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

                                  FORM 10-K
(Mark One)
(x)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
       ACT OF 1934
For the fiscal year ended December 31, 1995

                                      OR
( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      
       EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________

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

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act:
                                                       Name of each exchange
     Registrant            Title of each class          on which registered

Cinergy Corp.           Common Stock                   New York Stock Exchange

The Cincinnati Gas      Cumulative Preferred Stock 
  & Electric Company      4%, 4 3/4%, 7 3/8%, and
                            7 7/8%                     New York Stock Exchange
                        Junior Subordinated            
                          Debentures 8.28%             New York Stock Exchange

PSI Energy, Inc.        Cumulative Preferred Stock     
                          4.32%, 4.16%, 6 7/8%,         
                            7.15%, and 7.44%           New York Stock Exchange
                        First Mortgage Bonds           
                          Series S and Y               New York Stock Exchange

The Union Light,        None
  Heat and Power
  Company

Securities registered pursuant to Section 12(g) of the Act for Cinergy Corp.,
The Cincinnati Gas & Electric Company, PSI Energy, Inc., and The Union Light, 
Heat and Power Company:  None

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrants' knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K.  (x)

Requirements pursuant to Item 405 of Regulation S-K are not applicable for The 
Union Light, Heat and Power Company.

The Union Light, Heat and Power Company meets the conditions set forth in 
General Instruction J(1)(a) and (b) of Form 10-K and is therefore filing this 
Form 10-K with the reduced disclosure format specified in General Instruction 
J(2) of Form 10-K.

As of February 29, 1996, the aggregate market values of Cinergy Corp. Common 
Stock and PSI Energy, Inc. Cumulative Preferred Stock held by non-affiliates 
were $4.7 billion and $186 million, respectively.

Cinergy Corp. is the sole owner of the Common Stock of each of PSI Energy, 
Inc. and The Cincinnati Gas & Electric Company.  The Union Light, Heat and 
Power Company's Common Stock is wholly-owned by The Cincinnati Gas & Electric 
Company.

As of February 29, 1996, shares of Common Stock outstanding for each 
registrant were as listed:

              Company                                                Shares

Cinergy Corp., par value $.01 per share                            157,676,286
The Cincinnati Gas & Electric Company, par value $8.50 per share    89,663,086
PSI Energy, Inc., without par value, stated value $.01 per share    53,913,701
The Union Light, Heat and Power Company, par value $15.00 per share    585,333

                    DOCUMENTS INCORPORATED BY REFERENCE

The Proxy Statement of Cinergy Corp. dated March 15, 1996, and the Information 
Statement of PSI Energy, Inc. dated March 27, 1996, are incorporated by 
reference into Part III of this report.

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

<PAGE>
                                TABLE OF CONTENTS
 Item  
Number

         Glossary of Terms                                                
                                      PART I

  1      Business
           Organization . . . . . . . . . . . . . . . . . . . . . .       
           CG&E . . . . . . . . . . . . . . . . . . . . . . . . . .       
           ULH&P. . . . . . . . . . . . . . . . . . . . . . . . . .       
           PSI. . . . . . . . . . . . . . . . . . . . . . . . . . .       
           Investments. . . . . . . . . . . . . . . . . . . . . . .          
      
           Services . . . . . . . . . . . . . . . . . . . . . . . .      
           Customer, Sales, and Revenue Data. . . . . . . . . . . .      
           Financial Information by Business Segment. . . . . . . .      
           Regulation . . . . . . . . . . . . . . . . . . . . . . .      
           Rate Matters . . . . . . . . . . . . . . . . . . . . . .      
           Power Supply . . . . . . . . . . . . . . . . . . . . . .      
           Fuel Supply. . . . . . . . . . . . . . . . . . . . . . .      
           Gas Supply . . . . . . . . . . . . . . . . . . . . . . .      
           Competition. . . . . . . . . . . . . . . . . . . . . . .       
           Capital Requirements . . . . . . . . . . . . . . . . . .      
           Environmental Matters. . . . . . . . . . . . . . . . . .      
           Employees. . . . . . . . . . . . . . . . . . . . . . . .      
  2      Properties . . . . . . . . . . . . . . . . . . . . . . . .      
           CG&E . . . . . . . . . . . . . . . . . . . . . . . . . .      
           PSI. . . . . . . . . . . . . . . . . . . . . . . . . . .      
           ULH&P. . . . . . . . . . . . . . . . . . . . . . . . . .      
           Other Utility Subsidiaries . . . . . . . . . . . . . . .      
  3      Legal Proceedings
           Power International Litigation . . . . . . . . . . . . .      
           Merger Litigation. . . . . . . . . . . . . . . . . . . .      
           Shareholder Litigation . . . . . . . . . . . . . . . . .      
  4      Submission of Matters to a Vote of Security Holders. . . .      
         Executive Officers of the Registrant . . . . . . . . . . .      

                                     PART II

  5      Market for Registrant's Common Equity
           and Related Stockholder Matters. . . . . . . . . . . . .      
  6      Selected Financial Data. . . . . . . . . . . . . . . . . .      
  7      Management's Discussion and Analysis of Financial
           Condition and Results of Operations. . . . . . . . . . .      
         Index to Financial Statements and Financial Statement
           Schedules. . . . . . . . . . . . . . . . . . . . . . . .      
  8      Financial Statements and Supplementary Data. . . . . . . .      
  9      Changes in and Disagreements with Accountants on 
           Accounting and Financial Disclosure. . . . . . . . . . .     

                                       PART III

 10      Directors and Executive Officers of the Registrant . . . .     
 11      Executive Compensation . . . . . . . . . . . . . . . . . .     
 12      Security Ownership of Certain Beneficial Owners 
           and Management . . . . . . . . . . . . . . . . . . . . .     
 13      Certain Relationships and Related Transactions . . . . . .     

                                      PART IV

 14      Exhibits, Financial Statement Schedules, and
           Reports on Form 8-K
             Financial Statements and Schedules . . . . . . . . . .        
                   Reports on Form 8-K. . . . . . . . . . . . . . . 
             Exhibits . . . . . . . . . . . . . . . . . . . . . . .     
         Signatures . . . . . . . . . . . . . . . . . . . . . . . .     
<PAGE>
                              GLOSSARY OF TERMS

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

    TERM                                     DEFINITION                       


Cinergy and Certain of its Subsidiaries:

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

CG&E                  The Cincinnati Gas & Electric Company, an utility 
                        subsidiary of Cinergy

Cinergy or Company    Cinergy Corp.

Costanera             Costanera Power Corp., a subsidiary of PSI Argentina, 
                        Inc.

Enertech              Enertech Associates International, Inc., a subsidiary
                        of Investments

Investments           Cinergy Investments, Inc., a subsidiary of Cinergy

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

Lawrenceburg          Lawrenceburg Gas Company, an utility subsidiary of CG&E

PESCO                 Power Equipment Supply Co., a subsidiary of Investments

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

PSI                   PSI Energy, Inc., an utility subsidiary of Cinergy

Resources             PSI Resources, Inc., PSI's previous parent holding
                        company

Services              Cinergy Services, Inc., a subsidiary of Cinergy

ULH&P                 The Union Light, Heat and Power Company, a Kentucky 
                        utility subsidiary of CG&E

Wholesale Power       Wholesale Power Services, Inc., a subsidiary of 
                        Investments


Certain of Cinergy's Generating Stations:

Gibson                Gibson Generating Station

Woodsdale             Woodsdale Generating Station

Zimmer                William H. Zimmer Generating Station


Certain of Cinergy's Regulatory Orders:

April 1990 Order      An IURC order issued in April 1990

August 1993 Order     A PUCO order issued in August 1993

December 1993 Order   An IURC order issued in December 1993

February 1995         An IURC order issued in February 1995
  Order 

June 1987 Order       An IURC order issued in June 1987

May 1992 Order        A PUCO order issued in May 1992

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


Regulatory Authorities:

CAAA                  Clean Air Act Amendments of 1990

CERCLA                Comprehensive Environmental Response, Compensation and 
                        Liability Act

EPA                   The Environmental Protection Agency

FASB                  Financial Accounting Standards Board

FERC                  Federal Energy Regulatory Commission

IDEM                  Indiana Department of Environmental Management

IURC                  Indiana Utility Regulatory Commission

KPSC                  Kentucky Public Service Commission

mega-NOPR             FERC's Notice of Proposed Rulemaking Promoting Wholesale 
                        Competition Through Open Access Non-discriminatory 
                        Transmission Services by Public Utilities

Order 636             FERC order regarding gas purchases and transportation

PUCO                  Public Utilities Commission of Ohio

PUHCA                 Public Utility Holding Company Act of 1935

SEC                   Securities and Exchange Commission

Statement 71          Statement of Financial Accounting Standards No. 71,
                        Accounting for the Effects of Certain Types of 
                        Regulation

Statement 87          Statement of Financial Accounting Standards No. 87, 
                        Employers' Accounting for Pensions 

Statement 121         Statement of Financial Accounting Standards No. 
                        121, Accounting for the Impairment of Long-Lived 
                        Assets and for Long-Lived Assets to be Disposed Of


Other Organizations:

AEP                   American Electric Power Company, Inc.

CFC                   National Rural Utilities Cooperative Finance
                        Corporation

East Kentucky         East Kentucky Power Cooperative, Inc.

IBEW                  International Brotherhood of Electrical Workers

IGC                   Indiana Gas Company, Inc., formerly Indiana Gas and 
                        Water Company, Inc.

IMPA                  Indiana Municipal Power Agency

IPALCO                IPALCO Enterprises, Inc.

IUU                   Independent Utilities Union 

Moody's               Moody's Investors Service

NIPSCO                Northern Indiana Public Service Company

RUS                   Rural Utilities Service, previously called the Rural 
                        Electrification Administration

S&P                   Standard & Poor's

UCC                   The Indiana Office of the Utility Consumer Counselor

USWA                  United Steelworkers of America

WVPA                  Wabash Valley Power Association, Inc.


Miscellaneous Terms:

AFUDC                 Allowance for funds used during construction

APBO                  Accumulated Postretirement Benefit Obligation

Clean Coal Project    Wabash River Clean Coal Project, a 262-megawatt clean
                        coal power generating facility, located at PSI's
                        Wabash River Generating Station

Committed Lines       Unsecured lines of credit

CWIP                  Construction work in progress

DSM                   Demand-side management

kwh                   Kilowatt-hour

M&R Fund              Maintenance and Replacement Fund
Mcf                   Thousand cubic feet

Merger Agreement      Amended and Restated Agreement and Plan of 
                        Reorganization

Merger Costs          Merger transaction costs and costs to achieve merger 
                        savings

MGP                   Manufactured gas plant 

mw                    Megawatt

Non-fuel Merger       Electric non-fuel operation and maintenance expense 
  Savings               savings from the merger

PRP                   Potentially Responsible Party

Stock Option Plan     Cinergy's Stock Option Plan

Uncommitted Lines     Short-term borrowings with various banks on an "as      
                        offered" basis
<PAGE>
                                    PART I

                               ITEM 1.  BUSINESS

Cinergy, CG&E, PSI, and ULH&P

Organization

Cinergy, a Delaware corporation, is a registered holding company under the 
PUHCA.  Cinergy was created in the October 1994 merger of Resources and CG&E. 
The business combination was accounted for as a pooling of interests.  
Following the merger, Cinergy became the parent holding company of PSI, CG&E, 
Investments, and Services.

Cinergy's two utility subsidiaries, CG&E and PSI, account for substantially 
all of Cinergy's total operating revenues and Cinergy's total assets.

Cinergy, CG&E, and ULH&P

CG&E

CG&E, an Ohio corporation, is a combination electric and gas public utility 
company with four wholly-owned utility subsidiaries, ULH&P, Miami Power 
Corporation (Miami), The West Harrison Gas and Electric Company (West 
Harrison), and Lawrenceburg.  In addition, CG&E has two wholly-owned non-
utility subsidiaries, KO Transmission and Tri-State Improvement Company (Tri-
State).    

CG&E and its utility subsidiaries are engaged in the production, transmission, 
distribution, and sale of electric energy and/or the sale and transportation 
of natural gas in the southwestern portion of Ohio and adjacent areas in 
Kentucky and Indiana.  The area served with electricity, gas, or both covers 
approximately 3,000 square miles, has an estimated population of 1.8 million 
people, and includes the cities of Cincinnati and Middletown in Ohio, 
Covington and Newport in Kentucky, and Lawrenceburg in Indiana.  

KO Transmission, a Kentucky corporation, will be used to acquire an interest 
in an interstate natural gas pipeline to which CG&E is entitled as a result of 
a settlement with the Columbia Gas Transmission Corp.  KO Transmission will be 
engaged in the transportation of natural gas in interstate commerce between 
Kentucky and Ohio. 

Tri-State, an Ohio corporation, is devoted to acquiring and holding property 
in Ohio, Kentucky, and Indiana for substations, electric and gas rights of 
way, office space, and other uses in CG&E's and its subsidiaries' utility 
operations.

ULH&P

ULH&P is engaged in the transmission, distribution, and sale of electric 
energy and/or the sale and transportation of natural gas in northern Kentucky. 
The area served with electricity, gas, or both covers approximately 500 square 
miles, has an estimated population of 292,000 people, and includes the cities 
of Covington and Newport in Kentucky.

Cinergy and PSI

PSI

PSI, an Indiana corporation, is engaged in the production, transmission, 
distribution, and sale of electric energy in north central, central, and 
southern Indiana.  It serves an estimated population of two million people 
located in 69 of the state's 92 counties including the cities of Bloomington, 
Columbus, Kokomo, Lafayette, New Albany, and Terre Haute.     

PSI Energy Argentina, Inc. (PSI Energy Argentina), a wholly-owned subsidiary 
of PSI and an Indiana corporation, was formed to invest in foreign utility 
companies.  PSI Energy Argentina is a member of a multinational consortium 
which has controlling ownership of Edesur S.A. (Edesur).  Edesur is an 
electricity-distribution network serving the southern half of Buenos Aires, 
Argentina.  Edesur provides distribution services to 2.1 million customers.  
PSI Energy Argentina owns a small equity interest in this project and provides 
operating and consulting services.

South Construction Company, Inc. (South Construction), a wholly-owned 
subsidiary of PSI and an Indiana corporation, has been used solely to hold 
legal title to real estate and interests in real estate which are either not 
used and useful in the conduct of PSI's business (such as undeveloped real 
estate of PSI abutting a PSI office building) or which has some defect in 
title which is unacceptable to PSI.  Most of the real estate to which South 
Construction acquires title relates to PSI's utility business.

Cinergy

Investments

Investments, a Delaware corporation, is a non-utility subholding company that 
was formed to operate Cinergy's non-utility businesses and interests.  
Investments holds the following active non-utility subsidiaries and interests, 
which are more fully described below: Power International, formerly Enertech, 
its direct subsidiary, Bruwabel, and its indirect subsidiaries, Power 
International s.r.o. and Power Development s.r.o.; Cinergy Resources, Inc. 
(Cinergy Resources), formerly CG&E Resource Marketing, Inc.; CGE ECK, Inc. 
(CGE ECK) and its interest in ECK s.r.o.; PSI Recycling, Inc. (Recycling); 
PESCO; Wholesale Power; PSI Argentina, Inc. (PSI Argentina) and its 
subsidiary, Costanera; Cinergy Technology, Inc. (Technology), formerly PSI 
Environmental Corp.; and Cinergy Cooling Corp. (CoolCo).

Enertech was incorporated in Ohio in 1992 as a vehicle for CG&E to offer 
utility management consulting services and to pursue investment opportunities 
in energy-related areas, including DSM services, consulting, energy and fuel 
brokering, engineering services, construction and/or operation of generation, 
cogeneration, independent power production facilities, and project 
development.  In July 1994, Enertech acquired Bruwabel and its subsidiaries 
for the purpose of pursuing design, engineering, and development work 
involving energy privatization projects, primarily in the Czech Republic.  
Subsequently, Enertech changed its name to Power International.  While an 
office in the Czech Republic is still being maintained, activities in the 
Czech Republic and elsewhere have been reduced.  Currently, Investments is 
exploring opportunities to sell Bruwabel and its subsidiaries and their 
assets, including the Vytopna Kromeriz Heating Plant which was acquired by 
Power Development s.r.o. in 1995.  (See Note 13(d) of the "Notes to Financial 
Statements" in "Item 8.  Financial Statements and Supplementary Data".)
Cinergy Resources, a Delaware corporation, was formed to hold CG&E's interest 
in U.S. Energy Partners, a gas marketing partnership that was dissolved 
effective September 1, 1995.  Upon dissolution, Cinergy Resources took its 
portion of the partnership assets to continue in the gas marketing business.  
Cinergy Resources will compete with traditional, regulated local distribution 
companies by offering "merchant service" (i.e., acquiring natural gas for 
resale to end-use customers) and will broker gas to industrial and large 
commercial customers. 

CGE ECK, a Delaware corporation, was formed to hold an investment in ECK 
s.r.o., a Czech limited liability company which owns and operates a generating 
facility in the Czech Republic.  At present, CGE ECK holds an approximate 3% 
interest in ECK s.r.o. and intends to dispose of that interest.

Recycling is an Indiana corporation which recycles metal from CG&E and paper, 
metal, and other materials from PSI, its largest single supplier, and other 
sources.  Investments is actively pursuing the sale of Recycling.

PESCO was incorporated in Indiana to sell equipment and parts from a PSI 
generating plant which was canceled, the Marble Hill Nuclear Project.  PESCO 
also purchased equipment for resale, brokered equipment, and sold equipment on 
consignment for others.  In late 1995 and early 1996, PESCO sold its remaining 
assets and is in the process of discontinuing operations.

Wholesale Power, an Indiana corporation, was formed to engage in the business 
of brokering power, emission allowances, electricity futures, and related 
products and services and to provide consulting services in the wholesale 
power-related markets.  In addition, Wholesale Power was formed to create, 
market, and maintain the services of an "electronic bulletin board" for the 
bulk power market.  The use of the electronic bulletin board was limited in 
1995 and is being phased out in 1996.

PSI Argentina was formed as an Indiana corporation to, among other things, own 
foreign generating facilities.  In 1995, Costanera, a wholly-owned subsidiary 
of PSI Argentina, sold its equity interest in its only investment, the 1,260-
mw Costanera power plant in Buenos Aires, Argentina.  Costanera had obtained 
its interest in the plant as a member of a multi-national consortium which has 
controlling ownership of the plant. 

Technology, an Indiana corporation, was created to manage Cinergy's existing 
non-regulated, technology-related investments, assess the market potential for 
non-regulated product and service development opportunities, and form key 
alliances for non-regulated product development.

CoolCo, incorporated in Ohio in February 1996, was formed to engage in the 
district cooling business.  The City of Cincinnati awarded a non-exclusive 
franchise that will permit CoolCo to construct, install, maintain, and operate 
a chilled water system in the downtown business district of Cincinnati, Ohio. 
Construction of such system is expected to begin in the first half of 1996.

Cinergy, CG&E, PSI, and ULH&P

Services

Services, a Delaware corporation, is the service company for the Cinergy 
system, providing member companies with a variety of administrative, 
management, and support services.

Cinergy, CG&E, PSI, and ULH&P 

Customer, Sales, and Revenue Data

The number of customers served at year-end and the percent of operating 
revenues derived from the sale of electricity and the sale and transportation 
of natural gas for each registrant for 1995 are as follows:

                                                    Operating
                                Customers           Revenues    
Registrant                   Electric    Gas     Electric   Gas  

Cinergy and subsidiaries    1,369,043  439,427      85%     13%
CG&E and subsidiaries         719,227  439,427      77%     22%
PSI                           649,816    N/A        98%     N/A
ULH&P                         113,874   73,680      72%     27%

Cinergy's utilities' service territory spans 86 counties in Ohio, Indiana, and 
Kentucky and includes approximately 840 cities, towns, unincorporated 
communities, and adjacent rural areas, including municipal utilities and rural 
electric cooperatives.

The service territory of CG&E and its utility subsidiaries, including ULH&P, 
is heavily populated and characterized by a stable residential customer base 
and a diverse mix of industrial customers.  CG&E's and its utility 
subsidiaries' service territory spans 19 counties in Ohio, Indiana, and 
Kentucky (of which ULH&P serves six counties in Kentucky) and includes 
approximately 130 (44 for ULH&P) cities, towns, unincorporated communities, 
and adjacent rural areas, including municipal utilities and rural electric 
cooperatives.  The area served by PSI is a residential, agricultural, and 
widely diversified industrial territory.  PSI's service territory includes 
approximately 710 cities, towns, unincorporated communities, and adjacent 
rural areas, including municipal utilities and rural electric cooperatives.  
No one customer accounts for more than 5% of operating revenues for PSI, 5% of 
electric or gas operating revenues for CG&E and its utility subsidiaries, or 
10% of electric or gas operating revenues for ULH&P.  Sales of electricity and 
gas sales and transportation are affected by seasonal weather patterns, and, 
therefore, operating revenues and associated operating expenses are not 
distributed evenly during the year.

Cinergy, CG&E, and ULH&P

Financial Information by Business Segment

For financial information by business segment, see Note 16 of the "Notes to 
Financial Statements" in "Item 8.  Financial Statements and Supplementary 
Data".  For a discussion of the potential divestiture of CG&E's, including 
ULH&P's, gas operations, see Note 13(f) of the "Notes to Financial Statements" 
in "Item 8.  Financial Statements and Supplementary Data".

Regulation

Cinergy, CG&E, PSI, and ULH&P

Cinergy, its utility subsidiaries, and certain of its non-utility subsidiaries 
are subject to regulation by the SEC under the PUHCA with respect to, among 
other things, issuances and sales of securities, acquisitions and sales of 
certain utility properties, acquisitions and retentions of interests in non-
utility businesses, intrasystem sales of certain goods and services, the 
method of keeping accounts, and access to books and records.  In addition, the 
PUHCA generally limits registered holding companies to a single "integrated" 
public utility system, which the SEC traditionally has interpreted to prohibit 
a registered holding company, with limited exceptions, from owning both gas 
and electric properties.  (Refer to the information appearing under the 
captions "Repeal of the PUHCA" in the "Competitive Pressures" section and 
"Potential Divestiture of Gas Operations" in the "Regulatory Matters" section 
in "Item 7.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations".)

CG&E, ULH&P, Miami, and PSI are each subject to regulation by the FERC under 
the Federal Power Act with respect to the classification of accounts, rates 
for wholesale sales of electricity, interconnection agreements, and 
acquisitions and sales of certain utility properties.  In addition, services 
by KO Transmission will be rendered in accordance with terms and conditions 
and at rates contained in a gas tariff filed with the FERC.  Transportation of 
gas between CG&E and ULH&P is subject to regulation by the FERC under the 
Natural Gas Act.  

Cinergy, CG&E, and ULH&P

CG&E, as a public utility under the laws of Ohio, is also subject to 
regulation by the PUCO as to retail electric and gas rates, services, 
accounts, depreciation, issuance of securities, acquisitions and sales of 
certain utility properties, and in other respects as provided by Ohio law.  
Rates within municipalities in Ohio are subject to original regulation by the 
municipalities.  The Ohio Power Siting Board, a division of the PUCO, has 
jurisdiction in Ohio over the location, construction, and initial operation of 
new electric generating facilities and certain electric and gas transmission 
lines presently utilized by CG&E.  As to retail rates and other matters, ULH&P 
is regulated by the KPSC, and West Harrison and Lawrenceburg are regulated by 
the IURC.  

Cinergy and PSI

PSI, as a public utility under the laws of Indiana, is also regulated by the 
IURC as to its retail rates, services, accounts, depreciation, issuance of 
securities, acquisitions and sales of certain utility properties, and in other 
respects as provided by Indiana law.  Prior to the construction, purchase, or 
lease of a facility used for the generation of electricity, a public utility 
in Indiana must obtain from the IURC a certificate of public convenience and 
necessity.  

Cinergy, CG&E, PSI, and ULH&P

Rate Matters

Refer to the information appearing under the caption "Regulatory Matters" in 
"Item 7.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations".

Power Supply

Cinergy, CG&E, PSI, and ULH&P

CG&E, PSI, and 27 other electric utilities in an eight-state area are 
participating in the East Central Area Reliability Coordination Agreement for 
the purpose of coordinating the planning and operation of generating and 
transmission facilities to provide for maximum reliability of regional bulk 
power supply.  (Refer to the information appearing under the caption 
"Cinergy's Response to the Changing Competitive Environment" in the 
"Competitive Pressures" section of "Item 7.  Management's Discussion and 
Analysis of Financial Condition and Results of Operations" for a discussion of 
Cinergy's involvement in a coalition for operation of a regional transmission 
system.)

In addition to the intercompany tie between CG&E's and PSI's electric systems, 
Cinergy's electric system, which is operated by Services, is interconnected 
with the electric systems of Indiana Michigan Power Company, Columbus and 
Southern Ohio Electric Company, Ohio Power Company (all doing business as 
AEP), Central Illinois Public Service Company, East Kentucky, Hoosier Energy 
Rural Electric Cooperative, Inc., Indianapolis Power and Light Company, 
Kentucky Utilities Company, Louisville Gas & Electric Company (LG&E), NIPSCO, 
Southern Indiana Gas and Electric Company, The Dayton Power and Light Company, 
Ohio Valley Electric Corporation, and Tennessee Valley Authority.  

Cinergy, CG&E, and PSI

CG&E and East Kentucky have an agreement for the interchange of electric 
power, subject to availability, during certain times of the year through March 
2000.  Under the agreement, CG&E, a summer peaking company, has the right to 
obtain up to 150 mw of electricity through March 31, 1997, and up to 50 mw 
from April 1, 1997, through March 31, 2000, from East Kentucky during the 
months of June, July, and August.  East Kentucky, a winter peaking company, 
has the right to receive up to 150 mw through March 31, 1997, and up to 50 mw 
from April 1, 1997, through March 31, 2000, from CG&E in December, January, 
and February.  In addition, PSI has a power supply relationship with WVPA and 
IMPA through power coordination agreements.  WVPA and IMPA are also parties 
with PSI to a joint transmission and local facilities agreement.

Cinergy, CG&E, and ULH&P

ULH&P does not own or operate any electric generating facilities.  Its 
requirements for electric energy are purchased from CG&E at rates regulated by 
the FERC.

Fuel Supply

Cinergy 

Cinergy purchases approximately 23 million tons of coal annually for use by 
CG&E and PSI, which historically would rank Cinergy as the sixth largest 
utility coal purchaser in the United States.

Cinergy, CG&E, and PSI

A major portion of the coal required by CG&E and PSI is obtained through both 
long- and short-term coal supply agreements, with the remaining requirements 
purchased on the spot market.  The prices to be paid under most of these 
contracts are subject to adjustment.  In addition, some of these agreements 
include extension options and termination provisions pertaining to coal 
quality.  The coal delivered under these contracts is primarily from mines 
located in Illinois, Indiana, and Pennsylvania for PSI and Ohio, Kentucky, 
West Virginia, and Pennsylvania for CG&E.
CG&E and PSI monitor alternative sources to assure a continuing availability 
of economical fuel supplies.  The companies intend to maintain the practice of 
purchasing a portion of their coal requirements on the spot market and will 
continue to investigate the least cost coal options in connection with their 
compliance with the CAAA (see the information appearing under the caption 
"Environmental Issues" in "Item 7.  Management's Discussion and Analysis of 
Financial Condition and Results of Operations").

The companies believe they will be able to obtain sufficient coal to meet 
future generating requirements.  However, both CG&E and PSI are unable to 
predict the extent to which coal availability and price may ultimately be 
affected by future environmental requirements.  Presently, CG&E and PSI expect 
the cost of coal to rise in the long run as the supply of more accessible and 
higher-grade coal diminishes and as mining, transportation, and other related 
costs continue an upward trend. 

Cinergy, CG&E, and ULH&P

Gas Supply

Order 636 restructured the operations of gas pipelines and the supply 
portfolios of gas distribution companies.  As gas pipelines unbundled their 
historic service of supply aggregation, gas distribution companies are 
entering into term (one year or more) contracts directly with producers and 
marketers, diminishing the once prominent spot market (see the information 
appearing under the caption "Order 636" in the "Competitive Pressures" section 
of "Item 7.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations").

CG&E and its utility subsidiaries, including ULH&P, now obtain the majority of 
their natural gas supply (91%) from firm supply agreements, with remaining 
volumes purchased in the spot market.  These firm contracts feature dual 
levels of gas supply: base load for continuous supply for CG&E's and its 
utility subsidiaries' core requirements, and "swing" load, which is gas 
available on a daily basis to accommodate changes in demand.  While a premium 
is paid for the swing load, the use of industry indices to price firm gas 
volumes on a monthly basis ensures that the price CG&E and its utility 
subsidiaries pay remains economically competitive.

Gas is transported on interstate pipelines either directly to CG&E's and its 
subsidiaries' distribution systems, or it is injected into pipeline storage 
facilities for withdrawal and delivery in the future.  Most of CG&E's and its 
utility subsidiaries' gas supplies are sourced from the Gulf of Mexico coastal 
area.  CG&E and its subsidiaries have also obtained limited supply sourced 
from the Appalachian region and the mid-continent (Arkansas - Oklahoma) basin, 
and from methane gas recovered from an Ohio landfill.  Over the long term, 
natural gas is expected to retain its competitiveness with alternative fuels; 
however, the costs of discovery and development of new sources of supply,, 
among other things, will influence prices.

Cinergy, CG&E, PSI, and ULH&P

Competition

Refer to the information appearing under the caption "Competitive Pressures" 
in "Item 7.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations".

Cinergy, CG&E, PSI, and ULH&P

Capital Requirements

Refer to the information appearing under the caption "Capital Requirements" in 
"Item 7.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations".

Cinergy, CG&E, and PSI 

Environmental Matters

Environmental compliance construction expenditures for 1996 for Cinergy and 
its subsidiaries are forecasted to be as follows:


                    Registrant               Expenditures
                                            (in thousands)

                    CG&E and subsidiaries        $309 
                    PSI                            51 
                    Cinergy and subsidiaries     $360 

In addition, refer to the information appearing under the caption 
"Environmental Issues" in "Item 7.  Management's Discussion and Analysis of 
Financial Condition and Results of Operations".

Employees
     
Cinergy

The number of employees of Cinergy and its subsidiaries at December 31, 1995, 
was 8,602, of whom 4,859 belonged to bargaining units.  These bargaining unit 
employees were represented by labor agreements between CG&E and its 
subsidiaries, including ULH&P, or PSI and the applicable union organization.  
Of Cinergy's total employees, 3,236 employees were represented by the IBEW, 
466 were represented by the USWA, and 1,157 were represented by the IUU.  (For 
additional information, See Note 13(g) of the "Notes to Financial Statements" 
in "Item 8.  Financial Statements and Supplementary Data".)

Employees assigned to Services at December 31, 1995, totaled 2,739, of whom 
922 belonged to bargaining units.  These bargaining unit employees were 
represented by the labor agreements previously discussed.  Of Services' total 
employees, 455 were represented by the IUU and 467 were represented by the 
IBEW (158 were represented by the agreement with PSI and 309 were represented 
by the agreement with CG&E).

Cinergy and CG&E

The number of employees of CG&E and its subsidiaries at December 31, 1995, was 
3,056, of whom CG&E employed 2,759, ULH&P employed 284, and Lawrenceburg 
employed 13.

CG&E and its subsidiaries have collective bargaining agreements with several 
union organizations.  Of CG&E's and its subsidiaries' total employees 702 
employees were represented by the IUU, 466 were represented by the USWA, and 
1,214 were represented by the IBEW.  The current contract between CG&E and the 
IUU will expire in March 1998.  CG&E and its subsidiaries have a three-year 
contract with the USWA expiring May 15, 1997.  The IBEW contract expires April 
1, 1997.

Cinergy and PSI

The number of employees of PSI at December 31, 1995, was 2,807, of whom 1,555 
were represented by the IBEW.

PSI's collective bargaining agreement with the IBEW will expire at the end of 
April 1996.

Cinergy and ULH&P

The number of employees of ULH&P at December 31, 1995, was 284, of whom 228 
belonged to bargaining units.  These bargaining unit employees were 
represented by the same labor agreements between CG&E and the applicable union 
organization.  Of ULH&P's total employees, 58 employees were represented by 
the IBEW, 104 were represented by the USWA, and 66 were represented by the 
IUU.

The current contract between ULH&P and the IUU will expire in March 1998.  
ULH&P has three-year agreements with the USWA and IBEW that will expire May 
15, 1997, and April 1, 1997, respectively.

                                 ITEM 2.  PROPERTIES

Cinergy, CG&E, PSI, and ULH&P

Substantially all utility plant is subject to the lien of each applicable 
company's first mortgage bond indenture.

In addition to the information discussed herein, refer to Note 14 of the 
"Notes to Financial Statements" in "Item 8.  Financial Statements and 
Supplementary Data".

Cinergy, CG&E, and PSI

At December 31, 1995, the Cinergy utility subsidiaries owned electric 
generating plants, or portions thereof in the case of jointly owned plants, 
with net capabilities (winter ratings) as shown in the following table:


<TABLE>
<S>                               <C>                    <C>        <C>          <C>
                                                                                      Net
                                                           Percent    Principal   Capability
      Plant Name                      Location            Ownership  Fuel Source     (mw)   

CG&E
Steam Electric Generating 
  Plants:
Miami Fort Station (Units 5&6)     North Bend, Ohio        100.00%       Coal         243 
Miami Fort Station (Units 7&8)     North Bend, Ohio         64.00        Coal         640
W.C. Beckjord Station (Units 1-5)  New Richmond, Ohio      100.00        Coal         704
W.C. Beckjord Station (Unit 6)     New Richmond, Ohio       37.50        Coal         158 
J.M. Stuart Station                Aberdeen, Ohio           39.00*       Coal         913
Killen Station                     Adams County, Ohio       33.00*       Coal         198
Conesville Station                 Conesville, Ohio         40.00*       Coal         312
Zimmer                             Moscow, Ohio             46.50        Coal         605
East Bend Station                  Boone County, Kentucky   69.00        Coal         414

Combustion Turbines:
Dicks Creek Station                Middletown, Ohio        100.00        Gas          172
Miami Fort Gas Turbine Station     North Bend, Ohio        100.00        Oil          207
W.C. Beckjord Gas Turbine Station  New Richmond, Ohio      100.00        Oil          245
Woodsdale                          Butler County, Ohio     100.00        Gas          564

PSI
Steam Electric Generating 
  Plants:
Gibson (Units 1-4)                 Princeton, Indiana      100.00        Coal       2,533
Gibson (Unit 5)                    Princeton, Indiana       50.05        Coal         313 
Wabash River Station               Terre Haute, Indiana    100.00        Coal         668
Cayuga Station                     Cayuga, Indiana         100.00        Coal       1,005
R.A. Gallagher Station             New Albany, Indiana     100.00        Coal         560
Edwardsport Station                Edwardsport, Indiana    100.00        Coal         160
Noblesville Station                Noblesville, Indiana    100.00        Coal          90

Combustion Turbines:
Cayuga Combustion Turbine          Cayuga, Indiana         100.00        Gas          120
Wabash River Coal Gasification
  Project                          Terre Haute, Indiana    100.00        Coal         262

Internal Combustion Units:
Connersville Peaking Station       Connersville, Indiana   100.00        Oil           98
Miami-Wabash Peaking Station       Wabash, Indiana         100.00        Oil          104
Cayuga Peaking Units               Cayuga, Indiana         100.00        Oil           11
Wabash River Peaking Units         Terre Haute, Indiana    100.00        Oil            8 

Hydroelectric Generating Station:
Markland Generating Station        Markland Dam, Ohio 
                                     River                 100.00        Water         45
<FN>
* Station is not operated by CG&E.
</TABLE>

<PAGE>
Cinergy and CG&E

CG&E 

CG&E's 1995 peak load, which occurred on August 14 and was exclusive of off-
system transactions, was 4,509 mw.  For the period 1996 through 2005, peak 
load and kwh sales are each forecasted to have annual growth rates of 2%.  
These forecasts reflect CG&E's load growth, alternative fuel choices, 
population growth, and housing starts.  These forecasts exclude an assessment 
of DSM, non-firm power transactions, and any potential off-system, long-term 
firm power sales.

As of December 31, 1995, CG&E's transmission system consisted of 388 circuit 
miles of 345,000 volt line, 605 circuit miles of 138,000 volt line, 512 
circuit miles of 69,000 volt line, and 117 circuit miles of lesser volt line, 
all within the states of Ohio and Kentucky.  In addition, as of December 31, 
1995, CG&E's distribution system consisted of 14,556 circuit miles, all within 
the state of Ohio.  As of the same date, CG&E's transmission substations had a 
combined capacity of 14,845,000 kilovolt-amperes, and the distribution 
substations had a combined capacity of 5,964,000 kilovolt-amperes.  A portion 
of CG&E's total transmission system is jointly owned, primarily in connection 
with its jointly owned electric generating units.

During 1995, almost all of the electricity generated by units owned by CG&E or 
in which it has an ownership interest was produced by coal-fired generating 
units.  Those units generate most of the electric requirements of CG&E and its 
utility subsidiaries.

CG&E owns two propane/air peakshaving plants.  Associated with these plants 
are two underground caverns, one with a seven million gallon capacity and one 
with an eight million gallon capacity.  Both plants and storage caverns are 
located in Ohio and used primarily to augment CG&E's supply of natural gas 
during periods of peak demand and emergencies.  CG&E also owns natural gas 
distribution systems consisting of 5,506 miles of mains and service lines in 
southwestern Ohio.

Cinergy and PSI

PSI

PSI's 1995 peak load, which occurred on August 14 and was exclusive of off-
system transactions, was 5,274 mw.  For the period 1996 through 2005, peak 
load and kwh sales are each forecasted to have annual growth rates of 2%.  
These forecasts reflect PSI's load growth, alternative fuel choices, 
population growth, and housing starts.  These forecasts exclude an assessment 
of DSM, non-firm power transactions, and any potential off-system, long-term 
firm power sales.

As of December 31, 1995, PSI's transmission system consisted of 719 circuit 
miles of 345,000 volt line, 656 circuit miles of 230,000 volt line, 1,595 
circuit miles of 138,000 volt line, and 2,427 circuit miles of 69,000 volt 
line, all within the state of Indiana.  In addition, as of December 31, 1995, 
PSI's distribution system consisted of 19,264 circuit miles, all within the 
state of Indiana.  As of the same date, PSI's transmission substations had a 
combined capacity of 21,608,000 kilovolt-amperes, and the distribution 
substations had a combined capacity of 6,142,000 kilovolt-amperes.

During 1995, almost all of PSI's kwh production was obtained from coal-fired 
and hydroelectric generation.
Cinergy, CG&E, and ULH&P

ULH&P

As of December 31, 1995, ULH&P owned 104 circuit miles of 69,000 volt electric 
transmission line, an electric distribution system consisting of 2,504 circuit 
miles, and a gas distribution system consisting of 1,230 miles of mains and 
service lines in northern Kentucky.  ULH&P also owns a propane/air peakshaving 
plant, a seven million gallon capacity underground cavern for the storage of 
liquid propane, and related liquid propane feeder lines, located in northern 
Kentucky and adjacent to one of the gas lines that transports natural gas to 
CG&E.  The propane/air plant and cavern are used primarily to augment CG&E's 
and ULH&P's supply of natural gas during periods of peak demand and 
emergencies.

Cinergy and CG&E

Other Utility Subsidiaries

As of December 31, 1995, Lawrenceburg owned a gas distribution system 
consisting of 171 miles of mains and service lines in Indiana adjacent to the 
western part of CG&E's service area.  Lawrenceburg is connected with and sells 
gas at wholesale to the city of Aurora, Indiana, and is also connected within 
Indiana with the lines of Texas Gas Transmission Corporation and Texas Eastern 
Transmission Corporation.

As of December 31, 1995, West Harrison owned a small electric distribution 
system consisting of 10 circuit miles in Indiana adjacent to CG&E's service 
area.  As of the same date, Miami owned 40 miles of 138,000 volt transmission 
line connecting the lines of LG&E with those of CG&E.

                         ITEM 3.  LEGAL PROCEEDINGS

Cinergy, CG&E, and PSI

Power International Litigation

See Note 13(d) of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplementary Data".

Cinergy, CG&E, and PSI

Merger Litigation

In August 1995, AEP filed a petition in the United States Court of Appeals 
for the District of Columbia Circuit for review of the FERC's Merger Order. 
AEP has objected to the Merger Order alleging that the post-merger 
operations of Cinergy would require the use of AEP's transmission 
facilities on a continuous basis without compensation.  AEP contends that 
the FERC, in issuing the Merger Order, did not adequately evaluate the 
impact on AEP or whether the need to use AEP's transmission facilities 
would interfere with Cinergy achieving merger benefits.  In addition, AEP 
claims that the FERC failed to evaluate the extent to which the merged 
facilities' operations would be consistent with the integrated public 
utility concept of the PUHCA.  CG&E and PSI have intervened in this action 
and have filed a Motion to Dismiss.  At this time, Cinergy, CG&E, and PSI 
cannot predict the outcome of the appeal.

Cinergy, CG&E, and PSI

Shareholder Litigation

In March 1993, in conjunction with a proposed tender offer for Resources, 
IPALCO filed suit in the United States District Court for the Southern 
District of Indiana, Indianapolis Division (District Court), against 
Resources, Cinergy, PSI, CG&E, and James E. Rogers (at that time Mr. Rogers 
was an officer and director of Resources and PSI).  In addition, in the 
weeks following, suits with claims similar to those of IPALCO were filed by 
purported shareholders of Resources.  IPALCO's claim was subsequently 
dismissed in November 1993, and in November 1995, the District Court 
dismissed the shareholders' claims in accordance with the terms of a 
settlement agreement entered into by the parties.

ULH&P

ULH&P has no material pending legal proceedings.

Cinergy, CG&E, PSI, and ULH&P

In addition to the above litigation, see Notes 2, 13(b), 13(c), 13(e), and 
13(f) of the "Notes to Financial Statements" in "Item 8.  Financial Statements 
and Supplementary Data".

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 

Cinergy, CG&E, and PSI

None.

ULH&P

Omitted pursuant to instruction J(2)(c).

EXECUTIVE OFFICERS OF THE REGISTRANTS (at February 29, 1996)

                         Age at
                        Dec. 31,
         Name             1995          Office & Date Elected or in Job     

Cinergy, CG&E, and PSI

Jackson H. Randolph        65      Chairman of Cinergy, CG&E, and             
                                     PSI - 1995
                                   Chairman and Chief Executive Officer
                                     of Cinergy, CG&E, and PSI - 1994
                                   Chairman, President, and Chief Executive
                                     Officer of CG&E - 1993
                                   President and Chief Executive Officer
                                     of CG&E - 1986

James E. Rogers            48      Vice Chairman, President, and Chief        
                                     Executive Officer of Cinergy - 1995
                                   Vice Chairman and Chief Executive 
                                     Officer of CG&E and PSI - 1995
                                   Vice Chairman, President, and Chief 
                                     Operating Officer of Cinergy - 1994
                                   Vice Chairman and Chief Operating
                                     Officer of CG&E and PSI - 1994
                                   Chairman and Chief Executive Officer
                                     of Resources - 1993
                                   Chairman, President, and Chief Executive
                                     Officer of PSI - 1990
                               
Terry E. Bruck             50      Group Vice President, Transmission and     
                                     Distribution of Cinergy, CG&E, and       
                                     PSI - 1995
                                   Group Vice President, Wholesale Power and
                                     Transmission Operations of CG&E and 
                                     PSI - 1995
                                   Group Vice President, Wholesale Power
                                     and Transmission Operations of 
                                     Cinergy - 1994
                                   Vice President, Electric Operations of
                                     CG&E - 1988

Cheryl M. Foley            48      Vice President, General Counsel, and
                                     Secretary of CG&E - 1995
                                   Vice President, General Counsel, and
                                     Secretary of Cinergy - 1994
                                   Vice President, General Counsel, and
                                     Secretary of PSI and Resources - 1991
                                   Vice President and General Counsel of 
                                     Resources - 1990
                                  
J. Wayne Leonard           45      Group Vice President and Chief
                                     Financial Officer of CG&E and PSI - 1995
                                   Group Vice President and Chief Financial
                                     Officer of Cinergy - 1994
                                   Senior Vice President and Chief Financial
                                     Officer of PSI and Resources - 1992
                                   Vice President and Chief Financial 
                                     Officer of PSI and Resources - 1989

Stephen G. Salay           58      Group Vice President, Power Operations
                                     of CG&E and PSI - 1995
                                   Group Vice President, Power Operations of
                                     Cinergy - 1994
                                   Vice President, Electric Production and 
                                     Fuel Supply of CG&E - 1988

William L. Sheafer         52      Treasurer of Cinergy and PSI - 1994
                                   Treasurer of CG&E - 1987

George H. Stinson          50      Vice President, Corporate Services of      
                                     Cinergy, CG&E, and PSI - 1995
                                   Vice President of Cinergy - 1995  
                                   President of CG&E - 1994
                                   Vice President, Gas Operations of
                                     CG&E - 1991
                                   Manager, Gas Operations of CG&E - 1990

Larry E. Thomas            50      Group Vice President and Chief             
                                     Transformation Officer of Cinergy, CG&E, 
                                     and PSI - 1995
                                   Group Vice President, Reengineering and
                                     Operations Services of CG&E and 
                                     PSI - 1995
                                   Group Vice President, Reengineering
                                     and Operations Services of Cinergy - 1994
                                   Senior Vice President and Chief Operations
                                     Officer of PSI - 1992
                                   Senior Vice President and Chief Operating
                                     Officer, Customer Operations of 
                                     PSI - 1990
                                   
Charles J. Winger          50      Comptroller of CG&E - 1995
                                   Comptroller of Cinergy - 1994
                                   Comptroller of Resources - 1988
                                   Comptroller of PSI - 1984

Cinergy and CG&E
                                  
William J. Grealis 1/      50      President of CG&E - 1995 
                                   Vice President of Cinergy - 1995
                                   President, Gas Business Unit of CG&E - 1995
                                   President of Investments - 1995
                                   Partner - Akin, Gump, Strauss, Hauer
                                     & Feld 2/ - 1978 

Cinergy and PSI

John M. Mutz 3/            60      Vice President of Cinergy - 1995 
                                   President of PSI - 1994 
                                   President of Resources - 1993
                                   President - Lilly Endowment, Inc. 2/ - 1989

ULH&P

Omitted pursuant to instruction J(2)(c).

Cinergy, CG&E, and PSI

None of the officers are related in any manner.  Executive officers of Cinergy 
are elected to the offices set opposite their respective names until the next 
annual meeting of the Board of Directors and until their successors shall have 
been duly elected and shall have been qualified.

1/  Prior to becoming President of Investments, Mr. Grealis was a partner 
in the Washington, D.C. law firm of Akin, Gump, Strauss, Hauer & Feld. In 
addition, prior to the merger, Mr. Grealis was President of PSI 
Investments, Inc. on an interim basis beginning in 1992.

2/  Non-affiliate of Cinergy.

3/  Prior to becoming President of Resources, Mr. Mutz was President of 
Lilly Endowment, Inc., a private philanthropic foundation located in 
Indianapolis, Indiana, and also served two terms as lieutenant governor of 
Indiana.

                                    PART II

                    ITEM 5.  MARKET FOR REGISTRANT'S COMMON
                     EQUITY AND RELATED STOCKHOLDER MATTERS

Cinergy, CG&E, PSI, and ULH&P

Cinergy's common stock is listed on the New York Stock Exchange and has 
unlisted trading privileges on the Boston, Chicago, Cincinnati, Pacific, and 
Philadelphia exchanges.  As of February 5, 1996, Cinergy's most recent 
dividend record date, there were 80,550 common shareholders of record.
Trading of CG&E's and Resources' common stock ended at the close of the market 
October 24, 1994.  Trading of Cinergy's common stock began upon the opening of 
the market October 25, 1994.  The following table shows the high and low sales 
prices per share, if applicable, and the dividends on common stock declared by 
CG&E, Resources, PSI, ULH&P, and Cinergy for the past two years:

                        Market Price (a)         Dividends Declared
                      High          Low     (per share)   (in thousands)
      1994
        CG&E
      4th Quarter    $23 3/8      $21 7/8    $ .3272 (b)      $15 267 (c) 
      3rd Quarter     23 1/4       20 7/8      .43      
      2nd Quarter     23 7/8       21          .43     
      1st Quarter     27 3/4       23 5/8      .43      

    Resources
      4th Quarter     23 1/2       22          .1805 (b)   
      3rd Quarter     23 1/8       20 3/4      .31      
      2nd Quarter     23 1/8       19 5/8      .31      
      1st Quarter     26 5/8       22 3/4      .31      
    
    PSI 
      4th Quarter                                              10 376 (c)
      3rd Quarter                                              16 174 (c)
      2nd Quarter                                              16 622 (c)
      1st Quarter                                              15 970 (c)

    ULH&P
      4th Quarter                             6.00
    
    Cinergy
      4th Quarter     24           20 3/4      .1028 (b)
 
  1995
    CG&E
      4th Quarter                                              56 600 (c)
      3rd Quarter                                              55 400 (c)
      2nd Quarter                                              55 900 (c)
      1st Quarter                                              51 650 (c)

    ULH&P
      4th Quarter                             6.00

    Cinergy
      4th Quarter     31 1/8       27 3/4      .43
      3rd Quarter     27 7/8       25 1/4      .43
      2nd Quarter     27           24 5/8      .43
      1st Quarter     25 1/4       23 3/8      .43

(a)  Market price for PSI and ULH&P for 1994 and for CG&E, PSI, and ULH&P for 
     1995 is not applicable.

(b)  The prorated fourth quarter dividends for CG&E and Resources were      
     determined by multiplying that portion of each company's regular 
     quarterly dividend by a fraction equal to the number of days from their 
     last respective common dividend payment dates (August 15, 1994, for CG&E; 
     September 1, 1994, for Resources) to and including the closing date of 
     the merger, divided by the number of days in the quarterly period for 
     each respective company (92 for CG&E; 91 for Resources).  These 
     respective prorated dividends were in addition to, but paid separately 
     from, the fourth quarter dividend on Cinergy common stock, which was 
     determined by prorating Cinergy's 43-cents per share quarterly dividend 
     for the remainder of the quarter ending November 15, 1994.  

(c)  All of PSI's 1994 dividends were paid to Resources.  CG&E's 1994 fourth 
     quarter dividend of $15,276,000 and all of CG&E's 1995 dividends were 
     paid to Cinergy.  

See Notes 3(b) and 4(c) of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplementary Data" for a brief description of common 
dividend restrictions.

All CG&E and PSI common stock is held by Cinergy and all ULH&P common stock is 
held by CG&E; therefore, there is no public trading market for their common 
stock.  

                    ITEM 6.  SELECTED FINANCIAL DATA

Cinergy

                                      1995     1994    1993     1992     1991 
                                      (in millions, except per share amounts)

Operating revenues (1)               $3 031   $2 898  $2 843   $2 613   $2 640
Net income (1)                          347      191      63      271      202
Common stock
  Earnings per share (1)               2.22     1.30     .43     1.91     1.46
  Dividends declared per share         1.72     1.50    1.46     1.39     1.33

Total assets (2)                      8 220    8 150   7 804    7 133    6 681
Cumulative preferred stock of 
  subsidiaries subject to mandatory
  redemption (3)                        160      210     210      210      192
Long-term debt (4)                    2 531    2 715   2 645    2 547    2 376
Long-term debt due within
  one year                              202       60      -        46      115
     
   CG&E
                                      1995     1994    1993     1992      1991 
                                                  (in millions)

Operating revenues (1)               $1 848   $1 788  $1 752   $1 553   $1 518
Net income (loss)(1)                    236      158      (9)     202      207

Total assets (2)                      5 177    5 182   5 144    4 802    4 584
Cumulative preferred stock subject
  to mandatory redemption (3)           160      210     210      210      167
Long-term debt (4)                    1 703    1 838   1 829    1 810    1 734
Long-term debt due within
  one year                              152       -       -         7       25

      PSI
                                      1995     1994     1993     1992     1991 
                                                   (in millions)

Operating revenues (1)               $1 248   $1 114   $1 092   $1 066  $1 120
Net income (1)                          146       82      125      107      30

Total assets (2)                      3 076    2 945    2 645    2 300   2 093
Cumulative preferred stock subject
  to mandatory redemption (3)            -        -        -        -       26
Long-term debt (4)                      828      878      816      737     642
Long-term debt due within 
  one year                               50       60       -        40      90

Cinergy, CG&E, and PSI

       (1)  See Notes 1, 2, and 16 of the "Notes to Financial Statements" 
in "Item 8.  Financial Statements and Supplementary Data".

       (2)  See Notes 1(d) and 7 of the "Notes to Financial Statements" in 
"Item 8.  Financial Statements and Supplementary Data".

       (3)  Includes $39.5 million, $36.5 million, and $3 million in 1991 
for Cinergy, CG&E, and PSI, respectively, to be redeemed within one year. 
Also, see Note 4 of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplementary Data".

       (4)  See Note 5 of the "Notes to Financial Statements" in "Item 8. 
Financial Statements and Supplementary Data".  

In addition, see "Item 7.  Management's Discussion and Analysis of Financial 
Condition and Results of Operations" and Note 13 of the "Notes to Financial 
Statements" in "Item 8.  Financial Statements and Supplementary Data" for 
discussions of material uncertainties for Cinergy, CG&E, and PSI. 

ULH&P

Omitted pursuant to Instruction J(2)(a).

             ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cinergy, CG&E, PSI, and ULH&P

THE COMPANIES

Cinergy is a registered holding company under the PUHCA.  Cinergy was created 
in the October 1994 merger of Resources and CG&E.  The business combination 
was accounted for as a pooling of interests.  Following the merger, Cinergy 
became the parent holding company of PSI, previously Resources' utility 
subsidiary, CG&E, Investments, and Services.  

FINANCIAL CONDITION

COMPETITIVE PRESSURES

Electric Utility Industry

Cinergy, CG&E, PSI, and ULH&P

Introduction  The primary factor influencing the future profitability of 
Cinergy is the changing competitive environment for energy services, including 
the impact of emerging technologies, and the related commoditization of 
electric power markets.  Changes in the industry include increased competition 
in wholesale power markets and ongoing pressure for "customer choice" by large 
industrial customers and, ultimately, by all retail customers.  

Pressures for Customer Choice  Extending choice to end-user customers, also 
referred to as retail wheeling, would allow customers within a particular 
utility's service territory to "unbundle" their purchase decisions.  Customers 
would be able to buy power as a commodity directly from another source and buy 
distribution service over the power lines of the local utility for delivery.  
The regulatory and legislative reform to facilitate this result is primarily 
driven by: (1) large industrial energy users; (2) the emergence of new 
suppliers in the competitive markets; and (3) increasing evidence from other 
regulated industries that wherever effective competition is feasible, it can 
yield lower costs and a wider range of customer options and services than 
traditional cost-of-service regulation.  Industrial customers are intensifying 
their efforts to change the regulatory process so that they may access the 
lower-cost power necessary to remain competitive in the global marketplace.  
The current restrictions on access to low-cost power are exacerbated by 
traditional cost-of-service regulation which has produced average industrial 
rates to customers that vary substantially across the United States (from less 
than 3 cents per kwh to approximately 10 cents per kwh). 

While customer efforts at industry reform have resulted in some success, the 
emergence of new competitors to the local franchise utility has become an 
equally effective force for change.  This new competition was facilitated by 
the Energy Policy Act of 1992 (Energy Act), which granted the FERC authority 
to order wholesale transmission access.  New competitors include power 
marketers, power brokers, and local franchise utilities that now sell power in 
regional or national markets.  To date, the FERC has granted approximately 150 
power marketers the ability to sell at market-based rates and accepted several 
utilities' general sales tariffs that allow for sales anywhere in the United 
States.  Cinergy's non-firm power sales tariff was accepted by the FERC in 
December 1995, and an affiliated power marketer of Cinergy was given 
authorization to begin transacting business in September 1995.  Additionally, 
utilities are using merger and acquisition strategies to achieve expanded 
scale and scope to support a regional or national market strategy.  For 
example, since the beginning of 1995, there were seven mergers involving major 
investor-owned utilities announced in the industry, representing nearly $28 
billion of combined market value. 

Brokers are intermediaries between buyers and sellers (i.e., they do not take 
title to the power).  Power marketers are entities licensed by the FERC to 
conduct bulk power trades at market-based prices.  They manage portfolios of 
power contracts (to which they have title) and owned generation and package 
energy products for customers of bulk power, including price risk management 
contracts such as options on fixed-price energy or guaranteed fixed-price 
contracts.

Despite increased activity by utilities and new competitors to respond to the 
demands of industrial customers for greater choice and lower prices, the pace 
of legislative and regulatory restructuring appears to have slowed somewhat in 
1995.  Many states continue to examine the complex technical and economic 
issues restructuring presents.  Among other things, states are considering the 
trade-offs between achieving long-run economic efficiency and potential short-
term wealth transfers between customers and shareholders (see further 
discussion below) or among customers, as well as the potential impact (if any) 
of restructuring on other socially desirable objectives like clean air or 
energy efficiency. 

The most difficult issue polarizing the debate on the future competitive 
framework of the industry is the transition from the old order to the new and 
who will bear the costs of historical utility investments or past commitments 
incurred under cost-of-service regulation.  If the generation component of the 
industry's business was immediately brought to market and priced at 
competitive wholesale prices, it is likely that many utilities would currently 
be unable to recover a large percentage of their fixed costs.  Other costs 
such as investments in energy efficiency (DSM investments) could also become 
"stranded" (i.e., unrecoverable at competitive market prices) in this 
scenario.  The financial impact on the industry of alternative scenarios for a 
transition to market prices is highly dependent upon: (1) the speed of the 
transition; (2) the clearing price for electricity in a fully competitive 
market; and (3) customer behavior (e.g., loyalty) when afforded potentially 
lower-cost alternatives.  

Because of the complex nature of electric power flows, the variety of state-
by-state regulations, and the potential inability or unwillingness to shut 
down high-cost plants (e.g., nuclear) in a fully competitive market, great 
uncertainty exists as to the time frame required for the future price of 
electricity in a commodity market to rise to long-run marginal cost (e.g., 
full cost of new resources) and, importantly, how close to short-term marginal 
cost (e.g., fuel and variable operating expenses) prices may fall in the 
interim.  For example, depending upon the scenario, Moody's has quantified the 
stranded investment issue for the industry at between $50 billion and $300 
billion (with the most likely result approximately $135 billion), while S&P 
has estimated a total exposure of between $10 billion and $26 billion (6% and 
16%, respectively) of total industry annual revenues.  The Oak Ridge National 
Laboratory has quantified the industry financial impact at $6 billion for 
every 1 mill (tenth of a cent) change in market price.

The position that all prudent past investments and commitments must be honored 
has received support from regulators at the FERC and in the state of 
California, both of which have provided for the recovery of utility stranded 
investments (see further discussion of each of these proposals herein), 
although that position varies from state to state.  For example, a recent 
survey of 90 state utility commissioners from 40 states concluded that 
approximately 50% agreed with allowing recovery of stranded costs at the state 
level, while 26% disagreed with recovery, and the remaining 24% were 
uncertain.

Cinergy's Response to the Changing Competitive Environment  Cinergy supports 
increased competition in the electric utility industry.  Cinergy believes that 
competition would benefit electric customers and the economy as a whole.  At 
the same time, Cinergy possesses competitive advantages (e.g., low-cost 
generation) that could work to the benefit of its shareholders in a 
competitive environment.  However, these advantages could be substantially 
eroded by restrictive regulations that lag the development of a competitive 
market and limit the Company's ability to preempt the competition in 
responding to customer needs.  As such, Cinergy has chosen to take a 
leadership role in state and Federal debates on industry reform.

However, Cinergy believes there are two substantial impediments to realizing 
the potential efficiencies of competition in the generation segment of the 
business: (1) resolving the issue of stranded costs associated with past 
utility commitments and (2) recognizing states' rights, concerns, and 
authority in regulating a product that flows in interstate commerce.  While 
Cinergy is among the lowest-cost producers nationwide and has been recognized 
by both Moody's and S&P as having little exposure to stranded investment, 
Cinergy nevertheless recognizes the legitimacy of the industry's equity 
argument for recovery of at least some of the costs associated with past 
commitments and the importance of resolving this issue in the interest of 
moving the debate to more important issues like how to achieve the potential 
economic efficiencies that competition offers and what regulatory and 
structural reforms are necessary to achieve those results.  Cinergy remains 
concerned that even low-cost producers, under certain scenarios, could face 
difficult if not ruinous competition in an excess capacity market that was 
created at least in part by past government policies.  Cinergy has 
approximately $1 billion of regulatory assets (past costs incurred for which 
regulators have promised recovery in the future) that could be at risk, at 
least in part, in some scenarios.  At the same time, Cinergy believes that 
full recovery of the industry's potential stranded investment is unrealistic 
to expect in a market where certain customers can bypass stranded cost 
mechanisms (e.g., self-generation), is politically infeasible, and is neither 
necessarily equitable nor efficient.  

Additionally, Cinergy believes that efficient competition cannot be achieved 
if neighboring states reach substantially different conclusions concerning 
items such as the transition rules, the timetables for implementation, 
universal service to customers, and reliability standards.  Such state-by-
state disparity would provide inequitable advantages to some competitors while 
unduly harming others' ability to compete in the marketplace.  While Cinergy 
believes that satisfactory results cannot be achieved without a broad national 
consensus for the long-term goal and a time frame for getting there, Cinergy 
does not believe a total preemption of states' rights on this issue is either 
politically feasible or necessary.

Cinergy intends to pursue aggressively a national solution that will recognize 
the legitimacy of certain claims to past costs (within some level of cost and 
demonstrated prudence) and provide a required framework for states to align 
their regulations and policies within a specified time frame.  The framework 
would require a consistent transition to full competition for generation in 
all markets, thus minimizing the current fragmentation resulting from the 
initiatives of multiple regulators and regulations.

As further evidence of its leadership in the restructuring of the electric 
utility industry, in February 1996, Cinergy and several other midwestern 
utilities announced the formation of a coalition to create and develop a 
multi-state transmission region operated by an independent system operator 
(ISO).  The coalition, which Cinergy believes is likely to expand in 
membership, is proposing a midwest ISO which would ensure non-discriminating 
open transmission access, develop a regional transmission tariff, and ensure 
system reliability.  Cinergy believes the formation of ISOs will be a major 
step toward facilitating competition in the electric utility industry and 
potentially more mergers among utilities (i.e., reduced market power 
concerns).

For an electric utility to be successful in this competitive environment, it 
is critical that regulatory reform in all segments of the business keeps pace 
with the competitive realities facing electric utilities and their customers 
in not only generation, but also transmission, distribution, and energy 
services activities.  Strict adherence to traditional, cost-based rate-of-
return regulation will both significantly disadvantage a utility's ability to 
compete successfully to supply customer needs and result in a failure to 
realize the potential economic efficiencies from restructuring.  For example, 
performance-based regulation (e.g., price caps) would result in better 
economic incentives to control costs and likely add substantial flexibility 
for the franchise utility in the transition to a fully competitive 
environment.  

Legislation allowing significant flexibility was passed (Senate Bill 637) in 
Indiana in 1995.  The Company intends to pursue similar flexibility in all 
markets where it conducts business.

Federal Developments

Mega-NOPR  The Energy Act granted the FERC the authority to order wholesale 
transmission access.  Acting on that authority, in March 1995, the FERC took a 
substantial step toward assuring increased competition in the electric 
industry by issuing the mega-NOPR.  

Cinergy was the first utility in the country to file its comments endorsing 
the mega-NOPR, reaffirming its support for the FERC's authority to order 
utilities owning transmission systems to provide access to other entities at 
rates and terms comparable to those provided to affiliated companies.  As 
proposed, the FERC's mega-NOPR would, among other things, provide for 
mandatory filing of open access/comparability transmission tariffs, provide 
for functional unbundling of all services, require utilities to use the filed 
tariffs for their own bulk power transactions, establish an electronic 
bulletin board for transmission availability and pricing information, and 
establish a contract-based approach to recovering any potential stranded costs 
as a result of customer choice at the wholesale level.  A final order is 
expected to be issued during the first half of 1996.

Repeal of the PUHCA  After a year-long review of its continuing regulation of 
public utility holding companies under the PUHCA, in June 1995, the SEC 
endorsed recommendations for reform of the PUHCA.  The recommendations call 
for repeal and, pending repeal, significant administrative reform of the 60-
year-old statute.  While the report offers three alternative approaches to 
repeal and legislative reform, the SEC's preferred option is repeal coupled 
with a transition period of one year or longer and a transfer of certain 
consumer-protection provisions of the PUHCA to the FERC.  

The report further recommends that, pending consideration of legislative 
options, the SEC take prompt administrative action, by rulemaking and on a 
case-by-case basis, to modernize and simplify regulation under the PUHCA, with 
particular reference to financing transactions, diversification into non-
utility businesses, utility mergers and acquisitions, and the PUHCA's 
"integration" standards.  In the latter regard, the report recommends a 
changed interpretation of the PUHCA to permit registered holding companies to 
own combination electric and gas utility companies, provided the affected 
states agree.  Subsequent to the issuance of the report, the SEC adopted rule 
changes exempting various types of financing transactions by utility and non-
utility subsidiaries of registered holding companies.  The SEC also proposed a 
rule that would exempt investments by registered systems in specified "energy-
related companies", subject to certain conditions.  

In October 1995, a bill was introduced in the United States Senate providing 
for the repeal of the PUHCA.  The bill is pending before Congress.  In 
addition, various members of Congress have indicated their support for 
industry restructuring.  One view that has been publicly stated in Congress is 
that the repeal of the PUHCA and the orderly transition to open competition 
should be considered comprehensively rather than piecemeal.  Hearings have 
been initiated in Congress for a comprehensive review of the electric utility 
industry and the role Congress should play in fostering competition.  Cinergy 
supports the repeal of the PUHCA, either as part of comprehensive reform of 
the electric utility industry or as separate legislation.

Cinergy, CG&E, PSI, and ULH&P

State Developments  During 1995, 40 states initiated or took part in formal or 
informal processes, held hearings, and/or passed legislation addressing retail 
wheeling, restructuring, competition, alternative regulation, or closely 
related issues concerning electric utility industry restructuring. 

Cinergy and CG&E

Ohio  The PUCO has been actively examining issues raised by continuing 
competitive pressures.  The Chairman of the PUCO has publicly stated his 
desire to make progress toward enhancing competition in Ohio, but with the 
objective of doing it right and not necessarily first.  In late 1994, the PUCO 
formed an electric competition roundtable that meets on an informal basis to 
address competition, restructuring, performance-based regulation, and related 
issues, with a stated mission of "promoting increased competitive options for 
Ohio businesses that do not unduly harm the interests of utility company 
shareholders or ratepayers".  In 1995, the roundtable participants submitted 
principles for a customer choice pilot program for interruptible buy-through 
service.  The PUCO issued the proposed guidelines for comments in late 1995 
and issued final guidelines in February 1996.

Additionally, two recent actions of the PUCO provide support for maintaining 
the financial integrity of the utilities in the state.  In October 1995, the 
PUCO approved a stipulated rate plan which could improve the competitive 
position of a major utility in the state by the end of a 10-year moratorium 
period, including provisions for accelerating depreciation and amortization of 
the utility's nuclear plants and regulatory assets, respectively.  In November 
1995, the PUCO staff recommended a rate increase for another "at risk" utility 
that is conditioned upon the increase being utilized to achieve a significant 
reduction in the utility's uneconomic generating assets.     

Finally, a retail wheeling bill was introduced in the Ohio legislature that 
would, if passed, require utilities to develop retail wheeling plans by 
January 1, 1998, and provide flexibility to propose alternatives to 
traditional cost-of-service ratemaking methodologies.  The bill is expected to 
be considered during the 1996 legislative session.

Cinergy, CG&E, and PSI

Indiana  The IURC has taken several steps to investigate the desirability of 
retail competition in the state.  A legislative regulatory flexibility 
committee was established by Senate Bill 637.  Senate Bill 637 also allows the 
IURC to approve utility alternative regulation proposals upon a showing that, 
among other things, traditional regulation in a particular service sector is 
no longer needed.  

Additionally, the IURC has sponsored informal competition forums that are 
designed to develop a better understanding of issues related to expanding the 
competitive market on both the wholesale and retail levels.  While various 
parties have participated in this process, the Citizens Action Coalition of 
Indiana, Inc. (CAC)(a non-profit organization representing customers) has 
called for electric utilities to make a new "covenant" with customers.  The 
CAC outlines eight principles intended to balance various economic and 
environmental interests at stake in the debate.  Among other things, the 
covenant would include a voluntary pledge by utilities that: customers' bills 
will not increase; the environment will not be polluted; universal service 
will be provided; construction of new power plants will be avoided; and 
customers will not be harmed by utility self-dealing.

Cinergy, CG&E, and ULH&P

Kentucky  There has been considerably less activity and interest in industry 
restructuring in Kentucky.  This situation is generally attributed to the fact 
that Kentucky is one of the lowest-cost states in the country for electric 
service.  While large volume customers have circulated a draft of a retail 
wheeling bill, Cinergy does not believe such legislation, if introduced, would 
receive much attention in 1996.

Cinergy, CG&E, PSI, and ULH&P

Other States  In addition to the states in which Cinergy operates, significant 
developments in other states have occurred during 1995.  Not surprisingly, the 
higher-cost regions of the country have been most interested in facilitating 
the more rapid development of a competitive market for electric utilities.  
For example, in December 1995, California regulators adopted a hybrid plan for 
restructuring the state's electric services industry.  The plan will 
simultaneously create an ISO, a wholesale power exchange, and direct access 
(customer choice) phased in over five years beginning on January 1, 1998.  The 
plan further provides for a non-bypassable competitive transition charge on 
all retail customers to ensure utilities the opportunity for full recovery of 
their stranded investments by 2005.  Several aspects of the plan require 
enabling legislation to be passed in California prior to restructuring.  The 
plan contemplates the continuation of state regulation over the transmission 
and distribution segments of the industry. 

In the northeastern United States, Massachusetts, Connecticut, New Hampshire, 
and Rhode Island have all recently issued guidelines or principles for 
industry restructuring, authorized restructuring studies, or created retail 
wheeling pilot programs.  In particular, the restructuring principles issued 
in August 1995 by the Massachusetts state commission provide for the largest 
utilities in the state to file negotiated restructuring plans in February 1996 
to provide for a transition to full competition, including provisions for 
functional unbundling and retail wheeling.  A major utility in the region has 
already filed a plan that provides for customer choice, transition to a 
competitive market, restructuring, lower prices to customers in the interim, 
and the recovery for shareholders of all stranded costs.

At the same time, the traditionally low-cost Midwest has also been exploring 
how competition can efficiently and effectively be implemented for the benefit 
of customers.  In Wisconsin, a revised proposal by a state commissioner 
focuses on some of the social issues and economic trade-offs involved in 
restructuring the industry.  The plan has established the year 2000 as a 
target date for implementation of restructuring in that state, modifying the 
previously adopted "building block" approach.  The proposal would create an 
ISO for the transmission system, while the distribution system would continue 
to be subject to commission jurisdiction.  Other provisions of the proposal 
include a request for utilities to file plans for establishing functional 
separation of the generation, transmission, and distribution business units, 
commission certification of new market entrants, continuation of the winter 
moratorium on disconnections, a permanent commitment to low-income and 
universal service programs, priority generation service for Wisconsin 
customers, and the transfer of the risk of decisions on power generation from 
customers to shareholders.  

The state of Michigan has proposed a thorough review of existing state laws 
and the comprehensive changes to those laws that would be required to 
facilitate competition in the electric utility industry.  Additionally, 
Michigan has also mandated retail wheeling experiments for two of the large 
utility companies in the state, scheduled to begin at the time of each 
respective utility's next capacity solicitation.  In Illinois, the legislature 
has passed a resolution establishing a joint legislative committee to study 
and recommend policy changes regarding competition.  At least two of Illinois' 
investor-owned utilities have recently filed two proposed retail wheeling 
pilot programs with the state commission.

Cinergy, CG&E, PSI, and ULH&P

Cinergy's Future - Others' Views  The major credit rating agencies continue to 
recognize the risk of the imminent restructuring of the electric utility 
industry.  In August 1995, Moody's issued a report entitled "Stranded Costs 
Will Threaten Credit Quality of U.S. Electrics", wherein Moody's notes its 
belief that a substantial amount of fixed costs approved for recovery under 
the traditional regulatory regime is likely to be stranded.  In November 1995, 
S&P issued its report, "Direct Access Threatens Electric Utility Revenues", in 
which S&P estimated the potential loss of annual revenues in the industry.  
However, Cinergy has received praise and some measure of optimism for its 
position in a more competitive environment.  As part of the November 1995 
upgrade of Cinergy's operating subsidiaries' debt and preferred stock, Moody's 
expressed its opinion that Cinergy "will have no exposure to stranded costs" 
and that "Cinergy is expected to be a formidable competitor because of its low 
production costs".  All such models used to predict potential exposure to 
stranded costs are extremely sensitive to the assumed future market clearing 
price.  In its July 1995 upgrade of Cinergy's operating subsidiaries' debt and 
preferred stock, S&P commented that "the business position evaluation of all 
the Cinergy operating units is now high average" reflecting "low electric 
production costs, efficient coal-fired equipment, relatively low rates, a well 
positioned gas operation, the absence of nuclear challenges, a healthy service 
territory, and a balanced capital structure".  

Certain sell-side equity analysts continue to rank Cinergy highly as a utility 
possessing a strong competitive profile and aggressive and innovative 
management, with some considering Cinergy to be well positioned to outperform 
the market in the competitive arena.  Cinergy believes the opinions of these 
rating agencies and equity analysts further support its position that its 
competitive strategy and agenda will be successful.

Cinergy, CG&E, and ULH&P

Gas Utility Industry

Order 636  In 1992, the FERC issued Order 636 which restructured operations 
between interstate gas pipelines and their customers for gas sales and 
transportation services.  Order 636 mandated changes to the way CG&E and its 
utility subsidiaries purchase gas supplies and contract for transportation and 
storage services, resulting in increased risks in meeting the gas demands of 
their customers.

CG&E and its utility subsidiaries have responded to the supply risks and 
opportunities of Order 636 by introducing innovations to their supply 
strategy.  These innovations include: contracting with major producers and 
marketers for firm gas supply agreements with flexible, extremely market 
sensitive pricing, marketing short-term unused pipeline capacity and storage 
gas to other companies throughout the country through use of electronic 
bulletin boards, and restructuring their allotment of interstate pipeline 
capacity among delivering pipelines.  

Order 636 also allowed pipelines to recover transition costs they incurred in 
complying with the order from customers, including CG&E and its utility 
subsidiaries.  In July 1994, the PUCO issued an order approving a stipulation 
between CG&E and its residential and industrial customer groups providing for 
recovery of these pipeline transition costs.  CG&E is presently recovering its 
Order 636 transition costs pursuant to a PUCO-approved tariff.  CG&E and its 
utility subsidiaries, including ULH&P, recover such costs through their gas 
cost recovery mechanisms.

Customer Choice  In a January 1996 gas filing in Ohio (see additional 
discussion in Note 2(b) of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplemental Data"), CG&E proposed to initiate a 
pilot program that would allow residential customers the ability to choose 
their gas supplier and have CG&E transport the gas for them.  This pilot 
program for residential customers is essentially an extension of customer 
choice that has been available for several years to large-volume commercial 
and industrial customers.

Proposed Legislation  House Bill 476 (HB) 476 was adopted unanimously by the 
Ohio House of Representatives in March 1996.  HB 476 addresses regulatory 
reform of the natural gas industry at the state level and thus is an extension 
of Order 636 for local distribution companies.  The proposed legislation, 
among other things, provides that natural gas commodity sales services may be 
exempted from PUCO regulation and that the PUCO allow alternative rate-making 
methodologies in connection with other regulated services.  The Ohio Senate is 
expected to begin consideration of the legislation in April 1996

Cinergy, CG&E, PSI, and ULH&P

Substantial Accounting Implications  Historically, regulated utilities have 
applied the provisions of Statement 71.  The accounting afforded regulated 
utilities in Statement 71 is based on the fundamental premise that rates 
authorized by regulators allow recovery of a utility's costs, including the 
cost of capital.  These principles have allowed the deferral of costs (i.e., 
regulatory assets) based on assurances of a regulator as to the future 
recoverability of the costs in rates charged to customers.  Certain criteria 
must be met in order to continue to apply the provisions of Statement 71, 
including regulated rates designed to recover the specific utility's costs.  
Failure to satisfy the criteria in Statement 71 would eliminate the basis for 
reporting regulatory assets.  

Although Cinergy's current regulatory orders and regulatory environment fully 
support the continued recognition of its regulatory assets, the ultimate 
outcome of the changing competitive environment could result in Cinergy 
discontinuing application of Statement 71 for all or part of its business.  
Such an event would require the write-off of the portion of any regulatory 
asset for which sufficient regulatory assurance of future recovery no longer 
exists.  No evidence currently exists that would support a write-off of any 
portion of Cinergy's regulatory assets.  

In March 1995, the FASB issued Statement 121, which is effective in January 
1996 for Cinergy.  Statement 121, which addresses the identification and 
measurement of asset impairments for all enterprises, will be particularly 
relevant for electric utilities as a result of the potential for deregulation 
of the generation segment of the business.  Statement 121 requires recognition 
of impairment losses on long-lived assets when book values exceed expected 
future cash flows.  Based on the regulatory environment in which Cinergy 
currently operates, compliance with the provisions of Statement 121 is not 
expected to have an adverse effect on its financial condition or results of 
operations.  However, this conclusion may change in the future as competitive 
pressures and potential restructuring influence the electric utility industry.

Cinergy intends to continue its pursuit of competitive strategies that 
mitigate the potential impact of these issues on the financial condition of 
the Company.

Cinergy, CG&E, PSI, and ULH&P

SECURITIES RATINGS  

Reflecting the positive results and future benefits of the merger, the credit 
ratings of Cinergy's operating subsidiaries' debt and preferred stock have 
been upgraded by Fitch Investors Service, Inc. (Fitch), Moody's, and S&P.  
Additionally, Duff & Phelps Credit Rating Co. (D&P) upgraded the credit 
ratings of PSI's and CG&E's debt.  Among the reasons cited for the upgrades 
were decreases in projected capital expenditures, lower new capacity needs, 
lower combined power production costs, reduced operation and maintenance 
expenses, enhanced transmission capabilities, competitive retail rates, and 
strengthening financial profiles.
The current ratings are provided in the following table:

                               D&P         Fitch      Moody's     S&P	

CG&E
  Secured Debt                  A-           A-         A3         A-
  Senior Unsecured Debt	      BBB+      Not rated     Baa1       BBB+
  Junior Unsecured Debt        BBB       Not rated     Baa2       BBB+
  Preferred Stock              BBB          BBB+       baa1       BBB+

PSI
  Secured Debt                  A-           A-         A3         A-
  Unsecured Debt            Not rated       BBB+       Baa1       BBB+
  Preferred Stock              BBB          BBB+       baa1       BBB+

ULH&P
  Secured Debt                  A-       Not rated      A3         A-
  Unsecured Debt            Not rated    Not rated     Baa1       BBB+

These securities ratings may be revised or withdrawn at any time, and each 
rating should be evaluated independently of any other rating.

REGULATORY MATTERS

Cinergy and PSI

Indiana 

PSI's Current Retail Rate Proceeding  PSI currently has pending before the 
IURC a retail rate increase request of 10.3% ($102.9 million annually).  Major 
components of the increase include the costs of the Clean Coal Project, 
increased DSM costs, the costs of a scrubber at Gibson, and other investments 
in utility plant.  Both the Clean Coal Project and the scrubber at Gibson were 
previously approved by the IURC.  The request also reflects a return on common 
equity of 11.9%, before the 100 basis points additional common equity return 
allowed as a merger savings sharing mechanism in the February 1995 Order 
discussed further herein, with an 8.6% overall rate of return on net original 
cost rate base.  The UCC filed testimony with the IURC recommending a 4.7% 
($47.3 million annually) retail rate increase.  The primary differences 
between PSI's request and the UCC's proposal are the requested return on 
common equity and DSM costs.  The UCC recommended the requested increase in 
DSM costs be excluded from this proceeding and addressed in a separate 
currently pending proceeding specifically established to review PSI's current 
and proposed DSM programs.  An order in the rate proceeding is anticipated by 
the end of the second quarter of 1996.  Cinergy cannot predict what action the 
IURC may take with respect to this proposed rate increase.  (See the "Capital 
Resources" section herein and Notes 2(a) and 17 in "Item 8. Financial 
Statements and Supplementary Data".)

February 1995 Order - Retail Rate Proceeding and Merger Savings Allocation
Plan  The IURC's February 1995 Order approved a settlement agreement between 
PSI and certain intervenors which authorized PSI to increase retail rates 
$33.6 million on an annual basis.  The $33.6 million increase is before 
reductions for customer credits for Non-fuel Merger Savings and excludes 
increases for carrying costs attributable to certain environmental 
expenditures not included in PSI's base retail electric rates, both of which 
are further discussed herein.  The increase included, among other things, 
recovery of the costs of postretirement benefits other than pensions on an 
accrual basis, recovery of DSM expenditures, and recovery of a portion of 
amounts deferred for post-in-service carrying costs and depreciation expense. 
The February 1995 Order also reflects the adoption of lower depreciation 
rates, which reduced annual depreciation expense by approximately $30 million. 
This rate increase reflected an 11.9% return on common equity with an 8.25% 
overall rate of return on net original cost rate base.

Additionally, through December 31, 1997, the February 1995 Order provides a 
mechanism to allocate PSI's share of net Non-fuel Merger Savings between PSI's 
customers and Cinergy's shareholders.  In essence, the mechanism guarantees 
PSI's customers 50% of PSI's portion of projected net Non-fuel Merger Savings. 
PSI's customers are receiving these merger savings via credits to base rates 
of $4.4 million in 1995 and an additional $2.2 million and $2.4 million in 
1996 and 1997, respectively.  The credits in 1996 and 1997 will be applied to 
the retail rates established in PSI's previously discussed current retail rate 
proceeding.  After 1997, the accumulated credits will continue until the 
effective date of an order in a PSI retail rate proceeding.  

The Non-fuel Merger Savings sharing mechanism provides PSI with a financial 
incentive to achieve, or exceed, merger savings projections and enhance 
operating efficiencies by allowing PSI to earn up to a 13.25% return on common 
equity until the effective date of an IURC order in PSI's current retail rate 
proceeding.  Upon the effective date of an order relating to the current 
retail rate proceeding, the February 1995 Order provides PSI an opportunity to 
earn an additional 100 basis points above the common equity rate of return to 
be granted by the IURC in such order until December 31, 1997.  To be eligible 
for the additional earnings, PSI must meet certain performance-related 
standards.  PSI currently meets these standards which are measured in 
conjunction with quarterly fuel adjustment clause filings.  

This arrangement for sharing of Non-fuel Merger Savings allows PSI to recover 
Merger Costs over a 10-year period.  (See Note 1(i) of the "Notes to Financial 
Statements" in "Item 8.  Financial Statements and Supplementary Data".)  Any 
mechanism for sharing of merger savings after December 31, 1997, will be 
determined in subsequent regulatory proceedings.

Effective with this order, PSI began recovering carrying costs on certain 
environmental-related projects while under construction and prior to the date 
of an order reflecting such projects in rates.  Through this mechanism, 
revenues were increased by $9 million, $18 million, and $2 million on an 
annual basis in February 1995, March 1995, and January 1996, respectively. 

Finally, the February 1995 Order included certain additional ratemaking and 
accounting mechanisms to address regulatory lag (see Notes 1(h) and 13(a) of 
the "Notes to Financial Statements" in "Item 8.  Financial Statements and 
Supplementary Data").

Cinergy and CG&E

Ohio 

CG&E's Current Gas Rate Proceeding  In January 1996, CG&E filed a request with 
the PUCO supporting a gas rate increase of 7.8% ($26.7 million annually).  The 
increase, anticipated to be effective in November 1996, is being requested, in 
part, to recover capital investments made since CG&E's last gas rate increase 
in 1993.  The proposed rate design includes a pilot program that would allow 
8,000 to 12,000 residential customers to choose their natural gas supplier 
with CG&E providing transportation services to the customers' premises.  
Settlement discussions with gas customer representatives, which began in July 
1995, are ongoing.  Cinergy cannot predict the outcome of the settlement 
discussions nor what actions the PUCO may take with respect to the proposed 
rate increase.  (See the "Capital Resources" section herein.)

Other  During the 1992 through 1994 period, CG&E received a number of rate 
increases.  The primary reasons for the electric rate increases were recovery 
of CG&E's investments in Zimmer and Woodsdale units.  The gas rate increase 
reflected investments in new and replacement gas mains and facilities.

In the August 1993 Order, the PUCO authorized annual increases of 
approximately $41 million (5%) in electric revenues and $19 million (6%) in 
gas revenues.

In April 1994, the PUCO issued an order approving a settlement agreement among 
CG&E, the PUCO Staff, the Ohio Office of Consumers' Counsel, and other 
intervenors which resolved outstanding issues related to the merger and the 
May 1992 Order which established a rate phase-in plan for Zimmer.  As a result 
of this order, the rate phase-in plan, which granted annual increases in 
electric revenues of $37.8 million, $38.8 million, and $39.8 million in May 
1992, 1993, and 1994, respectively, remained unchanged.  Additionally, as part 
of this settlement, CG&E agreed to a moratorium on increases in base electric 
rates until January 1, 1999 (except under certain circumstances), and, in 
return, is allowed to retain all PUCO electric jurisdictional Non-fuel Merger 
Savings until 1999.

Consistent with the provisions of the settlement agreement, CG&E expensed 
Merger Costs of $32 million in 1994 and $5 million in 1995 applicable to its 
PUCO electric jurisdiction.  CG&E and its utility subsidiaries are deferring 
the non-PUCO electric jurisdictional portion of Merger Costs for future 
recovery in customer rates, including $6 million in CG&E's current gas rate 
proceeding.

Cinergy, CG&E, and ULH&P

Kentucky  In mid-1993, the KPSC issued orders authorizing ULH&P to increase 
annual gas revenues by $4 million.  

In exchange for the KPSC's support of the merger, in May 1994, ULH&P accepted 
the KPSC's request for an electric rate moratorium commencing after ULH&P's 
next retail rate case and extending to January 1, 2000.  

In 1994, ULH&P deferred $1.8 million of Merger Costs.  ULH&P intends to 
continue deferring its portion of Merger Costs for future recovery in 
customers' rates.

Cinergy, CG&E, and ULH&P

Potential Divestiture of Gas Operations  Under the PUHCA, the divestiture of 
CG&E's gas operations may be required.  In its order approving the merger, the 
SEC reserved judgment over Cinergy's ownership of the gas operations for a 
period of three years.  However, as previously discussed in the "Competitive 
Pressures" section, in June 1995, the SEC endorsed recommendations for 
reform/repeal of the PUHCA, including allowing registered holding companies to 
own combination electric and gas utility companies, provided the affected 
states agree.  In addition, legislation providing for the repeal of the PUHCA 
is currently pending before Congress.

Regardless of the outcome of the proposals to reform/repeal the PUHCA, Cinergy 
believes it has a justifiable basis for retention of its gas operations and 
will continue its pursuit of SEC approval.  If divestiture is ultimately 
required, the SEC has historically allowed companies sufficient time to 
accomplish divestitures in a manner that protects shareholder value.

ENVIRONMENTAL ISSUES  

Cinergy, CG&E, and PSI

CAAA  The 1990 revisions to the Clean Air Act require reductions in both 
sulfur dioxide and nitrogen oxide emissions from utility sources.  Reductions 
of these emissions are to be accomplished in two phases.  Compliance under 
Phase I was required by January 1, 1995, and Phase II compliance is required 
by January 1, 2000.  To achieve the sulfur dioxide reduction objectives of the 
CAAA, emission allowances have been allocated by the EPA to affected sources 
(e.g., Cinergy's electric generating units).  Each allowance permits one ton 
of sulfur dioxide emissions.  The CAAA allows compliance to be achieved on a 
national level, which provides companies the option to achieve this compliance 
by reducing emissions and/or purchasing emission allowances.  

Cinergy's operating strategy for Phase I is based upon the compliance plans 
developed by PSI and CG&E and approved by the IURC and the PUCO.  All required 
modifications to Cinergy's generating units to implement the compliance plans 
were completed prior to January 1, 1995.

To comply with Phase II sulfur dioxide emission requirements, Cinergy's 
current strategy includes a combination of switching to lower-sulfur coal 
blends and utilizing its emission allowance banking strategy.  This cost 
effective strategy will allow Cinergy to meet Phase II sulfur dioxide 
reduction requirements while maintaining optimal flexibility to meet changes 
in output due to increased customer choice as well as potentially significant 
future environmental demands.  Cinergy intends to utilize an emission 
allowance banking strategy to the extent a viable emission allowance market 
exists.  However, the availability and economic value of emission allowances 
over the long term is still uncertain.  In the event the market price for 
emission allowances or lower-sulfur coal increases substantially from the 
current forecast, Cinergy could be forced to consider high-cost, capital 
options.  

To meet nitrogen oxide reductions required by Phase II, Cinergy may install 
additional low-nitrogen oxide burners on certain affected units in addition to 
the use of a nitrogen oxide emission averaging strategy.

Cinergy is forecasting CAAA compliance capital expenditures of $34 million 
during the 1996 through 2000 period.  Of the forecasted expenditures, $19 
million relates to CG&E and $15 million relates to PSI.  These construction 
expenditures are included in the amounts provided in the "Capital 
Requirements" section herein.  In addition, operating costs may increase due 
to higher fuel costs (e.g., higher-quality, lower-sulfur coal; increased use 
of natural gas) and maintenance expenses.

Global Climate Change  Some scientists, environmentalists, and policymakers 
continue to express concern about the potential for climate change from 
increasing amounts of greenhouse gases released as by-products of burning 
fossil fuel and other industrial processes.  However, significant uncertainty 
exists concerning increased greenhouse gas concentrations and their effect on 
the global climate system.  Cinergy's plan for managing the potential risk and 
uncertainty of climate change includes: (1) implementing cost effective 
greenhouse gas emission reduction and offsetting activities; (2) encouraging 
the use of alternative fuels for transportation vehicles (a major source of 
greenhouse gases); (3) funding research of more efficient and alternative 
electric generating technologies; (4) funding research to better understand 
the causes and consequences of climate change; and (5) encouraging a global 
discussion of the issues and how best to manage them.  Cinergy believes that 
voluntary programs, such as the United States Department of Energy Climate 
Challenge program which Cinergy joined in 1995, can successfully limit 
greenhouse gas emissions.

Air Toxics  The air toxics provisions of the CAAA exempt fossil-fueled steam 
utility plants from mandatory reduction of 189 listed air toxics until the EPA 
completes a study, expected in early 1996, of the risk of these emissions on 
public health.  If additional air toxics regulations are issued, the cost of 
compliance could be significant.  Cinergy cannot predict the outcome or the 
effects of this EPA study.

Cinergy, CG&E, PSI, and ULH&P

Other  As more fully discussed in Note 13(b)(ii) of the "Notes to Financial 
Statements" in "Item 8.  Financial Statements and Supplementary Data", PSI has 
received notification from IGC and NIPSCO alleging PSI is a PRP under the 
CERCLA with respect to certain MGP sites. 

PSI has not assumed any responsibility to reimburse IGC or NIPSCO for their 
costs of investigating and remediating MGP sites, with the exception of a site 
at Shelbyville, for which the costs are not material.  It is premature, at 
this time, to predict the nature, extent, and ultimate costs of, or PSI's 
responsibility for, environmental investigations and remediations at MGP sites 
owned or previously owned by PSI.  Information available to PSI regarding the 
current status of investigation and/or remediation at the sites identified in 
IGC's claim indicates PSI's potential exposure to probable and reasonably 
estimable liabilities associated with these MGP sites would not be material to 
its financial condition or results of operations.  However, further 
investigation and remediation activities at these sites and the additional 
sites identified in NIPSCO's claim may indicate that the potential liability 
for MGP sites could be material.  

During 1995, the IURC denied IGC's request for recovery of costs incurred 
relating to its MGP sites, which included sites acquired from PSI.  IGC has 
appealed this decision.  The IURC has granted PSI's motion to establish a sub-
docket to PSI's pending retail rate proceeding to consider its request for 
rate recovery of any MGP site-related costs it may incur.  PSI is unable to 
predict the extent to which it will be able to recover through rates any MGP 
costs ultimately incurred.

Refer to Note 13(b) and (c) of the "Notes to Financial Statements" in "Item 8. 
Financial Statements and Supplementary Data" for a more detailed discussion of 
the status of certain environmental issues.

CAPITAL REQUIREMENTS

CONSTRUCTION

Cinergy, CG&E, PSI, and ULH&P

Construction expenditures for the Cinergy system are forecasted to be 
approximately $360 million for 1996, and over the next five years (1996 
through 2000), are forecasted to be approximately $2.1 billion.  Of these 
projected expenditures, approximately $195 million and $1.1 billion relate to 
CG&E (including $18 million and $102 million for ULH&P) and $165 million and 
$1.0 billion relate to PSI, each respectively, for 1996 and over the next five 
years.  These expenditures include approximately $1.1 billion, about half of 
which relates to each CG&E and PSI, for production plant additions, of which 
$520 million ($285 million for CG&E and $235 million for PSI) relate to 
investments in new generation.  As previously discussed in the "Competitive 
Pressures" section, potential deregulation of the generation segment of the 
electric utility industry creates numerous uncertainties (e.g., customer self- 
and cogeneration efforts, alternative supply-side options, and eventual retail 
wheeling) which could affect Cinergy's generation resource plan.  Cinergy 
plans to continue to evaluate future generation investments to maintain 
maximum flexibility in its ability to react to change as it occurs in the 
industry.  (All forecasted amounts are in nominal dollars and reflect 
assumptions as to the economy, capital markets, construction programs, 
legislative and regulatory actions, frequency and timing of rate increases, 
and other related factors which may change significantly.)

OTHER COMMITMENTS

Cinergy, CG&E, PSI, and ULH&P

DSM  The level of Cinergy's future expenditures on DSM programs within its 
regulated franchise is contingent on the extent to which recovery of its DSM 
costs is assured by the applicable state utility regulatory commissions.  PSI 
currently has a proceeding pending before the IURC to address its ongoing DSM 
programs.

Cinergy, CG&E, PSI, and ULH&P

Securities Redemptions  In January 1996, CG&E retired $5 million principal 
amount of its 10.20% first mortgage bonds (due December 1, 2020).  
Additionally, CG&E redeemed on February 15, 1996, the remaining $131.5 million 
principal amount of these bonds at a price of 100% through the M&R Fund 
provision of its first mortgage bond indenture.  ULH&P also redeemed on the 
same date $9 million principal amount of its 10 1/4% first mortgage bonds (due 
November 15, 2020) at a price of 107.20% and the remaining $6 million 
principal amount of such bonds at a price of 100% through its M&R Fund 
provision.  M&R Fund provisions contained in CG&E's, PSI's, and ULH&P's first 
mortgage bond indentures require cash payments, bond retirements, or pledges 
of unfunded property additions each year based on a formularized amount 
related to the net revenues of the respective company.

Mandatory redemptions of long-term debt and cumulative preferred stock total 
$456 million ($322 million for CG&E, including $20 million for ULH&P, and $134 
million for PSI) during the period 1996 through 2000.  Cinergy will continue 
to evaluate opportunities for the refinancing of outstanding securities beyond 
mandatory redemption requirements.

Cinergy, CG&E, PSI, and ULH&P

1996 Voluntary Workforce Reduction Program  In January 1996, Cinergy announced 
a voluntary workforce reduction program which provides enhanced retirement 
and/or severance benefits to eligible employees.  The program is being offered 
in conjunction with a corporate-wide initiative to redesign Cinergy's business 
processes to achieve additional merger savings and further enhance Cinergy's 
low-cost position.  There are 840 employees who meet certain age and service 
requirements and are potentially eligible for enhanced retirement benefits 
under this program.  Eligible employees who do not meet age and service 
requirements would receive severance benefits upon resignation from their 
employment.  Program costs will not be known until after the participation 
election period ends on May 15, 1996 (see Note 13(g) of the "Notes to 
Financial Statements" in "Item 8.  Financial Statements and Supplementary 
Data").  A significant portion of these benefits will be eligible for funding 
from qualified retirement plan assets.

Cinergy and PSI

Other  Funds are required for a payment of $80 million in accordance with the 
settlement of PSI's WVPA litigation.  The timing of this payment, which could 
occur in 1996, is dependent on the outcome of various issues related to WVPA's 
bankruptcy proceeding (see Notes 13(e) and 17 of the "Notes to Financial 
Statements" in "Item 8.  Financial Statements and Supplementary Data").

CAPITAL RESOURCES

Cinergy, CG&E, PSI, and ULH&P

Cinergy forecasts that its, CG&E and its subsidiaries', PSI's, and ULH&P's 
need, if any, for external funds during the 1996 through 2000 period will 
primarily be for the refinancing of long-term debt and preferred stock, as 
previously discussed.  (This forecast reflects nominal dollars and assumptions 
as to the economy, capital markets, construction programs, legislative and 
regulatory actions, frequency and timing of rate increases, and other related 
factors which may change significantly.)

INTERNAL FUNDS

Cinergy, CG&E, PSI, and ULH&P

General  Currently, substantially all of Cinergy's revenues and corresponding 
cash flows are derived from the cost-of-service regulated operations of CG&E 
and its subsidiaries, including ULH&P, and PSI.  As previously discussed in 
the "Competitive Pressures" section, Cinergy believes the generation segment 
of the electric utility industry will ultimately be deregulated.  However, the 
timing and nature of the restructuring is uncertain.  In the interim, revenues 
provided by cost-of-service regulated operations are anticipated to continue 
as the primary source of funds for Cinergy.  As a result of its low-cost 
position and market strategy, over the long term, Cinergy believes it will be 
successful in a more competitive environment.  However, as the industry 
becomes more competitive, future cash flows from Cinergy's operations could be 
subject to a higher degree of volatility than under the present regulatory 
structure.

Cinergy and PSI

Contribution from Parent Company  In December 1994, Cinergy publicly issued 
approximately 7.1 million shares of common stock.  The net proceeds of 
approximately $160 million were contributed to the equity capital of PSI for 
general corporate purposes, including repayment of short-term indebtedness 
incurred for construction financing.

Cinergy and PSI

Regulatory Lag Ratemaking And Accounting Mechanisms  As previously discussed 
in the "Regulatory Matters" section, PSI is currently recovering carrying 
costs on certain major projects prior to receipt of an order reflecting the 
projects in rates.  To the extent carrying costs are not recovered currently 
on these projects, PSI has approval for deferral of carrying costs until such 
projects are reflected in rates (see Note 1(h) of the "Notes to Financial 
Statements" in "Item 8.  Financial Statements and Supplementary Data").

Cinergy, CG&E, PSI, and ULH&P

Merger Savings  As previously discussed in the "Regulatory Matters" section, 
PSI and CG&E currently have regulatory orders in effect which provide 
mechanisms for the retention of a portion of net Non-fuel Merger Savings.

Cinergy, CG&E, PSI, and ULH&P

DSM Costs  In addition to the recovery of previous deferrals of DSM program 
costs, the February 1995 Order authorized recovery by PSI of $23 million of 
DSM expenditures on an annual basis.  Pursuant to the February 1995 Order, DSM 
expenditures in excess of this $23 million base level are being deferred for 
future recovery in rates.  If DSM expenditures in any calendar year are less 
than the $23 million in base rates, the unamortized balance of deferred DSM 
expenditures will be reduced by such difference.  In its current retail rate 
proceeding, PSI has requested similar treatment of DSM costs, including an 
increase in the ongoing annual expense level from $23 million to $39 million.

The August 1993 Order authorized CG&E to recover annually approximately $5 
million of costs associated with DSM programs for residential customers.  In 
1995, the PUCO authorized the deferral, with carrying costs, of the 
expenditures associated with a number of approved DSM programs to the extent 
such expenditures are in excess of the $5 million already being recovered.  
CG&E is also requesting PUCO approval to defer the costs of additional DSM 
programs.  In addition, the KPSC has authorized recovery of costs related to 
various DSM programs of ULH&P.

See Note 1(g) of the "Notes to Financial Statements" in "Item 8.  Financial 
Statements and Supplementary Data".

COMMON STOCK

Cinergy

During 1995, 1994, and 1993, Cinergy issued 2.6 million, 2.8 million, and 2.3 
million shares, respectively, of common stock pursuant to its dividend 
reinvestment and stock purchase plan and various stock-based employee plans.  
Historically, Cinergy has satisfied its obligations under these plans through 
the issuance of additional shares of common stock.  In the future and to the 
extent possible, Cinergy plans to use market purchases of outstanding common 
stock to satisfy all or at least a portion of its obligations under these 
plans.  At December 31, 1995, 15.8 million shares were reserved for issuance 
under Cinergy's stock-based plans.

LONG-TERM DEBT AND PREFERRED STOCK

Cinergy, CG&E, PSI, and ULH&P

As of December 31, 1995, CG&E, PSI, and ULH&P had state regulatory authority 
for long-term debt issuances of $250 million, $298 million, and $40 million, 
respectively.  Additionally, PSI had IURC authority to issue up to $40 million 
of preferred stock.  Regulatory approval to issue additional amounts of debt 
securities and preferred stock will be requested as needed.

SHORT-TERM DEBT

Cinergy, CG&E, PSI, and ULH&P  

Cinergy's subsidiaries had regulatory authority to borrow up to $838 million 
($438 million for CG&E and its subsidiaries, including $35 million for ULH&P, 
and $400 million for PSI) as of December 31, 1995.  In connection with this 
authority, Committed Lines have been established which permit borrowings of up 
to $322 million ($106 million for CG&E and its subsidiaries, including $30 
million for ULH&P, and $215 million for PSI) of which $182 million ($106 
million for CG&E and its subsidiaries, including $30 million for ULH&P, and 
$74 million for PSI) remained unused at December 31, 1995.  CG&E and PSI also 
issue commercial paper from time to time.  All outstanding commercial paper is 
supported by Committed Lines of the respective company.  Additionally, 
pursuant to this authority, Uncommitted Lines are arranged with various banks. 
All Uncommitted Lines provide for maturities of up to 365 days with various 
interest rate options.

To better manage cash and working capital requirements, Cinergy's utility 
subsidiaries, including CG&E, PSI, and ULH&P, participate in a money pooling 
arrangement.  Under the money pool, participants with surplus short-term 
funds, whether from internal sources, bank loans, or commercial paper sales, 
provide short-term loans to other system companies at rates that approximate 
the cost of the funds in the money pool.  The SEC's approval, pursuant to the 
PUHCA, of the money pool extends through May 31, 1997.

In addition, Cinergy has a $100 million credit facility which expires in 
September 1997 and  was unused at December 31, 1995.  The facility may be 
increased to a maximum of $300 million, and the Company has an annual option 
of extending the term of the facility by one year.  This credit facility will 
be used for general corporate purposes and funding non-utility business 
ventures.

SALE OF ACCOUNTS RECEIVABLE

Cinergy, CG&E, PSI, and ULH&P

In January 1996, CG&E, PSI, and ULH&P entered into an agreement to sell, on a 
revolving basis, undivided percentage interests in certain of their accounts 
receivable up to an aggregate maximum of $350 million.  PSI had a similar 
agreement, which expired in January 1996, to sell up to $90 million of its 
accounts receivable. 

Cinergy, CG&E, PSI, and ULH&P

ACCOUNTING CHANGES

See the information on Statement 121 provided herein under the caption 
"Substantial Accounting Implications" and Note 1(d) of the "Notes to Financial 
Statements" in "Item 8. Financial Statements and Supplementary Data".

Cinergy, CG&E, PSI, and ULH&P

INFLATION

Over the past several years, the rate of inflation has been relatively low.  
Cinergy believes that the recent inflation rates do not materially affect its 
results of operations or financial condition.  However, under existing 
regulatory practice, only the historical cost of plant is recoverable from 
customers.  As a result, cash flows designed to provide recovery of historical 
plant costs may not be adequate to replace plant in future years.

Cinergy, CG&E, and PSI

DIVIDEND RESTRICTIONS

See Notes 3(b) and 4(c) of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplementary Data".

Cinergy, CG&E, PSI, and ULH&P

RESULTS OF OPERATIONS

Reference is made to "ITEM 8.  Financial Statements and Supplementary Data".
<PAGE>
        Index to Financial Statements and Financial Statement Schedules

                                                                  
Financial Statements

  Cinergy, CG&E, PSI, and ULH&P
     Report of Independent Public Accountants. . . . . . . .      
  Cinergy
     Consolidated Statements of Income for the
      three years ended December 31, 1995 . . . . . . . . .       
     Consolidated Balance Sheets at
       December 31, 1995 and 1994 . . . . . . . . . . . . .       
     Consolidated Statements of Changes in
       Common Stock Equity for the three years
       ended December 31, 1995. . . . . . . . . . . . . . .       
     Consolidated Statements of Cash Flows
       for the three years ended December 31, 1995. . . . .       
     Results of Operations. . . . . . . . . . . . . . . . .       
  CG&E
     Consolidated Statements of Income for the
       three years ended December 31, 1995. . . . . . . . .       
     Consolidated Balance Sheets at
       December 31, 1995 and 1994 . . . . . . . . . . . . .       
     Consolidated Statements of Changes in
       Common Stock Equity for the three years
       ended December 31, 1995. . . . . . . . . . . . . . .       
     Consolidated Statements of Cash Flows
       for the three years ended December 31, 1995. . . . .       
     Results of Operations. . . . . . . . . . . . . . . . .       
  PSI
     Consolidated Statements of Income for the
       three years ended December 31, 1995. . . . . . . . .       
     Consolidated Balance Sheets at
       December 31, 1995 and 1994 . . . . . . . . . . . . .       
     Consolidated Statements of Changes in
       Common Stock Equity for the three years
       ended December 31, 1995. . . . . . . . . . . . . . .       
     Consolidated Statements of Cash Flows
       for the three years ended December 31, 1995. . . . .       
     Results of Operations. . . . . . . . . . . . . . . . .       
  ULH&P
     Statements of Income for the three years ended
       December 31, 1995. . . . . . . . . . . . . . . . . .       
     Balance Sheets at December 31, 1995 and 1994 . . . . .       
     Statements of Changes in Common Stock Equity
       for the three years ended December 31, 1995. . . . .       
     Statements of Cash Flows for the three years
       ended December 31, 1995. . . . . . . . . . . . . . .       
     Results of Operations. . . . . . . . . . . . . . . . .       

  Notes to Financial Statements . . . . . . . . . . . . . .       

Financial Statement Schedules
     Schedule II - Valuation and Qualifying Accounts 
       Cinergy . . . . . . . . . . . . . . . . . . . . . .   
       CG&E. . . . . . . . . . . . . . . . . . . . . . . .   
       PSI . . . . . . . . . . . . . . . . . . . . . . . .   
       ULH&P . . . . . . . . . . . . . . . . . . . . . . .   


The information required to be submitted in schedules other than those 
indicated above has been included in the balance sheets, the statements of 
income, related schedules, the notes thereto, or omitted as not required by 
the Rules of Regulation S-X.
<PAGE>
             ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of Cinergy Corp., The Cincinnati Gas & Electric 
Company, PSI Energy, Inc., and The Union Light, Heat and Power Company:

We have audited the financial statements of Cinergy Corp. (a Delaware 
Corporation), The Cincinnati Gas & Electric Company (an Ohio Corporation), PSI 
Energy, Inc. (an Indiana Corporation), and The Union Light, Heat and Power 
Company (a Kentucky Corporation), as of December 31, 1995 and 1994, and for 
each of the three years in the period ended December 31, 1995, as listed in 
the index on page 46.  These financial statements and the schedules referred 
to below are the responsibility of management.  Our responsibility is to 
express an opinion on these financial statements and schedules based on our 
audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement presentation.  We believe that our audits provide a reasonable basis 
for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Cinergy Corp., The Cincinnati 
Gas & Electric Company, PSI Energy, Inc., and The Union Light, Heat and Power 
Company as of December 31, 1995 and 1994, and the results of their operations 
and their cash flows for each of the three years in the period ended December 
31, 1995, in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic 
financial statements taken as a whole.  The supplemental financial statement 
schedules listed in the index on page 47 pursuant to Item 14, are presented 
for purposes of complying with the Securities and Exchange Commission's Rules 
and Regulations under the Securities Exchange Act of 1934 and are not a 
required part of the basic financial statements.  The supplemental financial 
statement schedules have been subjected to the auditing procedures applied in 
our audits of the basic financial statements and, in our opinion, are fairly 
stated in all material respects in relation to the basic financial statements 
taken as a whole.




Arthur Andersen LLP
Cincinnati, Ohio,
January 25, 1996
<PAGE>

<TABLE>
<CAPTION>
                                    CINERGY CORP.

                          CONSOLIDATED STATEMENTS OF INCOME

                                           1995           1994           1993
                                        (in thousands, except per share amounts)
<S>                                    <C>            <C>            <C>
Operating Revenues (Note 2)
  Electric                              $2 620 581     $2 455 537     $2 374 242
  Gas                                      410 852        442 398        469 296
                                         3 031 433      2 897 935      2 843 538

Operating Expenses
  Fuel used in electric production         716 754        712 993        733 159
  Gas purchased                            206 250        248 293        280 836
  Purchased and exchanged power             47 632         49 082         36 209
  Other operation                          534 587        563 650        456 590
  Maintenance                              182 180        200 959        192 877
  Depreciation                             279 759        294 395        278 882
  Amortization of phase-in deferrals         9 091           -              -    
  Post-in-service deferred operating
    expenses - net                          (2 500)        (5 998)       (11 540)
  Phase-in deferred depreciation              -            (2 161)        (8 524)
  Income taxes (Note 12)                   219 462        152 181        172 637
  Taxes other than income taxes            256 086        244 051        229 148
                                         2 449 301      2 457 445      2 360 274

Operating Income                           582 132        440 490        483 264

Other Income and Expenses - Net
  Allowance for equity funds used 
    during construction                      1 964          6 201         14 327
  Post-in-service carrying costs             3 186          9 780         18 105
  Phase-in deferred return                   8 537         15 351         35 334
  Reduction of loss related to the 
    IURC's June 1987 Order                    -              -            20 134
  Write-off of a portion of Zimmer            -              -          (234 844)
  Income taxes (Note 12)
    Related to the IURC's June 1987
      Order                                   -              -            (7 444)
    Related to the write-off of a 
      portion of Zimmer                       -              -            12 085
    Other                                    5 391         10 609         21 043
  Other - net                                3 497        (28 444)       (40 299)
                                            22 575         13 497       (161 559)

Income Before Interest and Other Charges   604 707        453 987        321 705

Interest and Other Charges
  Interest on long-term debt               213 911        219 248        225 990
  Other interest                            20 826         20 370          7 923
  Allowance for borrowed funds used
    during construction                     (8 065)       (12 332)       (12 740)
  Preferred dividend requirements of
    subsidiaries                            30 853         35 559         37 985
                                           257 525        262 845        259 158

Net Income                              $  347 182     $  191 142     $   62 547

Average Common Shares Outstanding          156 620        147 426        144 226

Earnings Per Common Share                    $2.22          $1.30           $.43

Dividends Declared Per Common Share          $1.72          $1.50          $1.46
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.

CONSOLIDATED BALANCE SHEETS

ASSETS

                                                            December 31
                                                         1995          1994_
                                                       (dollars in thousands)
<S>                                                 <C>            <C>
Utility Plant - Original Cost
  In service
    Electric                                         $8 617 695     $8 292 625
    Gas                                                 680 339        645 602
    Common                                              184 663        185 718
                                                      9 482 697      9 123 945
  Accumulated depreciation                            3 367 401      3 163 802
                                                      6 115 296      5 960 143
  CWIP                                                  135 852        238 750
      Total utility plant                             6 251 148      6 198 893

Current Assets
  Cash and temporary cash investments                    35 052         71 880
  Restricted deposits                                     2 336         11 288
  Accounts receivable less accumulated provision
    of $10,360 in 1995 and $9,716 in 1994
    for doubtful accounts (Note 7)                      371 150        299 509
  Materials, supplies, and fuel - at average cost
    Fuel for use in electric production                 122 409        156 028
    Gas stored for current use                           21 493         31 284
    Other materials and supplies                         85 076         92 880
  Property taxes applicable to subsequent year          116 822        112 420
  Prepayments and other                                  32 347         36 416
                                                        786 685        811 705

Other Assets
  Regulatory assets
    Amounts due from customers - income taxes           423 493        408 514
    Post-in-service carrying costs and deferred 
      operating expenses                                187 190        185 280
    Phase-in deferred return and depreciation           100 388        100 943
    Deferred DSM costs                                  129 400        104 127
    Deferred merger costs                                56 824         49 658
    Unamortized costs of reacquiring debt                73 904         70 424
    Other                                                74 911         86 389
  Other                                                 136 121        133 909
                                                      1 182 231      1 139 244

                                                     $8 220 064     $8 149 842
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              CINERGY CORP.

CAPITALIZATION AND LIABILITIES

                                                            December 31
                                                         1995          1994
                                                       (dollars in thousands)
<S>                                                 <C>           <C>
Common Stock Equity (Note 3)
  Common stock - $.01 par value;
    authorized shares - 600,000,000;
    outstanding shares - 157,670,141 in 1995
    and 155,198,038 in 1994                          $    1 577     $    1 552
  Paid-in capital                                     1 597 050      1 535 658
  Retained earnings                                     950 216        877 061
      Total common stock equity                       2 548 843      2 414 271

Cumulative Preferred Stock of Subsidiaries 
  (Note 4)
  Not subject to mandatory redemption                   227 897        267 929
  Subject to mandatory redemption                       160 000        210 000

Long-term Debt (Note 5)                               2 530 766      2 715 269
      Total capitalization                            5 467 506      5 607 469

Current Liabilities
  Long-term debt due within one year (Note 5)           201 900         60 400
  Notes payable (Note 6)                                165 800        228 900
  Accounts payable                                      263 403        266 467
  Litigation settlement (Note 13(e))                     80 000         80 000
  Accrued taxes                                         317 185        258 041
  Accrued interest                                       55 995         58 504
  Other                                                  61 938         52 092
                                                      1 146 221      1 004 404

Other Liabilities
  Deferred income taxes (Note 12)                     1 120 900      1 071 104
  Unamortized investment tax credits                    185 726        195 878
  Accrued pension and other postretirement
    benefit costs (Notes 10 and 11)                     171 771        133 578
  Other                                                 127 940        137 409
                                                      1 606 337      1 537 969 
Commitments and Contingencies (Note 13)
                                                     $8 220 064     $8 149 842
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      CINERGY CORP.

             CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK EQUITY
                                     Common      Paid-in       Retained     Total Common
                                      Stock      Capital       Earnings     Stock Equity
                                                 (dollars in thousands)
<S>                                 <C>        <C>           <C>            <C>
Balance December 31, 1992            $1 430     $1 260 474    $1 055 040     $2 316 944
Net income                                                        62 547         62 547
Issuance of 3,443,918 shares of
  common stock                           23         57 159                       57 182
Common stock issuance expenses                        (145)                        (145)
Costs of issuing and retiring 
  preferred stock of subsidiaries                   (5 062)                      (5 062)
Dividends on common stock (see 
  page 50 for per share amounts)                                (209 861)      (209 861)
Other                                                                 76             76

Balance December 31, 1993             1 453      1 312 426       907 802      2 221 681
Net income                                                       191 142        191 142
Issuance of 9,830,042 shares of
  common stock                           99        227 882                      227 981
Common stock issuance expenses                      (5 225)                      (5 225)
Dividends on common stock (see
  page 50 for per share amounts)                                (221 362)      (221 362)
Other                                                  575          (521)            54

Balance December 31, 1994             1 552      1 535 658       877 061      2 414 271
Net income                                                       347 182        347 182 
Issuance of 2,472,103 shares of
  common stock - net                     25         60 343                       60 368
Common stock issuance expenses                        (229)                        (229)
Dividends on common stock (see 
  page 50 for per share amounts)                                (268 851)      (268 851)
Other                                                1 278        (5 176)        (3 898)

Balance December 31, 1995            $1 577     $1 597 050    $  950 216     $2 548 843
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                        CINERGY CORP.

                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                         1995          1994       1993
                                                                  (in thousands)

<S>                                                  <C>           <C>         <C>
Operating Activities
  Net income                                          $ 347 182     $ 191 142   $  62 547
  Items providing (using) cash currently:
    Depreciation                                        279 759       294 395     278 882
    Deferred income taxes and investment
      tax credits - net                                  28 411        30 926      96 470
    Allowance for equity funds used during 
      construction                                       (1 964)       (6 201)    (14 327)
    Regulatory assets - net                               1 026       (58 165)    (85 786)
    Write-off of a portion of Zimmer                       -             -        234 844
    Changes in current assets and current
      liabilities
        Restricted deposits                              (1 035)       10 046          40
        Accounts receivable                             (71 641)       40 550     (24 152)
        Materials, supplies, and fuel                    51 214       (45 949)     61 969
        Accounts payable                                 (3 064)       (8 191)     62 508
        Advance under accounts receivable purchase
          agreement                                        -          (49 940)     49 940
        Accrued taxes and interest                       56 635         5 753       7 257
    Other items - net                                    16 872        36 890     (83 481)

        Net cash provided by (used in) operating 
          activities                                    703 395       441 256     646 711

Financing Activities
  Issuance of common stock                               60 139       222 756      57 037
  Issuance of preferred stock of subsidiaries              -             -        156 325
  Issuance of long-term debt                            344 280       420 935     538 704
  Funds on deposit from issuance of long-term debt        9 987        27 897     (31 342)
  Retirement of preferred stock of subsidiaries         (93 466)      (40 426)    (60 107)
  Redemption of long-term debt                         (398 833)     (313 682)   (502 335)
  Change in short-term debt                             (63 100)       51 186     (13 033)
  Dividends on common stock                            (268 851)     (221 362)   (209 861)

        Net cash provided by (used in) financing
          activities                                   (409 844)      147 304     (64 612)

Investing Activities
  Construction expenditures (less allowance for 
    equity funds used during construction)             (324 905)     (480 533)   (549 028)
  Deferred DSM costs - net                              (25 273)      (47 268)    (33 763)
  Equity investments in Argentine utilities              19 799          -           (206)
    
        Net cash provided by (used in) investing
          activities                                   (330 379)     (527 801)   (582 997)

Net increase (decrease) in cash and temporary
  cash investments                                      (36 828)       60 759        (898)
Cash and temporary cash investments at beginning 
  of period                                              71 880        11 121      12 019
Cash and temporary cash investments at end of
  period                                              $  35 052     $  71 880   $  11 121

Supplemental Disclosure of Cash Flow Information
  Cash paid during the year for:
    Interest (net of amount capitalized)              $ 218 357     $ 211 163   $ 213 774
    Income taxes                                        140 189        96 680      81 327

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>
RESULTS OF OPERATIONS - CINERGY

Kwh Sales 

Cinergy's total kwh sales in 1995, as compared to 1994, increased 4.1%, 
reflecting increased sales to all retail customer classes.  Contributing 
significantly to this increase were higher residential and commercial sales 
due to warmer weather during the 1995 summer cooling season and colder weather 
during the fourth quarter of 1995.  Additionally, increased sales to 
industrial customers, reflecting growth in the primary metals and chemicals 
sectors, contributed to the increased kwh sales level.  These increases were 
offset, in part, by a decline in non-firm power sales for resale.  

Total kwh sales increased 2.8% in 1994, as compared to 1993, due in large part 
to non-firm power sales for resale, reflecting third party, short-term power 
sales to other utilities through PSI's system and direct power sales by PSI to 
other utilities.  This increase was partially offset by CG&E's reduced power 
sales to other utilities in 1994.  Also significantly contributing to the 
total kwh sales levels were increased sales to industrial customers.  This 
increase reflected growth in the primary metals and transportation equipment 
sectors.  Commercial sales increased due, in part, to new customers.  A 
decrease in residential sales resulted from the milder weather experienced 
during the third and fourth quarters of 1994.

A return to more normal weather contributed to the 5.3% increase in total kwh 
sales in 1993, as compared to 1992.  In addition, growth in the primary metals 
and transportation equipment sectors resulted in increased industrial sales.  
Partially offsetting these increases was a reduction in non-firm power sales 
for resale, which reflected a significant decrease in third party, short-term 
power sales to other utilities through PSI's system.

Year-to-year changes in kwh sales for each major class of customers are shown 
below:
 
                                         Increase (Decrease) from Prior Year

                                             1995        1994       1993_
   Retail
     Residential                             5.8 %      (1.7)%     10.3 %
     Commercial                              4.3         1.9        6.3
     Industrial                              4.6         4.6        4.2

   Total retail                              4.9         1.6        6.9       
   
   Sales for resale   
     Firm power obligations                  1.7         2.5        2.6      
     Non-firm power transactions            (1.3)       14.4       (5.3)

   Total sales for resale                    (.4)       10.5       (2.8)

   Total sales                               4.1         2.8        5.3 

Cinergy currently forecasts a 2% annual compound growth rate in kwh sales over 
the 1996 through 2005 period.  This forecast does not reflect the effects of 
DSM programs and excludes non-firm power sales for resale and any potential 
new off-system, long-term firm power sales.

Mcf Sales and Transportation

Total gas sales and transportation volumes increased 8.6% in 1995, as compared 
to 1994.  Increased sales to residential customers, resulting from colder 
weather during the fourth quarter of 1995 and an increase in the number of 
customers, contributed to higher retail sales.  Additionally, increases in 
commercial and industrial transportation volumes, which resulted from 
customers electing to purchase gas directly from suppliers, more than offset 
declines in industrial and commercial sales.  The increased transportation 
volumes mainly reflect industrial demand for gas transportation services in 
the primary metals, food products, and paper products sectors. 

The milder weather experienced in 1994 contributed to a decrease in 
residential and commercial gas sales volumes and led to the decrease in total 
Mcf sales and transportation of 1.2% in 1994, as compared to 1993.  An 
increase in gas transportation volumes to industrial customers, mainly in the 
primary metals sector, partially offset this decrease.

The increase in retail Mcf sales of 5.4% in 1993, when compared to 1992, was 
primarily attributable to higher residential and commercial sales volumes as a 
result of the return to more normal weather during the 1993 heating season and 
the addition of a number of customers to CG&E's gas system during the year.  
Gas transportation volumes for 1993 increased largely as a result of 
additional industrial demand for gas transportation services in the primary 
metals sector.  The increase in Mcf transported more than offset the decrease 
in Mcf sold to industrial customers.

Year-to-year changes in Mcf sales for each major class of customers and Mcf 
transportation volumes are shown below:
 
                                         Increase (Decrease) from Prior Year

                                              1995       1994        1993_

   Retail
     Residential                              10.5 %    (10.2)%       9.5 % 
     Commercial                               (2.0)      (1.5)        1.1
     Industrial                              (26.6)      (9.9)        (.8)

   Total retail                                1.5       (6.7)        5.4

   Gas transported                            24.4       13.9        12.7

   Total gas sold and transported              8.6       (1.2)        7.2

Operating Revenues 

ELECTRIC OPERATING REVENUES

Higher retail kwh sales, PSI's electric rate increases which became effective 
in February 1995 and March 1995, and a full year's effect of CG&E's electric 
rate increase which became effective in May 1994, significantly contributed to 
the $165 million (6.7%) increase in electric operating revenues for 1995, when 
compared to 1994. 

Electric operating revenues increased $82 million (3.4%) in 1994, as compared 
to 1993, as a result of CG&E's electric rate increases which became effective 
in May 1993, August 1993, and May 1994, PSI's increased kwh sales, and the 
effects of PSI's $31 million refund to retail customers accrued in June 1993 
as a result of the settlement of the IURC's April 1990 Order.  

Electric operating revenues increased $155 million (7.0%) in 1993 primarily as 
a result of greater kwh sales and electric rate increases granted to CG&E in 
1993 and 1992.  These increases were partially offset by the refund resulting 
from the settlement of the April 1990 Order.

An analysis of electric operating revenues for the past three years is shown 
below:

                                                  1995       1994      1993_
                                                        (in millions)  

Previous year's electric                          
  operating revenues                             $2 456     $2 374    $2 219
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                           54         32        12
    Sales for resale 
      Firm power obligations                         (1)         1        (1)
      Non-firm power transactions                     4       -           10
  Total change in price per kwh                      57         33        21

  Kwh sales
    Retail                                          109         34       138
    Sales for resale
      Firm power obligations                          1          2         2
      Non-firm power transactions                    (1)        14        (5)
  Total change in kwh sales                         109         50       135

  Other                                              (1)        (1)       (1)

Current year's electric 
  operating revenues                             $2 621     $2 456    $2 374

GAS OPERATING REVENUES

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

In 1995, gas operating revenues declined $32 million (7.1%), as compared to 
1994, as a result of the aforementioned trend toward increased transportation 
services and the operation of fuel adjustment clauses reflecting a lower 
average cost of gas purchased.

Gas operating revenues decreased $27 million (5.7%) in 1994, as compared to 
1993, due to the operation of fuel adjustment clauses which reflected a lower 
average cost of gas purchased during the latter part of 1994 and a reduction 
in total volumes sold and transported.

In 1993, gas operating revenues increased $75 million (19.1%) as a result of 
rate increases granted in 1993, higher volumes of gas sold, and the operation 
of fuel adjustment clauses reflecting an increase in the average cost of gas 
purchased.

Operating Expenses

FUEL

Fuel Used in Electric Production  Electric fuel costs, Cinergy's largest 
operating expense, remained relatively constant in 1995, showing less than a 
1% increase when compared to 1994.  

An analysis of these fuel costs for the past three years is shown below:    

                                                     1995      1994     1993
                                                          (in millions)

Previous year's fuel expense                         $713      $733     $707
Increase (Decrease) due to change in:
  Price of fuel                                       (25)      (39)      (2) 
  Kwh generation                                       29        19       28

Current year's fuel expense                          $717      $713     $733

Gas Purchased  In 1995, gas purchased expense decreased $42 million (16.9%), 
as compared to 1994, reflecting a decline in the average cost per Mcf of gas 
purchased of 17.2%.
 
A reduction in the average cost per Mcf of gas purchased (5.1%) and lower 
volumes purchased (6.8%) contributed to the decline in gas purchased expense 
of $33 million (11.6%) in 1994, as compared to 1993.

Gas purchased expense increased $53 million (23.0%) in 1993 as a result of an 
increase in the average cost per Mcf of gas purchased of 17.5% and an increase 
in volumes purchased of 4.7%.  

PURCHASED AND EXCHANGED POWER 
  
Purchased and exchanged power increased $13 million (35.6%) in 1994, as 
compared to 1993, reflecting an increase in third party, short-term power 
sales to other utilities through PSI's system and increased purchases of other 
non-firm power by PSI primarily to serve its own load.  

In 1993, PSI increased its purchases of non-firm power primarily to serve its 
own load, which resulted in an increase in purchased and exchanged power costs 
of $16 million (78.0%).

OTHER OPERATION

In 1995, other operation expenses decreased $29 million (5.2%), as compared to 
1994.  Charges of $62 million in 1994 for Merger Costs and other expenditures 
which cannot be recovered from customers under the merger savings sharing 
mechanisms authorized by regulators significantly contributed to the decrease. 
In addition, emphasis on achieving merger savings and other cost reductions 
led to lower operating costs for 1995.  These decreases were partially offset 
by the recognition of postretirement benefit costs on an accrual basis, an 
increase in the ongoing level of DSM expenses, and the amortization of 
deferred postretirement benefit costs, deferred Merger Costs, and deferred DSM 
costs, all of which are being recovered in revenues pursuant to the February 
1995 Order.

Other operation expenses increased $107 million (23.4%) in 1994, as compared 
to 1993, due to a number of factors including the previously discussed charges 
of $62 million, fuel litigation expenses of $8 million incurred by PSI, and 
increased electric production and distribution expenses.

MAINTENANCE

Maintenance costs decreased $19 million (9.3%) in 1995, as compared to 1994, 
primarily due to improved scheduling of routine maintenance on electric 
generating units.  Lower maintenance costs on gas and electric distribution 
facilities also contributed to this decrease.

Increased maintenance on a number of PSI's generating stations and the initial 
costs of PSI's new distribution line clearing program resulted in increased 
maintenance expenses of $8 million (4.2%) in 1994. 

DEPRECIATION

In 1995, depreciation expense decreased $15 million (5.0%), when compared to 
1994, due in large part to the adoption of lower depreciation rates for PSI 
effective in March 1995.  This decrease was partially offset by the effect of 
additions to utility plant.

Depreciation expense increased $16 million (5.6%) in 1994, as compared to 
1993, primarily as a result of additions to electric utility plant.

Depreciation expense increased $21 million (8.1%) in 1993 primarily due to a 
full year's effect of the first five units of Woodsdale which were placed in 
commercial operation in 1992, the sixth unit which was placed in commercial 
operation in 1993, and other additions to electric utility plant.

POST-IN-SERVICE DEFERRED OPERATING EXPENSES - NET

Post-in-service deferred operating expenses - net reflect various deferrals of 
depreciation, operation and maintenance expenses (exclusive of fuel costs), 
and property taxes on certain generating units and other utility plant from 
the in-service date until the related plant is reflected in retail rates, net 
of amortization of these deferrals as they are recovered through retail rates. 
(See Note 1(h) of the "Notes to Financial Statements" in "Item 8. Financial 
Statements and Supplementary Data".)

PHASE-IN DEFERRED DEPRECIATION AND RETURN AND AMORTIZATION OF PHASE-IN 
DEFERRALS

Phase-in deferred depreciation, phase-in deferred return, and amortization of 
phase-in deferrals reflect the PUCO-ordered phase-in plan for Zimmer.  (See 
Note 1(f) of the "Notes to Financial Statements" in "Item 8.  Financial 
Statements and Supplementary Data".) 

TAXES OTHER THAN INCOME TAXES

Taxes other than income taxes increased $12 million (4.9%) in 1995, $15 
million (6.5%) in 1994, and $13 million (5.8%) in 1993, primarily due to 
increased property taxes resulting from a greater investment in taxable 
property (including Zimmer and Woodsdale) and higher property tax rates.

Other Income and Expenses - Net

POST-IN-SERVICE CARRYING COSTS

Post-in-service carrying costs reflect the deferral of carrying costs on 
certain generating units and other utility plant from the in-service date 
until the related plant is reflected in retail rates.  (See Note 1(h) of the 
"Notes to Financial Statements" in "Item 8.  Financial Statements and 
Supplementary Data".)

REDUCTION OF LOSS RELATED TO THE JUNE 1987 ORDER

The December 1993 Order resolved open issues related to the June 1987 Order 
which addressed the effect on PSI of the 1987 reduction in the Federal income 
tax rate.  The December 1993 Order provided for PSI to refund $119 million to 
its retail customers, which was a reduction of $20 million from the loss 
previously recognized.

WRITE-OFF OF A PORTION OF ZIMMER

In the May 1992 Order authorizing the rate phase-in plan for Zimmer, the PUCO 
disallowed from rates approximately $230 million of Zimmer costs.  Upon 
appeal, the Supreme Court of Ohio upheld the PUCO's decision, and CG&E wrote 
off Zimmer costs of approximately $223 million, net of taxes, in November 
1993.

OTHER - NET

Other - net increased $32 million in 1995, as compared to 1994, due in part to 
$4 million of interest on an income tax refund related to prior years, a $10 
million gain on the sale of Cinergy's investment in an Argentine utility, and 
charges of $17 million in 1994 for merger-related and other expenditures which 
cannot be recovered from customers. 

In 1994, other - net increased $12 million, as compared to 1993, primarily as 
a result of the write-off during 1993 of $22 million related to the defense 
against the IPALCO hostile takeover attempt.  The increase was offset, in 
part, by the charges in 1994 of $17 million previously discussed.

The decrease in other - net of $38 million in 1993, as compared to 1992, was 
primarily the result of the previously discussed write-off of IPALCO defense 
costs in 1993.
<PAGE>

<TABLE>
<CAPTION>
                         THE CINCINNATI GAS & ELECTRIC COMPANY

                           CONSOLIDATED STATEMENTS OF INCOME

                                           1995           1994           1993
                                                     (in thousands)
<S>                                    <C>            <C>            <C>
Operating Revenues (Note 2)
  Electric (including $30,104, $4,667,
    and $930 from affiliated companies
    for 1995, 1994, and 1993, 
    respectively)                        1 437 223      1 345 787      1 282 445
  Gas                                      410 852        442 398        469 296
                                         1 848 075      1 788 185      1 751 741

Operating Expenses
  Fuel used in electric production         327 353        325 470        333 279
  Gas purchased                            206 250        248 293        280 836
  Purchased and exchanged power
    Non-affiliated companies                13 870         12 349         12 865
    Affiliated companies                    42 575          8 583          9 594
  Other operation                          291 874        336 030        257 407
  Maintenance                               94 688        106 810        108 857
  Depreciation                             158 986        156 676        152 061
  Amortization of phase-in deferrals         9 091           -              -    
  Post-in-service deferred operating
    expenses - net                           3 290          3 290         (6 471)
  Phase-in deferred depreciation              -            (2 161)        (8 524)
  Income taxes (Note 12)                   136 386        104 128        108 970
  Taxes other than income taxes            203 680        197 381        183 367
                                         1 488 043      1 496 849      1 432 241

Operating Income                           360 032        291 336        319 500

Other Income and Expenses - Net
  Allowance for equity funds used 
    during construction                      1 790          1 971          3 154
  Post-in-service carrying costs              -              -            12 100
  Phase-in deferred return                   8 537         15 351         35 334
  Write-off of a portion of Zimmer            -              -          (234 844)
  Income taxes (Note 12)
    Related to the write-off of a 
      portion of Zimmer                       -              -            12 085
    Other                                    4 587          6 619          9 405
  Other - net                                4 221         (6 726)        (9 551)
                                            19 135         17 215       (172 317)

Income Before Interest                     379 167        308 551        147 183

Interest                  
  Interest on long-term debt               143 334        150 386        157 044
  Other interest                             3 486          2 831          2 449
  Allowance for borrowed funds used
    during construction                     (3 854)        (2 977)        (3 586)
                                           142 966        150 240        155 907

Net Income (Loss)                          236 201        158 311         (8 724)

Preferred Dividend Requirement              17 673         22 377         25 160

Net Income (Loss) Applicable to
  Common Stock                          $  218 528     $  135 934     $  (33 884)
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                    THE CINCINNATI GAS & ELECTRIC COMPANY

                         CONSOLIDATED BALANCE SHEETS

ASSETS

                                                            December 31
                                                         1995          1994
                                                       (dollars in thousands)
<S>                                                 <C>            <C>
Utility Plant - Original Cost
  In service
    Electric                                         $4 564 711     $4 502 840
    Gas                                                 680 339        645 602
    Common                                              183 422        185 718
                                                      5 428 472      5 334 160
  Accumulated depreciation                            1 730 232      1 613 505
                                                      3 698 240      3 720 655
  CWIP                                                   77 661         74 989
      Total utility plant                             3 775 901      3 795 644

Current Assets
  Cash and temporary cash investments                     6 612         52 516
  Restricted deposits                                     1 144             98
  Accounts receivable less accumulated 
    provision of $9,615 in 1995 and $8,999 in 1994
    for doubtful accounts (Note 7)                      292 493        265 132
  Accounts receivable from affiliated companies          21 409          3 888
  Materials, supplies, and fuel - at average cost
    Fuel for use in electric production                  40 395         42 167
    Gas stored for current use                           21 493         31 284
    Other materials and supplies                         55 388         57 864
  Property taxes applicable to subsequent year          116 822        112 420
  Prepayments and other                                  30 572         31 327
                                                        586 328        596 696

Other Assets
  Regulatory assets
    Amounts due from customers - income taxes           397 155        381 380
    Post-in-service carrying costs and deferred 
      operating expenses                                148 316        155 138
    Phase-in deferred return and depreciation           100 388        100 943
    Deferred DSM costs                                   19 158         10 002
    Deferred merger costs                                14 538         12 013
    Unamortized costs of reacquiring debt                39 428         33 426
    Other                                                41 025         56 359
  Other                                                  54 691         40 064
                                                        814 699        789 325

                                                     $5 176 928     $5 181 665
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                          THE CINCINNATI GAS & ELECTRIC COMPANY

CAPITALIZATION AND LIABILITIES

                                                            December 31
                                                         1995          1994
                                                       (dollars in thousands)
<S>                                                 <C>            <C>
Common Stock Equity (Note 3)
  Common stock - $8.50 par value;
    authorized shares - 120,000,000;
    outstanding shares - 89,663,086 in 1995
    and 1994                                         $  762 136     $  762 136
  Paid-in capital                                       339 101        337 874
  Retained earnings                                     427 226        432 962
      Total common stock equity                       1 528 463      1 532 972

Cumulative Preferred Stock (Note 4)
  Not subject to mandatory redemption                    40 000         80 000
  Subject to mandatory redemption                       160 000        210 000

Long-term Debt (Note 5)                               1 702 650      1 837 757
      Total capitalization                            3 431 113      3 660 729

Current Liabilities
  Long-term debt due within one year (Note 5)           151 500           -     Notes payable (Note 6)                            
       -            14 500
  Accounts payable                                      133 999        120 817
  Accrued taxes                                         250 189        227 651
  Accrued interest                                       31 299         31 902
  Other                                                  45 145         32 658
                                                        612 132        427 528

Other Liabilities
  Deferred income taxes (Note 12)                       795 385        747 060
  Unamortized investment tax credits                    129 372        135 417
  Accrued pension and other postretirement
    benefit costs (Notes 10 and 11)                     117 641        102 254
  Other                                                  91 285        108 677
                                                      1 133 683      1 093 408 
Commitments and Contingencies (Note 13)
                                                     $5 176 928     $5 181 665
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                         THE CINCINNATI GAS & ELECTRIC COMPANY

             CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK EQUITY
                                     Common      Paid-in       Retained     Total Common
                                      Stock      Capital       Earnings     Stock Equity
                                                 (dollars in thousands)

<S>                                <C>         <C>           <C>           <C>
Balance December 31, 1992           $734 307     $284 486     $ 636 337      $1 655 130
Net income (loss)                                                (8 724)         (8 724)
Issuance of 1,673,058 shares of
  common stock                        14 221       29 765                        43 986
Common stock issuance expenses                        (33)                          (33)
Dividends on preferred stock                                    (25 160)        (25 160)
Dividends on common stock                                      (145 942)       (145 942)

Balance December 31, 1993            748 528      314 218       456 511       1 519 257
Net income                                                      158 311         158 311
Issuance of 1,601,003 shares of
  common stock                        13 608       23 142                        36 750
Common stock issuance expenses                        (39)                          (39)
Dividends on preferred stock                                    (22 377)        (22 377)
Dividends on common stock                                      (158 970)       (158 970)
Other                                                 553          (513)             40

Balance December 31, 1994            762 136      337 874       432 962       1 532 972
Net income                                                      236 201         236 201 
Dividends on preferred stock                                    (17 673)        (17 673)
Dividends on common stock                                      (219 550)       (219 550)
Other                                               1 227        (4 714)         (3 487)

Balance December 31, 1995           $762 136     $339 101     $ 427 226      $1 528 463
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                           THE CINCINNATI GAS & ELECTRIC COMPANY

                           CONSOLIDATED STATEMENTS OF CASH FLOWS
<S>                                                  <C>           <C>         <C>
                                                         1995          1994       1993
                                                                  (in thousands)

Operating Activities
  Net income (loss)                                   $ 236 201     $ 158 311   $  (8 724)
  Items providing (using) cash currently:
    Depreciation                                        158 986       156 676     152 061
    Deferred income taxes and investment
      tax credits - net                                  26 938        13 680      23 635
    Allowance for equity funds used during 
      construction                                       (1 790)       (1 971)     (3 154)
    Regulatory assets - net                              16 654       (21 248)    (55 832)
    Write-off of a portion of Zimmer                       -             -        234 844
    Changes in current assets and current
      liabilities
        Restricted deposits                              (1 046)           22         109
        Accounts receivable                             (44 882)       43 145     (38 040)
        Materials, supplies, and fuel                    14 039        21 202       3 567
        Accounts payable                                 13 182        (8 093)      5 352
        Accrued taxes and interest                       21 935         8 211      15 711
    Other items - net                                       631        77 462      14 505

        Net cash provided by (used in) operating 
          activities                                    440 848       447 397     344 034

Financing Activities
  Issuance of common stock                                 -           36 711      43 953
  Issuance of long-term debt                            344 280       311 957     297 000
  Retirement of preferred stock of subsidiaries         (93 450)      (40 400)       -   
  Redemption of long-term debt                         (338 378)     (313 522)   (294 455)
  Change in short-term debt                             (14 500)      (16 500)    (15 500)
  Dividends on preferred stock                          (17 673)      (22 377)    (25 160)
  Dividends on common stock                            (219 550)     (158 970)   (145 942)

        Net cash provided by (used in) financing
          activities                                   (339 271)     (203 101)   (140 104)

Investing Activities
  Construction expenditures (less allowance for 
    equity funds used during construction)             (138 325)     (189 954)   (198 585)
  Deferred DSM costs - net                               (9 156)       (6 396)     (3 027)
        Net cash provided by (used in) investing
          activities                                   (147 481)     (196 350)   (201 612)

Net increase (decrease) in cash and temporary
  cash investments                                      (45 904)       47 946       2 318
Cash and temporary cash investments at beginning 
  of period                                              52 516         4 570       2 252
Cash and temporary cash investments at end of
  period                                              $   6 612     $  52 516   $   4 570

Supplemental Disclosure of Cash Flow Information
  Cash paid during the year for:
    Interest (net of amount capitalized)              $ 137 892     $ 142 380   $ 151 867
    Income taxes                                         79 769        88 639      53 786
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>
RESULTS OF OPERATIONS - CG&E

Kwh Sales

Kwh sales for 1995 increased 15.3% over 1994, reflecting increased sales to 
all customer classes.  Significantly contributing to this increase were higher 
non-firm power sales for resale primarily due to increased sales to PSI, as a 
result of the coordination of CG&E's and PSI's electric dispatch systems.  
Higher residential and commercial sales resulted primarily from warmer weather 
during the 1995 summer cooling season and colder weather during the fourth 
quarter of 1995.  Additionally, increased sales to industrial customers were 
mainly attributable to growth in the primary metals and chemicals sectors.

CG&E's total kwh sales in 1994, as compared to 1993, decreased 1.2%, due in 
large part to reduced power sales to other utilities in 1994 and decreased 
residential sales resulting from milder weather experienced during the third 
and fourth quarters of 1994.  This decrease was partially offset by increased 
kwh sales to industrial customers reflecting growth in the primary metals and 
machinery sectors.

A return to more normal weather contributed to the 5.3% increase in total kwh 
sales in 1993, as compared to 1992.  In addition, growth in the primary 
metals, transportation equipment, and chemicals sectors resulted in increased 
industrial sales.

Year-to-year changes in kwh sales for each major class of customers are shown 
below:
 
                                   Increase (Decrease) from Prior Year

                                        1995       1994      1993
   Retail
     Residential                        3.8%      (2.0)%     8.6 %
     Commercial                         3.4        2.3       5.4
     Industrial                         3.9        4.3       2.4

   Total retail                         3.8        1.1       5.8

   Sales for resale   
     Firm power obligations             6.3        1.7       6.1
     Non-firm power transactions      211.8      (29.3)      (.4)

   Total sales for resale             172.6      (24.9)      1.1

   Total sales                         15.3       (1.2)      5.3

CG&E currently forecasts a 2% annual compound growth rate in kwh sales over 
the 1996 through 2005 period.  This forecast does not reflect the effects of 
DSM programs and excludes non-firm power sales for resale and any potential 
new off-system, long-term firm power sales.

Mcf Sales and Transportation

Total gas sales and transportation volumes increased 8.6% in 1995, as compared 
to 1994.  Increased sales to residential customers, resulting from colder 
weather during the fourth quarter of 1995 and an increase in the number of 
customers, contributed to higher retail sales.  Additionally, increases in 
commercial and industrial transportation volumes, which resulted from 
customers electing to purchase gas directly from suppliers, more than offset 
declines in industrial and commercial sales.  The increased transportation 
volumes mainly reflect industrial demand for gas transportation services in 
the primary metals, food products, and paper products sectors.

The milder weather experienced in 1994 contributed to a decrease in 
residential and commercial gas sales volumes and led to the decrease in total 
Mcf sales and transportation of 1.2% in 1994, as compared to 1993.  An 
increase in gas transportation volumes to industrial customers, mainly in the 
primary metals sector, partially offset this decrease.

The increase in retail Mcf sales of 5.4% in 1993, when compared to 1992, was 
primarily attributable to higher residential and commercial sales volumes as a 
result of the return to more normal weather during the 1993 heating season and 
the addition of a number of customers to CG&E's gas system during the year.  
Gas transportation volumes for 1993 increased largely as a result of 
additional industrial demand for gas transportation services in the primary 
metals sector.  The increase in Mcf transported more than offset the decrease 
in Mcf sold to industrial customers.

Year-to-year changes in Mcf sales for each major class of customers and Mcf 
transportation volumes are shown below:
 
                                 Increase (Decrease) from Prior Year

                                     1995        1994       1993

   Retail
     Residential                     10.5 %     (10.2)%      9.5 %
     Commercial                      (2.0)       (1.5)       1.1
     Industrial                     (26.6)       (9.9)       (.8)

   Total retail                       1.5        (6.7)       5.4

   Gas transported                   24.4        13.9       12.7

   Total gas sold and transported     8.6        (1.2)       7.2

Operating Revenues

ELECTRIC OPERATING REVENUES

Electric operating revenues increased $91 million (6.8%) in 1995, as compared 
to 1994.  This increase reflects the higher kwh sales, as previously discussed 
and a full year's effect of CG&E's electric rate increase which became 
effective in May 1994.  This increase was partially offset by the operation of 
fuel adjustment clauses reflecting a lower average cost of fuel used in 
electric production.

CG&E's electric rate increases which became effective in May 1993, August 
1993, and May 1994 substantially contributed to the increase in electric 
operating revenues of $64 million (4.9%) in 1994, as compared to 1993.  

Electric operating revenues increased $123 million (10.6%) in 1993 primarily 
as a result of greater kwh sales and electric rate increases granted to CG&E 
in 1993 and 1992.  

An analysis of electric operating revenues for the past three years is shown 
below:

                                          1995      1994       1993
                                               (in millions)  
Previous year's electric                          
  operating revenues                     $1 346    $1 282     $1 159
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                  (10)       55         49
    Sales for resale 
      Firm power obligations                  1         -          -
      Non-firm power transactions            (9)        3          5
  Total change in price per kwh             (18)       58         54

  Kwh sales
    Retail                                   49        14         66
    Sales for resale
      Firm power obligations                  1         -          1
      Non-firm power transactions            60        (9)         1
  Total change in kwh sales                 110         5         68   
 
  Other                                      (1)        1          1
Current year's electric 
  operating revenues                     $1 437    $1 346     $1 282

GAS OPERATING REVENUES  

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

In 1995, gas operating revenues declined $32 million (7.1%), as compared to 
1994, as a result of the aforementioned trend toward increased transportation 
services and the operation of fuel adjustment clauses reflecting a lower 
average cost of gas purchased.

Gas operating revenues decreased $27 million (5.7%)in 1994, as compared to 
1993, due to the operation of fuel adjustment clauses which reflected a lower 
average cost of gas purchased during the latter part of 1994 and a reduction 
in total volumes sold and transported.

In 1993, gas operating revenues increased $75 million (19.1%) as a result of 
rate increases granted in 1993, higher volumes of gas sold, and the operation 
of fuel adjustment clauses reflecting an increase in the average cost of gas 
purchased.  

Operating Expenses

FUEL

Fuel Used in Electric Production  Electric fuel costs remained relatively 
constant in 1995, showing less than a 1% increase when compared to 1994.  

An analysis of these fuel costs for the past three years is shown below:    

                                              1995      1994     1993
                                                   (in millions)

Previous year's fuel expense                  $325      $333     $321
Increase (Decrease) due to change in:
  Price of fuel                                (20)       (9)      (8) 
  Kwh generation                                22         1       20

Current year's fuel expense                   $327      $325     $333

Gas Purchased  In 1995, gas purchased expense decreased $42 million (16.9%), 
as compared to 1994, reflecting a decline in the average cost per Mcf of gas 
purchased of 17.2%.
 
A reduction in the average cost per Mcf of gas purchased (5.1%) and lower 
volumes purchased (6.8%) contributed to the decline in gas purchased expense 
of $33 million (11.6%) in 1994, as compared to 1993.

Gas purchased expense increased $53 million (23.0%) in 1993 as a result of an 
increase in the average cost per Mcf of gas purchased of 17.5% and an increase 
in volumes purchased of 4.7%.  

PURCHASED AND EXCHANGED POWER

Purchased and exchanged power costs increased $36 million in 1995, as compared 
to 1994, reflecting increased purchases from PSI resulting from the 
coordination of PSI's and CG&E's electric dispatch systems.  These increases 
were partially offset by a decline in third party, short-term power sales to 
other utilities.

OTHER OPERATION

In 1995, other operation expenses decreased $44 million (13.1%), as compared 
to 1994.  Charges of $52 million in 1994 for Merger Costs and other 
expenditures which cannot be recovered from customers under the merger savings 
sharing mechanism authorized by the PUCO, significantly contributed to the 
decrease.  In addition, emphasis on achieving merger savings and other cost 
reductions led to lower operating costs for 1995.  The decrease was partially 
offset by the write-off of obsolete inventory in December 1995.

Other operation expenses increased $79 million (30.5%) in 1994, as compared to 
1993, due to a number of factors including the previously discussed charges of 
$52 million and increased electric production and distribution expenses.

The $15 million (6.1%) increase in other operation expense in 1993 was due to 
a number of factors, including wage increases, the adoption of two accounting 
standards involving postemployment and postretirement benefits, and increases 
in gas production expenses.

MAINTENANCE

The decrease in maintenance expense of $12 million (11.3%) in 1995, as 
compared to 1994, was primarily attributable to improved scheduling of routine 
maintenance on electric generating units.  Lower maintenance costs on gas and 
electric distribution facilities also contributed to the decline.

DEPRECIATION

Depreciation expense increased $11 million (7.8%) in 1993 primarily due to a 
full year's effect of the first five units of Woodsdale which were placed in 
commercial operation in 1992 and the sixth unit which was placed in commercial 
operation in 1993.

POST-IN-SERVICE DEFERRED OPERATING EXPENSES - NET

Post-in-service deferred operating expenses - net reflect various deferrals of 
depreciation, operation and maintenance expenses (exclusive of fuel costs), 
and property taxes on certain generating units and other utility plant from 
the in-service date until the related plant is reflected in retail rates, net 
of amortization of these deferrals as they are recovered through retail rates. 
(See Note 1(h) of the "Notes to Financial Statements" in "Item 8.  Financial 
Statements and Supplementary Data".)

PHASE-IN DEFERRED DEPRECIATION AND RETURN AND AMORTIZATION OF PHASE-IN 
  DEFERRALS

Phase-in deferred depreciation, phase-in deferred return, and amortization of 
phase-in deferrals reflect the PUCO-ordered phase-in plan for Zimmer.  (See 
Note 1(f) of the "Notes to Financial Statements" in "Item 8.  Financial 
Statements and Supplementary Data".)

TAXES OTHER THAN INCOME TAXES

Taxes other than income taxes increased $6 million (3.2%) in 1995, $14 million 
(7.6%) in 1994, and $9 million (5.3%) in 1993, primarily due to increased 
property taxes resulting from a greater investment in taxable property 
(including Zimmer and Woodsdale) and higher property tax rates.

Other Income and Expenses - Net

POST-IN-SERVICE CARRYING COSTS

Post-in-service carrying costs reflect the deferral of carrying costs on 
certain generating units from the in-service date until the related plant is 
reflected in retail rates.  (See Note 1(h) of the "Notes to Financial 
Statements" in "Item 8.  Financial Statements and Supplementary Data".)

WRITE-OFF OF A PORTION OF ZIMMER

In the May 1992 Order authorizing the rate phase-in plan for Zimmer, the PUCO 
disallowed from rates approximately $230 million of Zimmer costs.  Upon 
appeal, the Supreme Court of Ohio upheld the PUCO's decision, and CG&E wrote 
off Zimmer costs of approximately $223 million, net of taxes, in November 
1993.

OTHER - NET

The increase in other - net of $11 million in 1995, as compared to 1994, is 
due in part to $4 million of interest on an income tax refund related to prior 
years and charges of $12 million in 1994 for merger-related and other 
expenditures which cannot be recovered from customers. 

PREFERRED DIVIDEND REQUIREMENT

CG&E's preferred dividend requirement decreased $5 million (21.0%) for 1995, 
as compared to 1994.  The decrease was attributable to the early redemption of 
400,000 shares of $100 par value, 9.28% Series Cumulative Preferred Stock in 
April 1994, along with the early redemption of 400,000 and 500,000 shares of 
$100 par value Cumulative Preferred Stock, 7.44% Series and 9.15% Series, 
respectively, on July 1, 1995.
<PAGE>

<TABLE>
<CAPTION>
                                   PSI ENERGY, INC.

                          CONSOLIDATED STATEMENTS OF INCOME
                                           1995           1994           1993
                                                     (in thousands)

<S>                                   <C>              <C>            <C>
Operating Revenues (Note 2)
  Revenues (including $42,575, $8,583, 
    and $9,594 for affiliated companies
    for 1995, 1994, and 1993,
    respectively)                        1 248 035      1 113 512      1 092 222

Operating Expenses
  Fuel                                     389 401        387 523        399 880
  Purchased and exchanged power
    Non-affiliated companies                33 762         36 733         23 343
    Affiliated companies                    30 104          4 667            930
  Other operation                          228 508        213 122        186 695
  Maintenance                               87 492         94 149         84 020
  Depreciation                             120 773        137 719        126 821
  Post-in-service deferred operating
    expenses - net                          (5 790)        (9 288)        (5 069)
  Income taxes (Note 12)                    85 043         50 366         64 911
  Taxes other than income taxes             51 853         46 335         45 477
                                         1 021 146        961 326        927 008

Operating Income                           226 889        152 186        165 214

Other Income and Expenses - Net
  Allowance for equity funds used 
    during construction                        174          4 230         11 173
  Post-in-service carrying costs             3 186          9 780          6 005
  Reduction of loss related to the 
    IURC's June 1987 Order                    -              -            20 134
  Income taxes (Note 12)
    Related to the IURC's June 1987
      Order                                   -              -            (7 444)
    Other                                      941         (1 312)         3 202
  Other - net                               (3 188)        (7 893)        (9 403)
                                             1 113          4 805         23 667

Income Before Interest                     228 002        156 991        188 881

Interest                  
  Interest on long-term debt                70 577         68 862         68 946
  Other interest                            15 821         15 292          4 191
  Allowance for borrowed funds used
    during construction                     (4 211)        (9 355)        (9 154)
                                            82 187         74 799         63 983

Net Income                                 145 815         82 192        124 898

Preferred Dividend Requirement              13 180         13 182         12 825

Net Income Applicable to
  Common Stock                          $  132 635     $   69 010     $  112 073
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                PSI ENERGY, INC.

                            CONSOLIDATED BALANCE SHEETS

ASSETS

                                                            December 31
                                                         1995          1994
                                                       (dollars in thousands)
<S>                                                 <C>            <C>
Electric Utility Plant - Original Cost
  In service                                         $4 052 984     $3 789 785
  Accumulated depreciation                            1 637 169      1 550 297
                                                      2 415 815      2 239 488
  CWIP                                                   58 191        163 761
      Total electric utility plant                    2 474 006      2 403 249

Current Assets
  Cash and temporary cash investments                    15 522          6 341
  Restricted deposits                                     1 187         11 190
  Accounts receivable less accumulated provision
    of $468 in 1995 and $440 in 1994 for doubtful 
    accounts (Note 7)                                    73 419         32 030
  Accounts receivable from affiliated companies - net    20 568          4 031
  Materials, supplies, and fuel - at average cost
    Fuel for use in electric production                  82 014        113 861
    Other materials and supplies                         29 462         29 363
  Prepayments and other                                   1 234          4 758
                                                        223 406        201 574

Other Assets
  Regulatory assets
    Amounts due from customers - income taxes            26 338         27 134
    Post-in-service carrying costs and deferred 
      operating expenses                                 38 874         30 142
    Deferred DSM costs                                  110 242         94 125
    Deferred merger costs                                42 286         37 645
    Unamortized costs of reacquiring debt                34 476         36 998
    Other                                                33 886         30 030
  Other                                                  92 056         84 027
                                                        378 158        340 101

                                                     $3 075 570     $2 944 924
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                        PSI ENERGY, INC.

CAPITALIZATION AND LIABILITIES

                                                            December 31
                                                         1995          1994
                                                       (dollars in thousands)
<S>                                                 <C>            <C>
Common Stock Equity (Note 3)
  Common stock - without par value; $.01 stated
    value; authorized shares - 60,000,000;
    outstanding shares - 53,913,701 in 1995 and 1994 $      539     $      539
  Paid-in capital                                       403 253        389 309
  Accumulated earnings subsequent to November 
    30, 1986, quasi-reorganization                      625 275        493 103
      Total common stock equity                       1 029 067        882 951

Cumulative Preferred Stock (Note 4)
  Not subject to mandatory redemption                   187 897        187 929

Long-term Debt (Note 5)                                 828 116        877 512
      Total capitalization                            2 045 080      1 948 392

Current Liabilities
  Long-term debt due within one year                     50 400         60 400
  Notes payable (Note 6)                                198 531        193 573
  Accounts payable                                      116 817        142 775
  Litigation settlement (Note 13(e))                     80 000         80 000
  Accrued taxes                                          65 851         30 784
  Accrued interest                                       24 696         25 685
  Other                                                  16 000         18 684
                                                        552 295        551 901

Other Liabilities
  Deferred income taxes (Note 12)                       331 876        324 738
  Unamortized investment tax credits                     56 354         60 461
  Accrued pension and other postretirement
    benefit costs (Notes 10 and 11)                      54 130         31 324
  Other                                                  35 835         28 108
                                                        478 195        444 631 
Commitments and Contingencies (Note 13)
                                                     $3 075 570     $2 944 924
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      PSI ENERGY, INC.

                CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK EQUITY
                                     Common      Paid-in     Accumulated    Total Common
                                      Stock      Capital      Earnings      Stock Equity
                                                     (in thousands)

<S>                                 <C>         <C>         <C>            <C>
Balance December 31, 1992             $539       $221 812      $432 747       $  655 098
Net income                                                      124 898          124 898
Costs of issuing and retiring
  preferred stock                                  (5 062)                        (5 062)
Dividends on preferred stock                                    (12 288)         (12 288)
Dividends on common stock                                       (62 191)         (62 191)
Contribution from parent company                   12 538                         12 538
Other                                                                76               76

Balance December 31, 1993              539        229 288       483 242          713 069
Net income                                                       82 192           82 192
Dividends on preferred stock                                    (13 182)         (13 182)
Dividends on common stock                                       (59 142)         (59 142)
Contribution from parent company                  159 999                        159 999
Other                                                  22            (7)              15

Balance December 31, 1994              539        389 309       493 103          882 951
Net income                                                      145 815          145 815 
Dividends on preferred stock                                    (13 181)         (13 181)
Contribution from parent company                   13 926                         13 926
Other                                                  18          (462)            (444)

Balance December 31, 1995             $539       $403 253      $625 275       $1 029 067
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      PSI ENERGY, INC.

                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                         1995          1994       1993
                                                                  (in thousands)

<S>                                                  <C>           <C>         <C>
Operating Activities
  Net income                                          $ 145 815     $  82 192   $ 124 898
  Items providing (using) cash currently:
    Depreciation                                        120 773       137 719     126 821
    Deferred income taxes and investment
      tax credits - net                                   5 201        24 127      68 103
    Allowance for equity funds used during 
      construction                                         (174)       (4 230)    (11 173)
    Regulatory assets - net                             (15 628)      (36 917)    (29 954)
    Changes in current assets and current
      liabilities
        Restricted deposits                                  16        10 024         (69)
        Accounts receivable                             (57 926)       (7 404)      7 168
        Income tax refunds                                 -           28 900     (28 900)
        Materials, supplies, and fuel                    31 748       (66 697)     59 421
        Accounts payable                                (25 958)       (1 318)     56 415
        Advance under accounts receivable purchase
          agreement                                        -          (49 940)     49 940
        Accrued taxes and interest                       34 078        (2 928)     (8 504)
    Other items - net                                    18 714       (71 554)    (70 049)

        Net cash provided by (used in) operating 
          activities                                    256 659        41 974     344 117

Financing Activities
  Issuance of preferred stock                              -             -        156 325
  Issuance of long-term debt                               -          108 978     241 704
  Funds on deposit from issuance of long-term debt        9 987        27 897     (31 342)
  Retirement of preferred stock                             (16)          (26)    (60 107)
  Redemption of long-term debt                          (60 455)         (160)   (207 880)
  Change in short-term debt                               4 958        66 872       5 900
  Dividends on preferred stock                          (13 181)      (13 182)    (12 288)
  Dividends on common stock                                -          (59 142)    (62 191)
  Capital contribution from parent company               13 926       159 999      12 538
        Net cash provided by (used in) financing
          activities                                    (44 781)      291 236      42 659

Investing Activities
  Construction expenditures (less allowance for 
    equity funds used during construction)             (186 580)     (290 579)   (350 319)
  Deferred DSM costs - net                              (16 117)      (40 872)    (30 736)
  Equity investment in Argentine utility                   -             -        (10 200)
    
        Net cash provided by (used in) investing
          activities                                   (202 697)     (331 451)   (391 255)

Net increase (decrease) in cash and temporary
  cash investments                                        9 181         1 759      (4 479)
Cash and temporary cash investments at beginning 
  of period                                               6 341         4 582       9 061
Cash and temporary cash investments at end of
  period                                              $  15 522     $   6 341   $   4 582

Supplemental Disclosure Of Cash Flow Information
  Cash paid during the year for:
    Interest (net of amount capitalized)              $  80 465     $  67 150   $  60 653
    Income taxes                                         60 148         8 162      41 376
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>

RESULTS OF OPERATIONS - PSI

Kwh Sales

Kwh sales in 1995, as compared to 1994, increased 6.3%, reflecting increased 
sales to all customer classes.  Contributing significantly to this increase 
were higher residential and commercial sales due to warmer weather during the 
1995 summer cooling season, colder weather during the fourth quarter of 1995, 
and an increase in the number of residential and commercial customers.  
Increased sales to industrial customers, reflecting growth in the primary 
metals, chemicals, and food products sectors, also contributed to the 
increased kwh sales level.  This increase also reflects higher non-firm power 
sales for resale resulting from an increase in sales to CG&E reflecting the 
coordination of PSI's and CG&E's electric dispatch systems.

Total kwh sales increased 6.3% in 1994, as compared to 1993, due in large part 
to non-firm power sales for resale, reflecting third party, short-term power 
sales to other utilities through PSI's system and direct power sales by PSI to 
other utilities.  Also contributing to the total kwh sales levels were 
increased sales to industrial customers.  This increase reflected growth in 
the primary metals and transportation equipment sectors.  A decrease in 
residential sales resulted from the milder weather experienced during the 
third and fourth quarters of 1994.

New customers and a return to more normal weather contributed to the 3.6% 
increase in total kwh sales in 1993, as compared to 1992.  In addition, growth 
in the primary metals, transportation equipment, precision instruments, and 
photographic and optical goods sectors resulted in increased industrial sales. 
Partially offsetting these increases was a reduction in non-firm power sales 
for resale, which reflected a significant decrease in sales associated with 
third party, short-term power sales to other utilities through PSI's system.

Year-to-year changes in kwh sales for each major class of customers are shown 
below:
 
                                         Increase (Decrease) from Prior Year

                                             1995        1994       1993
   Retail
     Residential                              7.9%       (1.4)%     12.2 %
     Commercial                               5.2         1.4        7.2
     Industrial                               5.1         4.9        5.5

   Total retail                               6.0         2.0        8.0

   Sales for resale   
     Firm power obligations                   1.1         2.6        2.2
     Non-firm power transactions             10.2        33.5      (15.4)

   Total sales for resale                     7.4        22.4       (9.8)

   Total sales                                6.3         6.3        3.6 

PSI currently forecasts a 2% annual compound growth rate in kwh sales over the 
1996 through 2005 period.  This forecast does not reflect the effects of DSM 
programs and excludes non-firm power sales for resale and any potential new 
off-system, long-term firm power sales.
Operating Revenues

Higher kwh sales and electric rate increases which became effective in 
February 1995 and March 1995 significantly contributed to the $134 million 
(12.1%) increase in operating revenues for 1995, when compared to 1994.  

Operating revenues increased $22 million (1.9%) in 1994, as compared to 1993, 
as a result of increased kwh sales, the effects of a $31 million refund to 
retail customers accrued in June 1993 as a result of the settlement of the 
April 1990 Order, and increased fuel costs.  Partially offsetting these 
increases were the 1.5% retail rate reduction resulting from the IURC's 
December 1993 Order and the return of approximately $11 million (an increase 
of $9 million when compared to 1993) to customers in connection with certain 
provisions of Indiana law which limit the level of retail operating income as 
determined in quarterly fuel adjustment clause proceedings.  

In 1993, operating revenues increased $26 million (2.5%), as compared to 1992, 
reflecting increased kwh sales which were offset, in part, by the refund 
resulting from the settlement of the April 1990 Order. 

An analysis of operating revenues for the past three years is shown below:

                                                    1995       1994     1993
                                                           (in millions)  

Previous year's operating revenues                 $1 114     $1 092   $1 066
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                             68        (23)     (38)
    Sales for resale 
      Firm power obligations                           (1)         2       (1)
      Non-firm power transactions                       1       -           7
  Total change in price per kwh                        68        (21)     (32)

  Kwh sales
    Retail                                             55         18       71
    Sales for resale
      Firm power obligations                            1          2        2
      Non-firm power transactions                       9         23      (12)
  Total change in kwh sales                            65         43       61 

  Other                                                 1       -          (3) 

Current year's operating revenues                  $1 248     $1 114   $1 092

Operating Expenses

FUEL

Fuel costs, PSI's largest operating expense, remained relatively constant in 
1995, showing less than a 1% increase when compared to 1994.  

An analysis of these fuel costs for the past three years is shown below:    

                                                     1995      1994     1993
                                                          (in millions)

Previous year's fuel expense                         $387      $400     $386
Increase (Decrease) due to change in:
  Price of fuel                                        (5)      (30)       5 
  Kwh generation                                        7        17        9

Current year's fuel expense                          $389      $387     $400

PURCHASED AND EXCHANGED POWER

Purchased and exchanged power costs increased $22 million (54.3%) in 1995, as 
compared to 1994, reflecting increased purchases from CG&E as a result of the 
coordination of PSI's and CG&E's electric dispatch systems.  These increases 
were partially offset by a decline in third party, short-term power sales to 
other utilities.

Purchased and exchanged power increased $17 million (70.6%) in 1994, as 
compared to 1993, reflecting an increase in third party, short-term power 
sales to other utilities through PSI's system and increased purchases of other 
non-firm power by PSI primarily to serve its own load.  

In 1993, PSI increased its purchases of non-firm power primarily to serve its 
own load, which resulted in an increase in purchased and exchanged power costs 
of $11 million (76.8%), as compared to 1992.  

OTHER OPERATION

In 1995, other operation expenses increased $15 million (7.2%), as compared to 
1994.  This increase was due to a number of factors, including the recognition 
of postretirement benefit costs on an accrual basis, an increase in the 
ongoing level of DSM expenses, and the amortization of deferred postretirement 
benefit costs, deferred Merger Costs, and deferred DSM costs, all of which are 
being recovered in revenues pursuant to the February 1995 Order.  These 
increases were partially offset by charges of $10 million in 1994 for 
severance benefits to former officers of PSI which cannot be recovered from 
customers under the merger savings sharing mechanisms authorized by the IURC. 
In addition, emphasis on achieving merger savings and other cost reductions 
also partially offset the increase in other operation expenses.

Other operation expenses increased $26 million (14.2%) in 1994, as compared to 
1993, due to a number of factors including the previously discussed charges of 
$10 million and fuel litigation expenses of $8 million.

MAINTENANCE

Maintenance costs decreased $7 million (7.1%) in 1995, as compared to 1994, 
primarily due to improved scheduling of routine maintenance on generating 
units and lower maintenance costs on transmission and distribution facilities.

Maintenance on a number of PSI's generating stations and the initial costs of 
a new distribution line clearing program resulted in increased maintenance 
expenses of $10 million (12.1%) in 1994.

DEPRECIATION

In 1995, depreciation expense decreased $17 million (12.3%), when compared to 
1994, due in large part to the adoption of lower depreciation rates effective 
in March 1995.  This decrease was partially offset by the effect of additions 
to utility plant.

Additions to electric utility plant led to increases in depreciation expense 
of $11 million (8.6%), and $10 million (8.3%) in 1994 and 1993, respectively.

POST-IN-SERVICE DEFERRED OPERATING EXPENSES - NET

Post-in-service deferred operating expenses - net reflect the deferral of 
depreciation on certain major projects, primarily environmental in nature,  
from the in-service date until the related projects are reflected in retail 
rates, net of amortization of these deferrals as they are recovered.  (See 
Note 1(h) of the "Notes to Financial Statements" in "Item 8.  Financial 
Statements and Supplementary Data".)

TAXES OTHER THAN INCOME TAXES

Taxes other than income taxes increased $6 million (11.9%) in 1995, as 
compared to 1994, primarily due to increased property taxes resulting from a 
greater investment in taxable property.

Other Income and Expenses - Net

ALLOWANCE FOR EQUITY FUNDS USED DURING CONSTRUCTION

In 1995, allowance for equity funds used during construction decreased $4 
million (95.9%), as compared to 1994, primarily due to a decrease in the 
average balance of CWIP.
 
A decrease of $7 million (62.1%) in allowance for equity funds used during 
construction in 1994, as compared to 1993, was due to an increase in 
borrowings of short-term debt which resulted in a decrease in the equity rate.

The equity component of AFUDC increased in 1993, as compared to 1992, 
primarily as a result of increased construction.

POST-IN-SERVICE CARRYING COSTS

Post-in-service carrying costs reflect the deferral of carrying costs on 
certain major projects, primarily environmental in nature, from the in-service 
date until the related projects are reflected in retail rates.  (See Note 1(h) 
of the "Notes to Financial Statements" in "Item 8.  Financial Statements and 
Supplementary Data".)

REDUCTION OF LOSS RELATED TO THE JUNE 1987 ORDER

The December 1993 Order resolved open issues related to the June 1987 Order 
which addressed the effect on PSI of the 1987 reduction in the Federal income 
tax rate.  The December 1993 Order provided for PSI to refund $119 million to 
its retail customers, which was a reduction of $20 million from the loss 
previously recognized.

Interest

ALLOWANCE FOR BORROWED FUNDS USED DURING CONSTRUCTION

Allowance for borrowed funds used during construction decreased $5 million 
(55.0%) in 1995, as compared to 1994, primarily as a result of a decrease in 
the average balance of CWIP which was partially offset by an increase in the 
debt component of the AFUDC rate.
<PAGE>
The Union Light, Heat and Power Company
<PAGE>

<TABLE>
<CAPTION>
                     THE UNION LIGHT, HEAT AND POWER COMPANY

                                 STATEMENTS OF INCOME
                                            1995           1994           1993
                                                      (in thousands)

<S>                                      <C>            <C>            <C>
Operating Revenues (Note 2)
  Electric                                $187 180       $177 564       $175 712
  Gas                                       70 288         71 971         75 744
                                           257 468        249 535        251 456

Operating Expenses
  Electricity purchased from parent
    company for resale                     142 308        134 887        134 290
  Gas purchased                             36 745         40 508         43 380
  Other operation                           30 712         32 289         30 396
  Maintenance                                4 580          5 473          6 267
  Depreciation                              11 438         10 644          9 813
  Income taxes (Note 12)                     7 887          5 342          5 751
  Taxes other than income taxes              3 968          4 002          3 623
                                           237 638        233 145        233 520

Operating Income                            19 830         16 390         17 936

Other Income and Expenses - Net
  Allowance for equity funds used 
    during construction                         71             78            297
  Income taxes (Note 12)                       (44)            56             46
  Other - net                                    6            236           (580)
                                                33            370           (237)

Income Before Interest                      19 863         16 760         17 699

Interest                  
  Interest on long-term debt                 7 161          8 161          8 297
  Other interest                               728            395            331
  Allowance for borrowed funds used
    during construction                       (198)          (183)          (268)
                                             7 691          8 373          8 360

Net Income                                $ 12 172       $  8 387       $  9 339

<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                   THE UNION LIGHT, HEAT AND POWER COMPANY

                                BALANCE SHEETS

ASSETS

                                                            December 31
                                                         1995          1994
                                                       (dollars in thousands)
<S>                                                   <C>            <C>
Utility Plant - Original Cost
  In service
    Electric                                           $188 508       $179 098
    Gas                                                 140 604        134 103
    Common                                               19 068         19 122
                                                        348 180        332 323
  Accumulated depreciation                              112 812        104 113
                                                        235 368        228 210
  CWIP                                                    7 863          8 638
      Total utility plant                               243 231        236 848

Current Assets
  Cash and temporary cash investments                     1 750          1 071
  Accounts receivable less accumulated provision
    of $1,035 in 1995 and $457 in 1994 for doubtful 
    accounts (Note 7)                                    37 895         33 892
  Materials, supplies, and fuel - at average cost
    Gas stored for current use                            4 513          6 216
    Other materials and supplies                          1 215          1 406
  Property taxes applicable to subsequent year            2 350          2 200
  Prepayments and other                                     485            593
                                                         48 208         45 378

Other Assets
  Regulatory assets
    Deferred merger costs                                 1 785          1 785
    Unamortized costs of reacquiring debt                 2 526           -   
    Other                                                 2 548          2 718
  Other                                                   1 499            399
                                                          8 358          4 902

                                                       $299 797       $287 128
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                         THE UNION LIGHT, HEAT AND POWER COMPANY

CAPITALIZATION AND LIABILITIES

                                                            December 31
                                                         1995          1994
                                                       (dollars in thousands)
<S>                                                   <C>            <C>
Common Stock Equity (Note 3)
  Common stock - $15.00 par value;
    authorized shares - 1,000,000;
    outstanding shares - 585,333 in 1995
    and 1994                                           $  8 780       $  8 780
  Paid-in capital                                        18 839         18 839
  Retained earnings                                      82 863         74 203
      Total common stock equity                         110 482        101 822

Long-term Debt (Note 5)                                  54 377         89 238
      Total capitalization                              164 859        191 060

Current Liabilities
  Long-term debt due within one year (Note 5)            15 000           -   
  Notes payable (Note 6)                                   -            14 500
  Accounts payable                                       11 057          6 049
  Accounts payable to affiliated companies               44 708         15 606
  Accrued taxes                                           1 993          2 876
  Accrued interest                                        1 549          2 123
  Other                                                   5 505          4 123
                                                         79 812         45 277

Other Liabilities
  Deferred income taxes (Note 12)                        23 728         23 226
  Unamortized investment tax credits                      5 079          5 364
  Accrued pension and other postretirement
    benefit costs (Notes 10 and 11)                      12 202         10 356
  Amounts due to customers - income taxes                 4 717          4 282
  Other                                                   9 400          7 563
                                                         55 126         50 791 
Commitments and Contingencies (Note 13)
                                                       $299 797       $287 128
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                         THE UNION LIGHT, HEAT AND POWER COMPANY

                      STATEMENTS OF CHANGES IN COMMON STOCK EQUITY
                                     Common      Paid-in       Retained     Total Common
                                      Stock      Capital       Earnings     Stock Equity
                                                     (in thousands)

<S>                                 <C>         <C>           <C>          <C>
Balance December 31, 1992            $8 780      $18 839       $62 915        $ 90 534
Net income                                                       9 339           9 339
Dividends on common stock                                       (2 927)         (2 927)

Balance December 31, 1993             8 780       18 839        69 327          96 946
Net income                                                       8 387           8 387
Dividends on common stock                                       (3 511)         (3 511)

Balance December 31, 1994             8 780       18 839        74 203         101 822
Net income                                                      12 172          12 172
Dividends on common stock                                       (3 512)         (3 512)

Balance December 31, 1995            $8 780      $18 839       $82 863        $110 482

<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                          THE UNION LIGHT, HEAT AND POWER COMPANY

                                  STATEMENTS OF CASH FLOWS
                                                         1995          1994       1993
                                                                  (in thousands)

<S>                                                   <C>           <C>         <C>
Operating Activities
  Net income                                           $ 12 172      $  8 387    $  9 339
  Items providing (using) cash currently:
    Depreciation                                         11 438        10 644       9 813
    Deferred income taxes and investment
      tax credits - net                                     652         2 042         999
    Allowance for equity funds used during 
      construction                                          (71)          (78)       (297)
    Regulatory assets - net                                 170        (1 615)        116
    Changes in current assets and current
      liabilities
        Accounts receivable                              (4 003)        8 801      (5 859)
        Materials, supplies, and fuel                     1 894         1 043      (1 583)
        Accounts payable                                 34 110        (2 377)      2 311
        Accrued taxes and interest                       (1 457)        3 307      (1 390)
    Other items - net                                     5 019         2 780       2 294

        Net cash provided by (used in) operating 
          activities                                     59 924        32 934      15 743

Financing Activities
  Issuance of long-term debt                             14 704          -           -   
  Redemption of long-term debt                          (37 036)         -         (6 500)
  Change in short-term debt                             (14 500)      (10 500)     18 500
  Dividends on common stock                              (3 512)       (3 511)     (2 927)

        Net cash provided by (used in) financing
          activities                                    (40 344)      (14 011)      9 073

Investing Activities
  Construction expenditures (less allowance for 
    equity funds used during construction)              (18 901)      (20 329)    (24 127)

        Net cash provided by (used in) investing
          activities                                    (18 901)      (20 329)    (24 127)

Net increase (decrease) in cash and temporary
  cash investments                                          679        (1 406)        689
Cash and temporary cash investments at beginning 
  of period                                               1 071         2 477       1 788
Cash and temporary cash investments at end of
  period                                               $  1 750      $  1 071    $  2 477

Supplemental Disclosure of Cash Flow Information
  Cash Paid During the year for:
    Interest (net of amount capitalized)               $  8 121      $  8 281    $  8 404
    Income taxes                                          7 727         4 714       4 001
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>

RESULTS OF OPERATIONS - ULH&P

Kwh Sales

ULH&P's total kwh sales in 1995, as compared to 1994, increased 7.2% 
reflecting increased sales to all customer classes.  The increase in 
residential and commercial kwh sales was due to warmer weather during the 1995 
summer cooling season and colder weather during the fourth quarter of 1995 and 
an increase in the average number of customers.  The increased industrial 
sales primarily reflect growth in the primary metals sector.

Total kwh sales increased 2.8% in 1994, as compared to 1993, primarily due to 
increased retail sales to commercial and industrial customers.  Industrial 
sales reflected a higher level of economic activity, including growth in the 
primary metals, industrial machinery, food products, and rubber and plastic 
products sectors.  The increase in commercial sales was due, in part, to new 
customers.  A decrease in residential sales resulted from the milder weather 
experienced during the third and fourth quarters of 1994.

A return to more normal weather contributed to the 5.8% increase in total kwh 
sales in 1993, as compared to 1992.  In addition, growth in the food products, 
industrial machinery, transportation equipment, and fabricated metal products 
sectors resulted in increased industrial sales.

Year-to-year changes in kwh sales for each major class of customers are shown 
below:
 
                                         Increase (Decrease) from Prior Year

                                             1995        1994       1993
   Retail
     Residential                             10.0%       (4.6)%      6.6%
     Commercial                               5.6         6.0        5.8
     Industrial                               5.2         7.2        4.4

   Total retail                               7.2         2.8        5.9

   Firm power sales for resale                7.4         5.1        4.7

   Total sales                                7.2         2.8        5.8 

ULH&P currently forecasts a 2% annual compound growth rate in kwh sales over 
the 1996 through 2005 period.  This forecast does not reflect the effects of 
DSM programs and excludes any potential new off-system, long-term firm power 
sales.

Mcf Sales and Transportation

Mcf gas sales and transportation volumes increased 8.6% for 1995, as compared 
to 1994.  The colder weather during the fourth quarter of 1995 primarily 
attributed to the increase in residential and commercial sales.  These 
increases were partially offset by a decline in industrial sales resulting 
from customers electing to purchase directly from suppliers, creating 
additional demand for transportation services provided by ULH&P.  The 
increased transportation volumes mainly reflect industrial demand for gas 
transportation services in the paper products sector.
The milder weather experienced in 1994 contributed to a decrease in 
residential gas sales volumes and led to the decrease in total Mcf sales and 
transportation of 4.3%, as compared to 1993.  The increase in gas 
transportation more than offset the decrease in industrial sales volumes and 
was attributable to additional demand for gas transportation services by 
industrial customers mainly in the primary metals, paper products, and food 
products sectors.

The increase in Mcf sales and transportation of 5.8% in 1993, when compared to 
1992, was attributable to higher sales to retail customers.  This increase was 
primarily attributable to higher sales to residential customers caused by the 
return to more normal weather during the 1993 heating season and the addition 
of a number of customers to ULH&P's gas system during the year.  Gas 
transportation volumes for 1993 decreased largely as a result of lower 
industrial demand for gas transportation services in the paper products 
sector.  However, the decrease in Mcf transported was more than offset by the 
increase in Mcf sold to industrial customers.

Year-to-year changes in Mcf sales for each major class of customers and Mcf 
transportation volumes are shown below:
 
                                         Increase (Decrease) from Prior Year

                                             1995        1994       1993

   Retail
     Residential                              9.5 %     (11.2)%      8.2 %
     Commercial                               3.8         4.1        4.1
     Industrial                              (8.4)       (9.2)      23.9

   Total retail                               6.0        (6.6)       8.3

   Gas transported                           24.3        12.9      (10.5)

   Total gas sold and transported             8.6        (4.3)       5.8

Operating Revenues

ELECTRIC OPERATING REVENUES
     
Electric operating revenues increased $9.6 million (5.4%) in 1995, and $1.9 
million (1.1%) in 1994.  These increases reflect higher kwh sales, as 
previously discussed.  In 1993, electric operating revenues increased $16.0 
million (10.0%) due to an increase in kwh sales and the full effect of a rate 
increase that became effective in May 1992.


An analysis of electric operating revenues for the past three years is shown 
below:

                                                1995         1994       1993
                                                        (in thousands) 
Previous year's electric                          
  operating revenues                         $177 564     $175 712   $159 690
Increase (Decrease) due to change in:
  Price per kwh
    Retail                                     (3 934)      (3 095)     6 355
    Firm power sales for resale                    24          170         82
  Total change in price per kwh                (3 910)      (2 925)     6 437

  Kwh sales
    Retail                                     13 363        4 761      9 196
    Firm power sales for resale                   157           92         78
  Total change in kwh sales                    13 520        4 853      9 274

  Other                                             6          (76)       311
Current year's electric 
  operating revenues                         $187 180     $177 564   $175 712

GAS OPERATING REVENUES

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

Gas operating revenues declined $1.7 million (2.3%) in 1995, as compared to 
1994 as a result of the aforementioned trend toward increased transportation 
services and the operation of fuel adjustment clauses reflecting a lower 
average cost of gas purchased.  

In 1994, gas operating revenues decreased $3.8 million (5.0%), as compared to 
1993, primarily as a result of a decline in total volumes sold and transported 
of 4.3%.  This decrease was partially offset by the effect of a gas rate 
increase which became effective in mid-1993.

Gas operating revenues increased $13.1 million (21.0%) in 1993 due to the 
operation of the fuel adjustment clause reflecting an increase in the cost of 
gas purchased, the mid-1993 rate increase, and a 5.8% increase in total 
volumes sold and transported.  

Operating Expenses

ELECTRICITY PURCHASED FROM PARENT COMPANY FOR RESALE

Electricity purchased increased $7.4 million (5.5%) in 1995 due to an 8.1% 
increase in volumes purchased.  In 1993, electricity purchased increased 
$7.1 million (5.6%) due to a 6.3% increase in volumes purchased.

GAS PURCHASED

In 1995, gas purchased expense decreased $3.8 million (9.3%) from 1994 
primarily due to a 13.7% decrease in the average cost per Mcf of gas 
purchased.  Gas purchased expense in 1994 decreased $2.9 million (6.6%) due to 
a 5.2% decrease in volumes purchased.  In 1993, gas purchased expense 
increased $8.0 million (22.5%) due to an 11.8% increase in the average cost 
per Mcf of gas purchased and to a 9.5% increase in volumes purchased.

OTHER OPERATION

In 1995, other operation expense decreased $1.6 million (4.9%), as compared to 
1994, due, in part, to decreased gas and electric distribution expenses and 
decreased gas production expenses.  In 1994, other operation expense increased 
$1.9 million (6.2%), as compared to 1993, due primarily to increased gas and 
electric distribution expenses and increased wages and benefits.  Other 
operation expense decreased $1.2 million (3.8%) in 1993 due to a number of 
factors including reduced electric and gas distribution expenses and cost 
control efforts.

MAINTENANCE

Maintenance expense decreased $.9 million (16.3%) in 1995 and $.8 million 
(12.7%) in 1994 primarily as a result of reduced maintenance costs on gas and 
electric distribution facilities.

DEPRECIATION

Depreciation expense increased $.8 million (7.5%) in 1995, as compared to 
1994, primarily due to additions to electric and gas plant in service.  
Increases in 1994 and 1993 of $.8 million (8.5%) and $1.5 million (18.0%), 
respectively, were due to increases in depreciable plant in service and the 
adoption of higher depreciation rates on gas and common plant in accordance 
with a KPSC rate order issued in 1993.
<PAGE>
NOTES TO FINANCIAL STATEMENTS

1.  Summary of Significant Accounting Policies

Cinergy, CG&E, PSI, and ULH&P

(a)  Consolidation Policy  Cinergy, a Delaware corporation, was created in the 
October 1994 merger of Resources and CG&E.  Cinergy's subsidiaries are CG&E, 
PSI, Investments, and Services.  The accompanying Financial Statements include 
the accounts of Cinergy and its subsidiaries after elimination of significant 
intercompany transactions and balances.

At merger consummation, each outstanding share of common stock of Resources 
and CG&E was exchanged for 1.023 shares and one share, respectively, of 
Cinergy common stock, resulting in the issuance of approximately 148 million 
shares of Cinergy common stock, par value $.01 per share.  The outstanding 
preferred stock and debt securities of CG&E, its utility subsidiaries 
(including ULH&P), and PSI were not affected by the merger.  The merger was 
accounted for as a pooling of interests, and the Financial Statements, along 
with the related notes, are presented as if the merger was consummated as of 
the beginning of the earliest period presented.

Resources' and CG&E's consolidated operating revenues and net income for the 
nine months ended September 30, 1994, and the year ended December 31, 1993, 
were as follows:

                             Resources     CG&E     Eliminations(i)   Cinergy
                                              (in millions)

Nine months ended September
  30, 1994 (unaudited)
    Operating revenues       $  849(ii)   $1 363        $ (7)          $2 205
    Net income                   60          146           -              206

Year ended December 31, 1993
    Operating revenues        1 102(ii)    1 752         (10)           2 844
    Net income (loss)            97          (34)(iii)     -               63


(i)  Eliminations of intercompany power sales.
(ii)  Reflects reclassifications from previously reported amounts to 
conform to the 1995 presentation.
(iii)  Reflects write-off of a portion of Zimmer ($223 million, net of 
taxes).

Cinergy, CG&E, PSI, and ULH&P

(b)  Nature of Operations  Cinergy is a registered holding company under the 
PUHCA.  CG&E, an Ohio combination electric and gas utility, and its four 
wholly-owned utility subsidiaries (including ULH&P, a Kentucky combination 
electric and gas utility) are primarily engaged in the production, 
transmission, distribution, and sale of electric energy and/or the sale and 
transportation of natural gas in the southwestern portion of Ohio and adjacent 
areas in Kentucky and Indiana.  PSI, an Indiana electric utility and 
previously Resources' utility subsidiary, is engaged in the production, 
transmission, distribution, and sale of electric energy in north central, 
central, and southern Indiana.  Investments, a Delaware corporation, is a non-
utility subholding company that was formed to operate Cinergy's non-utility 
businesses and interests.  Services, a Delaware corporation, is the service 
company for the Cinergy system, providing member companies with a variety of 
administrative, management, and support services.  The majority of Cinergy's 
operating revenues are derived from the sale of electricity and the sale and 
transportation of natural gas.

Cinergy, CG&E, PSI, and ULH&P

(c)  Management's Use of Estimates  The preparation of financial statements in 
conformity with generally accepted accounting principles requires management 
to make estimates and assumptions that affect the reported amounts of assets 
and liabilities.  Estimates are also required with respect to the disclosure 
of contingent assets and liabilities at the date of the financial statements 
and the reported amounts of revenues and expenses during the reporting period. 
Actual results could differ from those estimates.  (See Note 13.)

Cinergy, CG&E, PSI, and ULH&P

(d)  Regulation  Cinergy, its utility subsidiaries, and certain of its non-
utility subsidiaries are subject to regulation by the SEC under the PUHCA.  
Cinergy's utility subsidiaries are also subject to regulation by the FERC and 
the state utility commissions of Ohio, Kentucky, and Indiana.  The accounting 
policies of Cinergy's utility subsidiaries conform to the accounting 
requirements and ratemaking practices of these regulatory authorities and to 
generally accepted accounting principles, including the provisions of 
Statement 71.  

Under the provisions of Statement 71, regulatory assets represent probable 
future revenue associated with deferred costs to be recovered from customers 
through the ratemaking process.  The following regulatory assets of PSI and 
CG&E and its utility subsidiaries are reflected in the Balance Sheets as of 
December 31:

                                     1995                     1994
                              PSI  CG&E 1/ Cinergy     PSI  CG&E 1/ Cinergy 
                                             (in millions)

Amounts due from customers -
  income taxes                $ 27   $397   $  424     $ 27  $382    $  409
Post-in-service carrying
  costs and deferred 
  operating expenses            39    148      187       30   155       185
Phase-in deferred return 
  and depreciation              -     100      100       -    101       101
Deferred DSM costs             110     19      129       94    10       104
Deferred merger costs           42     15       57       38    12        50
Unamortized costs of 
  reacquiring debt              34     40       74       37    33        70
Postretirement benefit 
  costs                         21      4       25       21     4        25
1992 workforce reduction 
  costs                         -       8        8       -     17        17
Other                           13     29       42        9    35        44

  Total                       $286   $760   $1 046     $256  $749    $1 005

1/    Includes $7 million and $5 million related to ULH&P at December 31, 1995
      and 1994, respectively.

PSI has previously received regulatory orders authorizing the recovery of $149 
million of its total regulatory assets at December 31, 1995, and is currently 
requesting recovery of an additional $119 million.  CG&E has previously 
received regulatory orders authorizing the recovery of $701 million (including 
$3 million for ULH&P) of its total regulatory assets at December 31, 1995, and 
is currently requesting recovery of an additional $11 million.  Both PSI and 
CG&E (including ULH&P) will request recovery of additional amounts in future 
rate proceedings in each applicable jurisdiction.  (See Note 2.)

See Note 1(e), (f), (g), (h), (i), (j), and (k) for additional information 
regarding amounts due from customers - income taxes, phase-in deferred return 
and depreciation, deferred DSM costs, post-in-service carrying costs and 
deferred operating expenses, deferred merger costs, costs of reacquiring debt, 
and 1992 workforce reduction costs, respectively.  For additional information 
regarding postretirement benefit costs, see Note 11.

Certain criteria must be met in order to continue to apply the provisions of 
Statement 71, including regulated rates designed to recover the specific 
utility's costs.  Failure to satisfy the criteria in Statement 71 would 
eliminate the basis for reporting regulatory assets.  Although Cinergy's 
utility subsidiaries' current regulatory orders and regulatory environment 
fully support the continued recognition of their regulatory assets, the 
ultimate outcome of the changing competitive environment discussed in the 
"Competitive Pressures" section of "Item 7.  Management's Discussion and 
Analysis of Financial Condition and Results of Operations" could result in 
Cinergy's utility subsidiaries discontinuing application of Statement 71 for 
all or part of their business.  Such an event would require the write-off of 
the portion of any regulatory asset for which sufficient regulatory assurance 
of future recovery no longer exists.  No evidence currently exists that would 
support a write-off of any portion of Cinergy's utility subsidiaries' 
regulatory assets.

In March 1995, the FASB issued Statement 121, which is effective in January 
1996 for Cinergy and its utility subsidiaries.  Statement 121, which addresses 
the identification and measurement of asset impairments for all enterprises, 
will be particularly relevant for electric utilities as a result of the 
potential for deregulation of the generation segment of the business.  
Statement 121 requires recognition of impairment losses on long-lived assets 
when book values exceed expected future cash flows.  Based on the regulatory 
environment in which Cinergy currently operates, compliance with the 
provisions of Statement 121 is not expected to have an adverse effect on its 
financial condition or results of operations.  However, this conclusion may 
change in the future as competitive pressures and potential restructuring 
influence the electric utility industry.  

Cinergy and its utility subsidiaries intend to continue their pursuit of 
competitive strategies that mitigate the potential impact of these issues on 
the financial condition of the companies (see the "Competitive Pressures" 
section of "Item 7.  Management's Discussion and Analysis of Financial 
Condition and Results of Operations").

Cinergy, CG&E, PSI, and ULH&P

(e)  Federal and State Income Taxes  Deferred tax assets and liabilities are 
recognized for the expected future tax consequences of existing differences 
between the financial reporting and tax reporting bases of assets and 
liabilities.  Investment tax credits utilized to reduce Federal income taxes 
payable have been deferred for financial reporting purposes and are being 
amortized over the useful lives of the property which gave rise to such 
credits.

Income tax provisions reflected in customer rates are regulated by the various 
regulatory commissions overseeing the regulated business operations of PSI, 
CG&E, and its utility subsidiaries.  To the extent deferred income taxes are 
not reflected in rates charged to customers, income taxes payable in future 
years are recoverable from customers as paid.  The future revenues associated 
with these amounts are reflected in the accompanying Financial Statements as a 
regulatory asset based on the probable recovery through customers' rates in 
future periods.  Conversely, to the extent deferred income taxes recovered in 
rates exceed amounts payable in future periods, such amounts are reflected in 
the accompanying Financial Statements as "Income taxes refundable through 
rates" on the basis of their probable repayment in future years.

Cinergy and CG&E

(f)  Phase-in Deferred Return and Depreciation  In the first three years of a 
rate phase-in plan for Zimmer included in the May 1992 Order by the PUCO, 
rates charged to customers did not fully recover depreciation expense and 
return on investment.  In accordance with the provisions of the May 1992 
Order, this deficiency has been deferred on the Consolidated Balance Sheets 
and is being recovered over a seven-year period beginning in May 1995.

Cinergy, CG&E, PSI, and ULH&P

(g)  DSM  In February 1995, the IURC issued the February 1995 Order approving 
a rate settlement agreement among PSI and certain intervenors which authorized 
the recovery of DSM expenditures deferred through July 1993 ($35 million), 
together with carrying costs.  In addition, base rates include recovery of $23 
million of DSM expenditures on an annual basis.  Under the February 1995 
Order, current deferral of DSM expenditures is the amount by which actual 
annual expenditures exceed the base level of $23 million.  If DSM expenditures 
in any calendar year are less than the $23 million in base rates, the 
unamortized balance of deferred DSM expenditures is reduced by such 
difference.  In its current retail rate proceeding, PSI has requested recovery 
of DSM expenditures deferred between July 1993 and August 1995, together with 
carrying costs, and an increase in the ongoing annual expense level from $23 
million to $39 million (see Note 2(a)).  DSM expenditures subsequent to August 
1995 in excess of the annual ongoing level in base rates are being deferred, 
with carrying costs, for recovery in a subsequent rate proceeding.

In the August 1993 Order, CG&E was authorized to recover approximately $5 
million annually of costs associated with DSM programs for residential 
customers.  In 1995, the PUCO authorized the deferral, with carrying costs, of 
the expenditures associated with a number of approved DSM programs to the 
extent such expenditures are in excess of the $5 million already being 
recovered.  CG&E is also requesting PUCO approval to defer the costs of 
additional DSM programs.  Additionally, the KPSC has authorized recovery of 
costs related to various DSM programs of ULH&P.

Cinergy, CG&E, and PSI

(h)  Post-in-service Carrying Costs and Deferred Operating Expenses  CG&E  
received various orders from the PUCO which permitted the deferral of carrying 
costs and non-fuel operating expenses (including depreciation) for Zimmer and 
Woodsdale.  Effective with the dates of the PUCO's orders reflecting the units 
in customer rates, the deferrals of post-in-service carrying costs are being 
recovered over the lives of the applicable units and the deferred non-fuel 
operating expenses are being recovered over a 10-year period. 

PSI received authority from the IURC for the accrual of the debt component of 
carrying costs (to the extent not recovered currently in retail rates) and the 
deferral of depreciation expense on certain major projects, primarily 
environmental in nature, including the Clean Coal Project and a scrubber at 
Gibson.  These deferrals are either being recovered currently over the 
remaining lives of the related assets in accordance with the February 1995 
Order, have been requested for recovery in PSI's current retail rate 
proceeding, or will be requested for recovery in a subsequent PSI retail rate 
proceeding.

Cinergy, CG&E, PSI, and ULH&P

(i)  Merger Costs  CG&E and its utility subsidiaries are deferring the non-
PUCO electric jurisdictional portion of Merger Costs for future recovery in 
customer rates, including $6 million requested for recovery in CG&E's current 
gas rate proceeding.  In accordance with the February 1995 Order, PSI is 
deferring Merger Costs it incurs through October 31, 1996, and is recovering 
the deferrals over a 10-year period as an offset against merger savings.
In 1994, CG&E and PSI completed voluntary workforce reduction programs.  As a 
result of the programs, the Cinergy subsidiaries incurred a combined pre-tax 
cost of approximately $28.8 million ($17.4 million for CG&E and its 
subsidiaries($1.8 million for ULH&P), including $15.6 million of additional 
pension costs further discussed in Note 10, and $11.4 million for PSI).  In 
the third quarter of 1994, CG&E expensed $11 million representing the PUCO 
electric jurisdictional portion of these costs.  The remaining $6.4 million of 
costs have been deferred as costs to achieve merger savings.  The cost of 
PSI's voluntary workforce reduction program was deferred as a cost to achieve 
merger savings. 

Cinergy, CG&E, PSI, and ULH&P

(j)  Debt Discount, Premium, and Issuance Expenses and Costs of Reacquiring 
Debt  Debt discount, premium, and issuance expenses on outstanding long-term 
debt of Cinergy's utility subsidiaries are amortized over the lives of the 
respective issues.

In accordance with established ratemaking practices, Cinergy's utility 
subsidiaries have deferred costs (principally call premiums) from the 
reacquisition of long-term debt and are amortizing such amounts over periods 
ranging from one to 25 years (three to 17 years for PSI, one to 25 years for 
CG&E and its subsidiaries, and 24 years for ULH&P).

Cinergy, CG&E, and ULH&P

(k)  1992 Workforce Reduction Costs  In 1992, CG&E and its subsidiaries 
incurred $30.4 million (of which approximately $3 million related to ULH&P) in 
connection with a workforce reduction program.  In accordance with the August 
1993 Order, CG&E is recovering the majority of these costs through rates over 
a three-year period.  ULH&P is recovering the gas portion of these costs 
through rates over a 10-year period.

Cinergy, CG&E, PSI, and ULH&P

(l)  Utility Plant  Utility plant is stated at the original cost of 
construction, which includes AFUDC and a proportionate share of overhead 
costs.  Construction overhead costs include salaries, payroll taxes, fringe 
benefits, and other expenses. 

Substantially all utility plant is subject to the lien of each applicable 
company's first mortgage bond indenture.

Cinergy, CG&E, PSI, and ULH&P

(m)  AFUDC  Cinergy's utility subsidiaries capitalize AFUDC, a non-cash income 
item, which is defined in the regulatory system of accounts prescribed by the 
FERC as including "the net cost for the period of construction of borrowed 
funds used for construction purposes and a reasonable rate on other funds when 
so used".  AFUDC accrual rates were as follows, and are compounded semi-
annually:

                                         1995      1994      1993 
               Cinergy Average           7.9%      6.9%      9.2%
               CG&E and utility
                 subsidiaries Average    8.8       9.1       8.3
               ULH&P Average             7.0       5.9       8.8
               PSI                       7.0       6.4       9.5

Cinergy, CG&E, PSI, and ULH&P

(n)  Depreciation and Maintenance  Provisions for depreciation are determined 
by using the straight-line method applied to the cost of depreciable plant in 
service.  The rates are based on periodic studies of the estimated service 
lives and net cost of removal of the properties.  The depreciation rates for 
utility plant during each of the following three years were:

                                             1995    1994    1993_

         PSI                                 3.1%    3.8%    3.8%
         CG&E and its utility subsidiaries
           Electric                          2.9     2.9     2.9
           Gas                               2.8     2.8     2.7
           Common                            3.4     3.4     3.3
         ULH&P
           Electric                          3.3     3.3     3.4
           Gas                               3.1     3.1     2.9
           Common                            5.1     5.1     4.1

In accordance with the February 1995 Order, revised depreciation rates for PSI 
were implemented in March 1995.  This change resulted in a decrease in annual 
depreciation expense of approximately $30 million.

In a July 1993 rate order, the KPSC authorized changes in depreciation accrual 
rates on ULH&P's gas and common plant.  The changes resulted in an increase in 
depreciation expense of approximately $.5 million for 1993.

For Cinergy's utility subsidiaries, maintenance and repairs of property units 
and replacements of minor items of property are charged to maintenance 
expense.  The costs of replacements of property units are capitalized.  The 
original cost of the property retired and the related costs of removal, less 
salvage recovered, are charged to accumulated depreciation.

Cinergy, CG&E, PSI, and ULH&P

(o)  Operating Revenues and Fuel Costs  Cinergy's utility subsidiaries 
recognize revenues for electric and gas service rendered during the month, 
which include revenues for sales unbilled at the end of each month.  The costs 
of electricity and gas purchased and the cost of fuel used in electric 
production are expensed as recovered through revenues, and any portion of 
these costs recoverable or refundable in future periods is deferred in the 
accompanying Balance Sheets.  In accordance with the settlement agreement 
approved in the February 1995 Order and the Indiana statute in effect at the 
time of the settlement agreement, PSI's recovery of fuel costs is subject to a 
determination that such recovery will not result in PSI earning a return in 
excess of that allowed in the February 1995 Order.
Cinergy, CG&E, and ULH&P

(p)  Order 636  In 1992, the FERC issued Order 636 which restructured 
operations between interstate gas pipelines and their customers for gas sales 
and transportation services.  Order 636 also allowed pipelines to recover 
transition costs they incurred in complying with the order from customers, 
including CG&E and its utility subsidiaries.  In July 1994, the PUCO issued an 
order approving a stipulation between CG&E and its residential and industrial 
customer groups providing for recovery of these pipeline transition costs.  
CG&E presently is recovering its Order 636 transition costs pursuant to a 
PUCO-approved tariff.  CG&E's utility subsidiaries, including ULH&P, recover 
such costs through their gas cost recovery mechanisms.  These costs are 
deferred as incurred by CG&E and its utility subsidiaries and amortized as 
recovered from customers.

Cinergy, CG&E, PSI, and ULH&P

(q)  Statements of Cash Flows  All temporary cash investments with maturities 
of three months or less, when acquired, are reported as cash equivalents.  
Cinergy and its subsidiaries had no material non-cash investing or financing 
transactions during the years 1993 through 1995.

Cinergy, CG&E, PSI, and ULH&P

(r)  Reclassification  Certain amounts in the 1993 and 1994 Financial 
Statements have been reclassified to conform to the 1995 presentation.

2.  Rates

Cinergy and PSI

(a)  PSI's Current Retail Rate Proceeding  PSI currently has pending before 
the IURC a retail rate increase request of 11.1% ($111.2 million annually).  
Major components of the increase include the costs of the Clean Coal Project, 
increased DSM costs, the costs of a scrubber at Gibson, and other investments 
in utility plant.  Both the Clean Coal Project and the scrubber at Gibson were 
previously approved by the IURC.  The request also reflects a return on common 
equity of 11.9%, before the 100 basis points additional common equity return 
allowed as a merger savings sharing mechanism in the February 1995 Order, with 
an 8.6% overall rate of return on net original cost rate base.  The UCC filed 
testimony with the IURC recommending a 4.7% ($47.3 million annually) retail 
rate increase.  The primary differences between PSI's request and the UCC's 
proposal are the requested return on common equity and DSM costs.  The UCC 
recommended the requested increase in DSM costs be excluded from this 
proceeding and addressed in a separate currently pending proceeding 
specifically established to review PSI's current and proposed DSM programs.  
An order in the rate proceeding is anticipated by the end of the second 
quarter of 1996.  Cinergy cannot predict what action the IURC may take with 
respect to this proposed rate increase.  (See Note 17 for an event subsequent 
to the date of the auditor's report.)

Cinergy and CG&E

(b)  CG&E's Current Gas Rate Proceeding  In January 1996, CG&E filed a request 
with the PUCO supporting a gas rate increase of 7.8% ($26.7 million annually). 
The increase, anticipated to be effective in November 1996, is being 
requested, in part, to recover capital investments made since CG&E's last gas 
rate increase in 1993.  The proposed rate design includes a pilot program that 
would allow 8,000 to 12,000 residential customers to choose their natural gas 
supplier with CG&E providing transportation services to the customers' 
premises.  Settlement discussions with gas customer representatives, which 
began in July 1995, are ongoing.  Cinergy cannot predict the outcome of the 
settlement discussions nor what actions the PUCO may take with respect to the 
proposed rate increase.

3.  Common Stock

(a)  Changes in Common Stock Outstanding

Cinergy

The following table reflects the shares of Cinergy common stock reserved for 
issuance at December 31, 1995, and issued in 1995, 1994, and 1993, for the 
Company's stock-based plans, including previous plans of Resources and CG&E.  
Shares issued prior to merger consummation have been adjusted for Resources' 
merger conversion ratio of 1.023.

                                  Shares
                                Reserved at            Shares Issued         
                               Dec. 31, 1995    1995       1994       1993

401(k) Savings Plans             6 469 373    1 222 379  1 458 631  1 152 096

Dividend Reinvestment and
  Stock Purchase Plan            1 798 486      935 711  1 127 881    944 168

Directors' Deferred 
  Compensation Plan                200 000         -            77     61 266

Performance Shares Plan*           771 793       28 207     27 116     28 447

Employee Stock Purchase 
  and Savings Plan               1 932 384        1 010    140 039        244

Stock Option Plan                4 596 003      403 997     25 575    139 026

*A long-term incentive compensation plan for certain participants designated 
by the Compensation Committee of Cinergy's Board of Directors.

In addition to the issuances of common stock previously discussed, Resources 
issued 1,118,671 shares of common stock in 1993 to the trustee of its two 
Master Trust Agreements as required as a result of the announcement of the 
merger.  Prior to consummation of the merger in October 1994, Resources issued 
an additional 16,518 shares to the trustee and distributed 98,400 shares 
(reflected in the above table as shares issued in 1994) to participants of 
certain benefit plans.  As a result of the merger consummation, in December 
1994, Cinergy retired the remaining 1,036,789 shares held by the trustee.

In December 1994, Cinergy publicly issued 7,089,000 shares of common stock 
under a shelf registration statement for the sale of up to eight million 
shares.  In addition, upon consummation of the merger, Cinergy awarded five 
shares of common stock to all non-officer employees for additional issuances 
under this shelf registration statement of 43,605 shares and 10 shares in 1994 
and 1995, respectively.
During 1995, Cinergy retired 119,211 shares of common stock, primarily 
representing shares tendered as payment for the exercise of previously granted 
stock options.

CG&E

CG&E issued 1,601,003 shares of common stock in 1994 (prior to the merger), 
and 1,673,058 shares in 1993, for its stock-based compensation and dividend 
reinvestment plans.  After merger consummation, the common stock issued to 
CG&E's 401(k) Savings Plans is Cinergy common stock rather than CG&E common 
stock, and CG&E's Dividend Reinvestment and Stock Purchase Plan was merged 
into and replaced by Cinergy's Dividend Reinvestment and Stock Purchase Plan.

ULH&P

All of ULH&P's common stock is held by CG&E.

Cinergy, CG&E, and PSI

(b)  Dividend Restrictions  Cinergy owns all of the common stock of CG&E and 
PSI.  The ability of Cinergy to pay dividends to holders of Cinergy common 
stock is dependent on the ability of CG&E and PSI to pay common dividends to 
Cinergy.  CG&E and PSI cannot purchase or otherwise acquire for value or pay 
dividends on their common stock if dividends are in arrears on their preferred 
stock or if they are in arrears in the redemption of preferred stock pursuant 
to mandatory redemption requirements.  The amount of common stock dividends 
that each company can pay also may be limited by certain capitalization and 
earnings requirements.  Currently, these requirements do not impact the 
ability of either company to pay dividends on common stock.

Cinergy

(c)  Stock Option Plan  The Stock Option Plan, which succeeded a similar plan 
of Resources, is designed to align executive compensation with shareholder 
interests.  Under the Stock Option Plan, incentive and non-qualified stock 
options and stock appreciation rights may be granted to key employees, 
officers, and outside directors.  Common stock granted under the Stock Option 
Plan may not exceed five million shares.  Options are granted at the fair 
market value of the shares on the date of grant, except that non-qualified 
stock options were granted to two executive officers under Resources' stock 
option plan at an option price equal to 91% of the fair market value of the 
shares at the date of grant.  Options vest over five years and have a purchase 
term of up to 10 years.  All options granted prior to November 1993, but not 
previously vested, became vested upon approval of the merger by Resources' 
shareholders.  No incentive stock options may be granted under the plan after 
October 24, 2004.

The Stock Option Plan activity for 1993, 1994, and 1995, adjusted for 
Resources' merger conversion ratio of 1.023, is summarized as follows:

                                                                  Range of
                                               Shares Subject   Option Prices
                                                  to Option       Per Share  

Balance at December 31, 1992                      1 186 554    $12.26 to 17.35
Options Exercised                                  (139 026)    12.26 to 16.56

Balance at December 31, 1993                      1 047 528    $12.50 to 17.35
Options Granted                                   1 387 500          22.88
Options Exercised                                   (25 575)    13.14 to 16.56

Balance at December 31, 1994                      2 409 453    $12.50 to 22.88
Options Granted                                   1 672 500     24.31 to 28.81
Options Exercised                                 _(403 997)    12.50 to 17.35

Balance at December 31, 1995                      3 677 956    $12.50 to 28.81

Shares Reserved for Future Grants
  At December 31, 1993                            1 368 263
  At December 31, 1994                            2 590 547
  At December 31, 1995                              918 047

In addition, 45,000 options were granted to various employees in January 1996, 
at an option price of $31.56 per share.

No stock appreciation rights have been granted under this plan.  The total 
options exercisable at December 31, 1995, 1994, and 1993, were 895,456, 
1,021,953, and 1,047,528, respectively.

4.  Preferred Stock of Subsidiaries

Cinergy, CG&E, and PSI

<TABLE>

<CAPTION>
(a)  Schedule of Cumulative Preferred Stock
                                                                                December 31
                                                                              1995        1994
                                                                           (dollars in thousands)
<S>                                                                        <C>         <C>
CG&E
  Authorized 6,000,000 shares
  Not subject to mandatory redemption
    Par value $100 per share - outstanding
      4%     Series 270,000 shares in 1995 and 1994                         $ 27 000    $ 27 000
      4 3/4% Series 130,000 shares in 1995 and 1994                           13 000      13 000
      7.44%  Series 400,000 shares in 1994                                      -         40 000
          Total                                                               40 000      80 000

  Subject to mandatory redemption
    Par value $100 per share - outstanding
      9.15%  Series 500,000 shares in 1994                                      -         50 000
      7 7/8% Series 800,000 shares in 1995 and 1994
        (subject to mandatory redemption on January 1, 2004 
        at $100; not redeemable prior to that date)                           80 000      80 000
      7 3/8% Series 800,000 shares in 1995 and 1994
        (redeemable, upon call, after August 1, 2002 at $100)                 80 000      80 000
          Total                                                              160 000     210 000

PSI
  Not subject to mandatory redemption
    Par value $25 per share - authorized 5,000,000 shares - outstanding
      4.32%  Series   169,162 shares in 1995 and 1994                          4 229       4 229
      4.16%  Series   148,763 shares in 1995 and 1994                          3 719       3 719
      7.44%  Series 4,000,000 shares in 1995 and 1994                        100 000     100 000
    Par value $100 per share - authorized 5,000,000 shares - outstanding 
      3 1/2% Series    40,843 shares in 1995 and 41,172 shares in 1994         4 085       4 117
      6 7/8% Series   600,000 shares in 1995 and 1994                         60 000      60 000
      7.15%  Series   158,640 shares in 1995 and 1994                         15 864      15 864
          Total                                                              187 897     187 929

Total - Cinergy
  Total not subject to mandatory redemption                                 $227 897    $267 929
  Total subject to mandatory redemption                                     $160 000    $210 000
</TABLE>

<PAGE>
Cinergy, CG&E, and PSI

(b)  Changes in Cumulative Preferred Stock Outstanding  Changes in cumulative 
preferred stock outstanding during 1995, 1994, and 1993, were as follows:

                                                     Shares
                                                     Issued          Par
                                                    (Retired)       Value
                                                                (in thousands)
1995
  Not subject to mandatory redemption
    Par value $100 per share
      CG&E
        7.44 % Series                                (400 000)     $(40 000)
      PSI
        3 1/2% Series                                    (329)          (32)
  Subject to mandatory redemption
    Par value $100 per share
      CG&E
        9.15 % Series                                (500 000)      (50 000)

1994
  Not subject to mandatory redemption
    Par value $100 per share
      CG&E
        9.28 % Series                                (400 000)      (40 000)
      PSI
        3 1/2% Series                                    (598)          (60)

1993
  Not subject to mandatory redemption
    Par value $25 per share
      PSI
        7.44 % Series                               4 000 000       100 000  
    Par value $100 per share
      PSI
        3 1/2% Series                                    (237)          (24)
        8.52 % Series                                (211 190)      (21 119)
        8.38 % Series                                (162 520)      (16 252)
        8.96 % Series                                (216 900)      (21 690)
        6 7/8% Series                                 600 000        60 000

Cinergy and CG&E

(c)  Cumulative Preferred Stock with Mandatory Redemption  In each of 1998, 
1999, and 2000, CG&E is required to redeem $4 million of its 7 3/8% Series 
Cumulative Preferred Stock, which is subject to mandatory redemption each 
August 1, beginning in 1998, in an amount sufficient to retire 40,000 shares, 
at a price of $100 per share, plus accrued dividends.  In addition, CG&E, at 
its option, may redeem up to a like amount of shares in any given year, at a 
price of $100 per share.  CG&E may satisfy this sinking fund requirement, in 
whole or in part, by crediting shares acquired during the year.  To the extent 
CG&E does not satisfy the sinking fund obligation in any year, such obligation 
must be satisfied in the succeeding year or years.  CG&E may not purchase or 
otherwise acquire for value or pay dividends on its common stock if it is in 
arrears in the redemption of preferred stock pursuant to the mandatory sinking 
fund requirements.

Cinergy, CG&E, PSI, and ULH&P
5.  Long-term Debt 


<TABLE>
<CAPTION>
(a)  Schedule of Long-term Debt (excluding amounts due within one year)
                                                                               December 31
                                                                            1995         1994
                                                                          (dollars in thousands)
<S>                                                                     <C>          <C>
CG&E and Subsidiaries                                              
  CG&E
    First Mortgage Bonds
       5 7/8% Series due July 1, 1997                                    $   30 000   $   30 000
       6 1/4% Series due September 1, 1997                                  100 000      100 000
        5.80% Series due February 15, 1999                                  110 000      110 000
       7 3/8% Series due May 1, 1999                                         50 000       50 000
       7 3/8% Series due November 1, 2001                                    60 000       60 000
       7 1/4% Series due September 1, 2002                                  100 000      100 000
       8 1/8% Series due August 1, 2003                                      60 000       60 000
        6.45% Series due February 15, 2004                                  110 000      110 000
      10 1/8% Series due December 1, 2015 (Pollution Control)                  -          84 000
        9.70% Series due June 15, 2019                                         -         100 000
      10 1/8% Series due May 1, 2020                                           -         100 000
       10.20% Series due December 1, 2020                                      -         150 000
        8.95% Series due December 15, 2021                                  100 000      100 000
       8 1/2% Series due September 1, 2022                                  100 000      100 000
        7.20% Series due October 1, 2023                                    300 000      300 000
        5.45% Series due January 1, 2024 (Pollution Control)                 46 700       46 700
       5 1/2% Series due January 1, 2024 (Pollution Control)                 48 000       48 000
          Total first mortgage bonds                                      1 214 700    1 648 700

    Pollution Control Notes
      Variable rate due August 1, 2013 and December 1, 2015                 100 000      100 000
      Variable rate due September 1, 2030                                    84 000         -
        6.50% due November 15, 2022                                          12 721       12 721
          Total pollution control notes                                     196 721      112 721

    Other Long-term Debt
        6.90% unsecured debentures due June 1, 2025                         150 000         -
        8.28% junior subordinated debentures due July 1, 2025               100 000         -
          Total other long-term debt                                        250 000         -

    Unamortized Premium and Discount - Net                                  (14 348)     (14 102)
          Total - CG&E                                                    1 647 073    1 747 319

  ULH&P
    First Mortgage Bonds
       6 1/2% Series due August 1, 1999                                      20 000       20 000
           8% Series due October 1, 2003                                     10 000       10 000
       9 1/2% Series due December 1, 2008                                    10 000       10 000
        9.70% Series due July 1, 2019                                          -          20 000
      10 1/4% Series due June 1, 2020 and November 15, 2020                    -          30 000
          Total first mortgage bonds                                         40 000       90 000

    Other Long-term Debt
        7.65% unsecured debentures due July 15, 2025                         15 000         -

    Unamortized Premium and Discount - Net                                     (623)        (762)
          Total - ULH&P                                                      54 377       89 238

  Lawrenceburg
    First Mortgage Bonds
       9 3/4% Series due October 1, 2001                                      1 200        1 200
          Total - CG&E and Subsidiaries                                  $1 702 650   $1 837 757
PSI
  First Mortgage Bonds   
    Series S,       7%, due January 1, 2002                              $   26 429   $   26 429
    Series Y,   7 5/8%, due January 1, 2007                                  24 140       24 140
    Series BB,  6 5/8%, due March 1, 2004 (Pollution Control)                 5 000        5 000
    Series NN,   7.60%, due March 15, 2012 (Pollution Control)               35 000       35 000
    Series QQ,  8 1/4%, due June 15, 2013 (Pollution Control)                23 000       23 000
    Series RR,  9 3/4%, due August 1, 1996                                     -          50 000
    Series TT,  7 3/8%, due March 15, 2012 (Pollution Control)               10 000       10 000
    Series UU,  7 1/2%, due March 15, 2015 (Pollution Control)               14 250       14 250
    Series YY,   5.60%, due February 15, 2023 (Pollution Control)            29 945       30 000
    Series ZZ,  5 3/4%, due February 15, 2028 (Pollution Control)            50 000       50 000
    Series AAA, 7 1/8%, due February 1, 2024                                 50 000       50 000
         Total first mortgage bonds                                         267 764      317 819

  Secured Medium-term Notes
    Series A, 6.65% to 8.88%, due January 3, 1997 to June 1, 2022           300 000      300 000
    Series B, 5.22% to 8.26%, due September 17, 1998
      to August 22, 2022                                                    230 000      230 000
    (Series A and B, 7.64% weighted average interest rate
       and 16 year weighted average remaining life) 
         Total secured medium-term notes                                    530 000      530 000

  Pollution Control Notes
    5 3/4%, due December 15, 1996 to December 15, 2003                       19 200       19 600

  Other Long-term Debt
    Series 1994A Promissory Note, non-interest bearing,
      due January 3, 2001                                                    19 825       19 825

  Unamortized Premium and Discount - Net                                     (8 673)      (9 732)
         Total - PSI                                                     $  828 116   $  877 512

Total - Cinergy and Subsidiaries
  First Mortgage Bonds                                                   $1 523 664   $2 057 719
  Secured Medium-term Notes                                                 530 000      530 000
  Pollution Control Notes                                                   215 921      132 321
  Other Long-term Debt                                                      284 825       19 825
  Unamortized Premium and Discount - Net                                    (23 644)     (24 596)
         Total long-term debt                                            $2 530 766   $2 715 269
</TABLE>

Cinergy, CG&E, PSI, and ULH&P

(b)  Mandatory Redemption and Other Requirements  Long-term debt maturities 
for the next five years are as follows:

                    Cinergy and      CG&E and
                    Subsidiaries   Subsidiaries        PSI          ULH&P
                                          (in millions)

     1996               $ 50           $ -            $ 50           $ -
     1997                140            130             10             -
     1998                 36             -              36             -
     1999                187            180              7            20
     2000                 31             -              31             -
                        $444           $310           $134           $20

In January 1996, CG&E retired $5 million principal amount of its 10.20% first 
mortgage bonds (due December 1, 2020).  Additionally, CG&E redeemed in 
February 1996, the remaining $131.5 million principal amount of these bonds at 
a price of 100% through the M&R Fund provision of its first mortgage bond 
indenture.  ULH&P also redeemed, in February 1996, $9 million principal amount 
of its 10 1/4% first mortgage bonds (due November 15, 2020) at a price of 
107.20% and the remaining $6 million principal amount of such bonds at a price 
of 100% through its M&R Fund provision.  The first mortgage bonds retired in 
January and February 1996 by CG&E and ULH&P have been classified as "Long-term 
debt due within one year" in the appropriate Balance Sheets.  M&R Fund 
provisions contained in CG&E's, PSI's, and ULH&P's first mortgage bond 
indentures require cash payments, bond retirements, or pledges of unfunded 
property additions each year based on a formularized amount related to the net 
revenues of the respective company.

6. Notes Payable 

Cinergy, CG&E, PSI, and ULH&P

Cinergy's subsidiaries had regulatory authority to borrow up to $838 million 
($438 million for CG&E and its subsidiaries, including $35 million for ULH&P, 
and $400 million for PSI) as of December 31, 1995.  In connection with this 
authority, Committed Lines have been established which permit borrowings of up 
to $322 million ($106 million for CG&E and its subsidiaries, including $30 
million for ULH&P, and $215 million for PSI), of which $182 million ($106 
million for CG&E and its subsidiaries, including $30 million for ULH&P, and 
$74 million for PSI) remained unused at December 31, 1995.  CG&E and PSI also 
issue commercial paper from time to time.  All outstanding commercial paper is 
supported by Committed Lines of the respective company.  Additionally, 
pursuant to this authority, Uncommitted Lines are arranged with various banks. 
All Uncommitted Lines provide for maturities of up to 365 days with various 
interest rate options.

Amounts outstanding under the Committed Lines would become immediately due 
upon an event of default which includes non-payment, default under other 
agreements governing company indebtedness, bankruptcy, or insolvency.  Certain 
of the Uncommitted Lines have similar default provisions.  The lines are 
maintained by compensating balances or commitment fees.  Commitment fees for 
the Committed Lines were immaterial during the 1993 through 1995 period.  

To better manage cash and working capital requirements, Cinergy's utility 
subsidiaries, including CG&E, PSI, and ULH&P, participate in a money pooling 
arrangement.  Under the money pool, participants with surplus short-term 
funds, whether from internal sources, bank loans, or commercial paper sales, 
provide short-term loans to other system companies at rates that approximate 
the costs of the funds in the money pool.  The SEC's approval, pursuant to the 
PUHCA, of the money pool extends through May 31, 1997.

In addition, Cinergy has a $100 million credit facility which expires in 
September 1997 and was unused at December 31, 1995.  The facility may be 
increased to a maximum of $300 million, and the Company has an annual option 
of extending the term of the facility by one year.  This credit facility will 
be used for general corporate purposes and funding non-utility business 
ventures.

The weighted average interest rates on short-term borrowings outstanding at 
December 31, 1995 and 1994, were as follows:

                                               1995         1994_    
             Cinergy and subsidiaries          5.97%        6.11%
             CG&E and subsidiaries              -           6.14
             PSI                               5.97         6.11
             ULH&P                              -           6.14

7.  Sale of Accounts Receivable 

Cinergy, CG&E, PSI, and ULH&P

In January 1996, CG&E, PSI, and ULH&P entered into an agreement to sell, on a 
revolving basis, undivided percentage interests in certain of their accounts 
receivable up to an aggregate maximum of $350 million.  PSI had a similar 
agreement, which expired in January 1996, to sell up to $90 million of its 
accounts receivable.  Accounts receivable on the Consolidated Balance Sheets 
of Cinergy and PSI are net of a $90 million and $87 million interest sold 
under the prior PSI agreement at December 31, 1995 and 1994, respectively.

8.  Leases

Cinergy, CG&E, PSI, and ULH&P

Cinergy and its subsidiaries have entered into operating lease agreements 
covering various facilities and properties, including office space and 
computer, communications, and transportation equipment.  Total rental payments 
on operating leases for each of the past three years were as follows:

                                      1995       1994       1993
                                            (in millions)
      Cinergy and subsidiaries         $36        $36        $35
      CG&E and subsidiaries             22         22         22
      PSI                               14         14         13
      ULH&P                              5          5          4

Future minimum lease payments required under operating leases with remaining, 
non-cancelable lease terms in excess of one year as of December 31, 1995, are 
as follows:

                   Cinergy and          CG&E and
                   Subsidiaries       Subsidiaries       PSI        ULH&P*
                                (in millions, ULH&P in thousands)

      1996             $28                $13            $12          $35
      1997              22                 10              9           24
      1998              14                  5              6           12
      1999               7                  4              3            -
      2000               5                  2              1            -
   After 2000           20                 17              3            -
                       $96                $51            $34          $71

* Excludes amounts applicable to CG&E's non-cancelable leases allocated to 
  ULH&P. 
Cinergy, CG&E, PSI, and ULH&P

9.  Fair Values of Financial Instruments

The estimated fair values of Cinergy's and its subsidiaries' financial 
instruments were as follows (this information does not purport to be a 
valuation of the companies as a whole):

                                        December 31            December 31
                                           1995                   1994       
                                    Carrying   Fair        Carrying    Fair
                                     Amount    Value        Amount     Value_
                                        (in millions; ULH&P in thousands)
Financial Instruments

Cinergy and Subsidiaries
  First mortgage bonds and
    other long-term debt (includes
    amounts due within one year)    $ 2 733   $ 2 837      $ 2 776    $ 2 718
  Cumulative preferred stock of 
    subsidiary - subject to 
    mandatory redemption                160       163          210        221

CG&E and Subsidiaries
  First mortgage bonds and
    other long-term debt (includes
    amounts due within one year)    $ 1 855   $ 1 912      $ 1 838    $ 1 806
  Cumulative preferred stock - 
    subject to mandatory redemption     160       163          210        221

PSI
  First mortgage bonds and
    other long-term debt (includes
    amounts due within one year)    $   878   $   925      $   938    $   912

ULH&P
  First mortgage bonds and
    other long-term debt (includes
    amounts due within one year)    $69 377   $72 804      $89 238    $91 361


The following methods and assumptions were used to estimate the fair values of 
each major class of financial instruments:

Cash and temporary cash investments, restricted deposits, and notes payable  
Due to the short period to maturity, the carrying amounts reflected on the 
Balance Sheets approximate fair values.

First mortgage bonds and other long-term debt  The fair values of long-term 
debt issues were estimated based on the latest quoted market prices or, if not 
listed on the New York Stock Exchange (NYSE), on the present value of future 
cash flows.  The discount rates used approximate the incremental borrowing 
costs for similar instruments.

Cumulative preferred stock - subject to mandatory redemption  The aggregate 
fair value of preferred stock subject to mandatory redemption was based on the 
latest closing prices quoted on the NYSE for each series or, if no trades 
occurred during the period, on the present value of future cash flows using 
discount rates that approximate the incremental borrowing costs for similar 
instruments.

10.  Pension Plans

Cinergy, CG&E, PSI, and ULH&P

The defined benefit pension plans of Cinergy's subsidiaries cover 
substantially all employees meeting certain minimum age and service 
requirements.  Plan benefits are determined under a final average pay formula 
with consideration of years of participation, age at retirement, and the 
applicable average Social Security wage base or benefit amount.  

The funding policies of the operating subsidiaries are to contribute annually 
to the plans an amount which is not less than the minimum amount required by 
the Employee Retirement Income Security Act of 1974 and not more than the 
maximum amount deductible for income tax purposes.  Contributions applicable 
to the 1995, 1994, and 1993 plan years for Cinergy's subsidiaries were $15.4 
million, $3.5 million, and $11.3 million, respectively.  Of these amounts, 
CG&E and its subsidiaries contributed $6.8 million and $3.1 million for the 
1995 and 1993 plan years, respectively.  There were no contributions made for 
the 1994 plan year by CG&E and its subsidiaries.  PSI's contributions were 
$8.6 million, $3.5 million, and $8.2 million for the 1995, 1994, and 1993 plan 
years, respectively.  The plans' assets consist of investments in equity and 
fixed income securities.  

Cinergy

Cinergy's pension cost for 1995, 1994, and 1993 included the following 
components:
                                                    1995     1994     1993  
                                                        (in millions)

Benefits earned during the period                  $ 18.5   $ 19.4   $ 16.9
Interest accrued on projected 
  benefit obligations                                61.4     54.9     53.9
Actual (return) loss on plans' assets              (119.3)     8.0    (69.9)
Net amortization and deferral                        61.1    (66.3)    15.4

Net periodic pension cost                          $ 21.7   $ 16.0   $ 16.3 

CG&E and ULH&P

CG&E's and its subsidiaries' (including ULH&P's) pension cost for 1995, 1994, 
and 1993 included the following components:
                                                    1995     1994     1993  
                                                        (in millions)

Benefits earned during the period                  $  9.8   $ 10.7   $  9.2
Interest accrued on projected 
  benefit obligations                                38.8     35.1     34.5
Actual (return) loss on plans' assets               (71.9)     5.6    (31.4)
Net amortization and deferral                        35.5    (43.2)    (4.7)

Net periodic pension cost                          $ 12.2   $  8.2   $  7.6 

PSI

PSI's pension cost for 1995, 1994, and 1993 included the following components:

                                                    1995     1994     1993  
                                                        (in millions)

Benefits earned during the period                  $  8.7   $  8.7   $  7.7
Interest accrued on projected 
  benefit obligation                                 22.6     19.8     19.4
Actual (return) loss on plan assets                 (47.4)     2.4    (38.5)
Net amortization and deferral                        25.6    (23.1)    20.1

Net periodic pension cost                          $  9.5   $  7.8   $  8.7 

Cinergy, CG&E, and ULH&P

During 1994, CG&E and its subsidiaries (including ULH&P) recognized an 
additional $15.6 million of accrued pension cost in accordance with Statement 
of Financial Accounting Standards No. 88, Employers' Accounting for 
Settlements and Curtailments of Defined Benefit Pension Plans and for 
Termination Benefits.  This amount represents the costs associated with 
additional benefits extended in connection with a voluntary workforce 
reduction program (see Note 1(i)).

Cinergy, CG&E, PSI, and ULH&P
                                                  1995      1994      1993
Actuarial Assumptions:
For determination of projected benefit
  obligations 
    Discount rate                                 7.50%     8.50%      7.50%
    Rate of increase in future compensation
      PSI                                         4.50      5.50    4.50-5.00
      CG&E and subsidiaries                       4.50      5.50       5.00

For determination of pension cost
  Rate of return on plans' assets
      PSI                                         9.00      9.00      9.00
      CG&E and subsidiaries                       9.50      9.50      9.50


<PAGE>
Cinergy

The following table reconciles the plans' funded status with amounts recorded 
in the Consolidated Financial Statements.  Under the 
provisions of Statement 87, certain assets and obligations of the plans are 
deferred and recognized in the Consolidated Financial 
Statements in subsequent periods.


<TABLE>
<CAPTION>
                                    1995                          1994
                             Plans'        Plan's          Plans'        Plan's    
                         Assets Exceed   Accumulated   Assets Exceed   Accumulated 
                          Accumulated     Benefits      Accumulated     Benefits   
                            Benefits    Exceed Assets     Benefits    Exceed Assets
                                               (in millions)
<S>                     <C>            <C>            <C>            <C>
Actuarial present value 
  of benefits
    Vested benefits         $(376.9)       $(227.3)       $(320.7)       $(206.5)
    Non-vested benefits       (35.1)         (16.0)         (25.5)         (11.0)

      Accumulated benefit
        obligations          (412.0)        (243.3)        (346.2)        (217.5)  

    Effect of future 
      compensation 
      increases              (120.3)         (53.2)        (120.3)         (52.2)  

      Projected benefit 
        obligations          (532.3)        (296.5)        (466.5)        (269.7)  

Plans' assets at fair value   500.6          220.0          438.4          198.7   

Projected benefit 
  obligations in excess of 
  plans' assets               (31.7)         (76.5)         (28.1)         (71.0)  

Remaining balance of plans'
  net assets existing at 
  date of initial application 
  of Statement 87 to be 
  recognized as a reduction  
  of pension cost in future 
  periods                      (7.7)          (3.4)          (8.6)          (3.8)  

Unrecognized net gain  
  resulting from experience 
  different from that 
  assumed and effects of 
  changes in assumptions      (14.1)          (1.3)          (7.9)          (1.9)  

Prior service cost not 
  yet recognized in net 
  periodic pension cost        35.2           16.8           38.1           18.2   

Accrued pension cost at 
  December 31               $ (18.3)       $ (64.4)       $  (6.5)       $ (58.5)  
CG&E and ULH&P
</TABLE>

<PAGE>
The following table reconciles the plans' funded status with amounts recorded 
in the Consolidated Financial Statements of CG&E.  Under the provisions of 
Statement 87, certain assets and obligations of the plans are deferred and 
recognized in the Financial Statements in subsequent periods.

<TABLE>

<CAPTION>
                                    1995                          1994
                             Plan's        Plan's          Plan's        Plan's    
                         Assets Exceed   Accumulated   Assets Exceed   Accumulated 
                          Accumulated     Benefits      Accumulated     Benefits   
                            Benefits    Exceed Assets     Benefits    Exceed Assets
                                               (in millions)
<S>                     <C>            <C>            <C>            <C>
Actuarial present value 
  of benefits
    Vested benefits         $(138.3)       $(227.3)       $(123.2)       $(206.5)  
    Non-vested benefits       (25.5)         (16.0)         (17.5)         (11.0)  

      Accumulated benefit
        obligations          (163.8)        (243.3)        (140.7)        (217.5)  

    Effect of future 
      compensation 
      increases               (54.8)         (53.2)         (53.0)         (52.2)  

      Projected benefit 
        obligations          (218.6)        (296.5)        (193.7)        (269.7)  

Plans' assets at fair 
  value                       209.3          220.0          182.1          198.7   

Projected benefit 
  obligations in excess of 
  plans' assets                (9.3)         (76.5)         (11.6)         (71.0)  

Remaining balance of plans'
  net assets existing at 
  date of initial application 
  of Statement 87 to be 
  recognized as a reduction  
  of pension cost in future 
  periods                      (2.7)          (3.4)          (2.9)          (3.8)  

Unrecognized net gain  
  resulting from experience 
  different from that 
  assumed and effects of 
  changes in assumptions      (18.9)          (1.3)         (13.6)          (1.9)  

Prior service cost not 
  yet recognized in net 
  periodic pension cost        19.5           16.8           20.9           18.2   

Accrued pension cost at 
  December 31               $ (11.4)       $ (64.4)       $  (7.2)       $ (58.5)  
</TABLE>

<PAGE>

PSI

The following table reconciles the plan's funded status with amounts recorded 
in the Consolidated Financial Statements.  Under the provisions of Statement 
87, certain assets and obligations of the plan are deferred and recognized in 
the Consolidated Financial Statements in subsequent periods.

                                              1995       1994    
                                               (in millions)
Actuarial present value of benefits
  Vested benefits                           $(238.6)   $(197.5) 
  Non-vested benefits                          (9.6)      (8.0)   

    Accumulated benefit obligation           (248.2)    (205.5) 

  Effect of future compensation
    increases                                 (65.5)     (67.3) 

    Projected benefit obligation             (313.7)    (272.8) 

Plan's assets at fair value                   291.3      256.3  

Projected benefit obligation in
  excess of plan's assets                     (22.4)     (16.5) 

Remaining balance of plan's net
  assets existing at date of initial
  application of Statement 87 to be
  recognized as a reduction of
  pension cost in future periods               (5.0)      (5.7) 

Unrecognized net loss resulting from 
  experience different from that assumed
  and effects of changes in assumptions         4.8        5.7 

Prior service cost not yet recognized
  in net periodic pension cost                 15.7       17.2  

Prepaid (Accrued) pension cost     
  at December 31                            $  (6.9)   $    .7  

11.  Other Postretirement Benefits  

Cinergy, CG&E, PSI, and ULH&P

Cinergy's subsidiaries provide certain health care and life insurance benefits 
to retired employees and their eligible dependents.  The health care benefits 
include medical coverage and prescription drugs.  Additionally, PSI provides 
dental benefits.  PSI employees must meet minimum age and service requirements 
to be eligible for these postretirement benefits.  All retirees of CG&E and 
its subsidiaries are eligible to receive health care benefits, while life 
insurance is provided to retirees who participated in the plans and earned the 
right to postretirement life insurance benefits prior to January 1, 1991.  The 
health care and dental benefits provided are subject to certain limitations, 
such as deductibles and co-payments.  Neither CG&E and its subsidiaries nor 
PSI currently pre-fund their obligations for these postretirement benefits; 
however, PSI, in connection with the settlement which resulted in the February 
1995 Order, agreed to begin pre-funding.

Postretirement benefit cost for 1995, 1994, and 1993 included the following 
components:

Cinergy

                                              Health     Life      
                                               Care    Insurance  Total
                                                     (in millions) 
1995
Benefits earned during the period             $ 4.4      $ .1     $ 4.5
Interest accrued on APBO                       15.6       2.2      17.8
Amortization of transition obligations          8.1        .3       8.4

Net periodic postretirement benefit cost      $28.1      $2.6     $30.7

1994
Benefits earned during the period             $ 5.2      $ .2     $ 5.4
Interest accrued on APBO                       13.8       2.2      16.0
Net amortization and deferral                    .1        -         .1
Amortization of transition obligations          8.1        .3       8.4

Net periodic postretirement benefit cost      $27.2      $2.7     $29.9

1993
Benefits earned during the period             $ 4.3      $ .2     $ 4.5
Interest accrued on APBO                       13.4       2.1      15.5
Amortization of transition obligations          8.1        .3       8.4

Net periodic postretirement benefit cost      $25.8      $2.6     $28.4

CG&E and ULH&P

                                              Health     Life      
                                               Care    Insurance  Total
                                                     (in millions) 
1995
Benefits earned during the period              $ .4      $ .1     $  .5
Interest accrued on APBO                        4.5       2.0       6.5
Amortization of transition obligation           2.6        .4       3.0

Net periodic postretirement benefit cost       $7.5      $2.5     $10.0

1994
Benefits earned during the period              $ .9      $ .1     $ 1.0
Interest accrued on APBO                        3.9       2.0       5.9
Amortization of transition obligation           2.6        .4       3.0

Net periodic postretirement benefit cost       $7.4      $2.5     $ 9.9

1993
Benefits earned during the period              $1.0      $ .1     $ 1.1
Interest accrued on APBO                        4.2       2.0       6.2
Amortization of transition obligation           2.6        .4       3.0

Net periodic postretirement benefit cost       $7.8      $2.5     $10.3
PSI

                                              Health     Life      
                                               Care    Insurance  Total
                                                     (in millions) 
1995
Benefits earned during the period             $ 4.0      $ -      $ 4.0
Interest accrued on APBO                       11.1        .2      11.3
Amortization of transition obligation           5.5       (.1)      5.4

Net periodic postretirement benefit cost      $20.6      $ .1     $20.7

1994
Benefits earned during the period             $ 4.3      $ .1     $ 4.4
Interest accrued on APBO                        9.9        .2      10.1
Net amortization and deferral                    .1        -         .1 
Amortization of transition obligation           5.5       (.1)      5.4

Net periodic postretirement benefit cost      $19.8      $ .2     $20.0

1993
Benefits earned during the period             $ 3.3      $ .1     $ 3.4
Interest accrued on APBO                        9.2        .1       9.3
Amortization of transition obligation           5.5       (.1)      5.4

Net periodic postretirement benefit cost      $18.0      $ .1     $18.1
Cinergy, CG&E, PSI, and ULH&P

The following tables reconcile the APBO of the health care and life insurance 
plans with amounts recorded in the Financial Statements.  Under the provisions 
of Statement of Financial Accounting Standards No. 106, Employers' Accounting 
for Postretirement Benefits Other Than Pensions (Statement 106), certain 
obligations of the plans are deferred and recognized in the Financial 
Statements in subsequent periods.

Cinergy
                                               Health      Life       
                                                Care     Insurance   Total_
                                                       (in millions)
1995
Actuarial present value of benefits
  Fully eligible active plan participants     $ (11.7)    $ (1.1)   $ (12.8)
  Other active plan participants               (112.0)      (2.7)    (114.7)
  Retirees and beneficiaries                    (99.2)     (26.4)    (125.6)
    Projected APBO                             (222.9)     (30.2)    (253.1)
Unamortized transition obligations              137.1         .7      137.8
Unrecognized prior service cost                   (.3)        -         (.3)
Unrecognized net loss resulting from 
  experience different from that assumed
  and effects of changes in assumptions          26.1         .5       26.6
Accrued postretirement benefit obligations    
  at December 31, 1995                        $ (60.0)    $(29.0)   $ (89.0)

1994
Actuarial present value of benefits
  Fully eligible active plan participants     $ (11.4)    $  (.9)   $ (12.3)
  Other active plan participants                (84.3)      (2.3)     (86.6)
  Retirees and beneficiaries                    (92.0)     (23.5)    (115.5)
    Projected APBO                             (187.7)     (26.7)    (214.4)
Unamortized transition obligations              145.2        1.0      146.2
Unrecognized net (gain) loss resulting
  from experience different from that 
  assumed and effects of changes in
  assumptions                                     2.2       (2.6)       (.4)
Accrued postretirement benefit obligations 
  at December 31, 1994                        $ (40.3)    $(28.3)   $ (68.6)

Increasing the health care cost trend rate by one percentage point in each 
year would increase the APBO by approximately $37 million and $27 million for 
1995 and 1994, respectively, and the aggregate of the service and interest 
cost components of the postretirement benefit cost for each of 1995, 1994, and 
1993 by approximately $3.4 million, $3.7 million, and $3.4 million, 
respectively.

CG&E and ULH&P

                                               Health      Life       
                                                Care     Insurance    Total_
                                                       (in millions)
1995
Actuarial present value of benefits
  Fully eligible active plan participants     $  (2.7)    $  (.9)    $  (3.6)
  Other active plan participants                (32.0)      (2.0)      (34.0)
  Retirees and beneficiaries                    (30.5)     (24.5)      (55.0)
    Projected APBO                              (65.2)     (27.4)      (92.6)
Unamortized transition obligation                43.4        2.9        46.3
Unrecognized net loss resulting from 
  experience different from that assumed
  and effects of changes in assumptions           4.4         .1         4.5
Accrued postretirement benefit obligation  
  at December 31, 1995                        $ (17.4)    $(24.4)    $ (41.8)

1994
Actuarial present value of benefits
  Fully eligible active plan participants     $  (2.2)    $  (.8)    $  (3.0)
  Other active plan participants                (26.3)      (1.8)      (28.1)
  Retirees and beneficiaries                    (25.2)     (21.7)      (46.9)
    Projected APBO                              (53.7)     (24.3)      (78.0)
Unamortized transition obligation                46.1        3.3        49.4
Unrecognized net (gain) resulting from 
  experience different from that assumed
  and effects of changes in assumptions          (5.2)      (2.7)       (7.9)
Accrued postretirement benefit obligation  
  at December 31, 1994                        $ (12.8)    $(23.7)    $ (36.5)

Increasing the health care cost trend rate by one percentage point in each 
year would increase the APBO by approximately $12.7 million and $10.0 million 
for 1995 and 1994, respectively, and the aggregate of the service and interest 
cost components of the postretirement benefit cost for 1995 by approximately 
$1.0 million and each of 1994 and 1993 by approximately $1.2 million.

PSI

                                               Health      Life       
                                                Care     Insurance    Total_
                                                       (in millions)
1995
Actuarial present value of benefits
  Fully eligible active plan participants     $  (9.0)    $  (.2)    $  (9.2)
  Other active plan participants                (80.0)       (.7)      (80.7)
  Retirees and beneficiaries                    (68.7)      (1.9)      (70.6)
    Projected APBO                             (157.7)      (2.8)     (160.5)
Unamortized transition obligation                93.7       (2.2)       91.5
Unrecognized prior service cost                   (.3)        -          (.3)
Unrecognized net loss resulting from 
  experience different from that assumed
  and effects of changes in assumptions          21.7         .4        22.1
Accrued postretirement benefit obligation  
  at December 31, 1995                        $ (42.6)    $ (4.6)    $ (47.2)

1994
Actuarial present value of benefits
  Fully eligible active plan participants     $  (9.2)    $  (.1)    $  (9.3)
  Other active plan participants                (58.0)       (.5)      (58.5)
  Retirees and beneficiaries                    (66.8)      (1.8)      (68.6)
    Projected APBO                             (134.0)      (2.4)     (136.4)
Unamortized transition obligation                99.1       (2.3)       96.8
Unrecognized net loss resulting from 
  experience different from that assumed
  and effects of changes in assumptions           7.4         .1         7.5 
Accrued postretirement benefit obligation  
  at December 31, 1994                        $ (27.5)    $ (4.6)    $ (32.1)

Increasing the health care cost trend rate by one percentage point in each 
year would increase the APBO by approximately $24 million and $17 million for 
1995 and 1994, respectively, and the aggregate of the service and interest 
cost components of the postretirement benefit cost for each of 1995, 1994, and 
1993 by approximately $2.4 million, $2.5 million, and $2 million, 
respectively.

Cinergy, CG&E, PSI, and ULH&P

The following assumptions were used to determine the APBO:

                                          1995          1994          1993
    Discount rate                         7.50%         8.50%         7.50%

    Health care cost trend rate, 
      gradually declining to 5%        
        CG&E and subsidiaries          8.00-11.00%   9.00-12.00%  10.00-13.00%
        PSI                            8.00-10.00    8.00-12.00    8.00-12.00
   
    Year ultimate trend rates achieved
        CG&E and subsidiaries             2002          2002          2002
        PSI                               2007          2007          2007

Cinergy, CG&E, and ULH&P

The majority of CG&E's and its subsidiaries' postretirement benefit costs are 
subject to PUCO jurisdiction.  The PUCO has authorized CG&E to recover these 
costs on an accrual basis.  Prior to the recovery of these health care costs 
in customers' rates on an accrual basis, the PUCO authorized CG&E to defer for 
future recovery the difference between postretirement benefit costs determined 
in accordance with the provisions of Statement 106 and the costs determined in 
accordance with CG&E's previous accounting practice.  CG&E's deferrals totaled 
$4 million as of December 31, 1995.  CG&E is requesting authorization for 
recovery of the gas portion of these costs in its current gas rate proceeding. 
CG&E will request authorization to begin recovering the electric portion of 
these costs in its next retail rate proceeding.  

Cinergy and PSI

In accordance with the February 1995 Order, PSI is recovering the cost of 
postretirement benefits other than pensions on an accrual basis.  Prior to the 
recovery of these costs in customers' rates on an accrual basis, the 
difference between postretirement benefit costs determined in accordance with 
the provisions of Statement 106 and the costs determined in accordance with 
PSI's previous accounting practice was deferred for future recovery.  PSI's 
deferrals totaled $21 million as of December 31, 1995.  Commencing in February 
1995, approximately $6 million of costs deferred for the period January 1, 
1993, through July 31, 1993, are being recovered over a five-year period.  
Recovery over a five-year period of the remaining deferrals is being requested 
in PSI's current retail rate proceeding.

12.  Income Taxes 

Cinergy, CG&E, PSI, and ULH&P

Cinergy and its subsidiaries comply with the provisions of Statement of 
Financial Accounting Standards No. 109, Accounting for Income Taxes (Statement 
109).  Statement 109 requires recognition of deferred tax assets and 
liabilities for the expected future tax consequences of existing differences 
between the financial reporting and tax reporting bases of assets and 
liabilities.

The significant components of each registrant's net deferred income tax 
liability at December 31, 1995, and 1994, are as follows: 

Cinergy

                                                        1995           1994
                                                           (in millions)

Deferred Income Tax Liabilities
  Utility plant                                       $  981.8       $  947.8
  Unamortized costs of reacquiring debt                   28.8           26.1
  Deferred operating expenses
    and carrying costs                                    86.6           87.8
  Amounts due from customers - income taxes              143.4          112.1
  Deferred DSM costs                                      47.3           39.8 
  Other                                                   36.4           47.2 
    Total deferred income tax liabilities              1 324.3        1 260.8

Deferred Income Tax Assets 
  Unamortized investment tax credits                      67.5           70.8
  Litigation settlement                                   29.8           29.8
  Deferred fuel costs                                     13.0           13.1
  Accrued pension and other benefit costs                 41.1           33.7
  Other                                                   52.0           42.3 
    Total deferred income tax assets                     203.4          189.7 

Net Deferred Income Tax Liability                     $1 120.9       $1 071.1

CG&E

                                                         1995           1994
                                                            (in millions)

Deferred Income Tax Liabilities
  Utility plant                                         $663.8         $639.8 
  Unamortized costs of reacquiring debt                   14.2           10.3
  Deferred operating expenses
    and carrying costs                                    76.2           76.4
  Amounts due from customers - income taxes              139.8          108.5
  Deferred DSM costs                                       5.6            2.6
  Other                                                   25.5           37.1 
    Total deferred income tax liabilities                925.1          874.7

Deferred Income Tax Assets 
  Unamortized investment tax credits                      46.1           47.9
  Deferred fuel costs                                      8.1           10.0
  Accrued pension and other benefit costs                 28.7           27.6
  Other                                                   46.8           42.1 
    Total deferred income tax assets                     129.7          127.6 

Net Deferred Income Tax Liability                       $795.4         $747.1

PSI

                                                         1995           1994_
                                                            (in millions)

Deferred Income Tax Liabilities
  Electric utility plant                                $315.7         $308.0
  Unamortized costs of reacquiring debt                   14.6           15.8
  Deferred operating expenses 
    and accrued carrying costs                            12.5           11.4
  Deferred DSM costs                                      41.7           37.2 
  Other                                                   13.0           13.7 
    Total deferred income tax liabilities                397.5          386.1

Deferred Income Tax Assets 
  Unamortized investment tax credits                      21.4           22.9
  Litigation settlement                                   29.8           29.8
  Accrued pension and other benefit costs                 13.4            6.1
  Other                                                    1.0            2.6 
    Total deferred income tax assets                      65.6           61.4 

Net Deferred Income Tax Liability                       $331.9         $324.7

ULH&P

                                                         1995          1994   
                                                           (in thousands)

Deferred Income Tax Liabilities
  Utility plant                                        $32 104        $30 637 
  Other                                                  3 852          3 740 
    Total deferred income tax liabilities               35 956         34 377

Deferred Income Tax Assets 
  Unamortized investment tax credits                     2 060          2 175
  Amounts due to customers - income taxes                1 904          1 810
  Deferred fuel costs                                    1 857          1 773
  Accrued pension and other benefit costs                2 365          2 179
  Other                                                  4 042          3 214 
    Total deferred income tax assets                    12 228         11 151 

Net Deferred Income Tax Liability                      $23 728        $23 226
Cinergy, CG&E, PSI, and ULH&P

A summary of Federal and state income taxes charged (credited) to income and 
the allocation of such amounts is as follows:

Cinergy
                                                   1995      1994       1993
                                                        (in millions)

Current Income Taxes
  Federal                                         $175.3    $104.1     $ 49.1
  State                                             10.4       6.5        1.3
      Total current income taxes                   185.7     110.6       50.4

Deferred Income Taxes
  Federal
    Depreciation and other utility plant-
      related items                                 53.8      62.2       58.4
    Loss related to the June 1987 Order               -       (5.2)      45.9
    Property taxes                                    -      (13.3)      (9.3)
    DSM costs                                       12.0      14.5       11.7
    Write-off of a portion of Zimmer                  -         -       (11.0)
    Pension and other benefit costs                (20.8)    (12.5)      (4.2)
    Deferred operating expenses and
      carrying costs                                (1.6)     (1.6)       4.7
    Other items - net                               (6.6)     (5.4)       3.2
      Total deferred Federal income taxes           36.8      38.7       99.4

  State                                              1.7       2.7        7.5 
      Total deferred income taxes                   38.5      41.4      106.9

Investment Tax Credits - Net                       (10.1)    (10.4)     (10.3)

      Total Income Taxes                          $214.1    $141.6     $147.0

Allocated to:
  Operating income                                $219.4    $152.2     $172.6
  Other income and expenses - net                   (5.3)    (10.6)     (25.6)
                                                  $214.1    $141.6     $147.0

CG&E

                                                    1995      1994      1993 
                                                          (in millions)

Current Income Taxes
  Federal                                          $102.4    $ 82.3    $ 61.8
  State                                               2.5       1.5       2.0
      Total current income taxes                    104.9      83.8      63.8

Deferred Income Taxes
  Federal
    Depreciation and other utility plant-
      related items                                  33.9      42.9      48.4
    Property taxes                                     -      (11.3)    (11.3)
    Unrecovered gas costs - net                       3.8      (6.8)       .7
    Pension and other benefit costs                 (10.7)     (8.4)     (5.5)
    Write-off of a portion of Zimmer                   -         -      (11.0) 
    Deferred fuel costs - net                        (1.3)      5.3      (4.2)
    Deferred operating expenses
      and carrying costs                             (1.6)     (1.6)      4.7
    DSM costs                                         3.6       1.9       1.2
    Other items - net                                 4.4      (2.8)      6.3
      Total deferred Federal income taxes            32.1      19.2      29.3

  State                                                .8        .6        .5

      Total deferred income taxes                    32.9      19.8      29.8

Investment Tax Credits - Net                         (6.0)     (6.1)     (6.1)

      Total Income Taxes                           $131.8    $ 97.5    $ 87.5

Allocated to:
  Operating income                                 $136.4    $104.1    $109.0
  Other income and expenses - net                    (4.6)     (6.6)    (21.5)
                                                   $131.8    $ 97.5    $ 87.5
PSI

                                                    1995      1994      1993 
                                                         (in millions)

Current Income Taxes
  Federal                                          $71.4     $22.0     $  .6
  State                                              7.5       5.5        .4 
      Total current income taxes                    78.9      27.5       1.0

Deferred Income Taxes
  Federal
    Depreciation and other electric utility
      plant-related items                           19.9      19.2       9.6
    Loss related to the June 1987 Order               -       (5.2)     45.9
    Property taxes                                    -       (2.0)      2.0 
    DSM costs                                        8.4      12.6      10.6
    Pension and other benefit costs                (10.1)     (1.8)       -  
    Deferred fuel costs - net                       (6.0)       .7      (1.8)
    Other items - net                               (4.0)      2.8       (.9)
      Total deferred Federal income taxes            8.2      26.3      65.4 
 
  State                                              1.1       2.2       7.0 
      Total deferred income taxes                    9.3      28.5      72.4

Investment Tax Credits - Net                        (4.1)     (4.3)     (4.2)

      Total Income Taxes                           $84.1     $51.7     $69.2
 
Allocated to:
  Operating income                                 $85.0     $50.4     $64.9
  Other income and expenses - net                    (.9)      1.3       4.3
                                                   $84.1     $51.7     $69.2
ULH&P
                                                     1995     1994      1993 
                                                          (in thousands)

Current Income Taxes
  Federal                                           $5 955   $2 746    $3 580
  State                                              1 324      498     1 126
      Total current income taxes                     7 279    3 244     4 706

Deferred Income Taxes
  Federal
    Depreciation and other utility plant-
      related items                                  1 382    1 727     1 664 
    Unrecovered gas costs - net                       (277)    (741)      575 
    Pension and other benefit costs                   (381)    (349)     (329)
    Deferred fuel costs - net                         (257)     764      (685)
    Unamortized costs of reacquiring debt              808     -         -
    Other items - net                                 (556)     280      (147)
      Total deferred Federal income taxes              719    1 681     1 078

  State
    Depreciation and other utility plant-
      related items                                    390      656       431
    Other items - net                                 (172)      (8)     (222)
      Total deferred state income taxes                218      648       209

      Total deferred income taxes                      937    2 329     1 287

Investment Tax Credits - Net                          (285)    (287)     (288)

      Total Income Taxes                            $7 931   $5 286    $5 705

Allocated to:
  Operating income                                  $7 887   $5 342    $5 751
  Other income and expenses - net                       44      (56)      (46)
                                                    $7 931   $5 286    $5 705

Cinergy, CG&E, PSI, and ULH&P

Federal income taxes, computed by applying the statutory Federal income tax 
rate to book income before Federal income tax, are reconciled to Federal 
income tax expense reported in the Statements of Income for each registrant as 
follows:

Cinergy
                                                 1995       1994      1993 
                                                       (in millions)

Statutory Federal income tax provision          $191.2     $109.8    $ 68.1 
Increases (Reductions) in taxes resulting from:
  Amortization of investment tax credits         (10.1)     (10.4)    (10.0)
  Depreciation and other utility plant-
    related differences                            9.0       13.5      13.1
  Preferred dividend requirements of
    subsidiaries                                  10.8       12.4      13.3
  AFUDC equity                                     (.6)      (2.2)     (5.0)
  Phase-in deferred return                         (.6)      (3.1)     (7.2)
  Write-off of a portion of Zimmer                  -          -       69.4
  Other - net                                      2.3       12.4      (3.5)
Federal income tax expense                      $202.0     $132.4    $138.2

CG&E

Statutory Federal income tax provision          $121.4      $81.0     $17.9
Increases (Reductions) in taxes resulting from:
  Amortization of investment tax credits          (6.0)      (6.1)     (5.8)
  Depreciation and other utility plant-
    related differences                            9.0        8.2       6.9
  Preferred dividends                              6.2        7.8       8.8
  AFUDC equity                                     (.6)       (.7)     (1.1)
  Phase-in deferred return                         (.6)      (3.1)     (7.2)
  Write-off of a portion of Zimmer                  -          -       69.4
  Other - net                                      (.9)       8.3      (3.9)
Federal income tax expense                      $128.5      $95.4     $85.0

PSI
                                                  1995       1994      1993
                                                        (in millions)

Statutory Federal income tax provision           $77.5      $44.2      $65.3
Increases (Reductions) in taxes resulting from:
  Amortization of investment tax credits          (4.1)      (4.3)      (4.2)
  Depreciation and other electric utility
    plant-related differences                       -         1.8        4.1
  AFUDC equity                                      -        (1.5)      (3.9)
  Other - net                                      2.1        3.8         .5
Federal income tax expense                       $75.5      $44.0      $61.8

ULH&P
                                                 1995       1994       1993 
                                                       (in thousands)

Statutory Federal income tax provision          $6 496     $4 385     $4 798
Increases (Reductions) in taxes resulting from:
  Amortization of investment tax credits          (285)      (287)      (288)
  Depreciation and other utility plant-
    related differences                            219        138        108
  AFUDC equity                                     (25)       (27)      (104)
  Other - net                                      (16)       (69)      (144)
Federal income tax expense                      $6 389     $4 140     $4 370

13.  Commitments and Contingencies

(a)  Construction and Other Expenditures

Cinergy, CG&E, PSI, and ULH&P

Cinergy and its subsidiaries will have commitments in connection with their 
forecasted construction programs.  Aggregate expenditures for Cinergy's 
construction program for the 1996 through 2000 period are currently forecasted 
to be $2.1 billion.  Of these projected expenditures, approximately $1.1 
billion relates to CG&E, including $102 million for ULH&P, and $1.0 billion 
relates to PSI.

Cinergy and PSI

In November 1995, a 25-year contractual agreement between PSI and Destec 
Energy, Inc. (Destec) for the provision of coal gasification services began 
upon commercial operation of the Clean Coal Project.  The agreement requires 
PSI to pay Destec a base monthly fee including certain monthly operating 
expenses.  Over the next five years (1996 through 2000), the fixed component 
of the base monthly fee is expected to total $63 million, and the variable 
expenses are estimated at $105 million in nominal dollars.  PSI's currently 
pending retail rate increase request includes recovery of the operating costs, 
including gasification services, associated with the Clean Coal Project.  PSI 
received authorization in the February 1995 Order to defer for future recovery 
the costs incurred prior to the order in its current retail rate proceeding.

(b) MGP Sites 

Cinergy, CG&E, PSI, and ULH&P

     (i)  General  Prior to the 1950s, gas was produced at MGP sites through a 
process that involved the heating of coal and/or oil.  The gas produced from 
this process was sold for residential, commercial, and industrial uses.

Cinergy and PSI

     (ii)  PSI  Coal tar residues, related hydrocarbons, and various metals 
associated with MGP sites have been found at former MGP sites in Indiana, 
including, but not limited to, Shelbyville and Lafayette, two sites previously 
owned by PSI.  PSI has identified at least 21 MGP sites which it previously 
owned, including 19 it sold in 1945 to IGC, including the Shelbyville and 
Lafayette sites.  IGC has informed PSI of the basis for its claim that PSI, as 
a PRP under the CERCLA, should contribute to IGC's response costs related to 
investigating and remediating contamination at MGP sites which PSI sold to 
IGC.  

The Shelbyville site has been the subject of an investigation and cleanup 
enforcement action by the IDEM against IGC and PSI.  Without admitting 
liability, PSI and IGC have conducted an investigation and remedial activities 
at the Shelbyville site.  PSI and IGC are sharing the costs of the Shelbyville 
site, and based upon environmental investigations and remediation completed to 
date, PSI believes that any further required investigation and remediation for 
this site will not have a material adverse effect on its financial condition 
or results of operations. 

In 1992, the IDEM issued an order to IGC, naming IGC as a PRP as defined in 
the CERCLA, which requires investigation and remediation of the Lafayette MGP 
site.  IGC entered into an agreed order with the IDEM for the removal of MGP 
contamination at that site.  

During 1995, PSI received notification from NIPSCO alleging PSI is a PRP under 
the CERCLA with respect to contamination associated with MGP sites previously 
owned and/or operated by both PSI and NIPSCO (or their predecessors).  The 
notification included seven sites, five of which PSI acquired from NIPSCO and 
subsequently sold to IGC.

PSI has placed its insurance carriers on notice of IGC's and NIPSCO's claims.

IGC and PSI have entered into discussions regarding IGC's claim; however, with 
the exception of the Shelbyville site, PSI has not assumed any responsibility 
to reimburse IGC or NIPSCO for their costs of investigating and remediating 
MGP sites.  It is premature, at this time, to predict the nature, extent, and 
ultimate costs of, or PSI's responsibility for, environmental investigations 
and remediations at MGP sites owned or previously owned by PSI.  Information 
available to PSI regarding the current status of investigation and/or 
remediation at the sites identified in IGC's claim indicates PSI's potential 
exposure to probable and reasonably estimable liabilities associated with 
these MGP sites would not be material to its financial condition or results of 
operations.  However, further investigation and remediation activities at 
these sites and the additional sites identified in NIPSCO's claim may indicate 
that the potential liability for MGP sites could be material.  

In May 1995, the IURC denied IGC's request for recovery of costs incurred in 
complying with Federal, state, and local environmental regulations related to 
MGP sites in which IGC has an interest, including sites acquired from PSI.  
IGC has appealed this decision, which IGC contends is contrary to decisions 
made by other state utility commissions with respect to this issue.  In August 
1995, the IURC granted PSI's motion to establish a sub-docket to PSI's pending 
retail rate proceeding to consider its request for rate recovery of any MGP 
site-related costs it may incur.  PSI is unable to predict the extent to which 
it will be able to recover through rates any MGP costs ultimately incurred.  

Cinergy, CG&E, and ULH&P

     (iii)  CG&E and its Utility Subsidiaries  Lawrenceburg also has an MGP 
site.  In May 1995, Lawrenceburg and the IDEM reached an agreement to include 
the Lawrenceburg MGP site in the IDEM's voluntary cleanup program.  
Lawrenceburg is currently implementing a remediation plan, and total cleanup 
costs are not expected to exceed amounts previously accrued of $400,000.  

CG&E and its utility subsidiaries are aware of other potential sites where MGP 
activities may have occurred at some time in the past.  None of these sites is 
known to present a risk to the environment.  Except for the Lawrenceburg site, 
neither CG&E nor its utility subsidiaries have undertaken responsibility for 
investigating other potential MGP sites.

Cinergy and CG&E

(c)  United Scrap Lead Site  The EPA alleges that CG&E is a PRP under the 
CERCLA liable for cleanup of the United Scrap Lead site in Troy, Ohio.  CG&E 
was one of approximately 200 companies so named.  CG&E believes it is not a 
PRP and should not be responsible for cleanup of the site.  Under the CERCLA, 
CG&E could be jointly and severally liable for costs incurred in cleaning up 
the site, estimated by the EPA to be $27 million, of which CG&E estimates its 
portion to be immaterial to its financial condition or results of operations.

Cinergy, CG&E, and PSI

(d)  Power International Litigation  On October 25, 1995, a suit was filed in 
the Federal District Court for the Southern District of Ohio by three former 
employees of Power International, a subsidiary of Investments, naming as 
defendants Power International, Cinergy, Investments, CG&E, PSI, James E. 
Rogers, and William J. Grealis.  (Mr. Rogers and/or Mr. Grealis are officers 
and/or directors of the foregoing companies.)  The lawsuit, which stems from 
the termination of employment of the three former employees, alleges that they 
entered into employment contracts with Power International based on the 
opportunity to participate in potential profits from future investments in 
energy projects in central and eastern Europe.  The suit alleges causes of 
action based upon, among other theories, breach of contract related to the 
events surrounding the termination of their employment and fraud and 
misrepresentation related to the level of financial support for future 
projects.  The suit alleges compensatory damages of $154 million based upon 
assumed future success of potential future investments and punitive damages of 
three times that amount.  All defendants intend to defend vigorously against 
the charges based upon meritorious defenses.  Cinergy, CG&E, and PSI are 
currently unable to predict the outcome of this litigation.
Cinergy and PSI

(e)  WVPA Litigation  In 1984, WVPA discontinued payments to PSI for its 17% 
share of Marble Hill, a nuclear project jointly owned by PSI and WVPA which 
was canceled by PSI in 1984, and filed suit against PSI in the United States 
District Court for the Southern District of Indiana (Indiana District Court), 
seeking $478 million plus interest and other damages to recover its Marble 
Hill costs.  The suit was amended to include as defendants several officers of 
PSI along with certain contractors and their officers involved in the Marble 
Hill project, and to allege claims against all defendants under the Racketeer 
Influenced and Corrupt Organizations Act (RICO).  Claims proven and damages 
allowed under RICO may be trebled and attorneys' fees assessed against the 
defendants.  The suit was further amended to add claims of common law fraud, 
constructive fraud and deceit, and negligent misrepresentation against PSI and 
the other defendants.

In 1985, PSI and WVPA entered into an agreement under which PSI agreed to 
place in escrow 17% of all salvage proceeds received from the sales of Marble 
Hill equipment, materials, and nuclear fuel after May 23, 1985, as a result of 
WVPA's filing for protection under Chapter 11 of the Federal Bankruptcy Code. 

In 1989, PSI and its officers reached a settlement with WVPA which, if 
approved by judicial and regulatory authorities, will settle the suit filed by 
WVPA.  The settlement is also contingent on the resolution of the WVPA 
bankruptcy proceeding.

The principal terms of the settlement are:

  PSI, on behalf of itself and its officers, will pay $80 million on behalf 
of WVPA to RUS and the CFC.  The $80 million obligation, net of insurance 
proceeds, other credits, and applicable income tax effects, was charged to 
income in 1988 and 1989.

  WVPA will transfer its 17% ownership interest in the site to PSI, and PSI 
will assume responsibility for all future costs associated with the site, 
excluding WVPA's 17% share of future salvage program expenses.  Additionally, 
RUS and the CFC will receive the balance in the salvage escrow account and 17% 
of future salvage proceeds, net of related salvage program expenses.

  PSI will enter into a 35-year, take-or-pay power supply agreement for the 
sale of 70 megawatts of firm power to WVPA.  This power will be supplied from 
Gibson Unit 1 and will be priced at PSI's firm power rates for service to 
WVPA.  The difference between the revenues received from WVPA and the costs of 
operating Gibson Unit 1 (the Margin) will be remitted annually by PSI, on 
behalf of itself and its officers, to RUS and the CFC to discharge a $90 
million obligation, plus accrued interest.  If, at the end of the term of the 
power supply agreement, the $90 million obligation plus accrued interest has 
not been fully discharged, PSI must do so within 60 days.  The settlement 
provides that in the event PSI is party to a merger or acquisition, PSI and 
WVPA will use their best efforts to obtain regulatory approval to price the 
power sale exclusive of the effects of the merger or acquisition.

Certain aspects of the settlement are subject to approval by the FERC and 
potentially by the IURC and the Michigan Public Service Commission.  At such 
time as the necessary approvals from these regulatory authorities are 
received, PSI will record a $90 million regulatory asset.  Concurrently, a $90 
million obligation to RUS and the CFC will be recorded as a long-term 
commitment.  Recognition of the asset is based, in part, on projections which 
indicate that the Margin will be sufficient to discharge the $90 million 
obligation to RUS and the CFC, plus accrued interest, within the 35-year term 
of the power supply agreement.  If, in some future period, projections 
indicate the Margin would not be sufficient to discharge the obligation plus 
accrued interest within the 35-year term, the deficiency would be recognized 
as a loss.

RUS has proposed a plan of reorganization which, similar to WVPA's plan, 
incorporates the settlement agreement.  However, RUS's plan provides for full 
recovery of principal and interest on WVPA's debt to RUS, which is 
substantially in excess of the amount to be recovered under WVPA's proposed 
plan.  In 1991, the United States Bankruptcy Court for the Southern District 
of Indiana (Bankruptcy Court) confirmed WVPA's plan of reorganization and 
denied confirmation of RUS's opposing plan.  The Bankruptcy Court's approval 
of WVPA's reorganization plan is contingent upon WVPA's receipt of regulatory 
approval to change its rates.  RUS appealed the Bankruptcy Court's decision to 
the Indiana District Court.  In June 1994, the Indiana District Court ruled in 
favor of WVPA's plan.  RUS subsequently appealed this decision, and on 
December 28, 1995, the Seventh Circuit Court of Appeals affirmed the decision 
of the Indiana District Court.  PSI cannot predict whether RUS will appeal 
this decision to the U.S. Supreme Court, and if appealed, the outcome of such 
appeal, nor is it known whether WVPA can obtain regulatory approval to change 
its rates.  If reasonable progress is not made in satisfying conditions to the 
settlement by February 1, 1997, either party may terminate the settlement 
agreement.  (See Note 17 for an event subsequent to the date of the auditor's 
report.)

Cinergy, CG&E, and ULH&P

(f)  Potential Divestiture of Gas Operations  Under the PUHCA, the divestiture 
of CG&E's, including ULH&P's, gas operations may be required.  In its order 
approving the merger, the SEC reserved judgment over Cinergy's ownership of 
the gas operations for a period of three years.  However, in June 1995, the 
SEC endorsed recommendations for reform/repeal of the PUHCA, including 
allowing registered holding companies to own combination electric and gas 
utility companies, provided the affected states agree.  In addition, 
legislation providing for the repeal of the PUHCA is currently pending before 
Congress.
 
Regardless of the outcome of the proposals to reform/repeal the PUHCA, Cinergy 
believes it has a justifiable basis for retention of its gas operations and 
will continue its pursuit of SEC approval.  If divestiture is ultimately 
required, the SEC has historically allowed companies sufficient time to 
accomplish divestitures in a manner that protects shareholder value.  See Note 
16 for financial information by business segment.   

Cinergy, CG&E, PSI, and ULH&P

(g)  1996 Voluntary Workforce Reduction Program  In January 1996, Cinergy 
announced a voluntary workforce reduction program which provides enhanced 
retirement and/or severance benefits to eligible employees.  There are 840 
employees who meet certain age and service requirements and are potentially 
eligible for enhanced retirement benefits under this program.  Eligible 
employees who do not meet age and service requirements would receive severance 
benefits upon resignation from their employment.  Program costs will not be 
known until after the participation election period ends on May 15, 1996.  
Cinergy intends to classify these costs as costs to achieve merger savings 
which, consistent with the merger savings sharing mechanisms previously 
approved by regulators, will result in the portion of these costs allocable to 
Ohio electric jurisdictional customers (approximately 38%) being charged to 
earnings in the second quarter of 1996, and the remaining costs allocable to 
other jurisdictions being deferred for future recovery through rates as an 
offset against merger savings. (See Note 1(i).)  A significant portion of 
these benefits will be eligible for funding from qualified retirement plan 
assets.

Cinergy, CG&E, and PSI

14.  Jointly Owned Plant 

PSI is a joint owner of Gibson Unit 5 with WVPA and IMPA.  Additionally, PSI 
is a co-owner with WVPA and IMPA of certain transmission property and local 
facilities.  These facilities constitute part of the integrated transmission 
and distribution systems which are operated and maintained by PSI.  CG&E, 
Columbus Southern Power Company, and The Dayton Power and Light Company have 
constructed electric generating units and related transmission facilities on 
varying common ownership bases.  The Consolidated Statements of Income reflect 
PSI's and CG&E's portions of all operating costs associated with the commonly 
owned facilities.

PSI's and CG&E's investments in jointly owned plant are as follows:

<TABLE>

<CAPTION>
                                                       1995
                                            Utility Plant   Accumulated    Construction
                                 Share       in Service     Depreciation  Work in Progress
                                                 (dollars in millions)
<S>                             <C>        <C>             <C>           <C> 
PSI
Production
  Gibson (Unit 5)                50.05%       $  204           $ 97            $ -
Transmission and local 
  facilities                     94.01         1 747            598             30

CG&E
Production
  Miami Fort Station
    (Units 7 and 8)              64              205            105              1
  W.C. Beckjord Station
    (Unit 6)                     37.5             41             22              -
  J.M. Stuart Station            39              267            108              4
  Conesville Station
    (Unit 4)                     40               71             33              1
  Zimmer                         46.5          1 212            168              3
  East Bend Station              69              330            148              1
  Killen Station                 33              186             76              -
Transmission                  Various             62             29              -
</TABLE>

<PAGE>
15.  Quarterly Financial Data (unaudited)

Cinergy

                                          Net   Earnings
                    Operating Operating Income    (Loss)
Quarter Ended        Revenues   Income   (Loss)   Per Share
                     (in millions, except per share amounts)

1995
March 31                 $  809        $161       $102     $ .65
June 30                     668         120         60       .39
September 30                768         168        109       .69
December 31                 786         133         76       .49
  Total                  $3 031        $582       $347     $2.22

1994
March 31                 $  851        $155       $ 99     $ .68
June 30                     662         106         49       .33
September 30                692         118(a)      58 (a)   .40 (a) 
December 31                 693          61(a)     (15)(a)  (.11)(a)
  Total                  $2 898        $440       $191     $1.30 

(a)  In 1994, Cinergy recognized charges to earnings of approximately $79 
million ($56 million, net of taxes) or 38 cents per share primarily for 
certain merger-related and other expenditures which cannot be recovered 
from customers under the merger savings sharing mechanisms authorized by 
regulators.  Of these charges, approximately $46 million, net of taxes 
(31 cents per share), was recognized in the fourth quarter, and 
approximately $8 million, net of taxes (5 cents per share), was 
recognized in the third quarter.  The charges include the PUCO electric 
jurisdictional portion of Merger Costs incurred through December 31, 
1994, previously capitalized information systems development costs, and 
severance benefits to former officers of CG&E and PSI.  Of the total $79 
million charge, $62 million is reflected in "Operating Expenses - Other 
operation" and $17 million is reflected in "Other Income and Expenses - 
Net".    

CG&E

                                                                  Net
                              Operating       Operating         Income
Quarter Ended                 Revenues         Income           (Loss)
                                            (in millions)   

1995
March 31                       $  525           $109             $ 77
June 30                           393             71               40
September 30                      435             98               69 
December 31                       495             82               50 
  Total                        $1 848           $360             $236

1994
March 31                       $  563           $106             $ 76
June 30                           391             70               39
September 30                      409             81 (a)           48 (a) 
December 31                       425             34 (a)           (5)(a)
  Total                        $1 788           $291             $158

(a)  In 1994, CG&E recognized charges to earnings of approximately $64 
million ($46 million, net of taxes) primarily for certain merger-related 
and other expenditures which cannot be recovered from customers under the 
merger savings sharing mechanism authorized by the PUCO.  Of these 
charges, approximately $39 million, net of taxes, was recognized in the 
fourth quarter and approximately $7 million, net of taxes, was recognized 
in the third quarter.  The charges include the PUCO electric 
jurisdictional portion of Merger Costs incurred through December 31, 
1994, previously capitalized information systems development costs, and 
severance benefits to former officers of CG&E.  Of the total $64 million 
charge, $52 million is reflected in "Operating Expenses - Other 
operation" and $12 million is reflected in "Other Income and Expenses - 
Net".

PSI

                                                                 Net
                              Operating       Operating         Income
Quarter Ended                 Revenues         Income           (Loss)
                                            (in millions)   

1995
March 31                       $  299           $ 53             $ 33
June 30                           290             49               29
September 30                      343             70               50    
December 31                       316             55               34
  Total                        $1 248           $227             $146

1994
March 31                       $  288           $ 48             $ 35
June 30                           272             37               19
September 30                      284             38               20
December 31                       270             29 (a)            8 (a)
  Total                        $1 114           $152             $ 82 

(a)  In the fourth quarter of 1994, PSI recognized a charge to earnings of 
approximately $10 million ($6 million, net of taxes) for severance 
benefits to former officers of PSI which cannot be recovered from 
customers under the merger savings sharing mechanism authorized by the 
IURC.  The total $10 million charge is reflected in "Operating Expenses - 
Other operation".

16.  Financial Information by Business Segment     

Cinergy
                                                  Operating
                  Operating  Operating   Income   Provision for   Construction
Year Ended        Revenues    Income      Taxes   Depreciation    Expenditures
                                      (in millions)
1995
  Electric          $2 620     $543       $207        $258            $286
  Gas                  411       39         12          22              36
Total               $3 031     $582       $219        $280            $322

1994
  Electric          $2 456     $412       $144        $274            $432
  Gas                  442       28          8          20              42
Total               $2 898     $440       $152        $294            $474
                         
1993 
  Electric          $2 374     $450       $166        $261            $517 
  Gas                  469       33          7          18              45
Total               $2 843     $483       $173        $279            $562

                                                        December 31
                                             1995          1994          1993_
                                                       (in millions)        
Property, Plant, and Equipment - net
  Electric                                  $5 719        $5 680        $5 519
  Gas                                          532           519           504
                                             6 251         6 199         6 023
Other Corporate Assets                       1 969         1 951         1 781
    Total Assets                            $8 220        $8 150        $7 804

For a discussion of the potential divestiture of CG&E's, including ULH&P's, 
gas operations, see Note 13(f).

CG&E
                                        Operating
                  Operating  Operating   Income   Provision for   Construction
Year Ended        Revenues    Income      Taxes   Depreciation    Expenditures
                                      (in millions)
1995
  Electric          $1 437     $321       $124        $137            $101
  Gas                  411       39         12          22              36
    Total           $1 848     $360       $136        $159            $137

1994
  Electric          $1 346     $263       $ 96        $137            $138
  Gas                  442       28          8          20              42
    Total           $1 788     $291       $104        $157            $180
                         
1993 
  Electric          $1 283     $287       $102        $134            $157 
  Gas                  469       33          7          18              45
    Total           $1 752     $320       $109        $152            $202 
CG&E Continued

                                                       December 31
                                            1995          1994          1993_
                                                      (in millions)       
Property, Plant, and Equipment - net
  Electric                                 $3 244        $3 277        $3 282
  Gas                                         532           519           504
                                            3 776         3 796         3 786
Other Corporate Assets                      1 401         1 386         1 358
    Total Assets                           $5 177        $5 182        $5 144

For a discussion of the potential divestiture of CG&E's, including ULH&P's, 
gas operations, see Note 13(f).

ULH&P

                                     Operating
                Operating  Operating  Income     Provision for   Construction
Year Ended      Revenues    Income     Taxes     Depreciation    Expenditures
                                   (in thousands)
1995
  Electric      $187 180    $11 425    $4 500       $ 6 679        $10 909
  Gas             70 288      8 405     3 387         4 759          8 063
    Total       $257 468    $19 830    $7 887       $11 438        $18 972

1994
  Electric      $177 564    $ 9 736    $3 007       $ 6 213        $12 127
  Gas             71 971      6 654     2 335         4 431          8 277
    Total       $249 535    $16 390    $5 342       $10 644        $20 404
                         
1993 
  Electric      $175 712    $ 9 821    $3 078       $ 5 798        $16 291
  Gas             75 744      8 115     2 673         4 015          8 133
    Total       $251 456    $17 936    $5 751       $ 9 813        $24 424

                                                      December 31
                                           1995          1994           1993  
                                                    (in thousands)

Property, Plant, and Equipment - net
  Electric                               $138 482      $134 508      $130 054
  Gas                                     104 749       102 340        98 445
                                          243 231       236 848       228 499
Other Corporate Assets                     56 566        50 280        57 546
    Total Assets                         $299 797      $287 128      $286 045

For a discussion of the potential divestiture of ULH&P's gas operations, see 
Note 13(f).

17.  Subsequent Events (unaudited)

(a)  PSI's Current Retail Rate Proceeding  In connection with the filing of 
its proposed retail rate order with the IURC in March 1996, PSI reduced its 
requested retail rate increase to 10.3% ($102.9 million annually) from 11.2% 
($111.2 million annually).  (See Note 2(a).)

(b)  WVPA Litigation  RUS has requested a rehearing by the Seventh Circuit 
Court of Appeals.  PSI cannot predict the disposition of the rehearing request 
or whether RUS will appeal an unfavorable decision to the U.S. Supreme Court, 
and in the event of such an appeal, the outcome of such appeal.  (See Note 
13(e).)

            ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

Cinergy, CG&E, PSI, and ULH&P

None.

                                    PART III

        ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS

Board of Directors

Cinergy

Reference is made to Cinergy's 1996 Proxy Statement with respect to 
identification of directors and their current principal occupations.  

CG&E

The directors of CG&E at February 29, 1996, included:

Jackson H. Randolph  Mr. Randolph, age 65, is Chairman of CG&E.  He has served 
as a director of CG&E since 1983, and his current term as director expires 
April 25, 1996.

James E. Rogers  Mr. Rogers, age 48, is Vice Chairman and Chief Executive 
Officer of CG&E.  He has served as a director of CG&E since October 24, 1994, 
and his current term as director expires April 25, 1996.

William J. Grealis  Mr. Grealis, age 50, is President of CG&E.  He has served 
as a director of CG&E since September 1, 1995, and his current term expires 
April 25, 1996.

PSI

Reference is made to PSI's 1996 Information Statement with respect to 
identification of directors and their current principal occupations.  

ULH&P

Omitted pursuant to Instruction J(2)(c).

Executive Officers

Cinergy, CG&E, and PSI

The information included in Part I of this report on pages 21 through 23 under 
the caption "Executive Officers of the Registrant" is referenced in reliance 
upon General Instruction G to Form 10-K and Instruction 3 to Item 401(b) of 
Regulation S-K.

ULH&P

Omitted pursuant to Instruction J(2)(c).

                       ITEM 11.  EXECUTIVE COMPENSATION

Cinergy

Reference is made to Cinergy's 1996 Proxy Statement with respect to executive 
compensation.

CG&E

Board Compensation Committee Report on Executive Compensation

The executive compensation program of Cinergy and its subsidiaries is 
administered by the Compensation Committee of Cinergy's Board of Directors 
(the "Committee").  The Committee establishes the compensation philosophy and 
the compensation of the chief executive officer and all other executive 
officers of Cinergy and its subsidiaries.  The Committee also recommends and 
administers compensation plans for all executive officers and key employees.  
The Committee is composed of Messrs. Van P. Smith (Chairman), Michael G. 
Browning, George C. Juilfs, and John J. Schiff, Jr., each of whom is an 
independent, non-employee director (of Cinergy), and an "outside director" (of 
Cinergy) within the meaning of Section 162(m) of the Internal Revenue Code of 
1986, as amended (the "Code").

Compensation Philosophy

The Committee reported in Cinergy's 1995 proxy statement that although its 
executive compensation philosophy was developing, it expressed an intent to 
emphasize incentive compensation, both short-term and long-term, in order to 
tie the interests of the executive officers and Cinergy's shareholders.  At 
that time, the Committee anticipated that base salary, annual cash incentives, 
and long-term incentives would play an integral part in Cinergy's executive 
compensation program.

With assistance from an independent compensation and benefits consulting firm 
which conducted a study of existing executive compensation program structures,
the Committee has formulated an integrated executive compensation philosophy 
which includes base salary, and annual and long-term incentives.  The 
consulting firm has also advised as to the retention, modification or 
replacement of certain existing compensation and benefits plans and as to plan
design generally.

Cinergy and its subsidiaries seek to provide a total compensation program that 
will attract, retain, and motivate the high quality employees needed to 
provide superior service to its customers and to maximize returns to its 
shareholders.  Base salaries for the executive group will be targeted at the 
median of comparably sized utility companies based on kilowatt hours sold. 
Because of the low-cost position of Cinergy and its subsidiaries, kilowatt 
hours sold is considered to be a better size measure than revenues for 
constructing a comparator group.  Base salary levels will be reviewed 
annually.  Salary increases will be based on such factors as corporate 
financial results, each individual's performance, and the executive's role and 
skills.  The executive compensation program seeks to link executive and 
shareholder interests through cash-based and equity-based incentive plans, in 
order to reward corporate and individual performance and balance short-term 
and long-term considerations.  Thus, annual and long-term incentive plans will 
be structured to provide opportunities that are competitive with general 
industry companies.

This philosophy will result in a compensation mix for the chief executive 
officer and senior officers, including executive officers, consisting of 
annual incentive and long-term incentives that will account for at least 50% 
of the employee's total compensation.

During 1995, the Committee adopted a charter which supports Cinergy's 
executive compensation philosophy and the Committee's role in designing and 
implementing that philosophy.  Pursuant to the charter, the Committee:

-    reviews and determines the annual base salaries, annual incentives, and 
long-term incentives of the executive officers of Cinergy and its 
subsidiaries, and develops an appropriate balance between short-term and long-
term incentives while focusing on long-term shareholder interests; and
 
-    reviews the operation of the executive compensation programs; establishes 
and periodically reviews policies for the administration of these programs; 
and takes steps, if appropriate, to modify such programs and to design and 
implement new executive compensation programs.

Consistent with its charter and its executive compensation philosophy, the 
Committee has reviewed Cinergy's existing short-term and long-term incentive 
plans and has concluded that it would be in the best interests of Cinergy and 
its shareholders to modify the Annual Incentive Plan and to adopt a new long-
term incentive compensation plan.

Under the proposed amendment to the Annual Incentive Plan, the maximum award 
opportunity for "covered employees", as that term is defined in Code Section 
162(m), would be one million dollars.  Currently, the maximum award is 75% of 
annual base salary.  Expressing the maximum possible award for covered 
employees in this manner is consistent with regulations issued by the Internal 
Revenue Service (the "IRS") in December, 1995.

The proposed 1996 Long-Term Incentive Compensation Plan would allow Cinergy 
flexibility to design long-term incentive compensation programs which will 
help achieve its goals.  The adoption of this plan is subject to approval by 
Cinergy's shareholders.  The 1996 Long-Term Incentive Compensation Plan is 
intended, in part, to replace Cinergy's Performance Shares Plan.

Annual Incentive Plan

For 1995, executive officers were eligible for incentives under Cinergy's 
Annual Incentive Plan.  Approximately 400 key employees participated in the 
plan in 1995 and were granted cash awards to the extent that certain pre-
determined corporate and individual goals were attained during that year. 
Graduated standards for achievement were developed to encourage each 
employee's contribution.  The potential awards ranged from 2.5% to 55% of the 
annual salary of the participant (including deferred compensation), depending 
upon the achievement levels and the participant's position.  The Committee 
reviewed and approved both the plan goals at the beginning of the year and the 
achievements at the end of the year.

For 1995, the Annual Incentive Plan used a combination of corporate and 
individual goals.  Achievement of corporate goals and achievement of 
individual goals each accounted for 50% of the total possible award.  The 
portion of the payout in March, 1996, attributable to the corporate goals was 
based on 1995 achievement in two areas:  (1) earnings per share; and (2) non-
fuel operation and maintenance merger savings.  The earnings per share goal 
accounted for 37.5% and the merger savings goal constituted 12.5% of the total 
possible award.  The achievement level for each of the corporate goals was at 
the maximum award level for 1995.

In 1995, incentive awards for each executive officer reflected individual 
achievement as well as Cinergy's attainment of its corporate goals.  
Individual performance goals for each executive varied from executive to 
executive; however, all related to the achievement of Cinergy's overall 
strategic vision of becoming a premier general energy services company.

For each executive officer, the Committee assessed the extent to which each 
person contributed toward the accomplishment of Cinergy's vision in 1995. 
Although its determinations were subjective, the Committee believed that its 
assessment accurately measured the performance of each executive officer.  
Based upon the extraordinary efforts of the executive officers in 1995, the 
Committee determined that a maximum award was payable to each. 

For 1996, Cinergy's Annual Incentive Plan will again use a combination of 
corporate and individual goals.  The corporate goal will account for 50% of 
the total possible award and achievement of individual goals will account for 
the remaining 50%.  The corporate goal for 1996 will be based on earnings per 
share.  For 1996, approximately 400 key employees will participate in the 
plan.  The potential awards will range from 2.5% to 90% of the participant's 
annual salary, depending upon the achievement levels and the participant's 
position.

Other Compensation Decisions

The Committee, at its discretion, can award other forms of compensation in 
recognition of outstanding service to Cinergy or any of its subsidiaries.  
Consistent with that philosophy, the Committee approved in 1995 special 
performance awards for Messrs. Leonard and Thomas and Ms. Foley for exemplary 
performance associated with consummation of the corporate reorganization 
resulting in the formation of Cinergy (as set forth in footnotes to the 
Summary Compensation Table).

Long-Term Incentive Plan and Stock Option Plan

Cinergy's Performance Shares Plan (the "Performance Shares Plan") is a long-
term incentive plan developed to reward officers and other key employees for 
contributing to long-term success by achieving corporate and individual goals 
approved by the Committee.  The executive officers named in the compensation 
tables participate in this plan, and the same corporate and individual goals 
used in Cinergy's Annual Incentive Plan are applicable to this plan.  The 
potential award opportunities are established in the same manner as the Annual 
Incentive Plan, with the minimum award opportunities ranging from 13.33% to 
36.66% of annual salary for the full performance cycle.  Performance cycles 
consist of overlapping four year periods.  Because the former Resources' 
performance shares plan was merged into the Performance Shares Plan effective 
as of October 24, 1994, the then existing Resources performance cycles of 
1992-1995 and 1994-1997 became performance cycles under the Performance Shares 
Plan.  Awards earned under the 1992-1995 performance cycle by executive 
officers are paid in two installments:  one-half of the award was paid in 
February, 1996, and the remaining portion will be paid in February, 1997.  The 
dollar value of the awards to Messrs. Rogers, Leonard, and Thomas and Ms. 
Foley, paid in February 1995 and earned under the 1990-1993 performance cycle, 
are set forth in the Summary Compensation Table.  The next overlapping four 
year performance cycle under the Performance Shares Plan began January 1, 1996 
and will end December 31, 1999.  As mentioned previously, the 1996 Long-Term 
Incentive Compensation Plan is intended, in part, to replace the Performance 
Shares Plan; the details of the transition have yet to be determined.    

Cinergy's executive officers and other key employees are also eligible for 
grants under Cinergy's Stock Option Plan in amounts determined to be 
appropriate by the Committee.  The plan is designed to align executive 
compensation with shareholder interests.  Both non-qualified and incentive 
stock options have been granted under the plan.  Options vest at the rate of 
20% per year over a five-year period from the date of grant and may be 
exercised over a 10-year term.

Chief Executive Officer

Mr. Randolph's 1995 base salary was determined pursuant to an employment 
agreement with Cinergy dated December 11, 1992, as amended and restated 
effective October 24, 1994 (see Employment Agreements and Severance 
Arrangements discussed further herein).  For 1995, Mr. Randolph also earned 
incentive compensation under the Annual Incentive Plan in the amount of 
$321,750, of which 50% was based on achievement of corporate goals and 50% was 
based upon the Committee's determination of his achievement of individual 
goals. 

Mr. Rogers' 1995 base salary was determined pursuant to an employment 
agreement with Cinergy dated December 11, 1992, as amended and restated 
effective July 2, 1993 (see Employment Agreements and Severance Arrangements 
discussed further herein).  For 1995, Mr. Rogers also earned incentive 
compensation under the Annual Incentive Plan in the amount of $321,750, of 
which 50% was based on achievement of corporate goals and 50% was based upon 
the Committee's determination of his achievement of individual goals.

Giving consideration to the accomplishments of 1995 leading to a total return 
to Cinergy shareholders of 39.1% and an increase in earnings per share of 17%, 
the latter adjusted for the effects of weather and non-recurring items, 
sufficient goals were met to obtain the maximum award available.  Other goals 
pertaining to budgeting, reengineering, development of a comprehensive human 
resource strategy, enhancement of top management team effectiveness, and 
elevation of Cinergy's impact in community involvement were also met.  The 
relative importance in meeting these goals was equal in the determination of 
awards.  

Summary

The Committee has established its executive compensation philosophy which 
emphasizes incentive compensation, both short-term and long-term, in order to 
tie the interests of the executive officers and shareholders.  Base salary, 
annual cash incentives, and long-term incentives are an integral part of 
executive compensation.  The Committee has determined that the Annual 
Incentive Plan should be modified to increase the maximum amount which can be 
awarded under that plan to "covered employees" under Code Section 162(m), and 
that the proposed 1996 Long-Term Incentive Compensation Plan is needed to 
provide flexibility in designing competitive long-term incentive programs in 
order to attract and retain qualified and highly motivated executive employees 
in the future.

The 1993 Omnibus Budget Reconciliation Act ("OBRA") became law in August, 
1993, for compensation earned in 1994 and later.  Under the law, income tax 
deductions of publicly traded companies may be limited to the extent total 
compensation for certain executive officers exceeds one million dollars in any 
one year.  Under OBRA, the deduction limit does not apply to payments which 
qualify as "performance based" or compensation which is payable under a 
written contract that was in effect before February 17, 1993.  The Committee 
has reviewed the final regulations issued by the IRS and will continue to 
review the application of these rules to future compensation; however, the 
Committee intends to compensate executives on performance achieved, both 
corporate and individual.
Summary Compensation Table

The following table sets forth the compensation of Messrs. Rogers and 
Randolph, each of whom served as chief executive officer at different periods 
during 1995, and each of the additional four most highly compensated executive 
officers (these six executive officers sometimes hereinafter collectively 
referred to as the "named executive officers") for services to Cinergy and its 
subsidiaries, including CG&E, during the calendar years ended December 31, 
1995, 1994, and 1993.  (The data presented includes, for Mr. Randolph 
compensation from CG&E, and for the remaining named executive officers 
compensation from PSI, for the periods prior to October 24, 1994.)
<TABLE>

<CAPTION>
                                                                     Long-Term Compensation       
 
                                 Annual Compensation                    Awards           Payouts   
   (a)                     (b)     (c)       (d)      (e)        (f)           (g)         (h)         (i)
                                                     Other                                             All
                                                    Annual    Restricted   Securities                 Other
                                                    Compen-     Stock      Underlying      LTIP      Compen-
Name and                         Salary    Bonus(1)  sation      Awards    Options/SARs   Payouts(2)  sation
Principal Position        Year     ($)       ($)      ($)        ($)           (#)         ($)         ($)   

<S>                      <C>    <C>    <C>         <C>       <C>    <C>  <C>            <C>        <C>
James E. Rogers           1995   535,000   321,750   15,322        0               0     283,427    135,676 (3)
  Vice Chairman           1994   433,144   265,729   64,417        0         250,000     273,720    285,393
  and CEO                 1993   402,408   239,324        0        0               0     193,618     83,968

Jackson H. Randolph       1995   535,000   321,750   11,594        0               0           0    104,112 (3)
  Chairman of the Board   1994   470,000   255,750    5,719        0         250,000           0     92,724
                          1993   425,000   200,000    3,512        0               0           0     84,886

William J. Grealis (4)    1995   276,000   103,500   37,677        0         100,000           0    116,136 (5)
  President, and 
  President Investments

J. Wayne Leonard          1995   250,008    93,753   17,385        0               0      83,974     49,726 (5)
  Group Vice President    1994   211,208    79,203   32,146        0         100,000      81,132     93,555
  and CFO                 1993   187,168    92,568        0        0               0      62,210      6,762

Larry E. Thomas           1995   240,000    90,000    1,794        0               0      80,066     29,464 (5)
  Group Vice President    1994   209,540    78,578   29,078        0         100,000      77,345     53,945
  and Chief               1993   187,168    67,568        0        0               0      56,339      6,762
  Transformation Officer

Cheryl M. Foley           1995   230,004    86,252    5,284        0               0      80,462     58,646 (5)
  Vice President, General 1994   200,510    75,191   30,732        0         100,000      77,714     59,618
  Counsel, and Secretary  1993   179,036    89,632        0        0               0      59,866          0

<FN>
(1)   The amounts appearing in this column reflect the Annual Incentive Plan awards earned during the year listed and paid in the 
following year.

(2)   The amounts appearing in this column for 1995 and 1994 reflect the values of the shares and cash earned under Resources 
performance shares plan, as predecessor to Cinergy's Performance Shares Plan, by Messrs. Rogers, Leonard, and Thomas and Ms. Foley 
during the four-year cycle from 1990 through 1993; the amounts reflected for 1993 were earned by such four officers under such 
plan during the two-year cycle from 1990 through 1991.

(3)   Amount includes for Messrs. Rogers and Randolph, respectively:  a deferred compensation award in the amount of $50,000 
pursuant to the terms of each officer's Deferred Compensation Agreement; employer matching contributions under the PSI and CG&E 
401(k) plans of $9,240 and $4,125; above-market interest on amounts deferred pursuant to the Deferred Compensation Agreements of 
$21,202 and $31,413; and benefits under Split Dollar Life Insurance Agreements of $16,584 and $18,574.  Also includes for Mr. 
Rogers insurance premiums paid with respect to executive/group-term life insurance and relocation compensation in the amounts of 
$5,290 and $33,360, respectively.

(4)   Mr. Grealis became President of Investments and President of CG&E's Gas Operations effective January 16, 1995, and President 
of CG&E effective September 1, 1995.

(5)   Amount includes for Messrs. Grealis, Leonard, and Thomas and Ms. Foley, respectively:  insurance premiums paid with respect 
to executive/group-term life insurance of $2,651, $1,927, $5,682, and $3,441; and relocation compensation in the amounts of 
$45,958, $8,797, $4,800, and $25,205.  Includes for Messrs. Grealis, Leonard, and Thomas, respectively, employer matching 
contributions under the PSI 401(k) plan of $1,344, $9,002, and $8,982. Includes for Mr. Grealis a profession transition allowance 
and supplemental life insurance of $50,000 and $16,183, respectively.  Includes for Messrs. Leonard, and Thomas and Ms. Foley, 
respectively, special performance awards in the amounts of $30,000, $10,000, and $30,000.
</TABLE>


Option/SAR Grants Table

The following table sets forth information concerning options to purchase 
Cinergy common stock granted to Mr. Grealis, the only named executive officer 
granted such options during 1995.

<TABLE>

<CAPTION>
                                                                            Potential
                                                                       Realizable Value at
                                                                          Assumed Annual
                                                                       Rates of Stock Price
                                                                           Appreciation
                       Individual Grants                                 for Option Term___
      (a)               (b)          (c)         (d)         (e)        (f)           (g)
                     Number of        %
                    Securities     of Total
                    Underlying   Options/SARs  Exercise
                   Options/SARs   Granted to   or Base
                      Granted    Employees in   Price      Expiration     5%          10%
     Name               (#)      Fiscal Year    ($/Sh)        Date       ($)          ($)  

<S>               <C>           <C>          <C>          <C>         <C>          <C>
William J. Grealis   100,000        6.02%       24.3125	    1/24/2005   671,710     1,484,300
</TABLE>


Aggregated Option/SAR Exercises and Year-End Option/SAR Value Table

The following table sets forth information concerning stock options exercised 
by the named executive officers during 1995, including the values realized for 
such options exercised, which represent the positive spread between the 
respective exercise prices and market prices on dates of exercises, and the 
numbers of shares for which options were held as of December 31, 1995, 
including the values for "in-the-money" options, which represent the positive 
spread between the respective exercise prices of outstanding stock options and 
the market price of the shares of Cinergy common stock as of December 31, 
1995, which was $30.625 per share.

<TABLE>

<CAPTION>
     (a)               (b)         (c)           (d)                 (e)
                                              Number of           Value of
                                        Securities Underlying   Unexercised
                                             Unexercised        In-the-Money
                                           Options/SARs at     Options/SARs at
                                               FY-End              FY-End
                 Shares Acquired  Value          (#)                 ($)   
                   on Exercise  Realized     Exercisable/       Exercisable/
    Name               (#)         ($)      Unexercisable       Unexercisable

<S>                <C>          <C>      <C>              <C>      
James E. Rogers      39,622      465,570  189,403/200,000  2,906,442/1,550,000
Jackson H. Randolph       0        N/A      50,000/200,00    387,500/1,550,000
William J. Grealis        0        N/A          0/100,000            0/775,000
J. Wayne Leonard     13,539      137,161    57,611/80,000      684,123/620,000
Larry E. Thomas      20,043      161,713    51,107/80,000      592,623/620,000
Cheryl M. Foley      13,753      126,435    57,397/80,000      681,112/620,000
</TABLE>

<PAGE>
Long-Term Incentive Plan Awards Table

The following table sets forth the potential payouts of an award contingently 
granted under the Performance Shares Plan to Mr. Grealis, the only named 
executive officer granted such award during 1995.

<TABLE>

<CAPTION>
                                                       Estimated Future Payouts
                                                   under Non-Stock Price-Based Plans
       (a)                (b)               (c)            (d)        (e)      (f)
                       Number of       Performance or
                   Shares, Units or     Other Period    Threshold   Target   Maximum
                     Other Rights     Until Maturation   Shares     Shares   Shares
      Name                (#)             or Payout        (#)        (#)     (#)   

<S>               <C>               <C>            <C>  <C>       <C>       <C>
William J. Grealis       2,042           1994 - 1997       (1)       4,085    (1)

<FN>
(1)   The number of performance shares of Cinergy common stock contingently granted is calculated by determining the award 
opportunity in dollars for the performance cycle and dividing this by the per share price of the common stock at the time of the 
grant.  For the 1994 through 1997 performance period, the award opportunity for participants is measured in terms of percentages 
ranging from 13.33% to 36.66% of annual salary. The performance shares vest based upon the achievement of long-term corporate and 
individual goals established by the Committee at the beginning of the performance period and measured at the end of the cycle.  
The actual size of an award is determined by multiplying the amount contingently granted by a weighted calculation reflecting the 
extent to which the aggregate of the pre-established goals has been met. For the 1994 through 1997 performance period, an award of 
approximately twice the number of shares contingently granted will be made if the aggregate of the pre-established goals are met. 
 There is no minimum (threshold) award and the Committee may enhance the target award in recognition of exemplary performance or 
achievement as to individual goals.  Awards are made in cash and Cinergy common stock over a two-year period immediately following 
each performance cycle.  The amount of an award that is generally paid in cash is equal to the amount of Federal, state, and local 
income taxes due on each installment, plus, with respect to the second installment, dividends otherwise payable on such 
installment.
</TABLE>


Pension Benefits

The primary pension benefits payable at retirement to each of the named 
executive officers are provided pursuant to the terms of either CG&E's non-
contributory management pension plan (the "CG&E Pension Plan") or PSI's non-
contributory pension plan (the "PSI Pension Plan").  Mr. Randolph is covered 
under the terms of the CG&E Pension Plan.  Messrs. Rogers, Grealis, Leonard, 
and Thomas and Ms. Foley are covered under the terms of the PSI Pension Plan.

Under the terms of the CG&E Pension Plan, the retirement income payable to a 
pensioner is 1.3% of final average pay plus 0.35% of final average pay in 
excess of covered compensation, times the number of years of credited service 
through 30 years, plus 0.1% of final average pay times the number of years of 
credited service over 30 years.  Final average pay is the average annual 
salary, based on July 1 pay rates, during the employee's five consecutive 
calendar years producing the highest such average within the last ten calendar 
years immediately preceding retirement.  The IRS annually establishes a dollar 
limit, indexed to inflation, of the amount of pay permitted for consideration 
under the terms of the plan, which for 1995 was $150,000.  Covered 
compensation is the average social security taxable wage base over a 35-year 
period.  The accrued annual benefit payable to Mr. Randolph upon his 
retirement under the terms of the plan is $106,211 based upon IRS limits and 
credited service of 37 years.         

Cinergy and Mr. Randolph have entered into an Amended and Restated  
Supplemental Executive Retirement Income Agreement which in effect freezes as 
of December 31, 1994, the accrual of benefits payable to Mr. Randolph under 
CG&E's Supplemental Executive Retirement Plan upon his retirement, death, or 
disability.  Under the amended agreement, the annual supplemental retirement 
benefit of $511,654 shall be paid to Mr. Randolph or his beneficiary in 
monthly installments of $42,638 for 180 months beginning December 1, 2000.

The PSI Pension Plan covers all of its employees who meet certain minimum age 
and service requirements.  Compensation utilized to determine benefits under 
the PSI Pension Plan includes substantially all salaries and annual incentive 
compensation, including deferred compensation for Mr. Rogers.  PSI Pension 
Plan benefits are determined under a final average pay formula with 
consideration of years of service to a maximum of 30, age at retirement and 
the applicable average social security wage base.  PSI also maintains an 
Excess Benefit Plan which is designed to restore pension benefits to those 
individuals whose benefits under the PSI Pension Plan would otherwise exceed 
the limits imposed by the Code.  Each of the named executive officers, with 
the exception of Mr. Randolph, participates in the Excess Benefit Plan.

The following pension plan table illustrates the estimated annual benefits 
payable as a straight-life annuity under both plans to participants who retire 
at age 62.  Such benefits are not subject to any deduction for social security 
or other offset amounts.

                                  Years of Service                      
Compensation     5        10        15        20        25        30    
$  300,000    $23,190  $ 46,380  $ 69,575  $ 92,765  $115,955  $139,145
   400,000     31,190    62,380    93,575   124,765   155,955   187,145
   500,000     39,190    78,380   117,575   156,765   195,955   235,145
   600,000     47,190    94,380   141,575   188,765   235,955   283,145
   700,000     55,190   110,380   165,575   220,765   275,955   331,145
   800,000     63,190   126,380   189,575   252,765   315,955   379,145
   900,000     71,190   142,380   213,575   284,765   355,955   427,145
 1,000,000     79,190   158,380   237,575   316,765   395,955   475,145
 1,100,000     87,190   174,380   261,575   348,765   435,955   523,145

The estimated credited years of service at age 62 for each of the named 
executive officers covered under the terms of the PSI Pension Plan are as 
follows:  Mr. Rogers, 20.22 years; Mr. Grealis, 11.69 years; Mr. Leonard, 30 
years; Mr. Thomas, 30 years; and Ms. Foley, 19.22 years.

Messrs. Rogers and Grealis and Ms. Foley also participate in the PSI 
Supplemental Retirement Plan, which is designed to provide coverage to 
employees, previously designated by the board of directors of PSI, who will 
not otherwise qualify for full retirement benefits under the PSI Pension Plan. 
The benefit provided by the PSI Supplemental Retirement Plan will be an amount 
equal to that which a covered employee with maximum permitted years of 
participation (30 years) would have received under the PSI Pension Plan, 
reduced by the actual benefit provided by the PSI Pension Plan and the Excess 
Benefit Plan, and further reduced by benefits the covered employee will be 
eligible to receive from retirement plans from previous self-employment and 
from previous employers.  The estimated annual benefit payable at age 62 under 
the PSI Supplemental Retirement Plan is $192,158 for Mr. Rogers, $3,230 for 
Mr. Grealis, and $54,624 for Ms. Foley.

Cinergy has an Executive Supplemental Life Insurance Program, which provides 
key management personnel, including the named executive officers, with 
additional life insurance coverage during employment, and post-retirement 
deferred compensation.  At the later of age 55 or retirement, the 
participant's life insurance coverage under the program will be canceled.  At 
that time, the participant will receive the total amount of coverage in the 
form of deferred compensation payable in ten equal annual installments.  The 
annual benefit payable, at the later of age 55 or retirement, to each of the 
named executive officers is $15,000 per year over ten years.

Employment Agreements and Severance Arrangements

Cinergy entered into individual employment agreements with Mr. Randolph and 
Mr. Rogers (each sometimes hereinafter individually referred to as the 
"Executive") effective as of October 24, 1994.

Pursuant to his employment agreement, Mr. Randolph served as Chairman and 
Chief Executive Officer of Cinergy until November 30, 1995, at which time he 
relinquished the position of Chief Executive Officer; he will continue to 
serve as Chairman of the Board of Cinergy until November 30, 2000.  Mr. Rogers 
served as Vice Chairman, President and Chief Operating Officer of Cinergy 
until November 30, 1995, and thereafter has served as Vice Chairman, President 
and Chief Executive Officer of Cinergy.  Mr. Rogers' agreement is for a term 
of three years; however, as amended in December 1995, on each annual 
anniversary date it will be automatically extended for an additional year, 
unless either Cinergy or Mr. Rogers gives timely notice otherwise.

During the terms of their agreements, Messrs. Randolph and Rogers will receive 
minimum annual base salaries of $465,000 and $422,722, respectively.  Each 
will also be paid an annual incentive award of up to a maximum of no less than 
55% of his annual salary pursuant to Cinergy's Annual Incentive Plan, and will 
be eligible to participate in all other incentive, stock option, performance 
award, savings, retirement and welfare plans applicable generally to Cinergy 
employees and executives.

If the Executive's employment terminates as a result of death, his beneficiary 
will receive a lump sum cash amount equal to the sum of (a) the Executive's 
annual base salary through the termination date to the extent not previously 
paid, (b) a pro rata portion of the benefit under Cinergy's Annual Incentive 
Plan calculated based upon the termination date, and (c) any compensation 
previously deferred but not yet paid to the Executive (with accrued interest 
or earnings thereon) and any unpaid accrued vacation pay.  In addition to 
these accrued amounts, if Cinergy terminates the Executive's employment 
without "cause" or the Executive terminates his employment for "good reason" 
(as each is defined in the employment agreements), Cinergy will pay to the 
Executive (a) a lump sum cash amount equal to the present value of his annual 
base salary and benefit under Cinergy's Annual Incentive Plan payable through 
the end of the term of employment, at the rate and applying the same goals and 
factors in effect at the time of notice of such termination, (b) the value of 
all benefits to which the Executive would have been entitled had he remained 
in employment until the end of the term of employment under Cinergy's 
Performance Shares Plan and Executive Supplemental Life Insurance Program, (c) 
the value of all deferred compensation and all executive life insurance 
benefits whether or not then vested or payable, and (d) medical and welfare 
benefits for the Executive and his family through the end of the term of 
employment.  If the Executive's employment is terminated by Cinergy for cause 
or by the Executive without good reason, the Executive will receive unpaid 
annual base salary accrued through the termination date and any accrued 
deferred compensation.

Mr. Randolph has a severance agreement with Cinergy which provides that if, 
within three years after October 24, 1994, he terminates his employment for 
good cause or his employment is terminated by Cinergy other than for 
disability or cause, Cinergy will pay him a cash amount equal to 300% of his 
annualized compensation for the most recent five years ending before October 
24, 1994, less $1,000, plus a cash "gross-up" payment equal to the federal 
excise tax due on such amount, if any.

Cinergy and Mr. Grealis entered into an employment agreement which commenced 
on January 16, 1995, and shall continue until June 30, 2000; provided, 
however, commencing on January 1, 1999, and each January 1, 1999, and each 
January 1 thereafter, the term of the employment agreement may be extended for 
one additional year upon mutual agreement.  Pursuant to the terms of his 
agreement, Mr. Grealis initially served as President of Investments and 
President of CG&E's Gas Operations.  However, Mr. Grealis may be further 
assigned such other responsible executive capacity or capacities as the boards 
of directors of Cinergy or Services or Cinergy's chief executive officer may 
from time to time determine.  Effective September 1, 1995, Mr. Grealis was 
named to the position of President of CG&E in addition to retaining the  
position of President of Investments.  During the term of his agreement, Mr. 
Grealis will receive a minimum annualized base salary of $288,000, will be 
eligible to participate in all other incentive, stock option, performance 
award, savings, retirement and welfare benefit plans applicable generally to 
Cinergy employees and executives, and will receive other fringe benefits. In 
connection with his retirement, the employment agreement provides that Mr. 
Grealis will receive an annual benefit of no less than $283,000 payable as a 
straight-life annuity at age 62.

Cinergy entered into individual employment agreements with Messrs. Leonard and 
Thomas and Ms. Foley, which shall continue until December 31, 1997; provided, 
however, effective January 1, 1996, and each January 1 thereafter, the term of 
each such employment agreement may be extended for one additional year upon 
mutual agreement.  Pursuant to the terms of their respective agreements, Mr. 
Leonard has served as Group Vice President and Chief Financial Officer of 
Cinergy and its subsidiaries, Mr. Thomas initially served as Group Vice 
President, Reengineering and Operation Services of Cinergy and its 
subsidiaries, and Ms. Foley has served as Vice President, General Counsel and 
Secretary of Cinergy and its subsidiaries.  However, each such officer may be 
further assigned such other responsible executive capacity or capacities as 
the boards of directors of Cinergy or Services or Cinergy's chief executive 
officer may from time to time determine.  Effective September 1, 1995, Mr. 
Thomas was named to the position of Group Vice President and Chief 
Transformation Officer.  During the term of their agreements, Messrs. Leonard 
and Thomas and Ms. Foley will receive minimum annual base salaries of 
$250,000, $240,000, and $230,000, respectively, and each will be eligible to 
participate in all other incentive, stock option, performance award, savings, 
retirement and welfare benefit plans applicable generally to Cinergy employees 
and executives, and will receive other fringe benefits. 

If the employment of Messrs. Grealis, Leonard, or Thomas or Ms. Foley (each 
sometimes hereinafter individually referred to as the "officer") is terminated 
as a result of death, for cause, or by the officer without good reason, the 
officer or the officer's beneficiary will be paid a lump sum cash amount equal 
to (a) the officer's unpaid annual base salary through the termination date, 
(b) a pro rata portion of the officer's award under Cinergy's Annual Incentive 
Plan, (c) the officer's vested accrued benefits under Cinergy's Performance 
Shares Plan, and (d) any unpaid deferred compensation (including accrued 
interest or earnings) and unpaid accrued vacation pay.  If, instead, the 
officer's employment is terminated prior to a change in control (as defined) 
without cause or by the officer for good reason, the officer will be paid (a) 
a lump sum cash amount equal to the present value of the officer's annual base 
salary and target annual incentive  award payable through the end of the term 
of the agreement, at the rate and applying the same goals and factors in 
effect at the time of notice of such termination, (b) the present value of all 
benefits to which the officer would have been entitled had the officer 
remained in employment until the end of the term of the agreement under 
Cinergy's Performance Shares Plan and Executive Supplemental Life Insurance 
Program, (c) the value of all deferred compensation and all executive life 
insurance benefits whether or not vested or payable, and (d) continued medical 
and welfare benefits through the end of the term of the agreement.

If the employment of any such officer (as defined above) is terminated after a 
change in control, the officer will be paid a lump sum cash payment equal to 
the greater of (i) three times (two times in the case of Mr. Grealis) the sum 
of the officer's annual base salary immediately prior to the date of the 
officer's termination of employment or, if higher, the date of the change in 
control, plus all incentive compensation or bonus plan amounts in effect prior 
to the date of the officer's termination of employment or, if higher, prior to 
the change in control, and (ii) the present value of all annual base salary, 
bonuses and incentive compensation and retirement benefits that would 
otherwise be due under the agreement plus deferred compensation and executive 
life insurance benefits.  In addition, the officer will be provided life, 
disability, accident and health insurance benefits for thirty-six months 
(twenty-four months in the case of Mr. Grealis), reduced to the extent 
comparable benefits are received, without cost, by the officer.

Deferred Compensation Agreements

Mr. Randolph and CG&E, and Mr. Rogers and Resources, entered into deferred 
compensation agreements effective as of January 1, 1992 (the "Deferred 
Compensation Agreements"), pursuant to which each such officer is credited 
with a $50,000 base salary increase in the form of deferred compensation.  
Such amount is deferred annually, in the case of both Mr. Randolph and Mr. 
Rogers, for a five-year period beginning January 1, 1992, and ending December 
31, 1996, and in the case of Mr. Rogers, for an additional five-year period 
beginning January 1, 1997 and ending December 31, 2001.  The Deferred 
Compensation Agreements were assumed by Cinergy effective as of October 24, 
1994.

In general, Mr. Randolph's Deferred Compensation Agreement provides that if 
his employment terminates for any reason, other than death or disability, 
prior to January 1, 1997, he will receive the total amount of his deferred 
income plus interest.  If Mr. Randolph's employment terminates on or after 
January 1, 1997, he will receive an annual cash benefit of $179,000 payable 
for a 15-year period beginning January 2001.  Proportional benefits are 
payable to Mr. Randolph in the event his employment is terminated for death or 
disability prior to January 1, 1997.

In general, Mr. Rogers' Deferred Compensation Agreement provides that if his 
employment terminates for any reason, other than death, prior to January 1, 
1997, he will receive a lump sum cash payment equal to the total amount 
deferred for the first five-year period described above plus interest.  If Mr. 
Rogers' employment terminates for any reason, other than death, on or after 
January 1, 1997, he will receive an annual cash benefit over a 15-year period 
beginning the first January following termination of his employment, but in no 
event earlier than January 2003 nor later than January 2010.  The annual cash 
benefit amount payable for such 15-year period ranges from $179,000 per year 
if payment begins in January 2003, to $554,400 per year if payment commences 
in January 2010.  Comparable amounts are payable to Mr. Rogers in the event 
his employment is terminated for disability prior to January 1, 1997, or if 
Mr. Rogers dies (i) prior to January 1, 1997, while employed or disabled, or 
(ii) on or after January 1, 1997, but before commencement of payment of the 
15-year payments described above; provided, however, if Mr. Rogers becomes 
disabled prior to the completion of the first award period, the amounts paid 
will be proportionately reduced based on the ratio of the amount deferred to 
the date of disability to the total amount that would have been deferred to 
the end of the first award period.  In addition, if Mr. Rogers' employment 
terminates for any reason, other than death or disability, on or after January 
1, 1997, but before January 1, 2002, he will receive a lump sum cash payment 
equal to the total amount deferred during the second five-year period 
described above plus interest.  Additionally, if Mr. Rogers' employment 
terminates for any reason, other than death or disability, on or after January 
1, 2002, he will receive an additional annual benefit for a 15-year period 
beginning the first January following termination of his employment, but in no 
event earlier than January 2008 nor later than January 2010.  The annual cash 
benefit amount payable for such period ranges from $179,000 per year if 
payment begins in January 2008, to $247,000 per year if payment begins in 
January 2010.  Provided that Mr. Rogers is employed on January 1, 1997, 
comparable amounts are payable to Mr. Rogers in the event his employment is 
terminated for disability prior to January 1, 2002, or if Mr. Rogers dies (i) 
prior to January 1, 2002, while employed or disabled, or (ii) on or after 
January 1, 2002, but before commencement of payment of benefits; provided, 
however, if Mr. Rogers becomes disabled prior to the completion of the second 
award period, his payments will be proportionately reduced in the same manner 
as described above for disability during the first award period.

Compensation Committee Interlocks and Insider Participation

Mr. Schiff, Chairman of the Board of Cincinnati Financial Corporation, serves 
on the  Compensation Committee of the board of directors of Cinergy, and Mr. 
Randolph, Chairman of the Board of Cinergy and its subsidiaries, including 
CG&E, serves on the board of directors of Cincinnati Financial Corporation. 

Performance Graph

The following line graph compares the cumulative total shareholder return of 
the common stock of CG&E with the cumulative total returns during the same 
time period of the S&P Electric Utilities Index and the S&P 500 Stock Index.  
The graph tracks performance from January 1, 1991, through October 24, 1994, 
the final trading date of CG&E's common stock.  The graph assumes a $100 
investment on January 1, 1991, and reinvestment of all dividends.

[OMITTED IS A LINE GRAPH ILLUSTRATING THE FOLLOWING DATA]

                             1/1/91    1/1/92    1/1/93    1/1/94    10/24/94

CG&E Common Stock             $100      $145      $144      $169       $149

S&P Electric Utilities Index  $100      $130      $138      $155       $128

S&P 500 Stock Index           $100      $130      $140      $155       $156
Directors' Compensation

Directors who are not employees (the "non-employee directors") receive an 
annual retainer fee of $8,000 plus a fee of $1,000 for each CG&E board of 
directors' meeting attended; however, any non-employee director of CG&E who 
also serves as a non-employee director of Cinergy or any of its affiliates 
shall neither receive such annual retainer fee, nor any compensation for 
attendance at any CG&E board meeting that is held concurrently or 
consecutively 
with a meeting of the board of directors of Cinergy.  Directors who are also 
employees of Cinergy or any of its subsidiaries (Messrs. Randolph, Rogers, and 
Grealis) will receive no remuneration for their services as directors.

Under Cinergy's Directors' Deferred Compensation Plan, each non-employee 
director of Cinergy or any of its subsidiaries may defer fees and have them 
accrued either in cash or in units representing shares of Cinergy common 
stock. 
If deferred in such units, the stock will be distributed to the director at 
the 
time of retirement from the appropriate board.  Amounts deferred in cash will 
be paid at the same time.

Under Cinergy's Retirement Plan for Directors, non-employee directors with 
five or more years of service will receive annual retirement compensation in 
an amount equal to the annual CG&E board retainer fee in effect at the time of 
termination of service as a director, plus the product of the fee paid for 
attendance at a CG&E board meeting multiplied by five.  Retirement 
compensation is paid for as many years as the director served on the CG&E 
board.  This plan covers non-employee directors serving on the boards of 
directors of Cinergy, Services, CG&E, or PSI.  Prior service by non-employee 
directors of CG&E, PSI, or Resources is credited under this plan.

PSI

Reference is made to PSI's 1996 Information Statement with respect to 
executive compensation.

ULH&P

Omitted pursuant to Instruction J(2)(c).

             ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                             OWNERS AND MANAGEMENT

Cinergy

Reference is made to Cinergy's 1996 Proxy Statement with respect to security 
ownership of certain beneficial owners and security ownership of management.

CG&E

Cinergy owns all the outstanding shares of common stock of CG&E.  The only two 
holders of record known by management of CG&E to be the beneficial owners of 
more than 5% of the class of CG&E's cumulative preferred stock as of December 
31, 1995 are set forth in the following table.  

     Name and Address                   Amount and Nature          Percent
    of Beneficial Owner              of Beneficial Ownership      of Class

U. S. Leasing International, Inc.         282,500 shares           14.13%
733 Front Street
San Francisco, CA   94111

Household Finance Corporation             105,000 shares            5.25%
2700 Sanders Road
Prospect Heights, IL  60070

CG&E's directors and executive officers did not beneficially own any shares of 
any series of the class of CG&E's cumulative preferred stock as of December 
31, 1995.  The beneficial ownership of Cinergy's common stock held by each 
director and named executive officer as of December 31, 1995 is set forth in 
the following table.

                                                    Amount and Nature
               Name of Beneficial Owner(1)       of Beneficial Ownership (2)

               Cheryl M. Foley                       71,592  shares
               William J. Grealis                       300  shares
               J. Wayne Leonard                      74,060  shares
               Jackson H. Randolph                   75,658  shares
               James E. Rogers                      252,582  shares
               Larry E. Thomas                       75,640  shares

               All directors and executive          666,772  shares (2)
               officers as a group           (representing 0.42% of the class)

(1)    No individual listed beneficially owned more than 0.16% of the 
outstanding shares of Cinergy common stock.
(2)    Includes shares which there is a right to acquire within 60 days 
pursuant to the exercise of stock options in the following amounts:  Ms. 
Foley - 57,397; Mr. Leonard - 57,611; Mr. Randolph - 50,000; Mr. Rogers 
- 189,403; Mr. Thomas - 51,107; and all directors and executive officers 
as a group - 491,093.
PSI

Reference is made to PSI's 1996 Information Statement with respect to security 
ownership of certain beneficial owners and security ownership of management.

ULH&P

Omitted pursuant to Instruction J(2)(c).

          ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Cinergy, CG&E, and PSI

None.

ULH&P

Omitted pursuant to Instruction J(2)(c).
 
                                       PART IV

  ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  Financial Statements and Schedules.

Cinergy, CG&E, PSI, and ULH&P

Refer to the page captioned "Index to Financial Statements and Financial 
Statement Schedules", pages 46 and 47 of this report, for an index of the 
financial statements and financial statement schedules included in this 
report.

(b)  Reports on Form 8-K.

Cinergy, CG&E, PSI, and ULH&P

None

(c)  Exhibits.

Copies of the documents listed below which are identified with an asterisk (*) 
have heretofore been filed with the SEC and are incorporated herein by 
reference and made a part hereof.  Exhibits not so identified are filed 
herewith.

  Exhibit
Designation                 Nature of Exhibit               

Cinergy

   3-a *Certificate of Incorporation of Cinergy.  (Exhibit to Cinergy's 
1993 Form 10-K in File No. 1-11377.)

   3-b *By-laws of Cinergy as amended January 25, 1996.  (Exhibit to 
Cinergy's Form U-1 Declaration filed February 23, 1996, in File No. 70-
8807.)  

CG&E

   3-c *Amended Articles of Incorporation of CG&E effective January 24, 
1994.  (Exhibit to CG&E's 1993 Form 10-K in File No. 1-1232.)

   3-d *Regulations of CG&E as amended, adopted June 16, 1995.  (Exhibit to 
CG&E's Form 8-A dated July 24, 1995.)

PSI

   3-e *Amended Articles of Consolidation of PSI, as amended to April 20, 
1995.  (Exhibit to PSI's June 30, 1995, Form 10-Q in File No. 1-3543.)

   3-f By-laws of PSI, as amended January 25, 1996.

ULH&P

   3-g *Restated Articles of Incorporation made effective May 7, 1976.  
(Exhibit to ULH&P's Form 8-K, May 1976.)

   3-h *By-laws of ULH&P as amended, adopted by    shareholders June 16, 
1995.  (Exhibit to    ULH&P's June 30, 1995, Form 10-Q in File No.   2-
7793.)

Cinergy and PSI

   4-a *Original Indenture (First Mortgage Bonds) dated September 1, 1939, 
between PSI and The First National Bank of Chicago, as Trustee (Exhibit A-
Part 3 in File No. 70-258), and LaSalle National Bank as Successor Trustee 
(Supplemental Indenture dated March 30, 1984).
 
   4-b *Nineteenth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated January 1, 1972.  (Exhibit to File No. 2-
42545.)

   4-c *Twenty-third Supplemental Indenture between PSI and The First 
National Bank of Chicago dated January 1, 1977.  (Exhibit to File No. 2-
57828.)

   4-d *Twenty-fifth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated September 1, 1978.  (Exhibit to File No. 2-
62543.)

   4-e *Twenty-seventh Supplemental Indenture between PSI and The First 
National Bank of Chicago dated March 1, 1979.  (Exhibit to File No. 2-
63753.)

   4-f *Thirty-fifth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated March 30, 1984.  (Exhibit to PSI's 1984 Form 
10-K in File No. 1-3543.)

   4-g *Thirty-ninth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated March 15, 1987.  (Exhibit to PSI's 1987 Form 
10-K in File No. 1-3543.)

   4-h *Forty-first Supplemental Indenture between PSI and The First 
National Bank of Chicago dated June 15, 1988.  (Exhibit to PSI's 1988 Form 
10-K in File No. 1-3543.)

   4-i *Forty-second Supplemental Indenture between PSI and The First 
National Bank of Chicago dated August 1, 1988.  (Exhibit to PSI's 1988 Form 
10-K in File No. 1-3543.)
 
   4-j *Forty-fourth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated March 15, 1990.  (Exhibit to PSI's 1990 Form 
10-K in File No. 1-3543.)

   4-k *Forty-fifth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated March 15, 1990.  (Exhibit to PSI's 1990 Form 
10-K in File No. 1-3543.)

   4-l *Forty-sixth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated June 1, 1990.  (Exhibit to PSI's 1991 Form 
10-K in File No. 1-3543.)
 
   4-m *Forty-seventh Supplemental Indenture between PSI and The First 
National Bank of Chicago dated July 15, 1991.  (Exhibit to PSI's 1991 Form 
10-K in File No. 1-3543.)

   4-n *Forty-eighth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated July 15, 1992.  (Exhibit to PSI's 1992 Form 
10-K in File No. 1-3543.)

   4-o *Forty-ninth Supplemental Indenture between PSI and The First 
National Bank of Chicago dated February 15, 1993.  (Exhibit to PSI's 1992 
Form 10-K in File No. 1-3543.)

   4-p *Fiftieth Supplemental Indenture between PSI and The First National 
Bank of Chicago dated February 15, 1993.  (Exhibit to PSI's 1992 Form 10-K 
in File No. 1-3543.)

   4-q *Fifty-first Supplemental Indenture between PSI and The First 
National Bank of Chicago dated February 1, 1994.  (Exhibit to PSI's 1993 
Form 10-K in File No. 1-3543.)

   4-r *Indenture (Secured Medium-term Notes, Series A), dated July 15, 
1991, between PSI and The First National Bank of Chicago, as Trustee.  
(Exhibit to PSI's Form 10-K/A, Amendment No. 2, dated July 15, 1993, in 
File No. 1-3543.)

   4-s *Indenture (Secured Medium-term Notes, Series B), dated July 15, 
1992, between PSI and The First National Bank of Chicago, as Trustee.  
(Exhibit to PSI's Form 10-K/A, Amendment No. 2, dated July 15, 1993, in 
File No. 1-3543.)

Cinergy and CG&E
 
   4-t *Original Indenture (First Mortgage Bonds) between CG&E and The Bank 
of New York (as Trustee) dated as of August 1, 1936.  (Exhibit to CG&E's 
Registration Statement No. 2-2374.)

   4-u *Tenth Supplemental Indenture between CG&E and The Bank of New York 
dated as of July 1, 1967.  (Exhibit to CG&E's Registration Statement No. 2-
26549.)
 
   4-v *Eleventh Supplemental Indenture between CG&E and The Bank of New 
York dated as of May 1, 1969.  (Exhibit to CG&E's Registration Statement 
No. 2-32063.)

   4-w *Thirteenth Supplemental Indenture between CG&E and The Bank of New 
York dated as of November 1, 1971.  (Exhibit to CG&E's Registration 
Statement No. 2-41974.)

   4-x *Fourteenth Supplemental Indenture between CG&E and The Bank of New 
York dated as of November 2, 1972.  (Exhibit to CG&E's Registration 
Statement No. 2-60961.)

   4-y *Fifteenth Supplemental Indenture between CG&E and The Bank of New 
York dated as of August 1, 1973.  (Exhibit to CG&E's Registration Statement 
No. 2-60961.)

   4-z *Thirty-second Supplemental Indenture between CG&E and The Bank of 
New York dated as of December 15, 1991.  (Exhibit to CG&E's Registration 
Statement No. 33-45115.)

   4-aa *Thirty-third Supplemental Indenture between CG&E and The Bank of 
New York dated as of September 1, 1992.  (Exhibit to CG&E's Registration 
Statement No. 33-53578.)

   4-bb *Thirty-fourth Supplemental Indenture between CG&E and The Bank of 
New York dated as of October 1, 1993.  (Exhibit to CG&E's September 30, 
1993, Form 10-Q in File No. 1-1232.)
  
   4-cc *Thirty-fifth Supplemental Indenture between CG&E and The Bank of 
New York dated as of January 1, 1994.  (Exhibit to CG&E's Registration 
Statement No. 33-52335.)

   4-dd *Thirty-sixth Supplemental Indenture between CG&E and The Bank of 
New York dated as of February 15, 1994.  (Exhibit to CG&E's Registration 
Statement No. 33-52335.)

   4-ee *Loan Agreement between CG&E and County of Boone, Kentucky dated as 
of February 1, 1985.  (Exhibit to CG&E's 1984 Form 10-K in File No. 1-
1232.)

   4-ff *Loan Agreement between CG&E and State of Ohio Air Quality 
Development Authority dated as of December 1, 1985.  (Exhibit to CG&E's 
1985 Form 10-K in File No. 1-1232.)

   4-gg *Loan Agreement between CG&E and State of Ohio Air Quality 
Development Authority dated as of December 1, 1985.  (Exhibit to CG&E's 
1985 Form 10-K in File No. 1-1232.)
  
   4-hh *Repayment Agreement between CG&E and The Dayton Power and Light 
Company dated as of December 23, 1992.  (Exhibit to CG&E's 1992 Form 10-K 
in File No. 1-1232.)

   4-ii *Loan Agreement between CG&E and State of Ohio Water Development 
Authority dated as of January 1, 1994.  (Exhibit to CG&E's 1993 Form 10-K 
in File No. 1-1232.)
  
   4-jj *Loan Agreement between CG&E and State of Ohio Air Quality 
Development Authority dated as of January 1, 1994.  (Exhibit to CG&E's 1993 
Form 10-K in File No. 1-1232.)

   4-kk *Loan Agreement between CG&E and County of Boone, Kentucky dated as 
of January 1, 1994. (Exhibit to CG&E's 1993 Form 10-K in File No. 1-1232.)
   
   4-ll *Original Indenture (Unsecured Debt Securities) between CG&E and 
The Fifth Third Bank dated as of May 15, 1995.  (Exhibit to CG&E's Form 8-A 
dated July 24, 1995, in File No. 1-1232.)

   4-mm *First Supplemental Indenture between CG&E and The Fifth Third Bank 
dated as of June 1, 1995.  (Exhibit to CG&E's June 30, 1995, Form 10-Q in 
File No. 1-1232.)

   4-nn *Second Supplemental Indenture between CG&E and The Fifth Third 
Bank dated as of June 30, 1995.  (Exhibit to CG&E's Form 8-A dated July 24, 
1995, in File No. 1-1232.)

   4-oo *Loan Agreement between CG&E and the State of Ohio Air Quality 
Development Authority dated as of September 13, 1995.  (Exhibit to CG&E's 
September 30, 1995, Form 10-Q in File No. 1-1232.)
 
   4-pp *Loan Agreement between CG&E and the State of Ohio Air Quality 
Development Authority dated as of September 13, 1995.  (Exhibit to CG&E's 
September 30, 1995, Form 10-Q in File No. 1-1232.)

Cinergy, CG&E, and ULH&P

   4-qq *Original Indenture (First Mortgage Bonds) between ULH&P and The 
Bank of New York dated as of February 1, 1949.  (Exhibit to ULH&P's 
Registration Statement No. 2-7793.)

   4-rr *Fifth Supplemental Indenture between ULH&P and The Bank of New 
York dated as of January 1, 1967.  (Exhibit to CG&E's Registration 
Statement No. 2-60961.)

   4-ss *Seventh Supplemental Indenture between ULH&P and The Bank of New 
York dated as of October 1, 1973.  (Exhibit to CG&E's Registration 
Statement No. 2-60961.)

   4-tt *Eighth Supplemental Indenture between ULH&P and The Bank of New 
York dated as of December 1, 1978.  (Exhibit to CG&E's Registration 
Statement No. 2-63591.)

   4-uu *Thirteenth Supplemental Indenture between ULH&P and The Bank of 
New York dated as of August 1, 1992.  (Exhibit to ULH&P's 1992 Form 10-K in 
File No. 2-7793.)

   4-vv *Original Indenture (Unsecured Debt Securities) between ULH&P and 
the Fifth Third Bank dated as of July 1, 1995.  (Exhibit to ULH&P's June 
30, 1995, Form 10-Q in File No. 2-7793)

   4-ww *First Supplemental Indenture between ULH&P and The Fifth Third 
Bank dated as of July 15, (Exhibit to ULH&P's June 30, 1995, Form 10-Q in 
File No. 2-7793.)
   
Cinergy, CG&E, and PSI

   10-a *+Amended and Restated Employment Agreement dated October 24, 1994, 
among CG&E, Cinergy Corp. (an Ohio corporation), Cinergy (a Delaware 
corporation), PSI Resources, Inc., PSI, and Jackson H. Randolph.  (Exhibit 
to Cinergy's 1994 Form 10-K in File No. 1-11377.)

   10-b *+Amended and Restated Employment Agreement dated July 2, 1993, 
among PSI Resources, Inc., PSI, CG&E, Cinergy, Cinergy Sub, Inc., and James 
E. Rogers, Jr.  (Exhibit to Cinergy's Amendment No. 3 to Form S-4, filed 
October 8, 1993.)
   
   10-c +First Amendment to Amended and Restated Employment Agreement dated 
December 12, 1995, retroactively effective to October 24, 1994, amended and 
restated July 2, 1993, among Cinergy, Services, CG&E, PSI, and James E. 
Rogers.

   10-d *+Employment Agreement dated January 1, 1995, among Cinergy, CG&E, 
Services, Inc., Investments, PSI, and William J. Grealis.  (Exhibit to 
Cinergy's 1994 Form 10-K in File No. 1-11377.)

    10-e Employment Agreement dated October 24, 1994, among Cinergy, 
Services, CG&E, PSI, and Larry E. Thomas.

    10-f First Amendment to Employment Agreement dated October 24, 1994, 
among Cinergy, Services, CG&E, PSI, and Larry E. Thomas.

    10-g Employment Agreement dated October 24, 1994, among Cinergy, 
Services, CG&E, PSI, and J. Wayne Leonard.

    10-h First Amendment to Employment Agreement dated October 24, 1994, 
among Cinergy, Services, CG&E, PSI, and J. Wayne Leonard.

    10-i Employment Agreement dated October 24, 1994, among Cinergy, 
Services, CG&E, PSI, and Cheryl M. Foley.

    10-j First Amendment to Employment Agreement dated October 24, 1994, 
among Cinergy, Services, CG&E, PSI, and Cheryl M. Foley.

Cinergy and PSI

   10-k First Amendment to the PSI Union Employees' 401(k) Savings Plan, dated
December 31, 1995.   

   10-l First Amendment to the PSI Employees' 401(k) Savings Plan, dated 
December 31, 1995.  

   10-m *+Employment Agreement dated October 4, 1993, among Cinergy, PSI, 
and John M. Mutz. (Exhibit to PSI Resources, Inc.'s September 30, 1993, 
Form 10-Q, File No. 1-9941.)

   10-n *+Deferred Compensation Agreement, effective as of January 1, 1992, 
between Cinergy and James E. Rogers, Jr.  (Exhibit to PSI's Form 10-K/A in 
File No. 1-3543, Amendment No. 1, dated April 29, 1993.)

   10-o *+Split Dollar Life Insurance Agreement, effective as of January 1, 
1992, between Cinergy and James E. Rogers, Jr.  (Exhibit to PSI's Form 10-
K/A in File No. 1-3543, Amendment No. 1, dated April 29, 1993.)

   10-p *+First Amendment to Split Dollar Life Insurance Agreement between 
Cinergy and James E. Rogers, Jr. dated December 11, 1992.  (Exhibit to 
PSI's Form 10-K/A in File No. 1-3543, Amendment No. 1, dated April 29, 
1993.) 

   10-q *+PSI Supplemental Retirement Plan amended and restated December 
16, 1992, retroactively effective January 1, 1989.  (Exhibit to PSI's 1992 
Form 10-K in File No. 1-3543.)

   10-r *+PSI Excess Benefit Plan, formerly named the Supplemental Pension 
Plan, amended and restated December 16, 1992, retroactively effective 
January 1, 1989.  (Exhibit to PSI's 1992 Form 10-K in File No. 1-3543.)

Cinergy and CG&E

   10-s *CG&E Deferred Compensation and Investment Plan, as amended, 
effective January 1, 1989. (Exhibit to Cinergy's Form S-8, filed August 30, 
1994.)

   10-t *CG&E Savings Incentive Plan, as amended, effective January 1, 
1989.  (Exhibit to Cinergy's Form S-8, filed August 30, 1994.)

   10-u *+Deferred Compensation Agreement between Jackson H. Randolph and 
Cinergy dated January 1, 1992.  (Exhibit to CG&E's 1992 Form 10-K in File 
No. 1-1232.)

   10-v *+Supplemental Executive Retirement Income Plan between CG&E and 
certain executive officers.  (Exhibit to CG&E's 1988 Form 10-K in File No. 
1-1232.)

   10-w *+Amendment to Supplemental Executive Retirement Income Plan 
between CG&E and certain executive officers.  (Exhibit to CG&E's 1992 Form 
10-K in File No 1-1232.)

   10-x +Amended and Restated Supplemental Retirement Income Plan between 
CG&E and Jackson H. Randolph.

   10-y *+Amendment to Executive Severance Agreement between CG&E and 
certain executive officers. (Exhibit to CG&E's 1992 Form 10-K in File No. 
1-1232.)

   10-z  *+Executive Severance Agreement between CG&E and certain executive 
officers.  (Exhibit to CG&E's 1989 Form 10-K in File No. 1-1232.)
   
Cinergy

   10-aa *+Cinergy Stock Option Plan, adopted October 18, 1994, effective 
October 24, 1994. (Exhibit to Cinergy's Form S-8, filed October 19, 1994.)

   10-bb *+Cinergy Performance Shares Plan, adopted October 18, 1994, 
effective October 24, 1994.  (Exhibit to Cinergy's Form S-8, filed October 
19, 1994.)

   10-cc *+Cinergy Annual Incentive Plan, adopted October 18, 1994, 
effective October 24, 1994.  (Exhibit to Cinergy's 1994 Form 10-K in File 
No. 1-11377.)

   10-dd *Cinergy Employee Stock Purchase and Savings Plan, adopted October 
18, 1994, effective October 24, 1994.  (Exhibit to Cinergy's Form S-8, 
filed October 19, 1994.)

   10-ee *Amendment to Cinergy Employee Stock Purchase and Savings Plan, 
adopted January 25, 1995, retroactively effective January 1, 1995.  
(Exhibit to Cinergy's 1994 Form 10-K in File No. 1-11377.)

   10-ff *+Cinergy Directors' Deferred Compensation Plan, adopted October 
18, 1994, effective October 24, 1994.  (Exhibit to Cinergy's Form S-8, 
filed October 19, 1994.)

   10-gg *+Cinergy Retirement Plan for Directors, adopted October 18, 1994, 
effective October 24, 1994.  (Exhibit to Cinergy's 1994 Form 10-K in File 
No. 1-11377.)

   10-hh *+Cinergy Executive Supplemental Life Insurance Program adopted 
October 18, 1994, effective October 24, 1994, consisting of Defined Benefit 
Deferred Compensation Agreement, Executive Supplemental Life Insurance 
Program Split Dollar Agreement I, and Executive Supplemental Life Insurance 
Program Split Dollar Agreement II.  (Exhibit to Cinergy's 1994 Form 10-K in 
File No. 1-11377.)

   10-ii *+Split Dollar Insurance Agreement, effective as of May 1, 1993, 
between Cinergy and Jackson H. Randolph.  (Exhibit to Cinergy's 1994 Form 
10-K in File No. 1-11377.)

Cinergy and PSI

   10-jj *PSI Union Employees' 401(k) Savings Plan, amended and restated 
October 24, 1994, effective January 1, 1992.  (Exhibit to Cinergy's Form S-8, 
filed October 18, 1994.)

   10-kk *PSI Employees' 401(k) Savings Plan, amended and restated October 24, 
1994, effective January 1, 1992.  (Exhibit to Cinergy's Form S-8, filed 
October 18, 1994.)

Cinergy

   21 Subsidiaries of Cinergy 

Cinergy, CG&E, PSI, and ULH&P

   23 Consent of Independent Public Accountants.

   24 Power of Attorney.

   27 Financial Data Schedules (included in electronic submission only).

Cinergy

   99-a 1995 Form 11-K Annual Report of Cinergy Directors' Deferred 
Compensation Plan.  

   99-b 1995 Form 11-K Annual Report of Cinergy Employee Stock Purchase and 
Savings Plan. (To be filed by amendment.)

____________
+  Management contract, compensation plan or arrangement required to be filed
   as an exhibit pursuant to Item 14(c) of Form 10-K.
<PAGE>

<TABLE>
<CAPTION>
                                                              CINERGY CORP.
                                              SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                                    FOR THE YEAR ENDED DECEMBER 31, 1995
                 Col. A                        Col. B             Col. C                      Col. D            Col. E 
                                                                Additions                   Deductions      
                                                                                     For Purposes
                                             Balance at                  Charged       For Which              Balance at
                                             Beginning     Charged to    to Other    Reserves Were             Close of
              Description                    of Period       Income      Accounts      Created        Other     Period 
                                                                           (in thousands)
<S>                                         <C>           <C>           <C>         <C>             <C>     <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts            $   90 547    $  72 804    $(47 322)      $21 620      $  -     $   94 409 1/
  Miscellaneous Materials & Supplies
    Provisions                                    5 693          614        -            1 364           73       4 870
  Accumulated Depreciation                    3 163 802      276 226       4 435        79 602 2/    (2 540)  3 367 401

Other Accumulated Provisions                  
  Deferred Income Taxes 3/                   $1 071 104    $  56 336    $ 11 235       $17 775      $  -     $1 120 900
  Accrued Pension and Other
    Postretirement Benefit Costs                133 578       34 765      12 989         9 561         -        171 771
  Environmental Liability                         8 750         -           -              511         -          8 239
  Injuries & Damages                              4 310        7 402        -            6 444         -          5 268
  Other                                          42 270        4 815       4 374         2 910          456      48 093
  
                                             $1 260 012    $ 103 318    $ 28 598       $37 201      $   456   $1 354 271
<FN>
  1/  Includes $84,049 for the WVPA Marble Hill receivable.  See Note 13(e) of the "Notes to Financial Statements" in 
      "Item 8.  Financial Statements and Supplementary Data".
  2/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  3/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary 
      Data" for further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                              CINERGY CORP.
                                              SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                                    FOR THE YEAR ENDED DECEMBER 31, 1994
                 Col. A                        Col. B             Col. C                      Col. D            Col. E _ 
                                                                Additions                   Deductions    
                                                                                     For Purposes
                                             Balance at                  Charged       For Which              Balance at
                                             Beginning     Charged to    to Other    Reserves Were             Close of
              Description                    of Period       Income      Accounts      Created      Other       Period _
                                                                           (in thousands)
<S>                                         <C>           <C>           <C>         <C>           <C>       <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts            $   93 735    $  31 145     $15 010       $49 343     $  -      $   90 547 1/
  Miscellaneous Materials & Supplies
    Provisions                                    6 852          405        -              638         926        5 693
  Accumulated Depreciation                    2 928 184      307 386       4 793        76 698 2/     (137)   3 163 802

Other Accumulated Provisions                  
  Deferred Income Taxes 3/                   $1 018 891    $  78 028     $ 8 985       $34 800     $  -      $1 071 104
  Accrued Pension and Other
    Postretirement Benefit Costs                 85 953       37 180      22 806        11 912         449      133 578
  Environmental Liability                         8 000         -            750          -           -           8 750
  Injuries & Damages                              3 578        9 836        -            9 104        -           4 310
  Other                                          30 275       10 628       3 973         2 162         444       42 270
  
                                             $1 146 697    $ 135 672     $36 514       $57 978     $   893   $1 260 012
<FN>
  1/  Includes $80,832 for the WVPA Marble Hill receivable.  See Note 13(e) of the "Notes to Financial Statements" in 
      "Item 8.  Financial Statements and Supplementary Data".
  2/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  3/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary 
      Data" for further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                               CINERGY CORP.
                                             SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                                  FOR THE YEAR ENDED DECEMBER 31, 1993
                 Col. A                        Col. B             Col. C                      Col. D            Col. E _
                                                                 Additions                  Deductions      
                                                                                     For Purposes
                                             Balance at                  Charged       For Which              Balance at
                                             Beginning     Charged to    to Other    Reserves Were             Close of
              Description                    of Period       Income      Accounts      Created      Other       Period _ 
                                                                           (in thousands)
<S>                                        <C>            <C>           <C>         <C>            <C>      <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts            $   88 651   $ 24 260     $  1 032       $20 208      $  -      $   93 735 1/
  Miscellaneous Materials & Supplies
    Provisions                                    8 844        554         -            2 356          190        6 852
  Accumulated Depreciation                    2 742 910    277 342        4 827        80 089 2/    16 806    2 928 184

Other Accumulated Provisions                  
  Deferred Income Taxes 3/                   $  494 910   $155 738     $417 125       $48 882      $  -      $1 018 891
  Accrued Pension and Other
    Postretirement Benefit Costs                 59 393     20 905       21 719        15 970           94       85 953
  Environmental Liability                         5 000      3 000         -             -            -           8 000
  Injuries & Damages                              5 212      7 563         -            9 197         -           3 578
  Other                                          20 818     11 380        1 313         3 218           18       30 275
  
                                             $  585 333   $198 586     $440 157       $77 267      $   112   $1 146 697
<FN>
  1/  Includes $78,174 for the WVPA Marble Hill receivable.  See Note 13(e) of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplementary Data".
  2/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  3/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary Data" for 
further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              THE CINCINNATI GAS AND ELECTRIC COMPANY
                                          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                               FOR THE YEAR ENDED DECEMBER 31, 1995
                 Col. A                        Col. B             Col. C                      Col. D              Col. E _
                                                                 Additions                  Deductions      
                                                                                     For Purposes
                                             Balance at                  Charged       For Which               Balance at
                                             Beginning     Charged to    to Other    Reserves Were              Close of
              Description                    of Period       Income      Accounts      Created        Other      Period _ 
                                                                           (in thousands)
<S>                                         <C>           <C>           <C>         <C>              <C>      <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts            $    8 999    $ 66 506     $(47 329)     $ 18 561        $ -      $    9 615
  Accumulated Depreciation                    1 613 505     155 453        4 137        42 863  1/      -       1 730 232

Other Accumulated Provisions                  
  Deferred Income Taxes 2/                   $  747 060    $ 20 594     $ 15 343      $(12 388)       $ -      $  795 385
  Accrued Pension and Other
    Postretirement Benefit Costs                102 254      13 185        4 202         2 000          -         117 641
  Environmental Liability                         8 750        -            -              511          -           8 239
  Injuries & Damages                                771       5 121         -            4 672          -           1 220
  Other                                          22 089       2 045          388         1 485          -          23 037
  
                                             $  880 924    $ 40 945     $ 19 933      $ (3 720)       $ -      $  945 522
<FN>
  1/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  2/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8. Financial Statements and Supplementary 
      Data."
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              THE CINCINNATI GAS AND ELECTRIC COMPANY
                                          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                               FOR THE YEAR ENDED DECEMBER 31, 1994
                 Col. A                        Col. B             Col. C                      Col. D              Col. E  
                                                                 Additions                  Deductions      
                                                                                     For Purposes
                                             Balance at                  Charged       For Which               Balance at
                                             Beginning     Charged to    to Other    Reserves Were              Close of
              Description                    of Period       Income      Accounts      Created        Other      Period _ 
                                                                           (in thousands)

<S>                                         <C>           <C>           <C>         <C>              <C>      <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts            $   14 906    $ 25 598      $ 15 010      $ 46 515       $ -      $    8 999 
  Accumulated Depreciation                    1 472 313     169 607         4 374        32 789 1/      -       1 613 505

Other Accumulated Provisions                  
  Deferred Income Taxes 2/                   $  733 224    $  8 616      $ (5 948)     $(11 168)      $ -      $  747 060
  Accrued Pension and Other
    Postretirement Benefit Costs                 71 856      26 566         5 243         1 411         -         102 254
  Environmental Liability                         8 000        -              750          -            -           8 750
  Injuries & Damages                                474       5 512          -            5 215         -             771
  Other                                          14 038       8 190           380           519         -          22 089
  
                                             $  827 592    $ 48 884      $    425      $ (4 023)      $ -      $  880 924
<FN>
  1/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  2/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary  Data" for 
further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              THE CINCINNATI GAS AND ELECTRIC COMPANY
                                          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                               FOR THE YEAR ENDED DECEMBER 31, 1993
                 Col. A                        Col. B             Col. C                      Col. D              Col. E_
                                                                 Additions                  Deductions      
                                                                                     For Purposes
                                             Balance at                  Charged       For Which               Balance at
                                             Beginning     Charged to    to Other    Reserves Were              Close of
              Description                    of Period       Income      Accounts      Created         Other     Period  
                                                                           (in thousands)

<S>                                         <C>           <C>           <C>         <C>              <C>     <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts            $   12 114    $ 19 801      $  1 032      $18 041        $  -     $   14 906 
  Accumulated Depreciation                    1 362 468     150 521         4 435       28 022 1/      17 089   1 472 313

Other Accumulated Provisions                  
  Deferred Income Taxes 2/                   $  307 139    $ 45 630      $396 307      $15 852        $  -     $  733 224
  Accrued Pension and Other
    Postretirement Benefit Costs                 59 162      10 309         5 466        3 081           -         71 856
  Environmental Liability                         5 000       3 000          -            -              -          8 000
  Injuries & Damages                              1 078       5 034          -           5 638           -            474
  Other                                           4 601       9 175           679          417           -         14 038
  
                                             $  376 980    $ 73 148      $402 452      $24 988        $  -     $  827 592
<FN>
  1/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  2/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary Data" for 
further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           PSI ENERGY, INC.
                          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 FOR THE YEAR ENDED DECEMBER 31, 1995
                 Col. A                       Col. B             Col. C                      Col. D              Col. E           
                                                       Additions      _           Deductions _     
                                                                                    For Purposes
                                            Balance at                  Charged       For Which               Balance at
                                            Beginning     Charged to    to Other    Reserves Were              Close of
              Description                   of Period       Income      Accounts      Created        Other      Period _ 
                                                                           (in thousands)
<S>                                        <C>           <C>           <C>       <C>               <C>       <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts          $   81 272      $  6 100     $     7      $ 2 862       $  -      $   84 517 1/
  Miscellaneous Materials & Supplies
    Provisions                                  5 693           614        -           1 364            73        4 870
  Accumulated Depreciation                  1 550 297       120 773         298       36 739 2/     (2 540)   1 637 169

Other Accumulated Provisions                  
  Deferred Income Taxes 3/                 $  324 738      $ 35 656     $(2 170)     $26 348       $  -      $  331 876
  Accrued Pension and Other
    Postretirement Benefit Costs               31 324        21 580       8 787        7 561          -          54 130
  Injuries & Damages                            3 539         2 281        -           1 772          -           4 048
  Other                                        20 176         2 551       3 986        1 425           456       24 832
  
                                           $  379 777      $ 62 068     $10 603      $37 106       $   456   $  414 886
<FN>
  1/  Includes $84,049 for the WVPA Marble Hill receivable.  See Note 13(e) of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplementary Data".
  2/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  3/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary Data" for 
further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                          PSI ENERGY, INC.
                          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 FOR THE YEAR ENDED DECEMBER 31, 1994
                 Col. A                       Col. B             Col. C                      Col. D             Col. E__
                                                               Additions __                Deductions      
                                                                                    For Purposes
                                            Balance at                  Charged       For Which               Balance at
                                            Beginning     Charged to    to Other    Reserves Were              Close of
              Description                   of Period       Income      Accounts      Created        Other      Period _ 
                                                                          (in thousands)
<S>                                        <C>           <C>           <C>         <C>             <C>      <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts          $   78 567      $  5 495     $  -         $ 2 790       $  -      $   81 272 1/
  Miscellaneous Materials & Supplies
    Provisions                                  6 852           405        -             638           926        5 693
  Accumulated Depreciation                  1 455 871       137 719         479       43 909 2/       (137)   1 550 297

Other Accumulated Provisions                  
  Deferred Income Taxes 3/                 $  281 417      $ 73 145     $14 933      $44 757       $  -      $  324 738
  Accrued Pension and Other
    Postretirement Benefit Costs               14 097        10 614      17 563       10 501           449       31 324
  Injuries & Damages                            3 104         4 324        -           3 889          -           3 539
  Other                                        16 235         2 435       3 593        1 643           444       20 176
  
                                           $  314 853      $ 90 518     $36 089      $60 790       $   893   $  379 777
<FN>
  1/  Includes $80,832 for the WVPA Marble Hill receivable.  See Note 13(e) of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplementary Data".
  2/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  3/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary Data" for 
further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                            PSI ENERGY, INC.
                           SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 FOR THE YEAR ENDED DECEMBER 31, 1993
                 Col. A                       Col. B             Col. C                      Col. D             Col. E_ 
                                                                Additions                  Deductions      
                                                                                    For Purposes
                                            Balance at                  Charged       For Which               Balance at
                                            Beginning     Charged to    to Other    Reserves Were              Close of
              Description                   of Period       Income      Accounts      Created        Other      Period  
                                                                          (in thousands)
<S>                                        <C>           <C>           <C>         <C>            <C>      <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts          $   76 275     $  4 459     $  -          $ 2 167       $  -      $   78 567 1/
  Miscellaneous Materials & Supplies
    Provisions                                  8 844          554        -            2 356           190        6 852
  Accumulated Depreciation                  1 380 442      126 821         392        52 067 2/       (283)   1 455 871

Other Accumulated Provisions                  
  Deferred Income Taxes 3/                 $  188 252     $109 967     $20 818       $37 620       $  -      $  281 417
  Accrued Pension and Other
    Postretirement Benefit Costs                  231       10 596      16 253        12 889            94       14 097
  Injuries & Damages                            4 134        2 529        -            3 559          -           3 104
  Other                                        16 203        2 044         790         2 784            18       16 235
  
                                           $  208 820     $125 136     $37 861       $56 852       $   112   $  314 853
<FN>
  1/  Includes $78,174 for the WVPA Marble Hill receivable.  See Note 13(e) of the "Notes to Financial Statements" in "Item 8.  
Financial Statements and Supplementary Data".
  2/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  3/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary Data" for 
further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                               THE UNION LIGHT, HEAT AND POWER COMPANY
                           SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                FOR THE YEAR ENDED DECEMBER 31, 1995
                 Col. A                        Col. B             Col. C                      Col. D              Col. E  
                                                                 Additions                  Deductions      
                                                                                     For Purposes
                                             Balance at                  Charged       For Which               Balance at
                                             Beginning     Charged to    to Other    Reserves Were              Close of
              Description                    of Period       Income      Accounts      Created        Other      Period _ 
                                                                           (in thousands)
<S>                                         <C>           <C>           <C>         <C>              <C>      <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts             $    457     $  9 220      $(6 198)      $ 2 444        $ -      $  1 035 
  Accumulated Depreciation                     104 113       11 438          831         3 570 1/       -       112 812

Other Accumulated Provisions                  
  Deferred Income Taxes 2/                    $ 23 226     $ (3 105)     $  (435)      $(4 042)       $ -      $ 23 728
  Accrued Pension and Other
    Postretirement Benefit Costs                10 356        1 156          773            83          -        12 202
  Environmental Liability                          800         -            -             -             -           800
  Injuries & Damages                               210        1 185         -              795          -           600
  Other                                            285         -              32          -             -           317
                                              $ 34 877     $   (764)     $   370       $(3 164)       $ -      $ 37 647
<FN>
  1/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  2/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8. Financial Statements and Supplementary 
      Data" for further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                               THE UNION LIGHT, HEAT AND POWER COMPANY
                           SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                FOR THE YEAR ENDED DECEMBER 31, 1994
                 Col. A                        Col. B             Col. C                      Col. D              Col. E  
                                                                 Additions                  Deductions      
                                                                                     For Purposes
                                             Balance at                  Charged       For Which               Balance at
                                             Beginning     Charged to    to Other    Reserves Were              Close of
              Description                    of Period       Income      Accounts      Created        Other      Period _ 
                                                                           (in thousands)
<S>                                         <C>           <C>           <C>         <C>              <C>      <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts             $  1 609     $  2 502      $    11       $ 3 665        $ -      $     457
  Accumulated Depreciation                      96 164       11 066          823         3 940 1/       -        104 113

Other Accumulated Provisions                  
  Deferred Income Taxes 2/                    $ 20 487     $  1 993      $(2 904)      $(3 650)       $ -      $  23 226
  Accrued Pension and Other
    Postretirement Benefit Costs                 7 273        1 024        2 200           141          -         10 356
  Environmental Liability                          800         -            -             -             -            800
  Injuries & Damages                               125          806         -              721          -            210
  Other                                            242           24           19          -             -            285
  
                                              $ 28 927     $  3 847      $  (685)      $(2 788)       $ -      $  34 877
<FN>
  1/  Includes property retired at original cost or estimated original cost less the net cost of removal.
  2/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary Data" for 
further information with respect to deferred income taxes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                               THE UNION LIGHT, HEAT AND POWER COMPANY
                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 FOR THE YEAR ENDED DECEMBER 31, 1993
                 Col. A                        Col. B             Col. C                      Col. D              Col. E
                                                                 Additions                  Deductions      
                                                                                     For Purposes
                                             Balance at                  Charged       For Which               Balance at
                                             Beginning     Charged to    to Other    Reserves Were              Close of
              Description                    of Period       Income      Accounts      Created        Other      Period _ 
                                                                           (in thousands)
<S>                                         <C>           <C>           <C>         <C>              <C>      <C>
Accumulated Provisions Deducted from
 Applicable Assets
  Allowance for Doubtful Accounts             $  1 001     $  2 632      $     3       $ 2 027        $ -      $  1 609
  Accumulated Depreciation                      89 132        9 655          865         3 488 1/       -        96 164

Other Accumulated Provisions                  
  Deferred Income Taxes 2/                    $ 27 609     $  1 204      $(9 251)      $  (925)       $ -      $ 20 487
  Accrued Pension and Other
    Postretirement Benefit Costs                 6 014        1 237          341           319          -         7 273
  Environmental Liability                          800         -            -             -             -           800
  Injuries & Damages                               143          642         -              660          -           125
  Other                                           -             242         -             -             -           242
  
                                              $ 34 566     $  3 325      $(8 910)      $    54        $ -      $ 28 927
<FN>
  1/  Includes property retired at original cost or estimated original cost less the net cost of removal.
 . 2/  See Notes 1(e) and 12 of the "Notes to Financial Statements" in "Item 8.  Financial Statements and Supplementary Data" for 
further information with respect to deferred income taxes.
</TABLE>

<PAGE>
                                 SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, Cinergy Corp., The Cincinnati Gas & Electric Company, 
PSI Energy, Inc., and The Union Light, Heat and Power Company have each duly 
caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized.

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

Dated:  March 27, 1996

                                    By          James E. Rogers
                                                 Vice Chairman

     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of 
the registrant and in the capacities and on the dates indicated.

       Signature                       Title                     Date
Cinergy, CG&E, PSI, and ULH&P
  Jackson H. Randolph          Chairman

Cinergy
  Neil A. Armstrong            Director
  Clement L. Buenger           Director
  Phillip R. Cox               Director
  Kenneth M. Duberstein        Director
  George C. Juilfs             Director
  Melvin Perelman, Ph.D.       Director
  Thomas E. Petry              Director
  John J. Schiff, Jr.          Director
  Phillip R. Sharp             Director
  Dudley S. Taft               Director
  Oliver W. Waddell            Director

Cinergy and PSI
  James K. Baker               Director
  Michael G. Browning          Director
  John A. Hillenbrand II       Director
  Van P. Smith                 Director

CG&E and ULH&P
  William J. Grealis           President and Director

PSI
  John M. Mutz                 President and Director

ULH&P
  Terry E. Bruck               Group Vice President and Director
  Cheryl M. Foley              Vice President, General Counsel,
                                 Secretary, and Director
  Stephen G. Salay             Director

Cinergy, CG&E, PSI, and ULH&P


      James E. Rogers               Vice Chairman, Chief        March 27, 1996
  Attorney-in-fact for all     Executive Officer, and Director
   the foregoing persons            President of Cinergy
                                (Principal Executive Officer)


     J. Wayne Leonard            Group Vice President and       March 27, 1996
                                  Chief Financial Officer 
                                     Director of ULH&P
                               (Principal Financial Officer)


    Charles J. Winger                   Comptroller             March 27, 1996
                              (Principal Accounting Officer)