THE UNION LIGHT, HEAT AND POWER COMPANY

                                       AND

                              THE FIFTH THIRD BANK,
                                     Trustee



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

                          Second Supplemental Indenture

                           Dated as of April 30, 1998

                                       To

                                    Indenture

                            Dated as of July 1, 1995
                                ----------------


                            6.50% Debentures Due 2008

<PAGE>

     SECOND  SUPPLEMENTAL  INDENTURE,  dated as of April 30,  1998,  between The
Union Light,  Heat and Power Company,  a corporation duly organized and existing
under the laws of the  Commonwealth  of Kentucky  (herein called the "Company"),
having its principal office at 139 East Fourth Street,  Cincinnati,  Ohio 45202,
and The Fifth Third Bank, an Ohio banking corporation, as Trustee (herein called
the "Trustee")  under the Indenture dated as of July 1, 1995 between the Company
and the Trustee (the "Indenture").


                             Recitals of the Company


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

     Pursuant to the terms of the Indenture,  the Company desires to provide for
the  establishment  of a new series of its  Securities  to be known as its 6.50%
Debentures   Due  2008  (herein  called  the   "Debentures"),   in  this  Second
Supplemental Indenture.

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

     Now, Therefore, This Second Supplemental Indenture Witnesseth:

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


                                   ARTICLE ONE

                             Terms of the Debentures

     Section 101. There is hereby  authorized a series of Securities  designated
the "6.50%  Debentures  Due  2008",  limited in  aggregate  principal  amount to
$20,000,000  (except  as  provided  in  Section  301(2) of the  Indenture).  The
Debentures shall mature and the principal shall be due and payable together with
all accrued and unpaid interest thereon on April 30, 2008 and shall be issued in
the form of a registered Global Security without coupons, registered in the name
of Cede & Co., as nominee of The Depository Trust Company (the "Depositary").

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

     Section  103.   Interest  on  each  of  the  Debentures  shall  be  payable
semiannually on April 30 and October 30 in each year (each an "Interest  Payment
Date"),  commencing on October 30, 1998, at the rate per annum  specified in the
designation  of the  Debentures  from April 30,  1998,  or from the most  recent
Interest  Payment Date to which interest has been paid or duly provided for. The
interest so payable,  and punctually  paid or duly provided for, on any Interest
Payment Date will be paid to the Person in whose name such  Debenture (or one or
more  Predecessor  Securities)  is  registered  at the close of  business on the
Regular  Record  Date  for  such  interest,  which  shall  be the  Business  Day
immediately preceding such Interest Payment Date. The amount of interest payable
for any period will be computed on the basis of a 360-day year of twelve  30-day
months.  As used herein,  "Business Day" means any day, other than a Saturday or
Sunday,  or a day on  which  banking  institutions  in New  York,  New  York are
authorized or obligated by law or executive order to be closed.

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

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

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

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

     Section 108.  Subject to the terms of Article Eleven of the Indenture,  the
Company shall have the right to redeem the Debentures, in whole but not in part,
from time to time and at any time (such  redemption,  an "Optional  Redemption",
and the date  thereof,  the  "Optional  Redemption  Date") upon not less than 30
days' notice to the holders,  at a redemption  price equal to the sum of (A) the
greater of (i) 100% of the principal  amount of the Debentures to be redeemed or
(ii) the sum of the present values of the Remaining  Scheduled  Payments thereon
discounted to the Optional  Redemption  Date on a semiannual  basis  (assuming a
360-day year  consisting of twelve  30-day  months) at the Treasury Rate plus 15
basis  points,  less  the  Applicable  Accrued  Interest  Amount  plus  (B)  the
Applicable Accrued Interest Amount.

     "Applicable  Accrued  Interest  Amount" means,  at the Optional  Redemption
Date, the amount of interest  accrued and unpaid from the prior interest payment
date to the Optional  Redemption Date on the Debentures  subject to the Optional
Redemption determined at the rate per annum shown in the title thereof, computed
on the basis of a 360-day year of twelve 30-day months.

     "Comparable  Treasury  Issue"  means the United  States  Treasury  security
selected by an Independent  Investment Banker as having a maturity that would be
utilized,  at the time of selection and in accordance  with customary  financial
practice,  in pricing new issues of  corporate  debt  securities  of  comparable
maturity to the remaining term of the Debentures to be redeemed  pursuant to the
Optional Redemption.  "Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the Company.

     "Comparable  Treasury Price" means, with respect to the Optional Redemption
Date, the average of the Reference  Treasury Dealer Quotations for such Optional
Redemption Date.

     "Reference  Treasury  Dealer"  means a primary U.S.  Government  securities
dealer in New York  City (a  "Primary  Treasury  Dealer").  "Reference  Treasury
Dealer Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its  principal  amount)  quoted in writing to the  Trustee by such  Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such redemption
date.

     "Remaining  Scheduled  Payments" means, with respect to any Debenture,  the
remaining  scheduled  payments  of the  principal  thereof  to be  redeemed  and
interest  thereon that would be due after the Optional  Redemption  Date but for
the Optional Redemption.

     "Treasury  Rate" means,  with respect to the Optional  Redemption  Date (if
any), the rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable  Treasury  Issue,  assuming a price for the  Comparable  Treasury
Issue  (expressed  as a  percentage  of  its  principal  amount)  equal  to  the
Comparable Treasury Price for such Optional Redemption Date.



                                   ARTICLE TWO

                             Form of the Debentures

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

                           (FORM OF FACE OF DEBENTURE)


No.  R-1                                 $20,000,000

CUSIP No.  906888AM4

                     THE UNION LIGHT, HEAT AND POWER COMPANY


                            6.50% DEBENTURE DUE 2008


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

     THE UNION LIGHT,  HEAT AND POWER COMPANY,  a corporation duly organized and
existing  under the laws of the  Commonwealth  of  Kentucky  (herein  called the
"Company",  which  term  includes  any  successor  Person  under  the  Indenture
hereafter  referred to), for value  received,  hereby  promises to pay to CEDE &
CO., or  registered  assigns,  the  principal  sum of Twenty  Million and No/100
Dollars  ($20,000,000) on April 30, 2008, and to pay interest thereon from April
30, 1998 or from the most recent  Interest  Payment  Date to which  interest has
been paid or duly provided for,  semiannually on April 30 and October 30 in each
year,  commencing  October 30, 1998,  at the rate of 6.50% per annum,  until the
principal  hereof is paid or made available for payment.  The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months.  The interest so payable,  and punctually  paid or
duly  provided  for,  on any  Interest  Payment  Date will,  as  provided in the
Indenture,  be paid to the  Person in whose name this  Security  (or one or more
Predecessor  Securities)  is  registered at the close of business on the Regular
Record Date for such  interest,  which  shall be the  Business  Day  immediately
preceding such Interest  Payment Date. Any such interest not so punctually  paid
or duly  provided for will  forthwith  cease to be payable to the Holder on such
Regular  Record  Date and may  either be paid to the  Person in whose  name this
Security (or one or more  Predecessor  Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted  Interest to
be fixed by the Trustee,  notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special  Record  Date,  or be
paid  at any  time  in  any  other  lawful  manner  not  inconsistent  with  the
requirements  of any securities  exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange,  all as
more fully provided in the Indenture.

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

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

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

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

     Unless the  certificate of  authentication  hereon has been executed by the
Trustee  referred to on the reverse  hereof by manual  signature,  this Security
shall  not be  entitled  to any  benefit  under  the  Indenture  or be  valid or
obligatory for any purpose.

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

                     THE UNION LIGHT, HEAT AND POWER COMPANY


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





<PAGE>








CERTIFICATE OF AUTHENTICATION

Dated:

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

                              THE FIFTH THIRD BANK,
                                   as Trustee

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


                         (FORM OF REVERSE OF DEBENTURE)


This  Security is one of a duly  authorized  issue of  securities of the Company
(herein called the "Securities"),  issued and to be issued in one or more series
under an  Indenture,  dated as of July 1, 1995 (herein  called the  "Indenture",
which term shall have the meaning  assigned to it in such  instrument),  between
the Company and The Fifth Third Bank, as Trustee  (herein  called the "Trustee",
which term includes any successor trustee under the Indenture), and reference is
hereby  made  to  the  Indenture  for a  statement  of  the  respective  rights,
limitations  of rights,  duties and  immunities  thereunder of the Company,  the
Trustee  and the  Holders  of the  Securities  and of the terms  upon  which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series  designated  on the face hereof,  limited in  aggregate  principal
amount to $20,000,000.

The Securities of this series are subject to optional  redemption,  in whole but
not in part,  from time to time and at any time (such  redemption,  an "Optional
Redemption", and the date thereof, the "Optional Redemption Date") upon not less
than 30 days' notice to the holders,  at a redemption  price equal to the sum of
(A) the greater of (i) 100% of the  principal  amount of the  Securities of this
series to be  redeemed or (ii) the sum of the  present  values of the  Remaining
Scheduled  Payments  thereon  discounted  to the Optional  Redemption  Date on a
semiannual  basis  (assuming a 360- day year consisting of twelve 30-day months)
at the Treasury Rate plus 15 basis points,  less the Applicable Accrued Interest
Amount plus (B) the Applicable Accrued Interest Amount.

"Applicable Accrued Interest Amount" means, at the Optional Redemption Date, the
amount of interest  accrued and unpaid from the prior  interest  payment date to
the Optional  Redemption  Date on the  Securities of this series  subject to the
Optional Redemption determined at the rate per annum shown in the title thereof,
computed on the basis of a 360-day year of twelve 30-day months.

"Comparable  Treasury Issue" means the United States Treasury  security selected
by an Independent Investment Banker as having a maturity that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate  debt  securities of comparable  maturity to the
remaining term of the  Securities of this series to be redeemed  pursuant to the
Optional Redemption.  "Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the Company.

"Comparable Treasury Price" means, with respect to the Optional Redemption Date,
the  average of the  Reference  Treasury  Dealer  Quotations  for such  Optional
Redemption Date.

"Reference Treasury Dealer" means a primary U.S. Government securities dealer in
New  York  City  (a  "Primary  Treasury  Dealer").  "Reference  Treasury  Dealer
Quotations"  means,  with  respect  to each  Reference  Treasury  Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its  principal  amount)  quoted in writing to the  Trustee by such  Reference
Treasury Dealer at 5:00 p.m. on the third Business Day preceding such redemption
date.

"Remaining  Scheduled  Payments"  means,  with respect to any Securities of this
series, the remaining scheduled payments of the principal thereof to be redeemed
and interest  thereon that would be due after the Optional  Redemption  Date but
for the Optional Redemption.

"Treasury  Rate" means,  with respect to the Optional  Redemption Date (if any),
the rate per annum equal to the semiannual  equivalent  yield to maturity of the
Comparable  Treasury Issue,  assuming a price for the Comparable  Treasury Issue
(expressed  as a percentage of its  principal  amount)  equal to the  Comparable
Treasury Price for such Optional Redemption Date.

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

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

The  Indenture  permits,  with  certain  exceptions  as  therein  provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Company  and the rights of the  Holders of the  Securities  of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal  amount of the  Securities  at
the time Outstanding of each series to be affected.  The Indenture also contains
provisions  permitting  the  Holders of a majority  in  principal  amount of the
Securities of each series at the time  Outstanding,  on behalf of the Holders of
all Securities of such series,  to waive  compliance by the Company with certain
provisions of the  Indenture  and certain past defaults  under the Indenture and
their  consequences.  Any such consent or waiver by the Holder of this  Security
shall be conclusive  and binding upon such Holder and upon all future Holders of
this  Security  and of any  Security  issued upon the  registration  of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.

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

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

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

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

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

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

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


                                  ARTICLE THREE

                                  Original Issue of Debentures

     Section 301.  Debentures in the aggregate  principal amount of $20,000,000,
may, upon execution of this Second Supplemental  Indenture, or from time to time
thereafter,  be  executed  by the  Company  and  delivered  to the  Trustee  for
authentication,  and the Trustee shall thereupon  authenticate  and deliver said
Debentures upon a Company Order without any further action by the Company.


                                  ARTICLE FOUR

                       Paying Agent and Security Registrar

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


                                  ARTICLE FIVE

                                Sundry Provisions

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

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

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


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

     In Witness Whereof, the parties hereto have caused this Second Supplemental
Indenture to be duly executed as of the date first above written.



                     THE UNION LIGHT, HEAT AND POWER COMPANY


                            By /s/ William L. Sheafer
                                 William L. Sheafer
                                 Vice President and
                                     Treasurer


                        THE FIFTH THIRD BANK, as Trustee



                               By /s/ Kerry Byrne
                                    Kerry Byrne
                                   Vice President