FOUR

                 Paying Agent and Security Registrar

       Section 401. Fifth Third Bank will be the Paying Agent and Security
Registrar for the Debentures.

                            ARTICLE FIVE


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                         Sundry Provisions

       Section 501. Except as otherwise expressly provided in this Seventh
Supplemental Indenture or in the form of Debenture or otherwise clearly
required by the context hereof or thereof, all terms used herein or in said
form of Debenture that are defined in the Indenture shall have the several
meanings respectively assigned to them thereby.

       Section 502. The Indenture, as supplemented by this Seventh
Supplemental Indenture, is in all respects ratified and confirmed, and this
Seventh Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.

                        ------------------



       This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

       In Witness Whereof, the parties hereto have caused this Seventh
Supplemental Indenture to be duly executed as of the day and year first above
written.

                                            PSI ENERGY, INC.

                                            BY /s/ MADELEINE W. LUDLOW
                                                   Madeleine W. Ludlow
                                                   Vice President and
                                                 Chief Financial Officer


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                                            FIFTH THIRD BANK, as Trustee

                                            BY /s/ KERRY BYRNE
                                                   Kerry Byrne
                                                   Vice President


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