EXHIBIT 10.1

                    IPALCO ENTERPRISES, INC.
                     1997 STOCK OPTION PLAN


      1.  Purpose.  The purpose of the IPALCO Enterprises,
Inc. 1997 Stock Option Plan (the "Plan") is to provide to
certain officers (including officers who are members of the
Board of Directors) and other key executive employees of
IPALCO Enterprises, Inc. (the "Corporation") and of any of the
eighty percent (80%) or greater owned, direct or indirect,
subsidiaries of the Corporation (individually a "Subsidiary
and collectively the "Subsidiaries") who are materially
responsible for the management or operation of the business of
the Corporation or a Subsidiary, a favorable opportunity to
acquire Common Stock, without par value, of the Corporation
("Common Stock"), thereby providing them with an increased
incentive to work for the success of the Corporation and the
Subsidiaries and better enabling the Corporation and the
Subsidiaries to attract and retain capable executive
personnel.

      2.  Administration of the Plan.  The Plan shall be
administered, construed and interpreted by the Compensation
Committee (the "Committee") of the Board of Directors of the
Corporation.  The Committee must be composed of two or more
persons who qualify as "Non-Employee Directors" within the
meaning of Rule 16b-3(b)(3) promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and as
"outside directors" as defined in Treasury Reg. Section
1.162-27(e)(3).  The decision of a majority of the members
of  the Committee shall constitute the decision of the
Committee, and the Committee may act (a) at a meeting at which
a majority of the members of the Committee is present, (b)
unless prohibited by the Corporation's Articles of
Incorporation or Bylaws, by simultaneous telephonic
communication as authorized by IND. CODE Section 23-1-34-1, or (c)
by a written consent signed by all members of the Committee. 
The Committee shall have the sole, final and conclusive
authority to determine, consistent with and subject to the
provisions of the Plan:

     (a)  the individuals (the "Optionees") to whom options or
          successive options shall be granted under the Plan;

     (b)  the time when options shall be granted hereunder;

     (c)  the number of shares of Common Stock of the
          Corporation to be covered under each option;

     (d)  the option price to be paid upon the exercise of
     each option;

     (e)  the period within which each option may be
     exercised;

     (f)  the extent to which an option is an incentive stock
          option or a non-qualified stock option; and

     (g)  the terms and conditions of the respective
          agreements by which options granted shall be
          evidenced.

The Committee shall also have authority to prescribe, amend
and rescind rules and regulations relating to the Plan, and to
make all other determinations necessary or advisable in the
administration of the Plan.

      3.  Eligibility.  The Committee may, consistent with the
purposes of the Plan, grant options to officers and other key
employees of the Corporation or of a Subsidiary who in the
opinion of the Committee are from time to time materially
responsible for the management or operation of the business of
the Corporation or of a Subsidiary; provided, however, that in
no event may any employee who owns (after application of the
ownership rules in Section 424(d) of the Internal Revenue Code of
1986, as amended (the "Code")) shares of stock possessing more
than 10% of the total combined voting power of all classes of
stock of the Corporation be granted an incentive stock option 
hereunder unless at the time such option is granted the option
price is at least 110% of the fair market value of the Common
Stock subject to the option and such incentive stock option by
its terms is not exercisable after the expiration of five (5)
years from the date such option is granted.  Subject to the
provisions of Section 4 hereof, an individual who has been
granted an option under the Plan, if he is otherwise eligible,
may be granted an additional option or options if the
Committee shall so determine.  The maximum number of shares of
the Corporation's Common Stock with respect to which options
may be granted in any calendar year to any individual shall
not exceed two hundred and fifty thousand (250,000).

      4.  Stock Subject to the Plan.  There shall be reserved
for issuance upon the exercise of options granted under the
Plan, two million (2,000,000) shares of the Corporation's
Common Stock which may be authorized but unissued shares of
the Corporation. Subject to Section 6 hereof, the shares for
which options may be granted under the Plan shall not exceed
that number.  If any option shall expire or terminate for any
reason without having been exercised in full, the unpurchased
shares subject thereto shall (unless the Plan shall have
terminated) become available for other options under the Plan.

      5.  Terms of Option.  Each option granted under the Plan
shall be subject to the following terms and conditions and to
such other terms and conditions not inconsistent therewith as
the Committee may deem appropriate in each case:

     (a)  Option Price.  The price to be paid for shares of
Common Stock upon the exercise of each option shall be
determined by the Committee at the time such option is
granted, but such price in the case of an incentive stock
option in no event shall be less than the fair market value,
as determined by the Committee consistent with the requirements
of Section 422 of the Code, of such Common Stock on the
date on which such option is granted.

     (b)  Period for Exercise of Option.  An option shall not
be exercisable after the expiration of such period as shall be
fixed by the Committee at the time such option is granted, but
such period in no event shall exceed ten (10) years and one
day from the date on which such option is granted; provided,
however, that incentive stock options shall have terms not in
excess of ten (10) years; provided, further, that no option
shall be exercisable prior to the date on which the Plan is
approved by the shareholders of the Corporation as required by
Section 422 of the Code.

     (c)  Exercise of Options.  The option price of each share
of Common Stock purchased upon exercise of an option shall be
paid in full (1) in cash at the time of such exercise, (2) if
the Optionee may do so in conformity with Regulation T (12
C.F.R. Section 220.3(e)(4)) and without violating
Section 16(b) or (c) of the 1934 Act (to the extent
applicable) and subject to approval by the Committee, by
delivering a properly executed exercise note  together with
irrevocable instructions to a broker to deliver promptly to
the Corporation the total option price in cash and, if
desired, the amount of any taxes to be withheld from the
Optionee's compensation as a result of any withholding tax
obligation of the Corporation or any of its Subsidiaries, as
specified in such notice, or (3) subject to the approval of
the Committee, by tendering to the Corporation whole shares of
Common Stock owned by him or any combination of whole shares
of Common Stock owned by him and cash, having a fair market
value equal to the cash exercise price of the shares with
respect to which the option is being exercised.  For this
purpose, the fair market value of the shares tendered by the
Optionee shall be computed as of the exercise date in such
manner as determined by the Committee, consistent with the
requirements of Section 422 of the Code.  The Committee shall have
the authority to grant options exercisable in full at any time
during their term, or exercisable in such quotas as the
Committee shall determine.  An option may be exercised at any
time or from time to time during the term of the option as to
any or all whole shares which have become subject to purchase
pursuant to the terms of the option (including, without
limitation, any quotas with respect to option exercise) or the
Plan.

     (d)  Termination of Option.  If an Optionee ceases to be
an employee of the Corporation or one of the Subsidiaries for
any reason other than retirement, permanent and total disability
(within the meaning of Section 105(d)(4) of the Code), or
death, any option granted to him shall forthwith terminate. 
Leave of absence approved by the Committee shall not
constitute cessation of employment.  If an Optionee ceases to
be an employee of the Corporation or one of the Subsidiaries
by reason of permanent and total disability (within the meaning
of Section 105(d)(4) of the Code), any option granted to him
may be exercised by him in whole or in part within one (1)
year after the date of his termination of employment by reason
of such disability whether or not the option was otherwise
exercisable at the date of such termination of employment.  If
an Optionee ceases to be an employee of the Corporation or one
of the Subsidiaries by reason of retirement, any option
granted to him may be exercised by him in whole or in part
during the period fixed by the Committee under subsection (b)
of this Section 5, provided that the option was otherwise
exercisable at the date of such termination of employment. 
The term "retirement" as used herein means an Optionee's
termination of employment on or after meeting the requirements
for early or normal retirement benefits under any then
existing Indianapolis Power & Light Company pension plan.  In
the event of the death of an Optionee while in the employ of
the Corporation or the Subsidiaries or within one (1) year
after the termination of his employment by reason of
retirement or permanent and total disability (within the
meaning of Section 105(d)(4) of the Code), any option granted 
to him may be exercised in whole or in part at any time after the
date of such death by the executor or administrator of his
estate or by the person or persons entitled to the option by
will or by applicable laws of descent and distribution until
the expiration of the option term as fixed by the Committee,
whether or not the option was otherwise exercisable at the
date of his death. Notwithstanding the foregoing provisions of
this subsection (d), no option shall in any event be
exercisable after the expiration of the period fixed by the
Committee in accordance with subsection (b) above.  An option
shall also terminate if this Plan is not approved by the
shareholders of the Corporation within the requisite time
period set forth in Section 422 of the Code.

     (e)  Nontransferability of Option.  An Option may not be
transferred by the Optionee otherwise than by will or the laws
of descent and distribution, and during the lifetime of the
Optionee shall be exercisable only by him.

     (f)  Investment Representations.  Unless the shares of
Common Stock subject to an option are registered under 
applicable federal and state securities laws, each Optionee by
accepting an option shall be deemed to agree for himself and
his legal representatives that any option granted to him and
any and all shares of Common Stock purchased upon the exercise
of the option shall be acquired for investment and not with a
view to, or for the sale in connection with, any distribution
thereof, and each notice of the exercise of any portion of an
option shall be accompanied by a representation in writing,
signed by the Optionee or his legal representatives, as the
case may be, that the shares of Common Stock are being
acquired in good faith for investment and not with a view to,
or for sale in connection with, any distribution thereof
(except in case of the Optionee's legal representatives for
distribution, but not for sale, to his legal heirs, legatees
and other testamentary beneficiaries).  Any shares issued
pursuant to an exercise of an option may, but need not, bear a
legend evidencing such representations and restrictions.  In
addition, if the options and shares of Common Stock issued
pursuant to this Plan are issued in reliance upon Rule 147,
promulgated under the Securities Act of 1933, as amended, the
written representations required by such rule shall be
obtained from the Optionees prior to or at the time they are
granted options, any and all legends required by Rule 147
shall be set forth on the certificates representing shares of
Common Stock issued pursuant to the exercise of such options,
and stop transfer instructions shall be issued to the
Corporation's recordkeeping transfer agent with respect to
such shares.

     (g)  Maximum Incentive Stock Options.  The aggregate fair
market value (determined as of the time the option is granted)
of Common Stock subject to incentive stock options that are
exercisable for the first time by an employee during any
calendar year under the Plan or any other plan of the
Corporation or any Subsidiary shall not exceed $100,000.  For
this purpose, the fair market value of such shares shall be
determined as of the date the option is granted and shall be
computed in such manner as shall be determined by the Committee,
consistent with the requirements of Section 422 of the
Code.  If the immediate exercisability of incentive stock
options arising from the death or permanent and total
disability of an Optionee pursuant to Section 5(d) above or
arising from any change of control of the Corporation would
cause this $100,000 limitation to be exceeded for an Optionee,
the Committee shall convert as of the date on which such
incentive stock options become exercisable all or a portion of
the outstanding incentive stock options held by such Optionee
to non-qualified stock options to the extent necessary to
comply with the $100,000 limitation.

     (h)  Agreement.  Each option shall be evidenced by an
agreement between the optionee and the Corporation which shall
provide, among other things, that, with respect to incentive
stock options, the optionee shall advise the Corporation
immediately upon any sale or transfer of the shares of Common
Stock received upon exercise of the option to the extent such
sale or transfer takes place prior to the later of (a) two (2)
years from the date of grant or (b) one (1) year from the date
of exercise.

     (i)  Tax Benefit.  The Committee may, in its sole
discretion, include a provision in any non-qualified stock
option agreement that provides for an additional cash payment
from the Corporation to the grantee of such non-qualified
option as soon as practicable after the exercise date of such
non-qualified stock option equal to all or a portion of the
tax benefit to be received by the Corporation attributable to
its federal income tax deduction resulting from the exercise
of such non-qualified stock option.

     (j)  Certificates.  The certificate or certificates for
the shares issuable upon an exercise of an option shall be
issued as promptly as practicable after such exercise.  An
Optionee shall not have any rights of a shareholder in respect
to the shares of Common Stock subject to an option until the
date of issuance of a stock certificate to him for such
shares.  In no case may a fraction of a share be purchased or
issued under the Plan, but if, upon the exercise of an option,
a fractional share would otherwise be issuable, the
Corporation shall pay cash in lieu thereof.

     (k)  No Right to Continued Service.  Nothing in this Plan
or in any agreement entered into pursuant hereto shall confer
on any person any right to continue in the employ of the
Corporation or its Subsidiaries or affect any rights of the
Corporation, a Subsidiary, or the shareholders of the
Corporation may have to terminate his service at any time.

     (l)  Incentive Stock Options and Non-Qualified Stock 
Options.  Options granted under the Plan may be incentive
stock options under Section 422 of the Code or non-qualified stock
options.  All options granted hereunder shall be clearly
identified as either incentive stock options or non-qualified
stock options.  In no event shall the exercise of an incentive
stock option affect the right to exercise any non-qualified
stock option, nor shall the exercise of any non-qualified
stock option affect the right to exercise any incentive stock
option.  Nothing in this Plan shall be construed to prohibit
the grant of incentive stock options and non-qualified stock
options to the same person; provided, however, that incentive
stock options and non-qualified stock options shall not be
granted in a manner whereby the exercise of one non-qualified
stock option or incentive stock option affects the
exercisability of the other.

      6.  Adjustment of Shares.  In the event of any change
after the effective date of the Plan in the outstanding stock
of the Corporation by reason of any reorganization,
recapitalization, stock split, stock dividend, combination of
shares, exchange of shares, merger or consolidation,
liquidation, or any other change after the effective date of
the Plan in the nature of the shares of stock of the 
Corporation, the Committee shall determine what changes, if
any, are appropriate in the number and kind of shares reserved
under the Plan, and in the option price under and the number
and kind of shares covered by outstanding options granted
under the Plan.  Any determination of the Committee hereunder
shall be conclusive.

      7.  Tax Withholding.  Whenever the Corporation proposes
or is required to issue or transfer shares of Common Stock
under the Plan, the Corporation shall have the right to
require the Optionee or his or her legal representative to
remit to the Corporation an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior
to the delivery of any certificate or certificates for such
shares, and whenever under the Plan payments are to be made in
cash, such payments shall be net of an amount sufficient to
satisfy any federal, state and/or local withholding tax
requirements.

      8.  Amendment.  The Board of Directors of the
Corporation may amend the Plan from time to time and, with the
consent of the Optionee, the terms and provisions of his
option, except that without the approval of the Corporation's
shareholders:

     (a)  the number of shares of Common Stock which may be
reserved for issuance under the Plan may not be increased
except as provided in Section 6 hereof;

     (b)  the period during which an option may be exercised
may not be extended beyond ten (10) years and one (1) day from
the date on which such option was granted;

     (c)  the class of employees to whom options may be
granted under the Plan shall not be modified materially; and

     (d)  no other amendment to the Plan may be made which
requires the approval of the Corporation's shareholders under
applicable law or under the rules and regulations of the New
York Stock Exchange.

     No amendment of the Plan, however, may, without the
consent of the Optionees, make any changes in any outstanding
options theretofore granted under the Plan which would
adversely affect the rights of such Optionees.

      9.  Termination.  The Board of Directors of the
Corporation may terminate the Plan at any time and no option
shall be granted thereafter.  Such termination, however, shall
not affect the validity of any option theretofore granted
under the Plan. In any event, no incentive stock option may be
granted after the conclusion of a ten (10) year period
commencing on the date the Plan is adopted or, if earlier, the
date the Plan is approved by the Corporation's shareholders.

     10.  Successors.  The Plan shall be binding upon the
successors and assigns of the Corporation.

     11.  Governing Law.  The terms of any options granted
hereunder and the rights and obligations hereunder of the
Corporation, the Optionees and their successors in interest
shall, except to the extent governed by federal law, be
governed by Indiana law.

     12.  Government and Other Regulations.  The obligations
of the Corporation to issue or transfer and deliver shares
under options granted under the Plan shall be subject to
compliance with all applicable laws, governmental rules and
regulations, and administrative action.

     13.  Effective Date.  The Plan shall become effective
when it shall have been approved by the Corporation's Board of
Directors; provided, however, that the granting of any options
under the Plan is conditional upon the approval of the Plan by
the Corporation's shareholders within twelve (12) months after
the adoption of the Plan by the Corporation's Board of
Directors and the options granted pursuant to the Plan may not
be exercised until the Board of Directors of the Corporation
has been advised by counsel that such approval has been
obtained and all other applicable legal requirements have been
met; provided, further, that if shareholder approval does not
occur within the required twelve (12) month period, the Plan
and all outstanding options shall be deemed terminated.