TENTH SUPPLEMENTAL AGREEMENT

TO 

INTERCONNECTION AGREEMENT

BETWEEN

INDIANAPOLIS POWER & LIGHT COMPANY

AND 

PSI ENERGY, INC.

0.01.  THIS TENTH SUPPLEMENTAL AGREEMENT, dated as of the 26TH day of June,2002 (the "2002 Agreement") between INDIANAPOLIS POWER & LIGHT COMPANY (hereinaftercalled "IPL" or a "Party"), an Indiana corporation, and PSI ENERGY, INC.,formerly named Public Service Company of Indiana, Inc., (hereinafter called "PSI" or a"Party"), an Indiana corporation, (IPL and PSI are hereinafter sometimes called"Parties".) 

WITNESSETH:

0.02.  **WHEREAS,**there is now in force and effect between PSI and IPL aninterconnection agreement dated as of May 1, 1992, as supplemented and amended thereto (suchagreement as so amended and supplemented being hereinafter referred to collectively as the"1992 Agreement"); and

0.03.  **WHEREAS,**IPL and PSI have established a new Interconnection Pointreferenced in Subsections 1.01 (viii) and 4.01, as well as a new metering point referenced inSection 4.03, and have determined that further mutual benefits and advantages may be realized bythe interconnected operation of their respective systems, and, as a result thereof, the 2002Agreement constitutes an amendment to and complete restatement of the 1992 Agreement and, as such,supersedes the 1992 Agreement in order to comply with the pagination and designation requirementsof *Designation of Electric Rate Schedule Sheets*, Order No. 614, III FERC Stats. & Regs. 31,096 (2000) and to more fully provide the terms and conditions for obtaining such furthermutual benefits and advantages:

	0.04.  NOW, THEREFORE, in consideration of the premises and of the mutualcovenants herein set forth, the Parties hereto agree as follows:	

 

 

ARTICLE 1

PROVISIONS FOR, AND CONTINUITY OF INTERCONNECTED OPERATION

Interconnection Points. 
The respective 69,000 volt,138,000 volt and 345,000 volttransmission systems of IPL and PSI are presently interconnected at the following points:
The 138kv Five Points Interconnection Point
The 345kv Whitestown Interconnection Point
The 345kv Gwynneville Interconnection Point
The 138kv Petersburg Interconnection Point
The 345kv Petersburg Interconnection Point
The 138kv Centerton Interconnection Point
The 138kv Carmel Tap Point

(viii)	The 345kv Frances Creek Interconnection Point
**Future Interconnection Points.
  The services provided for by the 2002 Agreementmay also be rendered through such other points of interconnection as the Parties may later agreeupon by amending the 2002 Agreement.		
**Synchronous Operation.
  The Parties mutually agree that, except as provided inService Schedule D hereof, their respective systems will be continuously operated in parallel(except in cases of interruption of such parallel operation due to mutually agreed upon maintenanceor due to causes beyond the control of either Party, or due to the necessity of an interruption ofparallel operation in order that the native load served by either Party may continue to receiveadequate service from such Party).  If synchronous operation of the systems through a particularline or lines become interrupted either manually or automatically because of any of the above-stated reasons, the Parties shall cooperate so as to remove the cause of such interruption as soonas practicable and restore such line or lines to normal operating conditions.	
**	1.03.1.	  Inadvertent Flow.  It is recognized that in interconnected systemoperation, power and reactive flow will exist on an interconnection due to scheduled power flowfrom either Party to third parties or between third parties.  This inadvertent power flow dependsmainly on the design of the internal systems of the Parties and the interconnected system, and theschedules of power flows on the interconnections.
  Interruption of Operations
.  
If, in the sole judgment of either Party, thepower or reactive flow over the interconnection facilities of either Party is excessive to theextent that it jeopardizes the reliability of either Party's service to its customers, the Partiesshall attempt to agree upon adequate corrective measures to eliminate or control such excessivepower or reactive flow; provided, however, that in the event such a situation exists, the Party soburdened shall have the right, with notice when possible to the other Party, to open and leave openone  or all of the interconnections between the respective systems of the Parties until correctiveaction has been taken.  The Parties further aggress to study and negotiate the installation,ownership, and cost of any additional equipment necessary to effect a long-term solution to anysuch excessive loading as herein described in the event either Party determines that thisinterconnection contributes to the excessive loading and requests such negotiation.
**Maintenance of Equipment
.  Each of the Parties shall keep, or shall cause to bekept, the transmission lines together with all associated equipment and appurtenances that arelocated on their respective sides of the Interconnection Points specified in Section 1.01 hereof,or agreed upon pursuant to Section 1.02 hereof, in a suitable condition of repair at all times,each at its own expense, in order that said transmission lines will operate in a reliable andsatisfactory manner and in order that reduction in the effective capacity of said transmissionlines will be avoided to the extent practicable.

 
**ARTICLE 2

SERVICES TO BE RENDERED
**Interconnection Services Schedules.
It is the purpose of the Parties to seek andrealize, on an equitable basis, all benefits which may be practicably effected through coordinationin the operation and development of their respective systems.  It is understood by the Parties thatsuch benefits may be realized by each of them by carrying out under stated terms and conditionsvarious interconnection services and transactions that may from time to time include amongothers:
- The furnishing of emergency service,
- The interchange, sale, and purchase of energy to effect operating economies,
- The sale and purchase of short term electric power and energy available on the system of oneParty and needed on the system of the other, and
- The transmission of power and energy on the basis of simultaneous transfers.

In furtherance of such purpose, the Parties shall create, and continue the functioning of, anOperating Committee, as provided in Article 7 hereof.
**Specific Terms and Conditions.
  Since the specific services to be rendered infurtherance of such purpose will vary during the term of the 2002 Agreement, and the terms andconditions applicable to such services may require modification from time to time, it is intendedthat such specific services and the terms and conditions applicable thereto will be set forth inService Schedules mutually agreed upon between the Parties. Such Service Schedules, unless anduntil changed, terminated, or supplemented, shall be those specified in Section 2.03 hereof.  If aService Schedule under the 2002 Agreement is changed or supplemented, such Service Schedule shallbe fully restated in order to reflect such change or supplement.
**Service Schedules
.  
The respective Service Schedules designated

Service Schedule A - Emergency Service

Service Schedule B - Interchange Energy

Service Schedule C - Short Term Power and Energy

Service Schedule D - Carmel Southeast Tap Network Power & Energy 

                                                          Transfer

have been agreed upon between the Parties, are identified as Exhibits I, II, III, and IV,respectively, to the 2002 Agreement and are attached hereto and made a part hereof the same as ifincorporated herein.  It is contemplated by the Parties that all additional mutually agreed uponService Schedules will be made a part of the 2002 Agreement upon presentation and acceptancethereof. 
**2.04.  Out-Of-Pocket Costs. The term "Out-of-Pocket Cost" of energy fromgenerating units on the system of a Party shall consist of any costs that are directly incurred byIPL or PSI by reason of its generation of such energy and which otherwise would not have beenincurred by such system including, but not limited to, fuel, labor, operation, maintenance, start-up, fuel handling, taxes, regulatory commission charges, and emission allowances.

"Out-of-Pocket Cost" of energy purchased from a third party by the supplying Partyshall consist of the total amount paid therefore by the supplying Party which otherwise would nothave been paid by such Party, plus any cost which otherwise would not have been incurred,including, but no limited to, regulatory commission charges, emission allowances, transmissionlosses and taxes related to such transaction. 

Tax expenses will be the expenses that are incurred as taxes either in connection with the saleor production of such energy
**2.05.  **Emission Allowances.  The federal Clean Air Act, as amended,42 U.S.C.  7401 et seq. (hereinafter referred to as "Clean Air Act"), establishescertain annual maximum sulfur dioxide ("SO2") levels, stated in terms ofrequired emission allowances, for flue gases emitted by electric generating units, including unitsoperated by IPL, PSI and other electric utilities who may supply electric energy for transactionsunder the 2002 Agreement.  The generator of the electric energy supplied and delivered under the2002 Agreement is required by the Clean Air Act to have adequate "allowances" (as definedby Section 402 (3) of the Clean Air Act in conjunction with Section 403 (f) of the Clean Air Act)in order to generate such electric energy.  To the extent that either IPL or PSI are required bythe Clean Air Act to have additional allowances by reason of its generation of electric energy tobe supplied by it under the 2002 Agreement, which allowances would otherwise not have been requiredby such supplying by it under the 2002 Agreement, which allowances would otherwise not have beenrequired by such supplying Party, then, unless the supplying Party otherwise agrees in advance inwriting, at the discretion of the supplying Party, the Party receiving such energy shall beresponsible for the cost or the actual furnishing (without cost to the supplying Party) of adequateallowances to the supplying Party in order for such Party to supply such energy under theAgreement.  The Parties shall establish, by mutual agreement, appropriate procedures in order tocarry out the provisions of this Section 2.05, including a statement of costs before anytransactions under the Service Schedules attached hereto are started.  Also, prior toimplementation of every transaction under the Service Schedules attached hereto, the purchasingParty must declare whether they will pay in cash or return SO2 Allowances in-kind forany consumption of SO2 Allowances directly attribute to such transaction, if any.
It shall be the responsibility of the supplying Party to provide the receiving Party, before thetransaction begins, with a statement of the estimated emission allowance charges associated withthe transaction which the supplying Party is seeking to add to the rates to be charged under theapplicable Service Schedule.  Failure of the supplying Party to provide a statement of such chargesbefore the transaction begins shall constitute a waiver of the recovery of any such costs.  Inestablishing such procedures, the Parties shall recognize that the determination of the additionalallowances required in order to generate the electric energy to be supplied hereunder is subject tovariables contingent upon the loading and operating conditions on the system where the actualgeneration occurs. The procedures so established by the Parties shall be in accord with soundengineering principles of power plant and system operation, and shall require the furnishing ofsuch additional allowances at such times and in such amounts as will be equitable to the supplyingParty.

When IPL is the supplier of energy and emission allowances, the recovery of the applicable costsfor the actual furnishing of adequate allowances in order for IPL to generate and supply suchenergy will be implemented in the following manner:
The Buyer shall compensate IPL for the consumption of Sulfur Dioxide Emissions Allowances("SO
2
 Allowances") directly attributed to electric energy sales by IPL toBuyer under the Service Schedules.  Such compensation shall, at Buyer's option, be made by eithersupplying IPL with the number of SO
2
 Allowances directly attributed to such energysales, or by reimbursing IPL for the incremental cost of such number of SO
2
 Allowances,rounded to the nearest whole SO
2
 Allowance.  

If Buyer opts to reimburse IPL in cash for SO2 Allowances associated with Buyer'senergy purchases for the month, the cash amount due at billing will be determined by multiplyingthe number of SO2 Allowances, as determined in Subsection 2 (b) of this Section 2.05, atthe time of the sale.  If Buyer opts to reimburse IPL in SO2 Allowances Buyer willrecord or transfer to IPL's account, the number of SO2 Allowances calculated below, atthe time cash settlement for the energy is due.  In all cases, Buyer will transfer to IPL's accountthe number of SO2 Allowances calculated below, at the time cash settlement for theenergy is due.  In all cases, Buyer will transfer to IPL's account the number of SO2Allowance due IPL for calendar year no later than January 15 of the following year.  "Transferto IPL's account" shall mean, for purposes of the 2002 Agreement, the transfer by the USEPA ofthe requisite number of SO2 Allowances to IPL's Allowance Tracking System account andthe receipt by IPL of the Allowance Transfer Confirmation
Determination of SO
2
 Emission Allowances Due IPL
- Number of SO 2  Allowances
The number of SO2 Allowances directly attributed to an energy sale made by IPL shallbe determined for each hour, by determining the contribution from each of the unit(s) from whichthe energy sale is being made for that hour.  For each unit, the emission rate in pounds ofSO2 per million Btu will be determined each month, from fuel sulfur content, controlequipment performance, and continuous emissions monitoring data. The emission rate and the unitheat rate will be used to determine the SO2 Allowances used per megawatt-hour("MWH").  The energy from each unit attributable to the sale, and the SO2Allowance per MWH for each unit, will be used to determine the number of SO2 Allowancesattributable to the sale.
- Cost of SO 2  Allowances

The incremental SO2 Allowance cost used to determine economic dispatch of IPL'sgenerating units in any month, will also be the basis used to determine compensation for IPL'senergy sales.  The incremental SO2 Allowances cost, in dollars per ton ofSO2, shall be determined each month and will be based on the Cantor Fitzgerald offerprice for SO2 Allowances, or if such is not available, then another nationallyrecognized SO2 Allowance trading market price or market price index, at the beginning ofthe month. The SO2 Allowance value may be changed at any time during the month toreflect the more current incremental cost, or market price, for SO2 Allowances.  Buyerwill be notified of the new SO2 Allowance value prior to dispatch of IPL energy toBuyer.

When PSI is the supplier of energy and emission allowances, the recovery of the applicable costsfor the actual furnishing of adequate allowances in order for PSI to generate and supply suchenergy will be implemented in the following manner:
The current Environmental Protection Agency ("EPA") auction price to value emissionallowances will be used for energy sales transactions.  The dispatch criteria may be revised fromtime to time if the emission allowance purchases on the average are determined to be significantlydifferent than the EPA auction price.
For each hour in which there is a transaction for energy services using an Out-of-Pocket Costrate under the 2002 Agreement, PSI will:
- identify the generation sources used to provide the transaction's energy by identifying theenergy that would not have been used had the transaction not been in effect that hour by using thesame after-the-fact incrementing costing model that is used to calculate the incremental cost offuel under the 2002 Agreement;
 
- determine, using the following formula, the quantity of emission allowances related to theenergy transaction: (i) by calculating an incremental heat rate for the appropriate generating unitand the corresponding incremental SO 2  emission levels, as determined by the computerbased tools, for the identified units dispatched to serve the transaction; (ii) applying thefollowing formula for such unit; (iii) adding together the total number of tons of SO 2 produced per million BTU ( i.e. , British Thermal Unit) of fuel burned by each such unit forthe transaction; and (iv) letting one (1) emission allowance equal one (1) ton of SO 2  soproduced. 

# OF UNITS

S (MBTU sale - MBTU no sales) *  (SO2) *   (100%-SE)
	       100%

MBTU sale = Million BTU consumed on unit n with sale.

MBTU no sale = Million BTU consumed on unit n without sale.

SO2 = Tons of SO2 produced per million BTU of fuel burned. 

SE = Scrubber Efficiency in %

PSI will perform periodic tests to maintain the accuracy and validity of such emission rateinformation.  Because some generating sources may not be subject to Clean Air Act during Phase I orPhase II thereunder, there will be no emission allowance charges included for the utilization ofsuch an energy source while it is not subject to such requirements.  One (1) emission allowanceshall be assigned to each ton of SO2 emitted to serve the transaction.  Fractions ofemission allowance tons will be rounded up to the next whole number when the fraction is equal toor greater than .5 and rounded down when the fraction is less than .5.
The purchasing Party of energy shall have the option of purchasing or providing emissionallowance for each transaction.  The purchasing Party shall notify PSI of its election to purchaseor provide emission allowances prior to the start of the transaction.  The running quantity ofemission allowances charged or furnished will be shown on the monthly invoices to the purchasingParty.
When the purchasing Party of energy elects to purchase the emission allowances from PSI, thenthe quantity of emission allowances used will be included as part of the charges on the monthlyinvoices to the purchasing Party.
By January 15
th
 of the year following the calendar year in which the transactionoccurred, the purchasing Party of energy shall transfer the appropriate emission allowances to PSIfor the emission allowances used when the allowances are provided in kind.
PSI has adopted the same incremental cost calculation to value emission allowances for dispatchcriteria as for billing energy transactions.
** 

ARTICLE 3

SERVICE CONDITIONS
**Control of System Disturbance
.  
Each Party shall maintain and operate its systemso as to minimize, in accordance with sound operating practice , the likelihood of disturbanceoriginating in either Party's system which might cause impairment to the service of the system ofthe other Party or of any system interconnected with the system of the other Party.
**Control of Kilovar Exchange
.
  It is the intent that neither Party shall beobligated to deliver kilovars for the benefit of the other Party; also that neither Party shall beobligated to receive kilovars when to do so may introduce objectionable operating conditions on itssystem.  The Operating Committee shall be responsible for the establishment of operating proceduresand schedules in respect of carrying kilovar loads by one Party's systems for the other Party'ssystem in order to secure adequate service and economical use of facilities of both Party's systemsand in respect of proper charges, if any, for the use of facilities carrying kilovar loads.  Indischarging such duties, the Operating Committee shall recognize that in the transmission anddelivery of power and energy hereunder the carrying of kilovar loads by either Party, in harmonywith sound engineering principles of transmission operation with their systems interconnected, issubject to numerous variables contingent upon loading and operating conditions existingsimultaneously on the systems of both Parties.  The operating procedures and schedules soestablished by the Operating Committee shall be in accord with such principles and shall requireeach Party to carry kilovar loads at such times and in such amounts as will be equitable to bothParties.
**Control of Unscheduled Power Deliveries
.
  The Parties shall exercise duediligence and foresight in carrying out all matters related to the providing and operating of theirrespective electric power resources so as to minimize to the extent practicable deviations betweenactual and scheduled deliveries of electric power and energy between their systems.  The Partiesshall provide and install on their respective systems such communication and telemeteringfacilities as are essential to so minimize such deviations and, in developing and executingoperating procedures that will enable the Parties to avoid to the extent practicable deviation fromscheduled deliveries, shall fully cooperate with each other and with third parties whose systemsare either directly or indirectly interconnected with the systems of the Parties and who ofnecessity, together with the Parties must unify their efforts cooperatively to achieve effectiveand efficient interconnected operation.  The Parties recognize, however, that, despite their bestefforts to prevent the same, unscheduled deliveries of electric energy from one Party to the othermay occur.  In such event, electric energy delivered hereunder shall be settled for by the returnof equivalent energy.  Equivalent energy shall be returned at times when the load conditions of theParty receiving it are equivalent to the load conditions of such Party at the time the energy forwhich it is returned was delivered or, if such Party elects to have equivalent energy returnedunder different conditions, it shall be returned in such amounts, to be agreed upon by theOperating Committee, as will compensate for the difference in conditions.

 
**ARTICLE 4

DELIVERY POINTS, METERING POINTS, AND METERING
**Delivery Points
.
  All electric energy delivered under the 2002 Agreement shall beof the character commonly know as three-phase sixty Hertz energy, and shall be delivered at theInterconnection Points specified under Section 1.01 hereof, at a nominal voltage of 138,000 voltsat the Five Points and Centerton Interconnection Points, at the 138KV Petersburg InterconnectionPoint, and at the Carmel Tap Point; and at a nominal voltage of 345,000 volts at the Whitestown andGwynneville Interconnection Points, at the 345KV Petersburg Interconnection Point, and at theFrances Creek Interconnection Point; and at such other points and voltages as hereafter may beagreed upon by the Parties pursuant to Section 1.02 hereof. In addition to the interconnectionpoints provided in Sections 1.01 and 1.02, PSI may request IPL deliver electric energy under the2002 Agreement at interconnection points IPL may have with third parties (hereinafter referred toas "Alternate Delivery Points").
**Billing Based on Scheduled Transactions
.  
As IPL and PSI systems areinterconnected with other systems forming a network, it is recognized that, because of the physicaland electrical characteristics of the facilities involved, a part or all of the energy beingtransferred from one Party to the other may flow through such other systems rather than through thepoint or points of connection between the systems of the Parties.  A part or all of the power beingtransferred between other systems in the network may flow through the point or points of connectionbetween the systems of the Parties, and as a result be included in the demand and energy meterreadings at the point or points of interconnection.  Therefore, all billings shall be based onscheduled transactions or upon methods determined by the Operating Committee which may result fromdevelopment of arrangements with other interconnected systems and which provide a basis foraccounting for the power and energy transfers actually contracted for between the Parties.
**Metering Points
.  
Electric power and energy supplied and delivered under the2002 Agreement shall be measured by suitable metering equipment which shall be provided, owned andmaintained by PSI or IPL as designated below at the following metering points:
- 138,000 volt metering equipment installed by PSI at the Five Points Substation; 138,000 voltmetering equipment installed by PSI at the Centerton Substation; 138,000 and 345,000 volt meteringequipment installed by IPL at the Petersburg Station; 345,000 volt metering equipment install byIPL at its Sunnyside Substation and at PSI's Gwynneville and Whitestown Substations; 12.47kvmetering equipment installed by PSI at its Carmel Southeast Substation; and 345,000 volt meteringequipment installed by PSI at its Frances Creek Substation ,  and
- At such other locations as hereafter may be agreed upon by the Parties pursuant to Section 1.02hereof.

 

Electric power and energy supplied and delivered at the Alternate Delivery Points specified inSection 4.01 shall be measured by metering equipment either provided, owned and maintained by IPLor third parties. Such metering equipment shall not be subject to Sections 4.04 through 4.07 butshall meet the reasonable requirements of the Operating Committee.
**Metering Equipment
.  
Suitable metering equipment at the metering points asdescribed in Section 4.03 above shall include electric meters, potential and current transformers,and such other appurtenances as shall be necessary to give for each direction of flow the followingquantities: (i) an automatic record of the kilowatt-hours for each clock-hour, and (ii) acontinuous integration record of the kilowatt-hours.
**Measurement of Electric Energy
.
  Measurements of electric energy for the purposeof effecting settlements under the 2002 Agreement shall be made by standard types of electricmeters installed and maintained (unless otherwise provided for in the Agreement) by the owner atthe metering points described in Section 4.03 above.  The timing devices of all meters having suchdevices shall be maintained in the synchronism as closely as practicable. 

The meters shall be sealed and the seals shall be broken only upon occasions when the meters areto be tested or adjusted.  For the purpose of checking the records of the metering equipmentinstalled by one of the Parties as hereinabove provided, the other Party shall have the right toinstall check metering equipment at the aforesaid metering points.  Metering equipment so installedby one Party on the premises of the other Party, unless otherwise provided for in the 2002Agreement, shall be owned and maintained by the Party installing such equipment.  Upon terminationof the 2002 Agreement, the Party owning such metering equipment shall remove it from the premisesof the other Party.  Authorized representatives of both Parties shall have access at all reasonablehours to the premises where the meters are located and to the records made by the meters. 
**Testing and Access to Meters and Records
.  
The aforesaid metering equipment shallbe tested by the owner at suitable intervals and its accuracy of registration maintained inaccordance with good practice.  On request of either Party, a special test may be made at theexpense of the Party requesting such special test. Representatives of both Parties shall beafforded the opportunity to be present at All Routine or Special Tests and upon occasions when anyreadings, for purposes of settlements hereunder, are taken from meters not bearing an automaticrecord.
**Adjustments Due to Inaccuracies.
  If at any test of metering equipment aninaccuracy shall be disclosed exceeding two percent, the account between the Parties for servicetheretofore delivered shall be adjusted to correct for the inaccuracy disclosed over the shorter ofthe following two periods:  (i)  for the thirty (30) day period immediately preceding the day ofthe test, or (ii) for the period that such inaccuracy may be determined to have existed.  Shouldthe metering equipment described in Section 4.04 above at any time fail to register, the electricpower and energy delivered shall be determined from the check meters, if installed, or otherwiseshall be determined from the best available data.

 
**ARTICLE 5

RECORDS AND STATEMENTS

	**5.01.  Records.**In addition to records of the meteringprovided for in Article 4 hereof, the Parties shall keep in duplicate such other records as may beneeded to afford a clear history of the various deliveries of electric energy made by one Party tothe other and of the clock-hour integrated demands in kilowatt-hours delivered by one Party to theother.  In maintaining such records, the Parties shall effect such segregations and allocations ofdemands and electric energy delivered into classes representing the various 

services and conditions as may be needed in connection with settlements under the 2002Agreement.  The originals of all such records shall be retained by the Party keeping the recordsand the duplicates shall be delivered monthly to the other Party, except that the Parties may agreeupon a different time interval for such delivery.
**Statements
.
  As promptly as practicable after the end of each calendar month, theParties shall prepare a statement setting forth the electric power and energy transactions betweenthe Parties during such month in such detail and with such segregations as may be needed foroperating records or for settlements under the provisions of the 2002 Agreement.

 
**ARTICLE 6

BILLINGS AND PAYMENTS
**Billing Period
.  
Unless otherwise agreed upon by the Parties, the calendar monthshall be the standard billing period for all settlements under the 
2002
 Agreement.
**Billing scheduled Transactions
.  
All billing shall be based on scheduledtransactions unless otherwise determined as provided in Section 4.02 hereof.
**Billing Payments
.
  All bills for amounts owed by one Party to the other Partyshall be due on the first business day following the fifteenth (15
th
) day after the endof the calendar month or period service was rendered, or on the tenth (10
th
) businessday following receipt of a bill, whichever is later.  Payments shall be made by electronic transferor by such other mutually agreeable method as shall cause such payment to be available for theaccount of the payee on or before the due date.  Interest on unpaid amounts, both principal andinterest, shall accrue daily at the then current prime interest rate per annum of The ChaseManhattan Bank, N.A., New York, New York, plus two percent (2%) per annum, or the maximum ratepermitted by law, whichever is less, from the date due until the date upon which payment ismade.
**Estimated Billing Factors.
  In order that bills may be rendered promptlyafter the end of each month, it may be necessary, from time to time, to estimate certain factorsinvolved in calculating the monthly billing.  Adjustments for errors in such estimates shall beincluded in the bill for the month following the time when information becomes available to makesuch corrections or adjustments in the billing for the preceding month or moths.
**Billing Disputes
.  
If a Party disputes the correctness of a bill, such Partywill, nevertheless, pay the undisputed portion of such bill, plus a minimum of one-half (1/2) ofthe disputed amount, and shall submit to the other Party a written statement detailing the itemsdisputed.  If the Parties are unable to agree upon the disputed items, such items shall besubmitted to the Operating Committee for further action consistent with the 2002Agreement.
** 

 
**ARTICLE 7

OPERATING COMMITTEE
Operating Committee Organization and Duties
.
  To coordinate the operation of theirrespective generation, transmission and substation facilities in order that the benefits of the2002 Agreement may be realized by the Parties to the fullest practicable extent, the Parties shallestablish a committee of authorized representatives to be known as the Operating Committee.  Eachof the Parties shall designate in writing delivered to the other Party, the person who is to act asits authorized representative (the "OC Representative") on said committee (and the personor persons who may serve as Alternate whenever the OC Representative is unable to act).  The OCRepresentative and Alternate or Alternates shall each be persons familiar with the generation,transmission, and substation facilities of the system of the Party he represents, and each shall befully authorized (i) to cooperate with the other OC Representative (or Alternates) and (ii) as theneed arises and subject to the declared intentions of the Parties as herein set forth and to theterms hereof and the terms of any other agreements then in effect between the Parties, to determineand agree from time to time upon the following:

- All matters pertaining to the coordination of maintenance of the generation and transmissionfacilities of the Parties.
- All matters pertaining to the control of time,  frequency, energy flow, kilovar exchange, powerfactor, voltage, and other similar matters bearing upon the satisfactory synchronous operation ofthe systems of the Parties.
- Such other matters not specifically provided for herein upon which cooperation, coordinationand agreement as to quantity, time, method, terms and conditions are necessary, in order that theoperation of the respective systems of the Parties may be coordinated to the end that the potentialbenefits anticipated by the Parties will be realized to the fullest extent practicable.
- All matters pertaining to the delivery of electric power and energy pursuant to the 2002Agreement.

**Operating Committee Access
.
  For the purpose of inspection and reading of meters,checking of records, and all other pertinent matters, the OC Representatives and their Alternatesshall have the right of entry at any reasonable time to all property of the Parties used inconnection with the performance of the 2002 Agreement.
**Unanimous Action
.
  All actions taken by said Operating Committee must be byunanimous vote or consent of all OC Representatives (including Alternates acting during OCRepresentatives' absence).
**Expenses
.  The expenses for establishing and maintaining the Operating Committeeshall be the responsibility of each individual Party as regards its respective personnel.  Anyexpenses jointly incurred by said Operating Committee in carrying out its duties, other than forthe Parties' personnel, shall be shared equally by the Parties.
** 
Authority to Amend or Supplement
.
  The Operating Committee may recommend changes to the2002 Agreement, but said Operating Committee shall not have authority to amend or supplement the2002 Agreement.

 
**ARTICLE 8

CONTINUITY AND SUSPENSION OF SERVICE

RELATIVE RESPONSIBILITIES AND LIABILITY LIMITS
Continuity and Suspension of Service
.
  Each Party shall exercise reasonable care andforesight to maintain continuity of service as provided in the 2002 Agreement.  In no event shallone Party be liable to the other Party or its customers for loss or damage arising from failure toprovide or for the interruption or suspension of any service provided for herein.  Each Partyreserves the right to suspend service without liability at such time and for such periods and insuch manner as it deems advisable, including, without limitation, suspensions for the purpose ofmaking necessary adjustments to, changes in, or repairs on, its facilities and to suspend servicein cases where, in its sole opinion, the continuance of service to the other Party would endangerpersons or property.  Both Parties shall use their best efforts to provide each other withreasonable notice in the event of suspension of service.
**Relative Responsibilities
.
  Each Party assumes all responsibility for receipt anddelivery of electricity on its system to and from the Points of Interconnection specified inSection 1.01 hereof or agreed upon pursuant to Section 1.02 hereof or as requested by PSI pursuantto Section 4.01.  Neither Party assumes any responsibility with respect to the construction,installation, maintenance or operation of the system of the other Party or of the systems of thirdparties, in whole or in part.  In no event shall one Party be liable to the other Party for damageor injury to any person or property, whatsoever, arising, accruing or resulting from, in anymanner, the receiving, transmission, control, use, application or distribution of said electricpower and energy.  Each Party shall use reasonable diligence to maintain its facilities in properand serviceable condition, and shall take reasonable steps and precautions for maintaining theservices agreed to be provided and received under the 2002 Agreement.  Each Party shall beresponsible for its own compliance with all applicable environmental regulations and shall bear allcosts arising from its failure to comply with such environmental regulations.
**Limitation of Liability
.
  In no event shall one Party be liable to the otherParty for any indirect, special, incidental or consequential damages with respect to any claimarising out of the 2002 Agreement.

 

 

 

 
**ARTICLE 9

TERM OF AGREEMENT

	**9.01.**The term of the 2002 Agreement and of the annexed ServiceSchedules shall begin as of May 1, 2002 and (except for Service Schedules D) shall continue throughApril 30, 2022 (the "Initial Term"); thereafter, the 2002 Agreement and Service Schedules(except Service Schedule D) shall continue for successive terms of three (3) years each unless anduntil terminated by either Party by giving notice to the other Party of its intention to terminatethe 2002 Agreement at lease two (2) years prior to the end of the Initial Term or any successiveterm; provided, that the 2002 Agreement shall not be deemed to have terminated until all priorcommitments for sales or purchases of power and energy hereunder shall have been fulfilled and allpayments shall have been made.  The term of Service Schedule D shall be as provided therein.  Anynotice of termination hereunder shall be given to the President or Chief Operations Officer of aParty with a copy to the OC Representative of such Party.

 
**ARTICLE 10

WAIVERS
Any waiver at any time by either Party of their rights with respect to a default underthe 2002 Agreement, or with respect to any other matter arising in connection with the 2002Agreement shall not be deemed a waiver with respect to any subsequent default or matter.  Anydelay, short of the statutory period of limitation, in asserting or enforcing any right under the2002 Agreement shall not be deemed a waiver of such right.

 
**ARTICLE 11

TAXES
If at any time during the term hereof there should be levied or assessed against eitherParty any direct tax by any taxing authority on the capacity or energy (or both) generated,purchased, sold, transmitted, interchanged or exchanged by it, which tax is in addition to ordifferent from the forms of such direct tax as are being levied or assessed as of the date hereofand such direct tax results in increasing the cost of either or both the Parties in carrying outthe provisions of the 2002 Agreement, then such increase shall be reflected in the charges forcapacity or energy (or both) furnished by one Party to the other hereunder as is necessary in orderto make adequate and equitable allowances for such tax.

 

 

 

 
** 

ARTICLE 12 

NOTICES
Notices Relating to Provisions of the 2002 Agreement
.  
Except as herein otherwiseprovided, any notice which may be given to or made upon either Party by the other Party, under anyof the provisions of the 2002 Agreement, shall be in writing unless it is otherwise specificallyprovided herein, and shall be treated as duly delivered when the same is either (a) personallydelivered to the President or Chief Operations Officer of the other Party or (b) deposited in theUnited States mail, postage prepaid and properly addressed to the President or Chief OperationsOfficer of the other Party; provided, however, that either Party may alter its recipient for noticehereunder by written notice to the other Party in accordance with the provisions of this Section12.01.
**Notices of An Operating Nature.
  Any notice, request or demand pertaining tomatters of an operating nature may be served in person or by United States mail, messenger,telephone, or telegraph, facsimile transmission or orally, as circumstances dictate, from the OCRepresentative of one Party to the OC Representative of the other Party; provided, that should thesame not be written, confirmation thereof shall be made in writing as soon as practicablethereafter, upon request of the Party being served.

 
**ARTICLE 13

REGULATORY AUTHORITIES
Regulatory Authority
.
  The 2002 Agreement is made subject to the authority of theFederal Energy Regulatory Commission or any other governmental regulatory agency havingjurisdiction in the premises and, if any of the terms and conditions hereof are altered or madeimpossible of performance by order, rule, or regulation of any such regulatory agency, and theParties hereto are unable to agree upon a modification of such terms and conditions that willsatisfy such order, rule, or regulation, then neither Party shall be liable to the other forfailure thereafter to comply with such terms and conditions; provided, that if either Party deemsthat the failure of such performance results in a substantial breach of the 2002  Agreement, thenthe 2002 Agreement may be terminated forthwith upon thirty (30) days' advance written notice.

	
**Amendments
.
  The 2002  Agreement and the annexed Service Schedules may be amendedby mutual agreement of the Parties, which amendment shall be in writing and shall become effectivein accordance with Section 13.01 hereof.  The rates and charges set forth in the annexed ServiceSchedules are subject to amendment and change, and each Party reserves the right from time to timeto seek unilaterally, from any regulatory agency having jurisdiction, amendments or changes in itsrates and charges set forth therein in accordance with the applicable law.  Nothing contained inthe 2002
Agreement, any annexed Service Schedule or any supplementsthereto shall be construed as affecting in any way the right of either Party unilaterally to makeapplication to the Federal Energy Regulatory Commission (or any successor regulatory agency havingjurisdiction) for a change in rates under Section 205 of the Federal Power Act and pursuant to theCommission's Rules and Regulation promulgated thereunder (or under comparable statutes andregulations of a successor regulatory agency having jurisdiction).
** 

ARTICLE 14

MISCELLANEOUS
No Partnerships; Tax Matters
.  
Notwithstanding any provision of the 2002 Agreement tothe contrary, the Parties do not intend to create hereby any joint venture, partnership,association taxable as a corporation, or other entity for the conduct of any business for profit,and any construction of the 2002 Agreement to the contrary which has an adverse tax effect oneither Party shall render the 2002 Agreement null and void from its inception.
**Computation of Time
.
  In computing any period of time prescribed or allowed bythe 2002 Agreement, the day of the act, event, or default from which the designated period of timebegins to run shall be excluded but the last day of such period shall be included, unless it is aSaturday, Sunday, or legal holiday, in which event the period shall run until the end of the nextbusiness day which is not a Saturday, Sunday, or legal holiday.
**Section Headings Not to Affect Meaning
.
  The descriptive headings of theArticles, Sections, Subsections and paragraphs of the 2002 Agreement have been inserted forconvenience only and shall not modify or restrict any of the terms and provisionsthereof.

 
**ARTICLE 15

ASSIGNMENT
The 2002 Agreement shall insure to the benefit of, and be binding upon, the respectivesuccessors and assigns of the Parties, but the assignment thereof by a Party shall not relieve suchParty, without the written consent of the other Party, of any obligation to supply, or to take andpay for, as the case may be, the services hereunder.

** 

ARTICLE 16

ENTIRE AGREEMENT CONTAINED HEREIN
The 2002 Agreement contains the entire agreement between the Parties in respect of thesubject mater hereof, and there are no other understanding or agreements between the Parties inrespect thereof; provided, however, that nothing contained in the 2002 Agreement shall be deemed toaffect in any manner whatsoever any rights or claims either Party may have against the other Partypursuant to any other agreement in effect before the effective date of the 2002 Agreement withrespect to any matter, including any right or claim to payments after the effective date of the2002 Agreement pursuant to other preexisting agreement.

 
**ARTICLE 17

1992 AGREEMENT SUPERSEDED
The 2002 Agreement constitutes an amendment to and complete restatement of the 1992Agreement and, as such, supersedes the 1992 Agreement from and after the date the 2002 Agreementbecomes effective.

 
**ARTICLE 18

AGENCY OF CINERGY SERVICES, INC.

18.01. Cinergy Services, Inc. joins in the execution of the 2002 Agreement for the solepurpose of serving and acting as agent for PSI.

 

	**IN WITNESS WHEREOF**the Parties have caused the 2002 Agreement to be executed by theirrespective duly authorized officers and their respective corporate seal to be hereunto affixed asof the date first above mentioned.

						
**INDIANAPOLIS POWER & 		CINERGY SERVICES, INC., acting as

LIGHT COMPANY				agent on behalf of PSI Energy, Inc.

 **
 

By:	/s/ William R. Dodds	
	William R. Dodds

	Vice President - Power Delivery

				

Date:     

By:	/s/ John Procario	
	John Procario

	Vice President and COO

				

Date:     

 
** 

 

 

 

 

 

 

 

 

 

Exhibit I

										

SERVICE  SCHEDULE  A

EMERGENCY SERVICE

 

 

 

 

 

 

 

 

Deleted in accordance with Docket ER99-2949-000, effective June 1, 1999.

 

 

 

 
** 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit II

SERVICE  SCHEDULE  B

INTERCHANGE ENERGY

 

 

 

 
** 

 

 

 

Deleted in accordance with Docket ER99-2949-000, effective June 1, 1999.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit III

SERVICE  SCHEDULE  C

SHORT TERM POWER / ENERGY

 

 

 

 
** 

 

 

 

Deleted in accordance with Docket ER99-2949-000, effective June 1, 1999.

 

Exhibit IV

SERVICE  SCHEDULE  D

CARMEL SOUTHEAST TAP NETWORK POWER AND ENERGY TRANSFER

 

 

 

 
** 

 

Terminated under its own term effective August 31, 2000, in accordance withDocket No. ER99-3428-000**********************************************************************************************************************