FORM 10-K
                                     
                    SECURlTlES AND EXCHANGE COMMlSSlON
                         WASHINGTON, D. C.   20549
                                     
     [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 

     For the fiscal year ended
         December 31, 1996              Commission File Number  1-3132-2


                    INDIANAPOLIS POWER & LIGHT COMPANY
           (Exact name of Registrant as specified in its charter)
                                     
            Indiana                                   35-0413620
     (State or other jurisdiction                 (I.R.S. Employer
      of incorporation or organization)            Identification No.)

          One Monument Circle
          Indianapolis, Indiana                      46204
     (Address of principal executive offices)       (Zip Code)

    Registrant's telephone number, including area code:  317-261-8261
                                     
    Securities Registered Pursuant to Section 12(b) of the Act:  None

    Securities Registered Pursuant to Section 12(g) of the Act:

    518,985 Shares of Cumulative Preferred Stock

    Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports),
    and (2) has been subject to the filing requirements for at least 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 registrant's 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)

    As of January 31, 1997, there were 17,206,630 shares of the
    registrant's common stock (without par value) issued and outstanding.
                   _____________________________________
                                     
    DOCUMENTS INCORPORATED BY REFERENCE
  
    Portions of the Indianapolis Power & Light Company definitive
    Proxy Statement for the Annual Meeting of Shareholders to be
    held on May 21, 1997 are incorporated by reference into Part III of
    this Report.
  
                              PART I
                              ------

Item 1.  BUSINESS
         --------

ORGANIZATION

   Indianapolis Power & Light Company (IPL) is an operating public
utility incorporated under the laws of the state of Indiana on October
27, 1926.  IPL is a subsidiary of IPALCO Enterprises, Inc. (IPALCO).
IPALCO is a holding company incorporated under the laws of the state of
Indiana on September 14, 1983.  All common stock of IPL is owned by
IPALCO.

GENERAL

   IPL was incorporated under the laws of the state of Indiana in 1927
and is a wholly owned subsidiary of IPALCO.  IPL is engaged primarily in
generating, transmitting, distributing and selling electric energy in the
city of Indianapolis and neighboring cities, towns, communities, and
adjacent rural areas, all within the state of Indiana, the most distant
point being about 40 miles from Indianapolis.  It also produces,
distributes and sells steam within a limited area in such city.  There
have been no significant changes in the services rendered, or in the
markets or methods of distribution, since the beginning of the fiscal
year.  IPL intends to do business of the same general character as that
in which it is now engaged.  No private or municipally-owned electric
public utility companies are competing with IPL in the territory it
serves.  Existing Indiana law provides for public utilities to have an
exclusive retail service area.

   IPL's business is not dependent on any single customer or group of
customers.  IPL's historical retail sales to ultimate consumers for 1992-
1996 are depicted at page I-4.

   The electric utility business is affected by the various seasonal
weather patterns throughout the year and, therefore, the operating
revenues and associated operating expenses are not generated evenly by
months during the year.

   IPL's generation, transmission and distribution facilities (electric
system) are described in Item 2, "PROPERTIES."  IPL's electric system is
directly interconnected with the electric systems of Indiana Michigan
Power Company, PSI Energy, Inc., Southern Indiana Gas and Electric
Company, Wabash Valley Power Association, Hoosier Energy Rural Electric
Cooperative, Inc. and the Indiana Municipal Power Agency.

   Also, IPL is a member of the East Central Area Reliability Group
(ECAR), and is cooperating under an agreement which provides for
coordinated planning of generating and transmission facilities and the
operation of such facilities to promote reliability of bulk power supply
in the nine-state region served by ECAR.  Smaller electric utility
systems, independent power producers and power marketers participate as
associate members.

REGULATION

   IPL is subject to regulation by the Indiana Utility Regulatory
Commission (IURC) as to its services and facilities, valuation of
property, the construction, purchase or lease of electric generating
facilities, classification of accounts, rates of depreciation, rates and
charges, issuance of securities (other than evidences of indebtedness
payable less than twelve months after the date of issue), the acquisition
and sale of public utility properties or securities and certain other
matters.  See Note 9 in the Notes to Financial Statements.

   In addition, IPL is subject to the jurisdiction of the Federal Energy
Regulatory Commission (FERC), in respect of short-term borrowings not
regulated by the IURC, the sale and transmission of electric energy in
interstate commerce, the classification of its accounts and the
acquisition and sale of utility property in certain circumstances as
provided by the Federal Power Act.

   IPL is also subject to federal, state and local environmental laws and
regulations, particularly as to generating station discharges affecting
air and water quality.  The impact of compliance with such regulations on
the capital and operating costs of IPL has been and will continue to be
substantial.  IPL has developed and substantially implemented a plan to
reduce sulfur dioxide and nitrogen oxide emissions from several
generating units.  This plan was approved by the Environmental Protection
Agency (EPA) in 1994.  Estimated annual expenditures for all air, solid
waste and water environmental compliance measures are $11 million and $5
million in 1997 and 1998, respectively.

RETAIL RATEMAKING

   IPL's tariffs for electric and steam service to retail customers
(basic rates and charges) are set and approved by the IURC after public
hearings initiated by IPL.  Such proceedings, which have occurred at
irregular intervals, involve IPL, the staff of the IURC, the Office of
the Indiana Utility Consumer Counselor, as well as other interested
consumer groups and IPL customers.  In Indiana, basic rates and charges
are determined after giving consideration, on a proforma basis, to all
allowable costs for ratemaking purposes including a fair return on the
fair value of the utility property dedicated to providing service to
customers.  Once set, the basic rates and charges authorized do not
assure the realization of a fair return on the fair value of property.
Other numerous factors including weather, inflation, customer growth and
usage, the level of actual maintenance and capital expenditures and IURC
restrictions on the level of operating income can impact the return
realized.  Substantially all of IPL's retail tariffs provide for the
monthly billing or crediting to customers of increases or decreases,
respectively, in the actual costs of fuel consumed from levelized fuel
costs embedded in base tariffs.  Additionally, all such retail tariffs
provide for billing of "lost revenue margins" on estimated kilowatt-hour
(KWH) sales reductions resulting from IPL's approved demand side
manangement program.  IPL maintains its books and records consistent with
generally accepted accounting principles reflecting the impact of
regulation.  See Note 1 in the Notes to Financial Statements and Item 7,
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS" under "Nature of Operations and Regulatory Matters."

   Future events, including the advent of retail competition within IPL's
service territory, could result in the deregulation of all or part of
IPL's existing regulated businesses.  Upon deregulation, adjustments to
IPL's accounting records may be required to eliminate the historical
impact of regulatory accounting.  Such adjustments, as required by
Statement of Financial Accounting Standards No. 101 (SFAS 101),
"Regulated Enterprises - Accounting for the Discontinuation of
Application of FASB Statement No. 71," would eliminate the "effects of
any actions of regulators that have been recognized as assets and
liabilities...."  Required adjustments could include expensing of any
unamortized net regulatory assets, elimination of certain tax liabilities
and a write down of any impaired utility plant balances.  IPL does not
expect to be in a position to be required to adopt SFAS 101 in the near
term and accordingly has not attempted to estimate the impact of adopting
SFAS 101.

FUEL

   In 1996, approximately 99.8% of the total KWH sold by IPL were
generated from coal, 0.1% from middle distillate fuel oil and 0.1% from
gas.  In addition to use in oil-fired generating units, fuel oil is used
for start up and flame stabilization in coal-fired generating units as
well as for coal thawing and coal handling.  Gas fuel is used in IPL's
newer combustion turbines.

   IPL's long-term coal contracts provide for the supply of the major
portion of its burn requirements through the year 1999, assuming existing
environmental regulations can be met.  The long-term coal agreements are
with three unaffiliated suppliers and the coal is mined entirely in the
state of Indiana.  See Exhibits listed under Part IV Item 14(a)2(10.1 to
10.5) for a list of coal contracts.  It is presently believed that all
coal used by IPL will be mined by others.  IPL normally carries fuel oil
and a 60-day supply of coal to offset unforeseen occurrences such as
labor disputes, equipment breakdowns and power sales to other utilities.
IPL increases its stockpile to an approximate 90-day supply when strikes
are anticipated in the coal industry.

EMPLOYEE RELATIONS

   As of December 31, 1996, IPL had 2,144 employees of whom 1,081 were
represented by the International Brotherhood of Electrical Workers, AFL-
CIO (IBEW) and 379 were represented by the Electric Utility Workers Union
(EUWU), an independent labor organization.  In December 1996, the
membership of the IBEW ratified a new labor agreement which remains in
effect until December 13, 1999.  The agreement provided for general pay
adjustments of 3.5% in 1996 and 3.0% in both 1997 and 1998, and changes
in pension and health care coverage.  In March 1995, the membership of
the EUWU ratified a new labor agreement which remains in effect until
February 23, 1998.  The agreement provided for general pay adjustments of
2% in 1995, 1996 and 1997; lump sum payments of $500 in both 1995 and
1996; and changes in pension and health care coverage.

<TABLE>  
                       INDIANAPOLIS POWER & LIGHT COMPANY
                       STATISTICAL INFORMATION - ELECTRIC

The following table of statistical information presents additional data on IPL's operation.
<CAPTION>
                                                                    Year Ended December 31,
                                       ------------------------------------------------------------------------------
                                             1996            1995            1994            1993            1992
                                       --------------  --------------  --------------  --------------  --------------

<S>                                    <C>             <C>             <C>             <C>             <C>
Operating Revenues (In Thousands):                                                           
  Residential                          $     261,819   $     243,055   $     230,805   $     225,138   $     212,757
  Small industrial and commercial            132,361         130,780         129,346         127,551         126,588
  Large industrial and commercial            298,720         275,803         266,703         255,945         243,446
  Public lighting                              8,147           7,598           6,949           7,186           7,133
  Miscellaneous                                9,264           8,289           7,186           7,373           6,018
                                       --------------  --------------  --------------  --------------  -------------- 
    Revenues - ultimate consumers            710,311         665,525         640,989         623,193         595,942
  Sales for resale - REMC                      1,141           1,105           1,098             897             861
  Sales for resale - other                    13,312           6,758           7,680           5,237           2,400
                                       --------------  --------------  --------------  --------------  -------------- 
      Total electric revenues          $     724,764   $     673,388   $     649,767   $     629,327   $     599,203
                                       ==============  ==============  ==============  ==============  =============
Kilowatt-hour Sales (In Millions):
  Residential                                  4,367           4,277           4,077           4,014           3,675
  Small industrial and commercial              2,130           2,209           2,207           2,202           2,171
  Large industrial and commercial              6,772           6,509           6,306           6,169           5,843
  Public lighting                                 58              61              64              62              64
                                       --------------  --------------  --------------  --------------  -------------- 
    Sales - ultimate consumers                13,327          13,056          12,654          12,447          11,753
  Sales for resale - REMC                         29              28              26              24              23
  Sales for resale - other                       725             394             456             321             169
                                       --------------  --------------  --------------  --------------  -------------- 
      Total kilowatt-hours sold               14,081          13,478          13,136          12,792          11,945
                                       ==============  ==============  ==============  ==============  ==============
Customers at End of Year:
  Residential                                370,029         365,163         360,347         356,015         352,139
  Small industrial and commercial             40,403          39,781          38,849          38,359          38,171
  Large industrial and commercial              3,657           3,557           3,525           3,342           3,163
  Public lighting                                303             281             266             252             239
                                       --------------  --------------  --------------  --------------  -------------- 
    Total ultimate consumers                 414,392         408,782         402,987         397,968         393,712
  Sales for resale - REMC                          1               1               1               1               1
                                       --------------  --------------  --------------  --------------  -------------- 
      Total electric customers               414,393         408,783         402,988         397,969         393,713
                                       ==============  ==============  ==============  ==============  ==============

</TABLE>


Item 2.   PROPERTIES
          ----------

   IPL's executive offices are in the IPALCO Corporate Center located at
One Monument Circle, Indianapolis, Indiana.  This facility contains
approximately 201,300 square feet of space and contains certain
administrative operations of IPALCO's subsidiaries.

   IPL also owns two distribution service centers located at 1230 West
Morris Street and 3600 North Arlington Avenue, both in Indianapolis,
Indiana.  IPL's customer service center is located at 2102 North Illinois
Street in Indianapolis.

   IPL owns and operates five primarily coal-fired generating plants,
three of which are used for only electric generation and two of which are
used for a combination of electric and steam generation.  In relation to
electric generation, there exists a total gross nameplate rating of 3,035
MW, a winter capability of 3,046 MW and a summer capability of 2,968 MW.
In relation to steam generation, there exists a gross capacity of 2,290
Mlbs. (thousands of pounds) per hour.

   Total Electric Stations:

      H. T. Pritchard plant (Pritchard), 25 miles southwest of
      Indianapolis (seven units in service - one in 1949, 1950, 1951,
      1956 and 1967 and two in 1953) with 367 MW nameplate rating and net
      winter and summer capabilities of 344 MW and 341 MW, respectively.

      E. W. Stout plant (Stout) located in the southwest part of Marion
      County (eleven units in service - one each in 1941, 1947, 1958,
      1961, 1967, 1994 and 1995 and four in 1973) with 921 MW nameplate
      rating and net winter and summer capabilities of 1,000 MW and
      924 MW, respectively.

      Petersburg plant (Petersburg), located in Pike County, Indiana
      (seven units in service - four in 1967 and one each in 1969, 1977
      and 1986) with 1,716 MW nameplate rating and net winter and summer
      capabilities of 1,672 MW and 1,672 MW, respectively.

   Combination Electric and Steam Stations:

      C.C. Perry Section K plant (Perry K), in the city of Indianapolis
      with 20 MW nameplate rating (net winter capability 20 MW, summer 19
      MW) for electric and a gross capacity of 1,990 Mlbs. per hour for
      steam.

      C.C. Perry Section W plant (Perry W), in the city of Indianapolis
      with 11 MW nameplate rating (net winter capability 10 MW, summer 12
      MW) for electric and a gross capacity of 300 Mlbs. per hour for
      steam.

   Net electrical generation during 1996, at the Petersburg, Stout and
Pritchard stations accounted for about 74.6%, 20.4% and 5.0%,
respectively, of IPL's total net generation.  All steam generation by IPL
for the steam system was produced by the Perry K and Perry W stations.
In addition, IPL purchases steam from an independent resource recovery
system located within the city of Indianapolis.

   Included in the above totals are three gas turbine units at the Stout
station added in 1973, one gas turbine added in 1994 and one gas turbine
added in 1995 with a combined nameplate rating of 214 MW, one diesel unit
each at Pritchard and Stout stations and three diesel units at Petersburg
station, all added in 1967.  Each diesel unit has a nameplate rating of 3
MW.

   IPL's transmission system includes 457 circuit miles of 345,000 volt
lines, 359 circuit miles of 138,000 volt lines and 269 miles of 34,500
volt lines.  Distribution facilities include 4,693 pole miles and 19,826
wire miles of overhead lines.  Underground distribution and service
facilities include 477 miles of conduit and 5,276 wire miles of
conductor.  Underground street lighting facilities include 109 miles of
conduit and 682 wire miles of conductor.  Also included in the system are
74 bulk power substations and 76 distribution substations.

   Steam distribution properties include 23 miles of mains with 253
services.  Other properties include coal and other minerals, underlying
798 acres in Sullivan County and coal underlying about 6,215 acres in
Pike and Gibson Counties, Indiana.  Additional land, approximately 4,722
acres in Morgan County, Indiana and approximately 884 acres in
Switzerland County, Indiana has been purchased for future plant sites.

   All of the facilities owned by IPL are well-maintained, in good
condition and meet the present needs of IPL.

   The Mortgage and Deed of Trust of IPL, together with the Supplemental
Indentures thereto (the "Mortgage"), secure first mortgage bonds issued
by IPL.  Pursuant to the terms of the Mortgage, substantially all
property owned by IPL is subject to a direct first mortgage lien.

Item 3.  LEGAL PROCEEDINGS
         -----------------

         None to be reported


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

         None


EXECUTIVE OFFICERS OF THE REGISTRANT AT FEBRUARY 25, 1997

    Name, age (at December 31, 1996), and positions and offices held  for
the past five years:
         
                                            From             To
   John R. Hodowal (51)
     Chairman of the Board              February, 1990
     Chief Executive Officer            May, 1989

   Ramon L. Humke (64)
     President and Chief Operating
       Officer                          February, 1990

   John R. Brehm (43)
     Senior Vice President - Finance
       and Information Services         May, 1991

   Robert W. Rawlings (55)
     Senior Vice President -
       Electric Production              May, 1991

   Bryan G. Tabler (53)
     Senior Vice President -
       Secretary and General Counsel                     January, 1995
     Partner, Barnes & Thornburg        January, 1979    October, 1994

   Gerald D. Waltz (57)
     Senior Vice President -
       Electric Delivery                May, 1996
     Senior Vice President -
       Business Development             May, 1991        May, 1996

   Paul S. Mannweiler (47)
     Senior Vice President -
       External Affairs                 January, 1997

   Max Califar (43)
     Vice President - Human
       Resources                        December, 1992
     Treasurer                          May, 1989        December, 1992

   Steven L. Meyer (38)
     Treasurer                          December, 1992

   Stephen J. Plunkett (48)
     Controller                         May, 1991

                             
                             PART II
                             -------

Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
        -----------------------------------------------------------
        HOLDER MATTERS
        --------------

    All common stock of IPL is owned by IPALCO and is not publicly
traded on any stock exchange.

    Aggregate quarterly dividends paid on the common stock  during
1996 and 1995 were as follows (in thousands):

                        1996      1995
                      -------   -------

   First Quarter      $20,449   $20,011
   Second Quarter      21,055    20,420
   Third Quarter       21,055    20,423
   Fourth Quarter      21,071    20,436

    At its meeting on February 25, 1997, IPL's Board of Directors
declared a regular quarterly dividend on common stock of $14,259,505
in total, payable April 15, 1997.

Dividend Restrictions
---------------------

   So long as any of the several series of bonds of IPL issued
under the Mortgage and Deed of Trust, dated as of May 1, 1940, as
supplemented and modified, executed by IPL to American National
Bank and Trust Company of Chicago, as Trustee, remain outstanding,
IPL is restricted in the declaration and payment of dividends, or
other distribution on shares of its capital stock of any class, or
in the purchase or redemption of such shares, to the aggregate of
its net income, as defined in Section 47 of such Mortgage, after
December 31, 1939.  The amount which these Mortgage provisions
would have permitted IPL to declare and pay as dividends at
December 31, 1996, exceeded retained earnings at that date.  Such
restrictions do not apply to the declaration or payment of
dividends upon any shares of capital stock of any class to an
amount in the aggregate not in excess of $1,107,155, or to the
application to the purchase or redemption of any shares of capital
stock of any class of amounts not to exceed in the aggregate the
net proceeds received by IPL from the sale of any shares of its
capital stock of any class subsequent to December 31, 1939.  In
addition, pursuant to IPL's Articles of Incorporation, no
dividends may be paid or accrued and no other distribution may be
made on IPL's common stock unless dividends on all outstanding
shares of IPL preferred stock have been paid or declared and set
apart for payment.  The management of IPL believes these
restrictions will not materially restrict anticipated dividends.


Item 6.           SELECTED FINANCIAL DATA
                  -----------------------

<TABLE>
<CAPTION>
(In Thousands)                                1996            1995            1994            1993            1992
-----------------------------------------------------------------------------------------------------------------------
<S>                                     <C>             <C>             <C>             <C>             <C>
Total operating revenues                $      762,503  $      709,206  $      686,076  $      664,303  $      633,203
Operating income                               163,219         147,588         143,310         142,368         134,240
Allowance for funds used
  during construction                            9,321          11,370           9,381           5,527           5,081
Income applicable to
  common stock                                 119,406         103,091         100,641          99,584          89,876
Utility plant - net                          1,787,969       1,792,007       1,711,772       1,608,871       1,532,964
Total assets                                 2,052,400       2,108,816       2,000,380       1,870,306       1,763,246
Construction expenditures                       78,543         166,874         178,295         145,765         112,037
Common shareholder's equity                    782,249         747,129         725,762         705,149         682,413
Nonredeemable cumulative
  preferred stock                               51,898          51,898          51,898          51,898          51,898
Long-term debt (less current
  maturities and sinking
  fund requirements)                           627,791         669,000         654,121         532,260         540,641



See financial statements.

</TABLE>



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

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM  ACT
OF 1995

   In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 (the Reform Act), IPL is hereby
filing cautionary statements identifying important factors that could
cause IPL's actual results to differ materially from those projected in
forward-looking statements of IPL.  Management's Discussion and Analysis
contains forward-looking statements, and many of these statements are
contained in this Item 7 under the section, "Future Performance."  The
Reform Act defines forward-looking statements as statements that express
an expectation or belief and contain a projection, plan or assumption
with regard to, among other things, future revenues, income, earnings per
share or capital structure.  Such statements of future events or
performance involve estimates, assumptions, and uncertainties and are
qualified in their entirety by reference to, and are accompanied by, the
following important factors that could cause IPL's actual results to
differ materially from those contained in forward-looking statements made
by or on behalf of IPL.

   Some important factors that could cause IPL's actual results or
outcomes to differ materially from those discussed in the forward-looking
statements include, but are not limited to, fluctuations in customer
growth and demand, weather, fuel costs and availability, regulatory
action, Federal and State legislation, interest rates, labor strikes,
maintenance and capital expenditures and local economic conditions.  In
addition, IPL's ability to have available an appropriate amount of
production capacity in a timely manner can significantly impact IPL's
financial performance.  The timing of deregulation and competition,
product development and introductions and technology changes are also
important potential factors.

   All such factors are difficult to predict, contain uncertainties which
may materially affect actual results, and are beyond the control of IPL.


LIQUIDITY AND CAPITAL RESOURCES

               Nature of Operations and Regulatory Matters
               -------------------------------------------

Regulation
----------
   
   IPL is a regulated public utility and is principally engaged in
providing electric and steam service to the Indianapolis
metropolitan area.  As a regulated entity, IPL is required to use
certain accounting methods prescribed by regulatory bodies which
may differ from those accounting methods required to be used by
nonregulated entities.  See Note 1 in the Notes to Financial
Statements.

Electric Rate Settlement Agreement
----------------------------------
   
   On August 24, 1995, the Indiana Utility Regulatory Commission
(IURC) issued an order approving, without amendment, a Stipulation
and Settlement Agreement (Settlement Agreement) resolving all
issues in IPL's then pending electric general rate proceeding.
The Settlement Agreement authorized IPL to increase its basic
rates and charges for electric service in two steps, to begin the
amortization of certain regulatory assets and approved IPL's plan
to expense and to fund its annual postretirement benefits.  These
issues are discussed further in Notes 1, 4, 9 and 11 in the Notes
to Financial Statements.


Authorized Annual Operating Income
----------------------------------
   
   During quarterly fuel adjustment clause proceedings, the annual
operating income of IPL's electric and steam businesses is
subject to review.  Customer refunds could result if actual annual
operating income exceeds levels authorized by the IURC.  See Note
1 in the Notes to Financial Statements.  IPL does not anticipate
any customer refunds to result from such reviews during 1997.


                 Competition and Industry Changes
                 --------------------------------

   As of year end 1996, various forms of proposed industry
restructuring legislation and/or rulemakings have been introduced
at the federal level and by some states.  Generally, the intent of
these initiatives is to encourage an increase in competition for
sales within the regulated electric utility industry.  While
federal rulemaking to date has addressed only the electric
wholesale market, various state legislatures are considering or
have enacted new laws impacting the retail energy markets within
their respective states.  A discussion of the legislative and
regulatory initiatives most likely to impact IPL follows:

Wholesale Energy Market
-----------------------
   
   Federal Energy Regulatory Commission (FERC) Orders 888 and 889:
In April of 1996, the FERC issued orders concerning open access
transmission service for wholesale sales.  These orders require
all utilities under FERC jurisdiction to: 1. file open,
nondiscriminatory transmission access tariffs with the FERC; 2.
offer transmission to eligible customers comparable to service
they provide themselves; and 3. take service under the tariffs for
their own wholesale sales and purchases of electricity.  The FERC
orders also provide for the recovery of utility stranded costs.
Stranded cost is the difference between revenues received by
utilities under traditional ratemaking and market-based prices.

   IPL requested and was initially denied a waiver from compliance
with orders 888 and 889.  On October 11, 1996, IPL was granted a
stay by the FERC pending disposition of its request for rehearing.
IPL requested a waiver because, among other reasons, the estimated
costs of compliance are expected to exceed revenue derived from
its transmission service for others.

Retail Energy Market
--------------------
   
   The legislatures of a few states have enacted and many other
states are considering new laws that would allow various forms of
competition, at the retail level, for the kilowatt-hour (KWH)
requirements of electric energy consumers within their respective
states.  While each state proposal is different, most provide for
some recovery of a utility's stranded costs and require an
extended transition period before the intended full competition is
fully effective.  Additionally, a few states have implemented
pilot "limited direct access" programs that experiment with
allowing some form of customer choice of electric suppliers.

   In Indiana, competition among electric energy providers for
sales has primarily focused on the wholesale power markets or the
sale of bulk power to other public and municipal utilities.  Such
wholesale sales have historically been and will continue to be
made at market rates.  Existing Indiana law provides for public
utilities to have an exclusive retail service area.

   In 1995, the Indiana General Assembly, anticipating increasing
competitive forces in the regulated public utility industry,
enacted into law legislation codified at I.C. 8-1-2.5 and commonly
referred to as "Senate Bill 637."  This new law enables the IURC
to consider and approve, on an individual utility basis, utility
company initiated proposals providing nontraditional forms of
determining customer tariffs.

   During January 1997, a new bill to revise the complete Indiana
code for electric utilities was introduced into the Indiana
legislature.  As proposed, this very complex bill requires, among
other things, the mandatory reorganization of all Indiana electric
utilities, a transition period ending in 2004, revenue reductions
during the transition period for utilities with production costs
exceeding the Indiana state average for 1995 and exit fees for
customers electing to purchase energy from new suppliers.  On February
20, 1997 the Indiana Senate sponsor announced his intention to amend
the bill to form a legislative committee to study this issue, rather
than immediately enact retail wheeling.

   IPL, as explained later, is opposed to the proposed
legislation, as well as to any such legislation on a state-by-
state basis.  IPL believes that "Senate Bill 637" already provides
the forum for Indiana public utilities to properly address the
issues created from competition and deregulation until
comprehensive federal legislation is enacted.

IPL's Position on Industry Deregulation
---------------------------------------
   
   In general the foregoing FERC wholesale and state-by-state
retail initiatives are inconsistent with IPL beliefs.  IPL favors
federal legislation to deregulate the industry for all companies
and all customers across the country at the same time.  IPL
believes that customers, particularly residential and small
businesses, are best served by the creation of large, diverse
markets.  Such markets enable the development of residential
aggregators who can deliver the same benefits of volume purchasing
to residential customers as are enjoyed by large industrial
customers.  IPL advocates a single, nondistance based transmission
access price over wide geographic areas to maximize competition;
turning over transmission system operation to an independent
system operator to avoid gamesmanship by incumbents who own both
transmission and generation assets; rejecting the piecemeal
opening of markets in favor of national access to all markets and
rejecting recovery of "stranded costs" due to competition because
such recovery would subsidize certain high-cost generators to the
detriment of competition.

   There can be no assurance as to the outcome of the debate on
electric utility industry restructuring.  IPL intends to remain
competitive in the face of increasing competition through
maintaining its low cost structure and continuing to serve
existing customers well, while accessing new markets as they open.
In 1995, IPL formed four Strategic Business Units: Electric
Production, Electric Delivery, Marketing and Steam, to better
evaluate and control costs and to prepare for the transition to a
more competitive environment.

     Liquidity, Financing Requirements and Capital Market Access
     -----------------------------------------------------------

   Liquidity is the ability of an entity to meet its short-term
and long-term cash needs.  IPL's liquidity is a function of its
ability to generate internal funds, its construction program, its
mortgage covenants and loan agreements and its access to external
capital markets.

   Sustaining investment grade debt ratings is also a key element
for having adequate liquidity and financial flexibility.  As of
December 31, 1996, IPL's senior secured debt was rated AA- by
Standard & Poor's, Aa2 by Moody's Investor Services and AA by Duff
& Phelps, and IPL's commercial paper was rated A-1+ by Standard &
Poor's and P-1 by Moody's Investor Services.  IPL expects to be able
to maintain investment grade debt ratings into the foreseeable future.

   IPL will retire $11.3 million of maturing long-term debt during
1997.  In addition, other existing higher rate debt may be
refinanced depending upon market conditions.  See following
section for discussion of construction program.

   During the next five years, IPL is forecasted to meet its cash
requirements without additional permanent financing.  Cash flows
from operations and temporary short-term borrowings are forecasted
to provide the funds required for IPL's construction program and
the retirement of maturing long-term debt.

                         Future Performance
                         ------------------

   IPL expects operating revenue growth based on a full year of
new tariffs implemented on July 1, 1996, a projected five-year
1.5% forecasted compound annual increase in retail KWH sales,
increasing sales opportunities in the wholesale power market and
expected annual increases in steam therm sales.

   The 1.5% annual KWH sales growth estimate compares to growth
rates IPL actually achieved of 2.2% and 2.6% for the periods 1991
through 1996 and 1986 through 1996, respectively, weather
adjusted.  The Indianapolis economy grew at annual rates of 1.9%
and 2.0% for those same periods and is expected to grow 2.0% from
1996 through 2001.

   Operating and maintenance expenses were $394.9 million in 1996.
These expenses in 1997 will be influenced by inflation, ongoing
cost controls and increased overhaul expenses of about $7 million.
Purchased power costs are expected to decrease approximately $9
million in 1997 due to a new contract effective in May 1997.

   Depreciation will increase in 1997 due to a full year's
depreciation on new SO2 removal facilities (scrubbers) placed in
service during 1996, as well as other plant additions.  IPL's long-
term interest expense should decrease due to the retirement of $50
million 9 5/8% First Mortgage Bonds in December 1996 and $11.3
million 5 5/8% First Mortgage Bonds in May 1997 partially offset
by a $20 million variable rate note issued in November 1996.

   IPL's construction program for the three-year period 1997-1999,
is estimated to cost $225.2 million including AFUDC.  The
estimated cost of the program by year (in millions) is $86.2 in
1997; $73.0 in 1998 and $66.0 in 1999.  It includes $137.7 million
for additions, improvements and extensions to transmission and
distribution lines, substations, power factor and voltage
regulating equipment, distribution transformers and street
lighting distribution.  At December 31, 1996, IPL had completed
installation of substantially all of its Environmental Compliance
Plan facilities.

   IPL will amortize approximately $34.3 million of its nontax
regulatory assets at December 31, 1996, over the next three years.

                               Other
                               -----

Preferred Stock, Debt Issuance and Dividend Restrictions
--------------------------------------------------------
   
   IPL is limited in its ability to issue certain securities by
restrictions under its Mortgage and Deed of Trust (Mortgage) and
its Amended Articles of Incorporation (Articles).  The restriction
under the Articles requires that the net income of IPL, as
specified therein, shall be at least one and one-half times the
total interest on the funded debt and the proforma dividend
requirements on the outstanding preferred stock and on any
preferred stock proposed to be issued, before any additional
preferred stock can be issued.  The Mortgage restriction requires
that net earnings as calculated thereunder be two and one-half
times the annual interest requirements before additional bonds can
be authenticated on the basis of property additions.  Based on
IPL's net earnings for the twelve months ended December 31, 1996,
the ratios under the Articles and the Mortgage are 3.90 and 10.15,
respectively.  IPL believes these requirements will not restrict
any anticipated future financings.  See Note 5 in the Notes to the
Financial Statements.  At December 31, 1996, and considering all
existing restrictions, IPL had the capacity to issue approximately
$1 billion of additional long-term debt.


RESULTS OF OPERATIONS


   Income applicable to common stock increased by $16.3 million in
1996 compared to 1995.  Income applicable to common stock
increased by $2.5 million in 1995 compared to 1994.  The following
discussion highlights the factors contributing to these increases.

Operating Revenues
------------------

   Operating revenues in 1996 and 1995 increased from the prior
year by $53.3 million and by $23.1 million, respectively.  The
increases in revenues resulted from the following:

                                              Increase (Decrease)
                                         -------------------------------
                                         1996 over 1995   1995 over 1994
                                         -------------------------------    
                                             (Millions of Dollars)
     Electric:
       Increase in retail base rate revenues     $40.8     $12.2
       Additional retail KWH sales - net of fuel  11.7      14.1
       Fuel revenues                              (8.7)     (2.9)
       Wholesale revenues                          6.6      (0.9)
     Steam revenues                                1.9      (0.5)
     Other revenues                                1.0       1.1
                                                 -----     -----
       Total change in operating revenues        $53.3     $23.1

   The increase in electric retail base rate revenue is the result
of new tariffs, effective July 1, 1996, and September 1, 1995,
designed to produce additional annual base revenues of $25 million
and $35 million, respectively.  The additional KWH sales in both
periods reflect customer growth and the impact of weather on KWH
sales used for heating and cooling.  Actual and percentage changes
in electric customers and in heating and cooling degree days for
these periods are as follows:

                                               Increase (Decrease)
                                         -------------------------------
                                         1996 over 1995   1995 over 1994
                                         -------------------------------    

       Electric Residential Customers    4,866     1.3%   4,816    1.3%
       Commercial & Industrial Customers   722     1.7%    964     2.3%

       Heating Degree Days                 315     5.7%    384     7.4%
       Cooling Degree Days                (223)  (18.4)%   157    14.9%

   The changes in fuel revenues in 1996 and 1995 from the prior
year reflect changes in total fuel costs billed customers.  The
changes in wholesale revenues in 1996 and 1995 reflect increased
wholesale marketing efforts and energy requirements of other
utilities in those years.  Increases in other revenues in both
periods are primarily from increased customer collection charges
effective in 1995.

Operating Expenses
-----------------

   Fuel costs decreased by $4.9 million and by $0.6 million from
the prior year during 1996 and 1995, respectively.  The decrease
in fuel costs during 1996 was due to decreased unit costs of coal
and oil of $9.7 million and decreased deferred fuel costs of $2.5
million, partially offset by increased fuel consumption of $7.3
million.  The decrease in 1995 was due to decreased unit costs of
coal and oil of $6.5 million and decreased deferred fuel costs of
$1.2 million, partially offset by increased fuel consumption of
$7.1 million.

   Other operating expenses in 1996 and 1995 increased from the
prior year by $20.8 million and by $12.2 million, respectively.
The increases for both 1996 and 1995 are primarily due to
increased administrative and general expenses of $13.5 million and
$8.5 million, respectively, resulting from postretirement benefit
expenses recognized since the 1995 electric rate order.  Also
contributing to the increased operating expenses in 1996 were
increased electric plant operations of $4.0 million, increased
amortization of Demand Side Management (DSM) program expenses of
$1.2 million, increased uncollectible expenses of $1.3 million and
increased electric distribution operating expense of $1.2 million,
partially offset by $2.0 million of gain from the sale of emission
allowances.  Factors contributing to increased other operating
expenses in 1995 were an increase in distribution expenses of $1.5
million, miscellaneous steam power and other production operating
expenses of $1.7 million and an increase in customer accounts
expense of $0.5 million.

   Purchased steam increased in 1996 and decreased in 1995
resulting from comparable changes in the volume of therms
purchased from an independent resource recovery system located
within the city of Indianapolis.

   Maintenance expenses increased by $4.8 million and decreased by
$5.5 million from the prior year during 1996 and 1995,
respectively.  The increase in maintenance expenses in 1996 was
mostly due to increased planned outage expenses of $4.6 million
for Unit 3 at IPL's Petersburg generating plant.  The decrease for
1995 reflected decreased unit overhaul expenses of $4.2 million
and decreased distribution and transmission expenses of $1.3
million.

   Depreciation and amortization expense increased in 1996 and
1995 from the prior year by $1.8 million and by $14.0 million,
respectively.  These changes resulted primarily from increases in
the depreciable utility plant balances, the amortization of
property-related regulatory deferrals effective with the September
1, 1995, electric rate increase, adjustments to spare parts
inventory in 1996 and to property held for future use in 1995.
Depreciable utility plant reflects the addition of new SO2 removal
facilities at IPL's Petersburg generating plant starting in June
1996.  An adjustment of $4.5 million was made in 1996 to spare
parts inventory resulting from the recognition of impairment in
value of excess spare parts.  The adjustment to property held for
future use was $12.3 million in 1995 reflecting expired regulatory
permits and specific design and engineering costs of a future
generating station in Patriot, Indiana.

   Taxes other than income taxes increased $1.7 million and $0.8
million in 1996 and 1995, respectively.  These increases were due
primarily to an increase in property and gross income taxes.

   Income taxes - net, increased in 1996 and decreased in 1995
from the prior year by $13.7 million and $1.0 million,
respectively.  These changes reflect an increase in pretax
operating income in both years with 1995 being offset by a $2.0
million adjustment to deferred taxes for removal costs.

Other Income And Deductions
---------------------------

   Allowance for equity funds used during construction was
unchanged in 1996, while increasing in 1995 from the prior year by
$1.3 million.  These amounts reflect carrying charges on
regulatory assets of $2.8 million and $1.4 million in 1996 and
1995, respectively, and the impact of new environmental facilities
placed in service in June 1996.

Interest Charges
----------------

   Interest on long-term debt decreased by $2.2 million in 1996
and slightly increased in 1995 from the prior year.  The decrease
in interest for 1996 was due to the refinancing of two of the
higher rate First Mortgage Bonds, 10 5/8% Series and 9 5/8% Series
in 1995, with debt instruments carrying lower interest rates.

   Other interest charges decreased by $1.1 million during 1996
from the prior year and increased by $3.2 million during 1995 from
the prior year.  The decrease during 1996 was primarily due to
decreased short-term debt borrowings and decreased interest rates,
whereas, the increase during 1995 was due to increased short-term
debt borrowings.

   As compared to the prior year, the allowance for borrowed funds
used during construction decreased in 1996 and increased in 1995
by $2.0 million and by $0.7 million, respectively.  These changes
reflect a comparable change in the construction base in those
years and decreased carrying charges on regulatory assets in 1996
and 1995.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------




                    INDEPENDENT AUDITORS' REPORT
                    ----------------------------


To the Board of Directors of Indianapolis Power & Light Company:

We have audited the accompanying balance sheets of Indianapolis
Power & Light Company as of December 31, 1996 and 1995, and the
related statements of income, retained earnings and cash flows for
each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements 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, such financial statements present fairly, in all
material respects, the financial position of Indianapolis Power &
Light Company as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for each of the three years in
the period ended December 31, 1996 in conformity with generally
accepted accounting principles.




Deloitte & Touche LLP

Indianapolis, Indiana
January 24, 1997

<TABLE>             
             INDIANAPOLIS POWER & LIGHT COMPANY

                    Statements of Income
    For the Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                                  1996             1995             1994
                                                            ---------------  ---------------  ---------------
                                                                             (In Thousands)
<S>                                                         <C>              <C>              <C>
OPERATING REVENUES (Note 9):
  Electric                                                  $      724,764   $      673,388   $      649,767
  Steam                                                             37,739           35,818           36,309
                                                            ---------------  ---------------  --------------- 
    Total operating revenues                                       762,503          709,206          686,076
                                                            ---------------  ---------------  --------------- 
OPERATING EXPENSES:
  Operation:
    Fuel                                                           164,339          169,206          169,756
    Other                                                          137,192          116,428          104,273
  Power purchased                                                   18,365           19,102           19,060
  Purchased steam                                                    7,240            6,680            7,653
  Maintenance                                                       67,768           63,013           68,562
  Depreciation and amortization                                    102,769          100,984           87,028
  Taxes other than income taxes                                     33,363           31,706           30,891
  Income taxes - net (Note 8)                                       68,248           54,499           55,543
                                                            ---------------  ---------------  --------------- 
    Total operating expenses                                       599,284          561,618          542,766
                                                            ---------------  ---------------  --------------- 
OPERATING INCOME                                                   163,219          147,588          143,310
                                                            ---------------  ---------------  --------------- 

OTHER INCOME AND (DEDUCTIONS):
  Allowance for equity funds used during construction                5,967            6,003            4,672
  Other - net                                                       (2,527)          (2,020)          (1,527)
  Income taxes - net (Note 8)                                          982              931              823
                                                            ---------------  ---------------  --------------- 
    Total other income - net                                         4,422            4,914            3,968
                                                            ---------------  ---------------  --------------- 
INCOME BEFORE INTEREST CHARGES                                     167,641          152,502          147,278
                                                            ---------------  ---------------  --------------- 
INTEREST CHARGES:
  Interest on long-term debt                                        43,425           45,656           45,566
  Other interest                                                     3,638            4,728            1,497
  Allowance for borrowed funds used during construction             (3,354)          (5,367)          (4,709)
  Amortization of redemption premiums and expenses on
    debt - net                                                       1,344            1,212            1,101
                                                            ---------------  ---------------  --------------- 
    Total interest charges                                          45,053           46,229           43,455
                                                            ---------------  ---------------  --------------- 
NET INCOME                                                         122,588          106,273          103,823

PREFERRED DIVIDEND REQUIREMENTS                                      3,182            3,182            3,182
                                                            ---------------  ---------------  --------------- 
INCOME APPLICABLE TO COMMON STOCK                           $      119,406   $      103,091   $      100,641
                                                            ===============  ===============  ===============

See notes to financial statements.
</TABLE>

<TABLE>               
               INDIANAPOLIS POWER & LIGHT COMPANY

                         Balance Sheets
                   December 31, 1996 and 1995
<CAPTION>
--------------------------------------------------------------------------------------------------------
ASSETS                                                                  1996                   1995
--------------------------------------------------------------------------------------------------------
                                                                              (In Thousands)
<S>                                                              <C>                    <C>
UTILITY PLANT:
  Utility plant in service (Note 2)                              $      2,763,305       $      2,517,790
  Less accumulated depreciation                                         1,048,492                984,910
                                                                 -----------------      -----------------
      Utility plant in service - net                                    1,714,813              1,532,880
  Construction work in progress                                            63,243                249,249
  Property held for future use                                              9,913                  9,878
                                                                 -----------------      -----------------
      Utility plant - net                                               1,787,969              1,792,007
                                                                 -----------------      -----------------
         
OTHER PROPERTY -
  At cost, less accumulated depreciation                                    5,799                  4,454
                                                                 -----------------      ----------------- 
         
CURRENT ASSETS:
  Cash and cash equivalents                                                 8,840                  9,985
  Accounts receivable (less allowance for doubtful
    accounts - 1996, $907,000 and 1995, $786,000)                           6,710                 55,459
  Receivable from parent                                                    1,182                  1,693
  Fuel - at average cost                                                   30,121                 29,894
  Materials and supplies - at average cost                                 52,027                 56,547
  Prepayments and other current assets                                      9,612                  4,095
                                                                 -----------------      ----------------- 
      Total current assets                                                108,492                157,673
                                                                 -----------------      ----------------- 
        
DEFERRED DEBITS:
  Regulatory assets (Note 4)                                              137,974                142,711
  Miscellaneous                                                            12,166                 11,971
                                                                 -----------------      ----------------- 
      Total deferred debits                                               150,140                154,682
                                                                 -----------------      ----------------- 

      TOTAL                                                      $      2,052,400       $      2,108,816
                                                                 =================      =================



See notes to financial statements.
</TABLE>

<TABLE>

<CAPTION>
----------------------------------------------------------------------------------------------------------
CAPITALIZATION AND LIABILITIES                                           1996                   1995
----------------------------------------------------------------------------------------------------------                  
                                                                                (In Thousands)
<S>                                                               <C>                    <C>
CAPITALIZATION (See Notes 5 and 6):
  Common shareholder's equity
    Common stock, no par, authorized - 20,000,000 shares,
      issued and outstanding - 17,206,630 shares in 1996,
      17,206,630 shares in 1995                                   $        324,537       $        324,537
    Premium on 4% cumulative preferred stock                                 1,363                  1,363
    Retained earnings                                                      456,349                421,229
                                                                  -----------------      -----------------
      Total common shareholder's equity                                    782,249                747,129
  Cumulative preferred stock (Note 5)                                       51,898                 51,898
  Long-term debt (Note 6)                                                  627,791                669,000
                                                                  -----------------      ----------------- 
        Total capitalization                                             1,461,938              1,468,027
                                                                  -----------------      ----------------- 


CURRENT LIABILITIES:
  Notes payable - banks and commercial paper (Note 7)                       34,000                 65,022
  Current maturities and sinking fund requirements (Note 6)                 11,250                 15,150
  Accounts payable and accrued expenses                                     56,537                 73,053
  Dividends payable                                                         21,910                 21,263
  Taxes accrued                                                             19,621                 19,023
  Interest accrued                                                          13,301                 14,324
  Other current liabilities                                                 14,519                 16,092
                                                                  -----------------      ----------------- 
      Total current liabilities                                            171,138                223,927
                                                                  -----------------      ----------------- 



DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
  Accumulated deferred income taxes - net (Note 8)                         304,854                293,748
  Unamortized investment tax credit                                         47,722                 50,636
  Accrued postretirement benefits (Note 11)                                 23,635                 30,517
  Accrued pension benefits (Note 10)                                        37,283                 31,834
  Miscellaneous                                                              5,830                 10,127
                                                                  -----------------      ----------------- 
      Total deferred credits and other long-term liabilities               419,324                416,862
                                                                  -----------------      ----------------- 
COMMITMENTS AND CONTINGENCIES (Note 13)

      TOTAL                                                       $      2,052,400       $      2,108,816
                                                                  =================      =================


See notes to financial statements.
</TABLE>

<TABLE>             
                                       INDIANAPOLIS POWER & LIGHT COMPANY

                                            Statements of Cash Flows
                             For the Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                                  1996              1995             1994
                                                            ---------------   --------------   ---------------
                                                                              (In Thousands)
<S>                                                         <C>               <C>              <C>
CASH FLOWS FROM OPERATIONS:
  Net income                                                $      122,588    $      106,273   $      103,823
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                   97,313            99,300           88,371
    Amortization of regulatory assets                               17,680             6,748             -
    Deferred income taxes and investment tax credit adjustme         3,195            (4,564)           2,650
    Allowance for funds used during construction                    (9,321)          (11,370)          (9,381)
    Premiums on redemptions of debt                                 (3,128)           (2,506)          (1,363)
    Change in certain assets and liabilities:
      Accounts receivable                                           49,260            (9,174)           4,869
      Fuel, materials and supplies                                   4,293             6,362           (2,743)
      Accounts payable                                             (16,516)            4,199           17,207
      Taxes accrued                                                    598             2,236           (4,590)
      Accrued pension benefits                                       5,449             4,731            4,563
      Other - net                                                  (17,177)            3,978           19,778
                                                            ---------------   ---------------  --------------- 
Net cash provided by operating activities                          254,234           206,213          223,184
                                                            ---------------   ---------------  --------------- 
CASH FLOWS FROM INVESTING:
  Construction expenditures                                        (78,543)         (166,874)        (178,295)
  Other                                                            (13,488)          (20,307)         (11,002)
                                                            ---------------   ---------------  --------------- 
Net cash used in investing activities                              (92,031)         (187,181)        (189,297)
                                                            ---------------   ---------------  --------------- 
CASH FLOWS FROM FINANCING:
  Issuance of long-term debt                                        20,000           110,000          200,000
  Retirement of long-term debt                                     (65,150)          (80,350)         (85,928)
  Short-term debt - net                                            (31,022)           38,622          (63,600)
  Dividends paid                                                   (86,811)          (84,471)         (82,421)
  Other                                                               (365)             (683)          (2,452)
                                                            ---------------   ---------------  --------------- 
Net cash used in financing activities                             (163,348)          (16,882)         (34,401)
                                                            ---------------   ---------------  --------------- 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                (1,145)            2,150             (514)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     9,985             7,835            8,349
                                                            ---------------   ---------------  --------------- 
CASH AND CASH EQUIVALENTS AT END OF PERIOD                  $        8,840    $        9,985   $        7,835
                                                            ===============   ===============  ===============




Supplemental disclosures of cash flow information:
  Cash paid during the year for:
    Interest (net of amount capitalized)                    $       45,339    $       46,792   $       40,747
                                                            ===============   ===============  ===============
    Income taxes                                            $       67,979    $       53,049   $       59,129
                                                            ===============   ===============  ===============



See notes to financial statements.
</TABLE>

<TABLE>             
                    INDIANAPOLIS POWER & LIGHT COMPANY

                      Statements of Retained Earnings
           For the Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                                                   1996                1995                1994
                                                             ----------------    ----------------    ----------------
                                                                                  (In Thousands)

<S>                                                          <C>                 <C>                 <C>
RETAINED EARNINGS AT BEGINNING OF YEAR                       $       421,229     $       399,862     $       379,249
NET INCOME                                                           122,588             106,273             103,823
                                                             ----------------    ----------------    ---------------- 
    Total                                                            543,817             506,135             483,072
                                                             
DEDUCT:
  Cash dividends declared:
    Cumulative preferred stock - at prescribed
      rate of each series (See Note 5)                                 3,182               3,182               3,182
    Common stock                                                      84,286              81,724              80,028
                                                             ----------------    ----------------    ---------------- 
    Total                                                             87,468              84,906              83,210
                                                             ----------------    ----------------    ---------------- 
RETAINED EARNINGS AT END OF YEAR                             $       456,349     $       421,229     $       399,862
                                                             ================    ================    ================


See notes to financial statements.
</TABLE>


                 INDIANAPOLIS POWER & LIGHT COMPANY
                 ----------------------------------

                  Notes to Financial Statements
       For the Years Ended December 31, 1996,1995 and 1994
--------------------------------------------------------------------------

 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

   All the outstanding common stock of Indianapolis Power & Light Company
(IPL) is owned by IPALCO Enterprises, Inc.  At December 31, 1996 and
1995, IPL had a receivable, which is due on demand, for advances made to
IPALCO.

   Nature of Operations:  IPL is engaged principally in providing
electric and steam service to the Indianapolis metropolitan area.

   Concentrations of Risk:  Substantially all of IPL's business activity
is with customers located within the Indianapolis area.  In addition,
approximately 65% of IPL's employees are covered by collective bargaining
agreements.

   Regulation:  The retail utility operations of IPL are subject to the
jurisdiction of the Indiana Utility Regulatory Commission (IURC).  IPL's
wholesale power transactions are subject to the jurisdiction of the
Federal Energy Regulatory Commission.  These agencies regulate IPL's
utility business operations, tariffs, accounting, depreciation
allowances, services, security issues and the sale and acquisition of
utility properties.  The financial statements of IPL are based on
generally accepted accounting principles, including the provisions of
Statement of Financial Accounting Standards No. 71, "Accounting for the
Effects of Certain Types of Regulation," which gives recognition to the
ratemaking and accounting practices of these agencies.

   Revenues:  Revenues are recorded as billed to customers on a monthly
cycle billing basis.  Revenue is not accrued for energy delivered but
unbilled at the end of the year.  A fuel adjustment charge provision,
which is established after public hearing, is applicable to substantially
all the rate schedules of IPL, and permits the billing or crediting of
estimated fuel costs above or below the levels included in such rate
schedules.  Actual fuel costs in excess of or under estimated fuel costs
billed are deferred or accrued, respectively.

   Authorized Annual Operating Income:  Indiana law requires electric
utilities under the jurisdiction of the IURC to meet operating expense
and income requirements as a condition for approval of requested changes
in fuel adjustment charges.  Additionally, customer refunds may result if
the utilities rolling 12-month operating income, determined at quarterly
measurement dates, exceeds the utilities' authorized annual operating
income and cannot be offset by applicable cumulative net operating income
deficiencies.  In such a circumstance, the required customer refund for
the quarterly measurement period is calculated to be one-fourth of the
excess annual operating income grossed up for federal and state taxes.

   Effective July 1, 1996, IPL's authorized annual electric operating
income, for purposes of quarterly operating income tests, is $163
million, as established in an IURC order dated August 24, 1995.  This
level will be maintained until changed by an IURC order.  During 1996,
IPL's rolling annual electric operating income was less than the
authorized annual operating income at each of the quarterly measurement
dates (January, April, July and October).  At October 31, 1996, IPL's
most recent quarterly measurement date, IPL had a cumulative net
operating deficiency of $93 million, of which $63.5 million expires at
varying amounts during the five-year period ending September 1, 2000.
The operating deficiency is calculated by summing the 20 most recent
quarterly measurement period results.  As a consequence IPL could, for a
period of time, earn above $163 million of electric net operating income
without being required to make a customer refund.

   Through the date of IPL's next general electric rate order, IPL is
required to file upward and downward adjustments in fuel cost credits and
charges on a quarterly basis, based on changes in the cost of fuel,
irrespective of its level of earnings.

   Pursuant to an order of the IURC, IPL's authorized annual steam net
operating income is $6.2 million, plus any cumulative annual
underearnings occurring during the five-year period subsequent to the
implementation of the new rate tariffs.

   Allowance For Funds Used During Construction:  In accordance with the
prescribed uniform system of accounts, IPL capitalizes an allowance for
the net cost of funds (interest on borrowed funds and a reasonable rate
on equity funds) used for construction purposes during the period of
construction with a corresponding credit to income.  IPL capitalized
amounts using pretax composite rates of 7.3%, 8.5% and 9.5% during 1996,
1995 and 1994, respectively.

   Utility Plant and Depreciation:  Utility plant is stated at original
cost as defined for regulatory purposes.  The cost of additions to
utility plant and replacements of retirement units of property, as
distinct from renewals of minor items which are charged to maintenance,
are charged to plant accounts.  Units of property replaced or abandoned
in the ordinary course of business are retired from the plant accounts at
cost; such amounts plus removal costs, less salvage, are charged to
accumulated depreciation.  Depreciation is computed by the straight-line
method based on functional rates approved by the IURC and averaged 3.4%
during 1996 and 3.5% during 1995 and 1994.  Depreciation expense for 1996
includes an adjustment to spare parts inventory of $4.5 million resulting
from recognition of the impairment in value of excess spare parts.
Depreciation expense for 1995 and 1994 includes adjustments to property
held for future use of approximately $12.3 million and $3.9 million,
respectively.  The adjustments in 1995 and 1994 reflect incurred costs of
expired regulatory permits and for designing and engineering a future
generating station in Patriot, Indiana.

   Sale of Accounts Receivable:  In late December 1996, IPL entered into
an agreement to sell, on a revolving basis, undivided percentage
interests in certain of its accounts receivable, including accounts
receivable for KWH delivered but not billed, up to an aggregate maximum
at any one time of $50 million.  Accounts receivable on the Consolidated
Balance Sheets are net of the $50 million interest sold under the IPL
agreement at December 31, 1996.  The gross amount of receivables sold was
$55.6 million, of which $5.6 million was replaced with a receivable from
the purchasing party.

   The Financial Accounting Standards Board has issued Statement No. 125
relating to the accounting for transfers of financial assets.
Enterprises anticipates adopting this standard on its effective date of
January 1, 1997, and does not expect that it will have a material effect
on its financial position or results of operations.

   Regulatory Assets:  Regulatory assets represent deferred costs that
have been, or that are expected to be, included as allowable costs for
ratemaking purposes.  IPL has recorded regulatory assets relating to
certain costs as authorized by the IURC.  Specific regulatory assets are
disclosed in Note 4.  As of December 31, 1996, all nontax-related
regulatory assets have been included as allowable costs in orders of the
IURC authorizing IPL to increase customer tariffs except for
approximately $10 million in costs for Demand Side Management (DSM)
incurred subsequent to January 1995 (see Note 9).  IPL is amortizing such
regulatory assets to expense over periods authorized by these orders. Tax-
related regulatory assets represent the net income tax liability for
deferred costs and revenues to be considered in future regulatory
proceedings.

   In accordance with regulatory treatment, IPL deferred as a regulatory
asset certain post in-service date carrying charges and certain other
costs related to its investment in Petersburg Unit 4.  As authorized in
the 1995 Electric Rate Settlement (see Note 9), IPL, effective September
1, 1995, is amortizing this deferral to expense over a life which
generally approximates the useful life of the related facility.

   Also in accordance with regulatory treatment, IPL defers as regulatory
assets nonsinking fund debt and preferred stock redemption premiums and
expenses, and amortizes such costs over the life of the original debt,
or, in the case of preferred stock redemption premiums, over 20 years.

   Derivatives:  IPL has limited involvement with derivative financial
instruments, and these financial instruments are not used for trading
purposes.  They are used to manage well-defined interest rate risks as
more fully discussed in Note 6.

   Income Taxes:  Deferred taxes are provided for all significant
temporary differences between book and taxable income.  The effects of
income taxes are measured based on enacted laws and rates.  Such
differences include the use of accelerated depreciation methods for tax
purposes, the use of different book and tax depreciable lives, rates and
in-service dates and the accelerated tax amortization of pollution
control facilities.  Deferred tax assets and liabilities are recognized
for the expected future tax consequences of existing differences between
the financial reporting and tax reporting basis of assets and
liabilities.

   IPL has recorded as regulatory assets and net deferred tax
liabilities, income taxes payable and includable in allowable costs for
ratemaking purposes in future years.

   Investment tax credits which reduced federal income taxes in the years
they arose have been deferred and are being amortized to income over the
useful lives of the properties in accordance with regulatory treatment.

   IPL participates in a tax sharing agreement with the consolidated
IPALCO group which allocates taxes as if each company had filed a return
on a stand alone basis.

   Statements of Cash Flows - Cash Equivalents:  IPL considers all highly
liquid investments purchased with original maturities of 90 days or less
to be cash equivalents.

   Employee Benefit Plans:  Substantially all employees of IPL are
covered by a defined benefit pension plan, a defined contribution plan
and a postretirement benefit plan.

   The defined benefit pension plan is noncontributory and is funded
through two trusts.  Additionally, a select group of management employees
of IPL are covered under a funded supplemental retirement plan.
Collectively, these two plans are referred to as Plans.  Benefits are
based on each individual employee's years of service and compensation.
IPL's funding policy is to contribute annually not less than the minimum
required by applicable law, nor more than the maximum amount which can be
deducted for federal income tax purposes.

   The defined contribution plan is sponsored by IPL as the Employees'
Thrift Plan of Indianapolis Power & Light Company (Thrift Plan).
Employees elect to make contributions to the Thrift Plan based on a
percentage of their annual base compensation.  IPL matches each
employee's contributions in amounts up to, but not exceeding, 4% of the
employee's annual base compensation.

   The postretirement benefit plan is sponsored by IPL and provides
certain health-care and life insurance benefits to employees who retire
from active service on or after attaining age 55 and have rendered at
least 10 years of service.  This plan is funded through a Voluntary
Employee Beneficiary Association (VEBA) Trust.  IPL's policy is to fund
the annual actuarially determined postretirement benefit cost.
   
   Long-Lived Assets:  Effective January 1, 1996, IPL adopted the
provision of Financial Accounting Standards Board, Statement of Financial
Accounting Standards No. 121 (SFAS 121), "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."  The
adoption of this new standard did not have a material impact on IPL's
financial position or results of operations.  As competitive factors
influence pricing in the utility industry, this opinion may change in the
future.  The general requirements of SFAS 121 apply to property, plant
and equipment of IPL and require impairment to be considered whenever
evidence suggests that it is no longer probable that future cash flows
are at least equal to the carrying amount of the asset.

   Stock-Based Compensation:  Effective January 1, 1996, IPL adopted the
provisions of Financial Accounting Standards Board, Statement of
Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-
Based Compensation."  The accounting requirements of this pronouncement
are applicable to all new employee awards granted after the adoption of
SFAS 123.  The new standard provides for the adoption, at the option of
the company, of a fair value method of accounting for stock options and
similar equity instruments.  IPL has elected to continue to account for
such transactions under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees."  The adoption of SFAS 123 has
no effect on the net income, earnings per share or the cash flows of IPL.

   Use of Management Estimates:  The preparation of financial statements
in conformity with generally accepted accounting principles requires that
management make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements.  The
reported amounts of revenues and expenses during the reporting period may
also be affected by the estimates and assumptions management is required
to make.  Actual results may differ from those estimates.

   Reclassification:  Certain amounts from prior years' financial
statements have been reclassified to conform to the current year
presentation.

2.  UTILITY PLANT IN SERVICE

   The original cost of utility plant in service at December 31,
segregated by functional classifications, follows:
                                           1996        1995
-----------------------------------------------------------------      
                                            (In Thousands)
Production                              $1,684,705  $1,490,958
Transmission                               235,218     231,410
Distribution                               712,391     676,240
General                                    130,991     119,182
                                        ----------  ----------
     Total utility plant in service     $2,763,305  $2,517,790
                                        ==========  ==========

   Substantially all of IPL's property is subject to the lien of the
indentures securing IPL's First Mortgage Bonds.

3.  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

   The estimated fair value amounts of financial instruments have been
determined by IPL, using available market information and appropriate
valuation methodologies.  However, considerable judgment is required in
interpreting market data to develop the estimates of fair value.
Accordingly, the estimates presented herein are not necessarily
indicative of the amounts that IPL could realize in a current market
exchange.  The use of different market assumptions and/or estimation
methodologies may have an effect on the estimated fair value amounts.
   
   Cash, Cash Equivalents and Notes Payable:  The carrying amount
approximates fair value due to the short maturity of these instruments.

   Long-Term Debt, Including Current Maturities and Sinking Fund
Requirements:  Interest rates that are currently available to IPL for
issuance of debt with similar terms and remaining maturities are used to
estimate fair value.  The variable rate debt has been included at the
face amount for both carrying amount and fair value.  The fair value of
the interest rate swap agreement has been estimated at $1.2 million and
$3.6 million, which represents the amount that IPL would have to pay to
enter into an equivalent agreement at December 31, 1996 and 1995,
respectively, with a swap counter party.  The fair value of the debt
outstanding has been determined on the basis of the specific securities
issued and outstanding.  Accordingly, the purpose of this disclosure is
not to approximate the value on the basis of how the debt might be
refinanced.  At December 31, 1996 and 1995, the carrying amount of IPL's
long-term debt, including current maturities and sinking fund
requirements, and the approximate fair value are as follows:

                                     1996      1995
-------------------------------------------------------                       
                                     (In Thousands)
          Carrying amount          $639,041  $684,150
          Approximate fair value   $644,988  $718,229

4.  REGULATORY ASSETS

   The amounts of regulatory assets at December 31, 1996 and 1995, are as
follows:

                                                      1996       1995
-----------------------------------------------------------------------
                                                       (In Thousands)

Related to Deferred Taxes (Note 1)                 $  39,175  $  34,178
Postretirement Benefit Costs in Excess of Cash 
   Payments and Amounts Capitalized (Note 11)         23,584     30,016
Unamortized Reacquisition Premium on Debt (Note 1)    25,151     22,600
Unamortized Petersburg Unit 4 Carrying Charges
   and Certain Other Costs (Note 1)                   34,005     39,143
Demand Side Management Costs (Note 9)                 13,841     10,853
Other                                                  2,218      5,921
                                                   ---------  ---------
      Total Regulatory Assets                      $ 137,974  $ 142,711
                                                   =========  =========

5.  CAPITAL STOCK

   Common Stock:  There were no changes in IPL common stock during 1996,
1995 and 1994.

   Restrictions on the payment of cash dividends or other distributions
on common stock and on the purchase or redemption of such shares are
contained in the indenture securing IPL's First Mortgage Bonds.  In
addition, pursuant to IPL's Articles of Incorporation, no dividends may
be paid or accrued and no other distribution may be made on the Common
Stock unless dividends on all outstanding shares of its preferred stock
have been paid or declared and set apart for payment.  All of the
retained earnings at December 31, 1996, were free of such restrictions.

   Cumulative Preferred Stock of Subsidiary:  Preferred stock
shareholders are entitled to two votes per share, and if four full
quarterly dividends are in default on all shares of the preferred stock
then outstanding, they are entitled to elect the smallest number of IPL
Directors to constitute a majority.  Preferred stock is redeemable solely
at the option of IPL and can be redeemed in whole or in part at any time
at the call prices stated below.
   
   Preferred stock consists of the following:
                                
                                  December 31, 1996
                                  -----------------  
                                    Shares    Call           December 31,
                                 Outstanding  Price          1996    1995
                                -----------  -------       ------- -------  
                                                       (Thousands of Dollars)
Cumulative, $100 Par Value,
  authorized 2,000,000 shares

  4% Series                        100,000  $118.00        $10,000 $10,000
  4.20% Series                      39,000   103.00          3,900   3,900
  4.60% Series                      30,000   103.00          3,000   3,000
  4.80% Series                      50,000   101.00          5,000   5,000
  6% Series                        100,000   102.00         10,000  10,000
  8.20% Series                     199,985   101.00         19,998  19,998
                                   -------                 -------  -------
Total cumulative preferred stock   518,985                 $51,898  $51,898
                                   =======                 =======  =======

Variable class, Par Value undetermined,
  authorized 3,000,000 shares, none issued


6.  LONG-TERM DEBT

   Long-term debt consists of the following:
                                                        December 31,
                                                      ----------------
                                                       1996     1995
                                                     --------  --------
    Series            Due                          (Thousands of Dollars)
    ------           -----
  First Mortgage Bonds:
     5 1/8%    April 1996 (redeemed April 1996)      $     -   $ 15,000
     5 5/8%    May 1997                                11,250    11,400
     6.05%     February 2004 (issued February 1994)    80,000    80,000
     8%        October 2006                            58,800    58,800
     7 3/8%    August 2007                             80,000    80,000
     6.10% *   January 2016                            41,850    41,850
     5.40% *   August 2017                             24,650    24,650
     9 5/8%    June 2019 (redeemed December 1996)          -     50,000
     7.45%     August 2019                             23,500    23,500
     5.50% *   October 2023                            30,000    30,000
     7.05%     February 2024 (issued February 1994)   100,000   100,000
     6 5/8% *  December 2024 (issued February 1995)    40,000    40,000
  Unamortized discount - net                           (1,009)   (1,050)
                                                     --------  --------
     Total first mortgage bonds                       489,041   554,150

  Variable Series Notes *    
     1991      August 2021                             40,000    40,000
     1994A     December 2024 (issued December 1994)    20,000    20,000
     1995B     January 2023 (issued October 1995)      40,000    40,000
     1995C     December 2029 (issued December 1995)    30,000    30,000
     1996      November 2029 (issued November 1996)    20,000       -
  Current maturities and sinking fund requirements    (11,250)  (15,150)
                                                     --------  --------
     Total long-term debt                            $627,791  $669,000
                                                     ========  ========

* Notes are issued to the city of Petersburg, Indiana (City), by IPL to
secure the loan of proceeds from various tax-exempt instruments issued by
the City.

   IPL redeemed the $33.2 million, 7.4% Series, the $19.75 million, 7
1/8% Series and the $25.2 million, 7.65% Series First Mortgage Bonds in
March 1994; the $40.0 million, 10 5/8% Series in March 1995; and the
$40.0 million, 9 5/8% Series in December 1995.

   The Series 1991 note provides for an interest rate which varies with
the tax-exempt commercial paper rate.  The 1994A, 1995B, 1995C and 1996
notes provide for an interest rate which varies with the tax-exempt
weekly rate.  IPL, at its option, can change the interest rate mode for
these notes to be based on other short-term rates.  Additionally, the
variable rate notes can be converted into long-term fixed interest rate
instruments by the issuance of an IPL First Mortgage Bond.  The notes are
classified as long-term liabilities because IPL maintains long-term
credit facilities supporting these agreements which were unused at
December 31, 1996.

    The  average interest rates and the year-end interest rates  for  the
variable rate notes are as follows:

                   Average Interest Rate for     Interest Rate at
                  the Year Ended December 31,      December 31,
                          1996     1995             1996   1995
------------------------------------------------------------------

      Series 1991        3.53%    3.91%           3.47%   3.72%
      Series 1994A       3.53%    3.94%           4.10%   5.10%
      Series 1995B       5.21%    5.14%           5.21%   5.21%
      Series 1995C       3.52%    4.41%           4.10%   5.10%
      Series 1996        3.72%      --            4.05%     --

   In conjunction with the issuance of the 1995B note, IPL entered into
an interest rate swap agreement.  Pursuant to the swap agreement, IPL
will pay interest at a fixed rate of 5.21% to a swap counter party and
will receive a variable rate of interest in return, which is identical to
the variable rate payment made on the 1995B note.  The result is to
effectively establish a fixed rate of interest on the 1995B note of
5.21%.

   There are no maturities or sinking fund requirements on long-term debt
for the five years subsequent to December 31, 1996, other than as shown
in the balance sheet for December 31, 1996.

7.  LINES OF CREDIT

   IPL has committed lines of credit with banks of $100 million at
December 31, 1996, to provide loans for interim financing and also
require the payment of commitment fees.  These lines of credit, based on
separate formal and informal agreements, have expiration dates ranging
from January 31, 1997, to December 31, 1997.  Lines of credit used to
support commercial paper were $20 million at December 31, 1996.  IPL has
a Liquidity facility in the amount of $150 million to support certain
floating rate tax-exempt facilities (see Note 6).  IPL has an uncommitted
line of credit with a bank in the amount of $25 million which does not
require the payment of a commitment fee.  At December 31, 1996, $11
million was unused.  The weighted average interest rate on notes payable
and commercial paper outstanding was 6.16% and 5.80% at December 31, 1996
and 1995, respectively.

8.  INCOME TAXES

   Federal and state income taxes charged to income are as follows:

                                                1996      1995      1994
-------------------------------------------------------------------------      
                                                    (In Thousands)
Operating Expenses:
  Current income taxes:
    Federal                                    $56,676   $51,331   $45,919
    State                                        8,378     7,732     6,919
                                               -------   -------   -------
      Total current taxes                       65,054    59,063    52,838
                                               -------   -------   ------- 
                                                
    Deferred federal income taxes                6,507    (1,748)    4,896  
    Deferred state income taxes                   (398)      309     1,077
                                               -------   -------   -------
      Total deferred  income taxes               6,109    (1,439)    5,973
                                               -------   -------   -------

Net amortization of investment credit           (2,915)   (3,125)   (3,268)
                                               -------   -------   -------
    Total charge to operating expenses          68,248    54,499    55,543
Net credit to other income and deductions         (982)     (931)     (823)
                                               -------   -------   -------
Total federal and state income tax provisions  $67,266   $53,568   $54,720
                                               =======   =======   =======

    The provision for federal income taxes (including net investment tax
credit adjustments) is less than the amount computed by applying the
statutory tax rate to pretax income.  The reasons for the difference,
stated as a percentage of pretax income, are as follows:

                                             1996     1995     1994
-------------------------------------------------------------------------
Federal statutory tax rate                   35.0%    35.0%    35.0%
Effect of state income taxes                 (1.5)    (1.8)    (1.8)
Amortization of investment tax credits       (1.5)    (2.0)    (2.1)
Removal cost adjustments                        -     (1.7)    (0.8)
Other - net                                  (0.7)    (1.0)    (0.8)
                                             ----     ----     ----
  Effective tax rate                         31.3%    28.5%    29.5%
                                             ====     ====     ====

    The significant items comprising IPL's net deferred tax liability
recognized in the balance sheets as of December 31, 1996 and 1995, are as
follows:

                                              1996        1995
----------------------------------------------------------------------        
                                                (In Thousands)
Deferred tax liabilities:
  Relating to utility property                $376,121   $366,801
  Other                                         19,200     14,666
                                              --------   --------
      Total deferred tax liabilities           395,321    381,467
                                              --------   --------
Deferred tax assets:
  Relating to utility property                  28,298     24,934
  Investment tax credit                         29,156     30,936
  Employee Benefit Plans                        15,396     14,724
  Unbilled revenue                              10,517     11,157
  Other                                          7,100      5,968
                                              --------   --------
      Total deferred tax assets                 90,467     87,719
                                              --------   --------
Net deferred tax liability                    $304,854   $293,748
                                              ========   ========

9.  RATE MATTERS

   Electric Rate Settlement Agreement:  On August 24, 1995, the IURC
issued an order approving without amendment a Stipulation and Settlement
Agreement (Settlement Agreement) resolving all issues in IPL's then
pending electric general rate proceeding.

   As provided for by the Settlement Agreement, IPL increased its basic
rates and charges for retail electric service in two steps.  It is
estimated that these increases will provide the following additional
annual revenues:

   Step 1 - $35,000,000 on September 1, 1995

   Step 2 - $25,000,000 on July 1, 1996

   Effective with the implementation of new tariffs in Step 1, IPL was
authorized to begin amortization of certain regulatory assets.
Additionally, IPL's existing depreciation rates were reapproved.

   Under terms of the Settlement Agreement, IPL will not seek another
general increase in its basic rates and charges until after July 1, 1997,
except in the event of an emergency.  IPL also has agreed not to file a
request to build any large, base-load generating capacity before January
1, 2000.  This provision can be waived in extreme circumstances.  In
addition, the parties agreed to, and subsequently resolved, pending
litigation involving IPL's Clean Air Act compliance plan.

   Steam Rate Order:  By an order dated January 13, 1993, the IURC
authorized IPL to increase its steam system rates and charges over a six-
year period.  Accordingly, IPL will implement new steam tariffs designed
to produce estimated additional annual steam operating revenues as
follows:

                                 Additional
                                   Annual
               Year               Revenues
               ----             -----------
          January 13, 1997      $ 2,384,000
          January 13, 1998          370,000

   Demand Side Management Program:  In compliance with an order dated
September 8, 1993, IPL is deferring certain approved DSM costs and
carrying charges.  In the Settlement Agreement approved by the IURC on
August 24, 1995, IPL was authorized to amortize $5.3 million of such
costs deferred prior to February 1995, over a four-year period beginning
September 1, 1995.  On December 19, 1996, IPL filed a petition with the
IURC requesting review, modification and/or termination of, and related
regulatory treatment for, DSM programs approved in the order dated
September 8, 1993.


10.  EMPLOYEE PENSION BENEFIT PLANS

   Pension expense is comprised of the following components:

                                                   1996     1995     1994
--------------------------------------------------------------------------     
                                                     (In Thousands)

Service cost--benefits earned during the period  $ 6,482  $ 6,375  $ 7,832
Interest cost on projected benefit obligation     16,335   15,348   15,358
Actual (return) loss on plan assets              (23,307) (29,529)  10,366
Net amortization and deferral                      5,758   13,499  (27,297)
                                                 -------  -------  -------
  Net periodic pension cost                        5,268    5,693    6,259
  Less:
    Amount allocated to related parties              121       98       79
                                                 -------  -------  -------
IPL net periodic pension cost                      5,147    5,595    6,180
  Less amount capitalized                          1,061    1,199    1,365
                                                 -------  -------  -------
Amount charged to expense                        $ 4,086  $ 4,396  $ 4,815
                                                 =======  =======  =======

   A summary of the Plans' funding status at its October 31, 1996 plan
year-end, evaluation date and the amount recognized in the balance sheets
at December 31, 1996 and 1995, follows:

                                                       1996        1995
---------------------------------------------------------------------------   
                                                       (In Thousands)
Actuarial present value of benefit obligations:
  Vested benefit obligation                         $(173,654)  $(148,124)
  Nonvested benefit obligation                        (32,705)    (27,883)
                                                    ---------   ---------
Accumulated benefit obligation                       (206,359)   (176,007)
                                                    =========   =========
  
  Projected benefit obligation                       (229,937)   (223,137)
  Plan assets at fair value                           235,250     220,978
                                                    ---------   ---------
Funded status--plan assets less than projected
  benefit obligation                                    5,313      (2,159)
  Unrecognized net gain from past experience 
      different from that assumed                     (36,126)    (30,174)
  Unrecognized past service costs                       8,132      14,495
  Unrecognized net asset at January 1, 1987, being
      amortized over an original life of 18.9 years   (12,583)    (13,996)
  Adjustment required to recognize minimum liability   (2,019)          -
                                                    ---------   ---------
Net accrued pension benefits included in other
  long-term liabilities at December 31              $ (37,283)  $ (31,834)
                                                    =========   =========
   
   Approximately 41% of the Plans' assets were in equity securities at
October 31, 1996, with the remainder in fixed income securities.

   Assumptions used in determining this information were:
                                           
                                                   1996    1995    1994
-------------------------------------------------------------------------
Discount rate                                      7.50%   7.50%   8.00%
Rate of increase in future compensation levels     5.10%   5.10%   6.10%
Expected long-term rate of return on assets        8.00%   8.00%   8.00%


11.  EMPLOYEE POSTRETIREMENT BENEFIT PLAN

<TABLE>
     
     Postretirement  benefit  expense  is  comprised  of  the   following
components:

                                                                   1996     1995     1994
------------------------------------------------------------------------------------------     
                                                                       (In Thousands)
<S>                                                              <C>      <C>      <C>
Service cost -- benefits earned during the period                $ 3,891  $ 3,855  $ 5,051
Interest cost on accumulated postretirement benefit obligation    10,450   10,796   11,052
Actual (return) loss on plan assets                                1,280     (319)    (435)
Net amortization and deferral                                      2,233    4,661    5,740
                                                                 -------  -------  -------
  Net periodic postretirement benefit cost                        17,854   18,993   21,408
  Less:
    Amount capitalized                                             3,511    3,891    4,464
    Regulatory asset deferral                                         -     6,978   12,289
                                                                 -------  -------  -------
Amount charged to expense                                        $14,343  $ 8,124  $ 4,655
                                                                 =======  =======  =======
</TABLE>   
   Also, during 1996 and 1995, IPL expensed postretirement regulatory
asset amortization of $6.4 million and $2.1 million, respectively.

   A summary of the retiree health-care and life insurance plan's funding
status, and the amount recognized in the balance sheets at December 31,
1996 and 1995, follows:

<TABLE>                                              
                                                                  1996        1995
-------------------------------------------------------------------------------------
<S>                                                            <C>         <C>
Actuarial present value of accumulated postretirement              (In Thousands)
    benefit obligation:
    Retirees                                                   $ (62,856)  $ (60,442) 
    Fully  eligible  active plan  participants                   (21,314)    (20,645)
    Other active plan participants                               (61,879)    (61,055)
                                                               ---------    --------
Total                                                           (146,049)   (142,142)
    Plan assets at fair value                                     49,274      29,800
                                                               ---------    --------
Funded status--accumulated postretirement benefit obligation
    in excess of plan assets                                     (96,775)   (112,342)
    Unrecognized  net  gain  from past experience  different
    from that assumed                                            (24,354)    (21,761)
    Unrecognized net obligation at January 1, 1993, being 
        amortized over an original life of 20 years               97,494     103,586
                                                               ---------   ---------
Net accrued postretirement benefit cost included in 
    deferred liabilities at December 31                        $ (23,635)  $ (30,517)
                                                               =========   =========

</TABLE>   
   
   IPL has expensed its nonconstruction related postretirement benefits
costs associated with its regulated steam business and, subsequent to
August 1995, with its regulated electric business.  IPL's electric
business postretirement benefit costs incurred prior to September 1,
1995, net of amounts capitalized for construction and benefits paid to
participants, were deferred as a regulatory asset on the balance sheets.
The Settlement Agreement approved the amortization to operating expense
of this regulatory asset over five years beginning September 1, 1995.
The annual amortization is $6.4 million.  IPL funds its annual
postretirement benefit costs in excess of actual benefits paid to
participants to an irrevocable VEBA Trust.  Annual funding is
discretionary and is based on the projected cost over time of benefits to
be provided to covered persons consistent with acceptable actuarial
methods.  The VEBA Trust provides for full funding of IPL's accumulated
postretirement benefit obligation in the event of certain change of
control transactions.  During 1996 and 1995, IPL contributed $20.8
million and $18.5 million, respectively, of these costs to the VEBA.

   Plan assets consist of the cash surrender value of life insurance
policies on certain active and retired employees.

   The assumed health-care cost trend rate used in measuring the
accumulated postretirement benefit obligation is 8.8% for 1997, gradually
declining to 4.5% in 2003.  A 1% increase in the assumed health care cost
trend rate for each year would increase the accumulated postretirement
benefit obligation, as of December 31, 1996, by approximately $20.8
million and the combined service cost and interest cost for 1996 by
approximately $2.5 million.

   Assumptions used in determining the information above were:
                                                   
                                                   1996    1995   1994
------------------------------------------------------------------------
Discount rate                                      7.50%   7.25%  8.00%
Rate of increase in future compensation levels     5.10%   5.10%  6.10%
Expected long-term rate of return on assets        8.00%   8.00%  8.00%

12.  OTHER EMPLOYEE BENEFIT PLANS

   IPL's contributions to the Thrift Plan, net of amounts allocated to
related parties were $3.4 million, $3.2 million and $3.3 million in 1996,
1995 and 1994, respectively.

13.  COMMITMENTS AND CONTINGENCIES

   In 1997, IPL anticipates the cost of its construction program to be
approximately $86 million.

   IPL is involved in litigation arising in the normal course of
business.  While the results of such litigation cannot be predicted with
certainty, management, based upon advice of counsel, believes that the
final outcome will not have a material adverse effect on the financial
position and results of operations.  With respect to environmental
issues, IPL has ongoing discussions with various regulatory authorities
and continues to believe that IPL is in compliance with its various
permits.


14.  QUARTERLY RESULTS (UNAUDITED)

    Operating results for the years ended December 31, 1996 and  1995  by
quarter, are as follows (in thousands):

                                                   1996
                              -----------------------------------------------

                             March 31     June 30   September 30  December 31
                             --------     -------   ------------  -----------

Operating revenues           $196,446     $177,621    $205,672    $182,764
Operating income             $ 44,844     $ 36,122    $ 51,163    $ 31,090
Net income                   $ 35,880     $ 26,980    $ 39,632    $ 20,096

                                                   1995
                             ------------------------------------------------
                             March 31     June 30   September 30  December 31
                             --------     -------   ------------  -----------

Operating revenues           $175,518     $159,652    $199,873    $174,163
Operating income             $ 38,278     $ 30,405    $ 50,802    $ 28,103
Net income                   $ 27,612     $ 20,111    $ 40,598    $ 17,952

   The quarterly figures reflect seasonal and weather-related
fluctuations which are normal to IPL's operations.  Colder weather was
experienced in the first and second quarters of 1996 as compared to the
same periods in 1995.  In addition, during the fourth quarter of 1995,
IPL expensed approximately $12.3 million of property held for future use.
See Note 9 regarding rate increases.



Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        ---------------------------------------------------------------
        FINANCIAL DISCLOSURE
        --------------------

        None.

                               PART III
                               --------


Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
          --------------------------------------------------

          Information relating to the directors of the registrant, set
          forth in the Proxy Statement of Indianapolis Power & Light
          Company dated April 15, 1997 (the registrant's Proxy
          Statement), under "Proposal 1-Election of 16 Directors" at
          pages 4-6 is incorporated herein by reference.  Information
          relating to the registrant's executive officers is set forth at
          page I-8 of this Form 10-K under "Executive Officers of the
          Registrant at February 25, 1997."

Item 11.  EXECUTIVE COMPENSATION
          ----------------------

          Information relating to executive compensation, set forth in
          the registrant's Proxy Statement under "Compensation of
          Executive Officers" at pages 13-15, "Compensation of Directors"
          at page 7, "Compensation Committee Interlocks and Insider
          Participation" at page 7, "Pensions Plans" at pages 17-18, and
          "Employment Contracts and Termination of Employment and Change
          in Control Arrangements" at pages 18-19, is incorporated herein
          by reference.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          --------------------------------------------------------------

          Information relating to ownership of the registrant's common
          stock by persons known by the registrant to be the beneficial
          owners of more than 5% of the outstanding shares of common
          stock and by management, set forth in the registrant's Proxy
          Statement under "Voting Securities and Beneficial Owners" at
          pages 2-3 is incorporated herein by reference.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          ----------------------------------------------

          Information relating to certain relationships and related
          transactions, set forth in the registrant's Proxy Statement
          under "Certain Business Relationships" at page 8, is
          incorporated herein by reference.
                                
                                PART IV
                                -------

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
          ---------------------------------------------------------------

          (a)The Financial Statements under this Item 14 (a) 1 filed in
              this Form 10-K are those of Indianapolis Power & Light
              Company.
              
              1.  Financial Statements

                  Included in Part II of this report:

                     Independent Auditors' Report

                     Statements of Income for the Years Ended
                       December 31, 1996, 1995 and 1994

                     Balance Sheets, December 31, 1996 and 1995

                     Statements of Cash Flows for the Years
                       Ended December 31, 1996, 1995 and 1994

                     Statements of Retained Earnings for the Years
                       Ended December 31, 1996, 1995 and 1994

                     Notes to Financial Statements

              2.  Exhibits
                  --------

                     The Exhibit Index beginning on page IV-6 of this
               Annual Report on Form 10-K lists the exhibits that are
               filed as part of this report.

          
          (b)Reports on Form 8-K
             -------------------

             None


<TABLE>   
          INDIANAPOLIS POWER & LIGHT COMPANY                                           EXHIBIT 12.1

          Ratio of Earnings to Fixed Charges
<CAPTION>
         

                                                     YEARS ENDED DECEMBER 31,
                                             ---------------------------------------------     
                                               1996              1995              1994
                                             ---------         ---------         ---------
                                                        (Thousands of Dollars)
<S>                                          <C>               <C>               <C>
Earnings, as defined:
     Net income                              $122,588          $106,273          $103,823
     Income taxes                              67,266            53,568            54,720
     Fixed charges, as below                   48,570            51,778            48,302
                                             ---------         ---------         ---------
         Total earnings, as defined          $238,424          $211,619          $206,845
                                             =========         =========         =========
Fixed charges, as defined:
     Interest charges                        $ 48,407          $ 51,596          $ 48,164
     Rental interest factor                       164               182               138
                                             ---------         ---------         ---------
         Total fixed charges, as defined     $ 48,571          $ 51,778          $ 48,302
                                             =========         =========         =========
Ratio of earnings to fixed charges               4.91              4.09              4.28
                                             =========         =========         =========

</TABLE>
                                 
                                 
                                 SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                       INDIANAPOLIS POWER & LIGHT COMPANY



                                    By  /s/ John R. Hodowal
                                      ---------------------------------------
                                      (John R. Hodowal, Chairman of the Board
                                          and Chief Executive Officer)

Date:  February 25, 1997
       -----------------

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

  (i) Principal Executive Officer:


      /s/ John R. Hodowal     Chairman of the Board and   February 25, 1997
      ----------------------   Chief Executive Officer
       (John R. Hodowal)       


 (ii) Principal Financial Officer:


       /s/ John R. Brehm      Senior Vice President -     February 25, 1997
       ---------------------  Finance and Information 
        (John R. Brehm)       Services                         
                                


(iii) Principal Accounting Officer:


       /s/ Stephen J. Plunkett       Controller           February 25, 1997
       -----------------------
        (Stephen J. Plunkett)


 (iv) A majority of the Board of Directors of Indianapolis Power & Light
      Company:



       /s/ Mitchell E. Daniels, Jr.  Director             February 25, 1997
       ----------------------------
        (Mitchell E. Daniels, Jr.)


       /s/ Rexford C. Early          Director             February 25, 1997
       ---------------------------
        (Rexford C. Early)


       /s/ Otto N. Frenzel III       Director             February 25, 1997
       ---------------------------
        (Otto N. Frenzel III)


       /s/ Max L. Gibson             Director             February 25, 1997
       --------------------------- 
        (Max L. Gibson)


       /s/ Dr. Earl B. Herr, Jr.     Director             February 25, 1997
       --------------------------- 
        (Dr. Earl B. Herr, Jr.)


       /s/ John R. Hodowal           Director             February 25, 1997
       --------------------------- 
        (John R. Hodowal)


       /s/ Ramon L. Humke            Director             February 25, 1997
       ---------------------------
        (Ramon L. Humke)


       /s/ Sam H. Jones              Director             February 25, 1997
       --------------------------- 
        (Sam H. Jones)


       /s/ Andre B. Lacy             Director             February 25, 1997
       ---------------------------
        (Andre B. Lacy)


       /s/ L. Ben Lytle              Director             February 25, 1997
       --------------------------- 
        (L. Ben Lytle)


       /s/ Michael S. Maurer         Director             February 25, 1997
       ---------------------------
        (Michael S. Maurer)


       /s/ Sallie W. Rowland         Director             February 25, 1997
       ---------------------------
        (Sallie W. Rowland)


       /s/ Thomas H. Sams            Director             February 25, 1997
       --------------------------- 
        (Thomas H. Sams)

                                   EXHIBIT INDEX
                                   -------------
   Copies of documents listed below which are identified with an asterisk
(*) are incorporated herein by reference and made a part hereof.  The
management contracts or compensatory plans are marked with a double
asterisk (**) after the description of the contract or plan.

Exhibit
  No.                           Description
-------   -------------------------------------------------------------------
3.1*      Articles of Incorporation of Indianapolis Power & Light Company,
          as amended.  (Form 10-Q for quarter ended March 31, 1991.)

3.2*      Bylaws of Indianapolis Power & Light Company dated January 25,
          1994.  (Form 10-Q for the quarter ended March 31, 1994.)

4.1*      Mortgage and Deed of Trust, dated as of May 1, 1940, between
          Indianapolis Power & Light Company and American National Bank and
          Trust Company of Chicago, Trustee, as supplemented and modified
          by 30 Supplemental Indentures.
               
             Exhibits D in File No. 2-4396; B-1 in File No. 2-6210; 7-C
          File No. 2-7944; 7-D in File No. 2-72944; 7-E in File No. 2-8106;
          7-F in File No. 2-8749; 7-G in File No. 2-8749; 4-Q in File No. 2-
          10052; 2-I in File No. 2-12488; 2-J in File No. 2-13903; 2-K in
          File No. 2-22553; 2-L in File No. 2-24581; 2-M in File No. 2-
          26156; 4-D in File No. 2-26884; 2-D in File No. 2-38332; Exhibit
          A to Form 8-K for October 1970; Exhibit 2-F in File No. 2-47162;
          2-F in File No. 2-50260; 2-G in File No. 2-50260; 2-F in File
          No. 2-53541; 2E in File No. 2-55154; 2E in File no. 2-60819; 2F
          in File No. 2-60819; 2-G in File No. 2-60819; Exhibit A to Form
          10-Q for the quarter ended 9-30-78 File No. 1-3132; 13-4 in File
          No. 2-73213; Exhibit 4 in File No. 2-93092.  Twenty-eighth,
          Twenty-ninth and Thirtieth Supplemental Indentures.  (Form 10-K
          dated for year ended 12-31-85.)

4.2*      Thirty-Second Supplemental Indenture dated as of June 1, 1989.
          (Form 10-K for year ended 12-31-89.)
               
4.3*      Thirty-Third Supplemental Indenture dated as of August 1, 1989.
          (Form 10-K for year ended 12-31-89.)
               
4.4*      Thirty-Fourth Supplemental Indenture dated as of October 15,
          1991.  (Form 10-K for year ended 12-31-91.)
               
4.5*      Thirty-Fifth Supplemental Indenture dated as of August 1, 1992.
          (Form 10-K for year ended 12-31-92.)
                
4.6*      Thirty-Sixth Supplemental Indenture dated as of April 1, 1993.
          (Form 10-Q for quarter ended 9-30-93.)
               
4.7*      Thirty-Seventh Supplemental Indenture dated as of October 1,
          1993.  (Form 10-Q for quarter ended 9-30-93.)

4.8*      Thirty-Eighth Supplemental Indenture dated as of October 1, 1993.
          (Form 10-Q for quarter ended 9-30-93.)

4.9*      Thirty-Ninth Supplemental Indenture dated as of February 1, 1994.
          (Form 8-K, dated 1-25-94.)

4.10*     Fortieth Supplemental Indenture dated as of February 1, 1994.
          (Form 8-K, dated 1-25-94.)
      
4.11*     Forty-First Supplemental Indenture dated as of January 15, 1995.
          (Exhibit 4.12 to the Form 10-K dated 12-31-94.)

4.12*     Forty-Second Supplemental Indenture dated as of October 1, 1995.
          (Exhibit 4.12 to the Form 10K dated 12-31-95.)

10.1*     Coal Supply Agreement between Indianapolis Power & Light Company
          and Peabody Coal Company effective as of January 1, 1992 and
          dated April 7, 1993.  Confidential portions of this Contract have
          been omitted and filed separately with the SEC pursuant to 17 CFR
          240.24b-2.  (Form 10-Q for quarter ended 3-31-93.)
               
10.2*     Amendment to Coal Supply Agreement dated July 5, 1985, between
          Indianapolis Power & Light Company and Black Beauty Coal Company,
          Inc.  (Form 10-K for year ended 12-31-86.)
               
10.3*     Amendment to Coal Supply Agreement dated February 27, 1987,
          between Indianapolis Power & Light Company and Black Beauty Coal
          Company, Inc.  (Form 10-K for year ended 12-31-87.)
               
10.4*     Transportation Contract dated September 28, 1987, between
          Indianapolis Power & Light Company and Consolidated Rail
          Corporation, together with Amendment Number 1, 2, 3 and 4.(Exhibit
          10.4 to the Form 10K dated 12-31-95.)
               
10.5*     Coal Supply Agreement between Indianapolis Power & Light Company
          and Triad Mining of Indiana, Inc. and Marine Coal Sales Company
          dated December 7, 1994.  Confidential portions of this Contract
          have been omitted and filed separately with the SEC pursuant to
          17 CFR 240.24b-2.  (Exhibit 10.2 to the Form 10-Q dated 3-31-95.)

10.6*     Interconnection Agreement, dated December 30, 1960, between IPL
          and Indiana & Michigan Electric Company as modified through
          Modification 17.(Exhibit 10.6 to the Form 10K dated 12-31-95.)
      
10.7*     Third Amendment to the Interconnection Agreement dated May 1,
          1992, among Indianapolis Power & Light Company, PSI Energy, Inc.
          and CINERGY Services, Inc. (The Third Amendment amends and
          restates the complete agreement between the parties.)(Exhibit 10.7
          to the Form 10K dated 12-31-95.)
      
10.8*     Facilities Agreement effective in 1968 among Indianapolis Power &
          Light Company, Public Service Company of Indiana, Inc. and
          Indiana & Michigan Electric Company.  (Exhibit 5-G in File No. 2-
          28756.)
               
10.9*     Facilities Agreement dated August 16, 1977, between Indianapolis
          Power & Light Company and Public Service Company of Indiana,
          Inc., together with Amendment Number 1 and 2.(Exhibit 10.9 to the 
          Form 10K dated 12-31-95.)

10.10     East Central Area Reliability Agreement dated August 1, 1967,
          between Indianapolis Power & Light Company and 23 other electric
          utility companies as supplemented.  (Exhibits 5-I in File No. 2-
          38332 and 5-J in File No. 2-38332.)
               
10.11*    Interconnection Agreement dated December 2, 1969, between
          Indianapolis Power & Light Company and Southern Indiana Gas and
          Electric Company as modified through Modification Number 9.
          
      
10.12*    Interconnection Agreement dated December 1, 1981, between
          Indianapolis Power & Light Company and Hoosier Energy Rural
          Electric Cooperative, Inc., as modified through Modification 4.
                        
10.13*    Interconnection Agreement, dated October 7, 1987, between
          Indianapolis Power & Light Company and Wabash Valley Power
          Association, as modified through Modification 1.

10.14*    Interchange Agreement between Indianapolis Power & Light Company
          and ENRON Power Marketing, Inc. dated August 1, 1995.

10.15*    Interconnection Agreement between Indianapolis Power & Light
          Company and Indiana Municipal Power Agency as modified through
          Modification 1.

10.16*    Employment Agreement between Indianapolis Power & Light Company
          and Ramon L. Humke dated February 1, 1990.  (Exhibit 10.31 to the
          Form 10-K dated 12-31-94.)  **

10.17*    Employment Agreement by and among IPALCO Enterprises, Inc.,
          Indianapolis Power & Light Company and John R. Hodowal dated July
          29, 1986.  (Exhibit 10.32 to the Form 10-K dated 12-31-94.)  **

10.18     Directors' and Officers' Liability Insurance Policy No.
          DO392B1A96 effective June 1, 1996 to June 1, 1997.  **
               
10.19*    Unfunded Deferred Compensation Plan for Indianapolis Power &
          Light Company Directors dated February 22, 1983, as amended.
          (Exhibit 10.34 to the Form 10-K dated 12-31-94.)  **
               
10.20     Unfunded Deferred Compensation Plan for Indianapolis Power &
          Light Company Officers effective January 1, 1994 as amended
          December 1, 1996.

10.21*    Indianapolis Power & Light Company Supplemental Retirement Plan
          and Trust Agreement For a Select Group of Management Employees
          (As Amended and Restated Effective March 1, 1996.) (Exhibit 10.21 
          to the Form 10K dated 12-31-95.) **
                
10.22     1996 Management Incentive Program.  **

10.23     Form of Termination Benefits Agreement together with schedule of
          parties to, and dates of, the Termination Benefits Agreements.  **

12.1      Ratio of Earnings to Fixed Charges.

21.1      Subsidiaries of the Registrant.

27.1      Financial Data Schedule.

99.1*     Agreement, dated as of October 27, 1993, by and among IPALCO
          Enterprises, Inc., Indianapolis Power & Light Company, PSI
          Resources, Inc., PSI Energy, Inc., The Cincinnati Gas & Electric
          Company, CINergy Corp., James E. Rogers, John R. Hodowal and
          Ramon L. Humke.  (Form 10-Q for quarterly period ended 9-30-93.)
               
99.2*     Amendment to Agreement dated October 27, 1994, by and among
          IPALCO Enterprises, Inc., Indianapolis Power & Light Company, PSI
          Resources, Inc., PSI Energy, Inc., The Cincinnati Gas & Electric
          Company, CINergy Corp., James E. Rogers, John R. Hodowal and
          Ramon L. Humke. (Exhibit 99.2 to the Form 10-K dated 12-31-94.)