Exhibit 10.03

                    SUPPORT AGREEMENT BETWEEN
                        LG&E ENERGY CORP.
                               AND
                       LG&E CAPITAL CORP.


     This  Support Agreement, dated as of September __, 1997,  is
between LG&E Energy Corp., a Kentucky corporation (together  with
its  successors  and  assigns  and  any  resulting  or  surviving
corporation, "Energy Corp."), and LG&E Capital Corp., a  Kentucky
corporation  (together with its successors and  assigns  and  any
resulting or surviving corporation, "LCC").
     
     WHEREAS,  Energy  Corp.  is  the  owner  of  100%   of   the
outstanding capital stock of LCC;
     
     WHEREAS,  LCC  intends from time to time to make  borrowings
from  Lenders (as hereinafter defined), issue debt securities  to
Lenders,  incur  other  obligations or  liabilities  to  Lenders,
guarantee  loans to its subsidiaries from Lenders  and  guarantee
other   obligations  of  its  subsidiaries   to   Lenders   (such
borrowings, debt securities, guarantees and other obligations  or
liabilities being hereinafter referred to as "Obligations");
     
     WHEREAS, Energy Corp. and LCC desire to take certain actions
to  enhance  and  maintain  the financial  condition  of  LCC  as
hereinafter set forth in order to enable LCC and its subsidiaries
to  incur indebtedness and other obligations on more advantageous
and reasonable terms; and
     
     WHEREAS,  the Lenders will rely upon this Support  Agreement
("Agreement")  in  making  loans  or  extending  credit  to,   or
purchasing securities of,  LCC and/or its subsidiaries.
     
     NOW,  THEREFORE, in consideration of the premises, and other
good  and valuable consideration, the receipt and sufficiency  of
which  is  hereby  acknowledged,  the  parties  hereto  agree  as
follows:
     
     1.    Definitions.  As used in this Agreement, the following
terms  shall  have the following meanings (such  meanings  to  be
equally applicable to both the singular and plural forms  of  the
terms defined):

     "Required  Lenders"  means  each Lender;  provided  that  in
respect  of  any  consent  required  under  Section  2  of   this
Agreement, in the event that any Lender is bound with one or more
other  Lenders  by an instrument, indenture, agreement  or  other
document  pursuant to which the Obligation was issued,  "Required
Lenders"  in  respect thereof means the requisite  percentage  of
such  Lenders  the consent of which is required therefor  as  set
forth  in such instrument, indenture, agreement or other document
or, if not so specified, the requisite percentage of such Lenders
the  consent  of  which is required pursuant to such  instrument,
indenture,  agreement or other document to  authorize  a  similar
amendment in respect of such Obligation.
     
     "Subsidiary"   means  for  Energy  Corp.,  any  corporation,
partnership or other entity of which at least a majority  of  the
securities  or  other  ownership interests having  by  the  terms
thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions  of  said
corporation, partnership or other entity (irrespective of whether
or not at the time securities or other ownership interests of any
other  class or classes of such corporation, partnership or other
entity  shall  have or might have voting power by reason  of  the
happening  of  any  contingency)  is  at  the  time  directly  or
indirectly  owned or controlled by Energy Corp. or  one  or  more
Subsidiaries of Energy Corp. or by Energy Corp. and one  or  more
Subsidiaries of Energy Corp.
     
     "Utility"  means  Louisville Gas  and  Electric  Company,  a
Kentucky  corporation, together with its successors  and  assigns
and any resulting or surviving corporation.
     
     2.    Stock  Ownership.   While this  Agreement  remains  in
effect,  (i)  Energy Corp. will own, directly or indirectly,  not
less  than 80% of the capital stock of LCC and (ii) Energy  Corp.
will  not, without the prior written consent of Required Lenders,
own  less  than  100% of the common stock of the  Utility.   Each
person, firm, corporation or other entity designated as a  Lender
pursuant  to Section 8 of this Agreement acknowledges and  agrees
that,  in  consideration for it being designated as a Lender,  it
will  not  (after consideration of those factors  that  it  deems
relevant,  including the manner in which the  proceeds  from  any
such  sale  or  transfer by Energy Corp. of the Utility's  common
stock  are  to be used to satisfy Obligations, whether contingent
or  otherwise,  owed  to the Lenders) unreasonably  withhold  its
consent to such sale or transfer.

     3.    Negative  Pledge.  During the term of this  Agreement,
Energy  Corp.  will  not  create or suffer  to  exist  any  lien,
security  interest or other charge or encumbrance, upon  or  with
respect  to  any common stock of the Utility from  time  to  time
owned  by Energy Corp. or any capital stock of LCC from  time  to
time owned by Energy Corp.

     4.   Net Worth.  Energy Corp. agrees that it shall cause LCC
to  have  at all times a net worth (total assets less liabilities
less intangible assets, if any) of $25 million, as determined  in
accordance with generally accepted accounting principles.

     5.    Liquidity  Provision.  If, during  the  term  of  this
Agreement,  LCC is unable to make timely payment,  when  due,  of
interest,  principal or premium, if any, or other  obligation  on
any  Obligation owing to any Lender by LCC, Energy Corp. promptly
shall provide LCC, at its request such funds (in the form of cash
or  liquid assets in an amount sufficient to permit LCC  to  make
timely payment, when due, in respect of each such Obligation)  as
equity.  Any request for payment pursuant to this Section 5 shall
specifically identify the Obligation in respect of which  LCC  is
unable to make timely payment and with respect to which LCC seeks
funds.  LCC, Energy Corp. and each Lender hereby acknowledge that
any  funds provided by Energy Corp. pursuant hereto shall be used
solely to make payment with respect to such identified Obligation
and not for any other purposes.  Without limiting any obligations
hereunder,  in the event that a request is made with  respect  to
two  or  more  identified Obligations and the funds  provided  by
Energy Corp. are not sufficient to pay the amounts owing on  each
such  identified Obligations, the funds provided by Energy  Corp.
shall be applied pro rata (in proportion to the amounts then  due
and  owing  on  such Obligations) to such identified Obligations.
Each  of  the  parties  hereto acknowledges that  Energy  Corp.'s
obligations  hereunder do not constitute a  guarantee  by  Energy
Corp.  of  the Obligations of LCC.  This Agreement shall continue
to  be effective or be reinstated with respect to any payment  of
an  Obligation which is rescinded or must otherwise  be  returned
upon  the insolvency, bankruptcy, reorganization, dissolution  or
liquidation of LCC, all as though such payment had not been made.

     6.    Waivers.   Energy Corp. hereby waives any  failure  or
delay  on the part of LCC or any Lender in asserting or enforcing
any  of  its rights or in making any claims or demands hereunder.
LCC  or  any  Lender  may  at any time,  without  Energy  Corp.'s
consent, without notice to Energy Corp. and without affecting  or
impairing  LCC's  or  such Lender's rights, or  impairing  Energy
Corp.'s  obligations  hereunder, do any  of  the  following  with
respect  to  any  Obligation:  (a) make  changes,  modifications,
amendments  or  alterations, by operation of  law  or  otherwise,
including  without  limitation, any  increase  in  the  principal
amount of such Obligation or the rate of interest payable thereon
or  any  change in the method of calculating the rate of interest
payable thereon, (b) grant renewals and extensions and extensions
of  time,  for payment or otherwise, (c) accept new or additional
documents,   instruments  or  agreements  relating   to   or   in
substitution  of  said  Obligation, or (d) otherwise  handle  the
enforcement of their respective rights and remedies in accordance
with their business judgment.

     7.    Amendment.  The Agreement may be amended or terminated
at  any  time  by written amendment or agreement signed  by  both
parties;  provided,  however,  that  (i)  no  amendment  to  this
Agreement which adversely affects the rights of LCC or any Lender
shall  be effective as to any Lender until the earliest to  occur
of  (x) all Obligations owing to any Lender by LCC on the date of
such   amendment   shall  be  discharged  and   all   irrevocable
commitments  of any Lender in respect of Obligations  shall  have
terminated, or (y) such Lender shall consent in writing  to  such
amendment, provided that in the event that such Lender  is  bound
with  one  or  more  other  Lenders by an instrument,  indenture,
agreement or other document pursuant to which the Obligation  was
issued,  the requisite consent of the Lenders to an amendment  to
this Agreement set forth in such instrument, indenture, agreement
or  other  document  is obtained or, if not  so  specified,  such
amendment  shall have been consented to by the requisite  Lenders
in  respect of such Obligation as shall be authorized pursuant to
which  instrument,  indenture, agreement  or  other  document  to
authorize  a similar amendment in respect of such Obligation  and
(ii)  no termination of this Agreement shall be effective  as  to
LCC  or  any Lender until such time as all Obligations  owing  to
such  Lender  by LCC on the date of such termination  shall  have
been  discharged in full and all irrevocable commitments of  such
Lender  in  respect of Obligations shall have terminated,  unless
such Lender shall consent in writing to the contrary.

     8.    Rights of Lenders.  LCC hereby assigns and pledges  to
Lenders  for  the  ratable benefit of each Lender,  LCC's  rights
under  Sections 2, 3, 4, 5 and 6 of this Agreement, and,  if  LCC
fails  or  refuses  to take timely action to enforce  its  rights
under Sections 2, 3, 4, 5 and 6 of this Agreement, any Lender may
enforce  such  rights  on behalf of LCC directly  against  Energy
Corp.  Energy Corp. hereby consents to such assignment and pledge
and  enforcement by the Lenders.  The term "Lender"  as  used  in
this  Agreement shall mean any person, firm, corporation or other
entity  (i)  to  which LCC is indebted for money borrowed  or  to
which  LCC  otherwise owes any Obligations or which is acting  as
trustee  or  authorized representative on behalf of such  person,
firm, corporation or other entity and (ii) which Energy Corp. has
expressly  designated in writing to LCC and  to  such  Lender  as
being a Lender for purposes of this Agreement and entitled to the
rights  and  privileges hereof.  Any designation of  any  person,
firm,  corporation or other entity as a Lender  for  purposes  of
this Agreement may provide that such person, firm, corporation or
other  entity shall be a Lender only as to a specific, identified
Obligation  owing  to  such person, firm,  corporation  or  other
entity  by  LCC or that such person, firm, corporation  or  other
entity shall be a Lender as to all Obligations at any time  owing
to  such  Lender  by LCC.  LCC and Energy Corp.  agree,  for  the
benefit   of   Lenders,  to  execute  and  deliver  all   further
instruments  and  documents, and take  all  further  action  that
Lenders  may  reasonably request in order to perfect and  protect
any security interest purported to be granted hereby.

     9.    Notices.   Any notice, instruction, request,  consent,
demand  or other communication required or contemplated  by  this
Agreement  shall be in writing, shall be given or made by  United
States  first class mail, telex, facsimile transmission  or  hand
delivery addressed as follows:

     If to Energy Corp.: LG&E Energy Corp.
                    220 W. Main Street (P.O. Box 32030)
                    Louisville, Kentucky  40232
                    Attention:  Treasurer

     If to LCC:     LG&E Capital Corp.
                    220 W. Main Street (P.O. Box 32030)
                    Louisville, Kentucky  40232
                    Attention:  Treasurer

     10.   Successors.  This Agreement shall be binding upon  the
parties hereto and their respective successors and assigns and is
also   intended   for   the  benefit   of   the   Lenders,   and,
notwithstanding  that such Lenders are not parties  hereto,  each
Lender  shall be entitled to the full benefits of this  Agreement
and  to enforce the covenants and agreements contained herein  as
set  forth in Section 8.  This Agreement is not intended for  the
benefit of any person other than Lenders, and shall not confer or
be  deemed to confer upon any such person any benefits, rights or
remedies hereunder.

     11.  Governing Law.  This Agreement shall be governed by the
laws of the Commonwealth of Kentucky.

                                   LG&E ENERGY CORP.
                                   
                                   
                                   By:
                                        Charles A. Markel III
                                   Title:               Treasurer
                                   
                                   
                                   LG&E CAPITAL CORP.
                                   
                                   
                                   By:
                                        Charles A. Markel III
                                   Title:               Treasurer