Exhibit 10.4





 

TENTH SUPPLEMENTAL AGREEMENT



TO 



INTERCONNECTION AGREEMENT



BETWEEN



INDIANAPOLIS POWER & LIGHT COMPANY



AND 



PSI ENERGY, INC.



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


WITNESSETH:



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


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


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


 

 

 

ARTICLE 1

PROVISIONS FOR, AND CONTINUITY OF INTERCONNECTED OPERATION





	Interconnection Points.  The respective 69,000 volt,138,000 volt and 345,000 volt
transmission systems of IPL and PSI are presently interconnected at the following points:


	The 138kv Five Points Interconnection Point
	The 345kv Whitestown Interconnection Point
	The 345kv Gwynneville Interconnection Point
	The 138kv Petersburg Interconnection Point
	The 345kv Petersburg Interconnection Point
	The 138kv Centerton Interconnection Point
	The 138kv Carmel Tap Point



(viii)The 345kv Frances Creek Interconnection Point








	Future Interconnection Points.  The services provided for by the 2002 Agreement
may also be rendered through such other points of interconnection as the Parties may later agree
upon by amending the 2002 Agreement.

	Synchronous Operation.  The Parties mutually agree that, except as provided in
Service Schedule D hereof, their respective systems will be continuously operated in parallel
(except in cases of interruption of such parallel operation due to mutually agreed upon maintenance
or due to causes beyond the control of either Party, or due to the necessity of an interruption of
parallel operation in order that the native load served by either Party may continue to receive
adequate service from such Party).  If synchronous operation of the systems through a particular
line or lines become interrupted either manually or automatically because of any of the above-
stated reasons, the Parties shall cooperate so as to remove the cause of such interruption as soon
as practicable and restore such line or lines to normal operating conditions.

1.03.1.  Inadvertent Flow.  It is recognized that in interconnected system
operation, power and reactive flow will exist on an interconnection due to scheduled power flow
from either Party to third parties or between third parties.  This inadvertent power flow depends
mainly on the design of the internal systems of the Parties and the interconnected system, and the
schedules of power flows on the interconnections.







	  Interruption of Operations.  If, in the sole judgment of either Party, the
power or reactive flow over the interconnection facilities of either Party is excessive to the
extent that it jeopardizes the reliability of either Party's service to its customers, the Parties
shall attempt to agree upon adequate corrective measures to eliminate or control such excessive
power or reactive flow; provided, however, that in the event such a situation exists, the Party so
burdened shall have the right, with notice when possible to the other Party, to open and leave open
one  or all of the interconnections between the respective systems of the Parties until corrective
action has been taken.  The Parties further aggress to study and negotiate the installation,
ownership, and cost of any additional equipment necessary to effect a long-term solution to any
such excessive loading as herein described in the event either Party determines that this
interconnection contributes to the excessive loading and requests such negotiation.



	Maintenance of Equipment.  Each of the Parties shall keep, or shall cause to be
kept, the transmission lines together with all associated equipment and appurtenances that are
located on their respective sides of the Interconnection Points specified in Section 1.01 hereof,
or agreed upon pursuant to Section 1.02 hereof, in a suitable condition of repair at all times,
each at its own expense, in order that said transmission lines will operate in a reliable and
satisfactory manner and in order that reduction in the effective capacity of said transmission
lines will be avoided to the extent practicable.

 

ARTICLE 2

SERVICES TO BE RENDERED




	Interconnection Services Schedules.  It is the purpose of the Parties to seek and
realize, on an equitable basis, all benefits which may be practicably effected through coordination
in the operation and development of their respective systems.  It is understood by the Parties that
such benefits may be realized by each of them by carrying out under stated terms and conditions
various interconnection services and transactions that may from time to time include among
others:


	The furnishing of emergency service,
	The interchange, sale, and purchase of energy to effect operating economies,
	The sale and purchase of short term electric power and energy available on the system of one
Party and needed on the system of the other, and
	The transmission of power and energy on the basis of simultaneous transfers.







In furtherance of such purpose, the Parties shall create, and continue the functioning of, an
Operating Committee, as provided in Article 7 hereof.




	Specific Terms and Conditions.  Since the specific services to be rendered in
furtherance of such purpose will vary during the term of the 2002 Agreement, and the terms and
conditions applicable to such services may require modification from time to time, it is intended
that such specific services and the terms and conditions applicable thereto will be set forth in
Service Schedules mutually agreed upon between the Parties. Such Service Schedules, unless and
until changed, terminated, or supplemented, shall be those specified in Section 2.03 hereof.  If a
Service Schedule under the 2002 Agreement is changed or supplemented, such Service Schedule shall
be fully restated in order to reflect such change or supplement.

	Service Schedules.  The respective Service Schedules designated

Service Schedule A - Emergency Service

Service Schedule B - Interchange Energy

Service Schedule C - Short Term Power and Energy



Service Schedule D - Carmel Southeast Tap Network Power & Energy 



                                                          Transfer


have been agreed upon between the Parties, are identified as Exhibits I, II, III, and IV,
respectively, to the 2002 Agreement and are attached hereto and made a part hereof the same as if
incorporated herein.  It is contemplated by the Parties that all additional mutually agreed upon
Service Schedules will be made a part of the 2002 Agreement upon presentation and acceptance
thereof. 


2.04.  Out-Of-Pocket Costs. The term "Out-of-Pocket Cost" of energy from
generating units on the system of a Party shall consist of any costs that are directly incurred by
IPL or PSI by reason of its generation of such energy and which otherwise would not have been
incurred by such system including, but not limited to, fuel, labor, operation, maintenance, start-
up, fuel handling, taxes, regulatory commission charges, and emission allowances.


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


Tax expenses will be the expenses that are incurred as taxes either in connection with the sale
or production of such energy


2.05.  Emission Allowances.  The federal Clean Air Act, as amended,
42 U.S.C.  7401 et seq. (hereinafter referred to as "Clean Air Act"), establishes
certain annual maximum sulfur dioxide ("SO2") levels, stated in terms of
required emission allowances, for flue gases emitted by electric generating units, including units
operated by IPL, PSI and other electric utilities who may supply electric energy for transactions
under the 2002 Agreement.  The generator of the electric energy supplied and delivered under the
2002 Agreement is required by the Clean Air Act to have adequate "allowances" (as defined
by Section 402 (3) of the Clean Air Act in conjunction with Section 403 (f) of the Clean Air Act)
in order to generate such electric energy.  To the extent that either IPL or PSI are required by
the Clean Air Act to have additional allowances by reason of its generation of electric energy to
be supplied by it under the 2002 Agreement, which allowances would otherwise not have been required
by such supplying by it under the 2002 Agreement, which allowances would otherwise not have been
required by such supplying Party, then, unless the supplying Party otherwise agrees in advance in
writing, at the discretion of the supplying Party, the Party receiving such energy shall be
responsible for the cost or the actual furnishing (without cost to the supplying Party) of adequate
allowances to the supplying Party in order for such Party to supply such energy under the
Agreement.  The Parties shall establish, by mutual agreement, appropriate procedures in order to
carry out the provisions of this Section 2.05, including a statement of costs before any
transactions under the Service Schedules attached hereto are started.  Also, prior to
implementation of every transaction under the Service Schedules attached hereto, the purchasing
Party must declare whether they will pay in cash or return SO2 Allowances in-kind for
any consumption of SO2 Allowances directly attribute to such transaction, if any.


It shall be the responsibility of the supplying Party to provide the receiving Party, before the
transaction begins, with a statement of the estimated emission allowance charges associated with
the transaction which the supplying Party is seeking to add to the rates to be charged under the
applicable Service Schedule.  Failure of the supplying Party to provide a statement of such charges
before the transaction begins shall constitute a waiver of the recovery of any such costs.  In
establishing such procedures, the Parties shall recognize that the determination of the additional
allowances required in order to generate the electric energy to be supplied hereunder is subject to
variables contingent upon the loading and operating conditions on the system where the actual
generation occurs. The procedures so established by the Parties shall be in accord with sound
engineering principles of power plant and system operation, and shall require the furnishing of
such additional allowances at such times and in such amounts as will be equitable to the supplying
Party.


When IPL is the supplier of energy and emission allowances, the recovery of the applicable costs
for the actual furnishing of adequate allowances in order for IPL to generate and supply such
energy will be implemented in the following manner:



	The Buyer shall compensate IPL for the consumption of Sulfur Dioxide Emissions Allowances
("SO2 Allowances") directly attributed to electric energy sales by IPL to
Buyer under the Service Schedules.  Such compensation shall, at Buyer's option, be made by either
supplying IPL with the number of SO2 Allowances directly attributed to such energy
sales, or by reimbursing IPL for the incremental cost of such number of SO2 Allowances,
rounded to the nearest whole SO2 Allowance.  

If Buyer opts to reimburse IPL in cash for SO2 Allowances associated with Buyer's
energy purchases for the month, the cash amount due at billing will be determined by multiplying
the number of SO2 Allowances, as determined in Subsection 2 (b) of this Section 2.05, at
the time of the sale.  If Buyer opts to reimburse IPL in SO2 Allowances Buyer will
record or transfer to IPL's account, the number of SO2 Allowances calculated below, at
the time cash settlement for the energy is due.  In all cases, Buyer will transfer to IPL's account
the number of SO2 Allowances calculated below, at the time cash settlement for the
energy is due.  In all cases, Buyer will transfer to IPL's account the number of SO2
Allowance due IPL for calendar year no later than January 15 of the following year.  "Transfer
to IPL's account" shall mean, for purposes of the 2002 Agreement, the transfer by the USEPA of
the requisite number of SO2 Allowances to IPL's Allowance Tracking System account and
the receipt by IPL of the Allowance Transfer Confirmation


	Determination of SO2 Emission Allowances Due IPL

	Number of SO2 Allowances

The number of SO2 Allowances directly attributed to an energy sale made by IPL shall
be determined for each hour, by determining the contribution from each of the unit(s) from which
the energy sale is being made for that hour.  For each unit, the emission rate in pounds of
SO2 per million Btu will be determined each month, from fuel sulfur content, control
equipment performance, and continuous emissions monitoring data. The emission rate and the unit
heat rate will be used to determine the SO2 Allowances used per megawatt-hour
("MWH").  The energy from each unit attributable to the sale, and the SO2
Allowance per MWH for each unit, will be used to determine the number of SO2 Allowances
attributable to the sale.


	Cost of SO2 Allowances

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








When PSI is the supplier of energy and emission allowances, the recovery of the applicable costs
for the actual furnishing of adequate allowances in order for PSI to generate and supply such
energy will be implemented in the following manner:



	The current Environmental Protection Agency ("EPA") auction price to value emission
allowances will be used for energy sales transactions.  The dispatch criteria may be revised from
time to time if the emission allowance purchases on the average are determined to be significantly
different than the EPA auction price.
	For each hour in which there is a transaction for energy services using an Out-of-Pocket Cost
rate under the 2002 Agreement, PSI will:

	identify the generation sources used to provide the transaction's energy by identifying the
energy that would not have been used had the transaction not been in effect that hour by using the
same after-the-fact incrementing costing model that is used to calculate the incremental cost of
fuel under the 2002 Agreement;

 

	determine, using the following formula, the quantity of emission allowances related to the
energy transaction: (i) by calculating an incremental heat rate for the appropriate generating unit
and the corresponding incremental SO2 emission levels, as determined by the computer
based tools, for the identified units dispatched to serve the transaction; (ii) applying the
following formula for such unit; (iii) adding together the total number of tons of SO2
produced per million BTU (i.e., British Thermal Unit) of fuel burned by each such unit for
the transaction; and (iv) letting one (1) emission allowance equal one (1) ton of SO2 so
produced. 

# OF UNITS

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

       100%


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


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


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


SE = Scrubber Efficiency in %


PSI will perform periodic tests to maintain the accuracy and validity of such emission rate
information.  Because some generating sources may not be subject to Clean Air Act during Phase I or
Phase II thereunder, there will be no emission allowance charges included for the utilization of
such an energy source while it is not subject to such requirements.  One (1) emission allowance
shall be assigned to each ton of SO2 emitted to serve the transaction.  Fractions of
emission allowance tons will be rounded up to the next whole number when the fraction is equal to
or greater than .5 and rounded down when the fraction is less than .5.


	The purchasing Party of energy shall have the option of purchasing or providing emission
allowance for each transaction.  The purchasing Party shall notify PSI of its election to purchase
or provide emission allowances prior to the start of the transaction.  The running quantity of
emission allowances charged or furnished will be shown on the monthly invoices to the purchasing
Party.
	When the purchasing Party of energy elects to purchase the emission allowances from PSI, then
the quantity of emission allowances used will be included as part of the charges on the monthly
invoices to the purchasing Party.
	By January 15th of the year following the calendar year in which the transaction
occurred, the purchasing Party of energy shall transfer the appropriate emission allowances to PSI
for the emission allowances used when the allowances are provided in kind.
	PSI has adopted the same incremental cost calculation to value emission allowances for dispatch
criteria as for billing energy transactions.


 

ARTICLE 3

SERVICE CONDITIONS





	Control of System Disturbance.  Each Party shall maintain and operate its system
so as to minimize, in accordance with sound operating practice , the likelihood of disturbance
originating in either Party's system which might cause impairment to the service of the system of
the other Party or of any system interconnected with the system of the other Party.



	  Control of Kilovar Exchange.  It is the intent that neither Party shall be
obligated to deliver kilovars for the benefit of the other Party; also that neither Party shall be
obligated to receive kilovars when to do so may introduce objectionable operating conditions on its
system.  The Operating Committee shall be responsible for the establishment of operating procedures
and schedules in respect of carrying kilovar loads by one Party's systems for the other Party's
system in order to secure adequate service and economical use of facilities of both Party's systems
and in respect of proper charges, if any, for the use of facilities carrying kilovar loads.  In
discharging such duties, the Operating Committee shall recognize that in the transmission and
delivery of power and energy hereunder the carrying of kilovar loads by either Party, in harmony
with sound engineering principles of transmission operation with their systems interconnected, is
subject to numerous variables contingent upon loading and operating conditions existing
simultaneously on the systems of both Parties.  The operating procedures and schedules so
established by the Operating Committee shall be in accord with such principles and shall require
each Party to carry kilovar loads at such times and in such amounts as will be equitable to both
Parties.



	Control of Unscheduled Power Deliveries.  The Parties shall exercise due
diligence and foresight in carrying out all matters related to the providing and operating of their
respective electric power resources so as to minimize to the extent practicable deviations between
actual and scheduled deliveries of electric power and energy between their systems.  The Parties
shall provide and install on their respective systems such communication and telemetering
facilities as are essential to so minimize such deviations and, in developing and executing
operating procedures that will enable the Parties to avoid to the extent practicable deviation from
scheduled deliveries, shall fully cooperate with each other and with third parties whose systems
are either directly or indirectly interconnected with the systems of the Parties and who of
necessity, together with the Parties must unify their efforts cooperatively to achieve effective
and efficient interconnected operation.  The Parties recognize, however, that, despite their best
efforts to prevent the same, unscheduled deliveries of electric energy from one Party to the other
may occur.  In such event, electric energy delivered hereunder shall be settled for by the return
of equivalent energy.  Equivalent energy shall be returned at times when the load conditions of the
Party receiving it are equivalent to the load conditions of such Party at the time the energy for
which it is returned was delivered or, if such Party elects to have equivalent energy returned
under different conditions, it shall be returned in such amounts, to be agreed upon by the
Operating Committee, as will compensate for the difference in conditions.



 

ARTICLE 4

DELIVERY POINTS, METERING POINTS, AND METERING





	Delivery Points.  All electric energy delivered under the 2002 Agreement shall be
of the character commonly know as three-phase sixty Hertz energy, and shall be delivered at the
Interconnection Points specified under Section 1.01 hereof, at a nominal voltage of 138,000 volts
at the Five Points and Centerton Interconnection Points, at the 138KV Petersburg Interconnection
Point, and at the Carmel Tap Point; and at a nominal voltage of 345,000 volts at the Whitestown and
Gwynneville Interconnection Points, at the 345KV Petersburg Interconnection Point, and at the
Frances Creek Interconnection Point; and at such other points and voltages as hereafter may be
agreed upon by the Parties pursuant to Section 1.02 hereof. In addition to the interconnection
points provided in Sections 1.01 and 1.02, PSI may request IPL deliver electric energy under the
2002 Agreement at interconnection points IPL may have with third parties (hereinafter referred to
as "Alternate Delivery Points").

	Billing Based on Scheduled Transactions.  As IPL and PSI systems are
interconnected with other systems forming a network, it is recognized that, because of the physical
and electrical characteristics of the facilities involved, a part or all of the energy being
transferred from one Party to the other may flow through such other systems rather than through the
point or points of connection between the systems of the Parties.  A part or all of the power being
transferred between other systems in the network may flow through the point or points of connection
between the systems of the Parties, and as a result be included in the demand and energy meter
readings at the point or points of interconnection.  Therefore, all billings shall be based on
scheduled transactions or upon methods determined by the Operating Committee which may result from
development of arrangements with other interconnected systems and which provide a basis for
accounting for the power and energy transfers actually contracted for between the Parties.

	  Metering Points.  Electric power and energy supplied and delivered under the
2002 Agreement shall be measured by suitable metering equipment which shall be provided, owned and
maintained by PSI or IPL as designated below at the following metering points:


	138,000 volt metering equipment installed by PSI at the Five Points Substation; 138,000 volt
metering equipment installed by PSI at the Centerton Substation; 138,000 and 345,000 volt metering
equipment installed by IPL at the Petersburg Station; 345,000 volt metering equipment install by
IPL at its Sunnyside Substation and at PSI's Gwynneville and Whitestown Substations; 12.47kv
metering equipment installed by PSI at its Carmel Southeast Substation; and 345,000 volt metering
equipment installed by PSI at its Frances Creek Substation, and
	At such other locations as hereafter may be agreed upon by the Parties pursuant to Section 1.02
hereof.







 

Electric power and energy supplied and delivered at the Alternate Delivery Points specified in
Section 4.01 shall be measured by metering equipment either provided, owned and maintained by IPL
or third parties. Such metering equipment shall not be subject to Sections 4.04 through 4.07 but
shall meet the reasonable requirements of the Operating Committee.




	Metering Equipment.  Suitable metering equipment at the metering points as
described in Section 4.03 above shall include electric meters, potential and current transformers,
and such other appurtenances as shall be necessary to give for each direction of flow the following
quantities: (i) an automatic record of the kilowatt-hours for each clock-hour, and (ii) a
continuous integration record of the kilowatt-hours.

	Measurement of Electric Energy.  Measurements of electric energy for the purpose
of effecting settlements under the 2002 Agreement shall be made by standard types of electric
meters installed and maintained (unless otherwise provided for in the Agreement) by the owner at
the metering points described in Section 4.03 above.  The timing devices of all meters having such
devices shall be maintained in the synchronism as closely as practicable. 

The meters shall be sealed and the seals shall be broken only upon occasions when the meters are
to be tested or adjusted.  For the purpose of checking the records of the metering equipment
installed by one of the Parties as hereinabove provided, the other Party shall have the right to
install check metering equipment at the aforesaid metering points.  Metering equipment so installed
by one Party on the premises of the other Party, unless otherwise provided for in the 2002
Agreement, shall be owned and maintained by the Party installing such equipment.  Upon termination
of the 2002 Agreement, the Party owning such metering equipment shall remove it from the premises
of the other Party.  Authorized representatives of both Parties shall have access at all reasonable
hours to the premises where the meters are located and to the records made by the meters. 


	Testing and Access to Meters and Records.  The aforesaid metering equipment shall
be tested by the owner at suitable intervals and its accuracy of registration maintained in
accordance with good practice.  On request of either Party, a special test may be made at the
expense of the Party requesting such special test. Representatives of both Parties shall be
afforded the opportunity to be present at All Routine or Special Tests and upon occasions when any
readings, for purposes of settlements hereunder, are taken from meters not bearing an automatic
record.

	Adjustments Due to Inaccuracies.  If at any test of metering equipment an
inaccuracy shall be disclosed exceeding two percent, the account between the Parties for service
theretofore delivered shall be adjusted to correct for the inaccuracy disclosed over the shorter of
the following two periods:  (i)  for the thirty (30) day period immediately preceding the day of
the test, or (ii) for the period that such inaccuracy may be determined to have existed.  Should
the metering equipment described in Section 4.04 above at any time fail to register, the electric
power and energy delivered shall be determined from the check meters, if installed, or otherwise
shall be determined from the best available data.

 

ARTICLE 5

RECORDS AND STATEMENTS



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

services and conditions as may be needed in connection with settlements under the 2002
Agreement.  The originals of all such records shall be retained by the Party keeping the records
and the duplicates shall be delivered monthly to the other Party, except that the Parties may agree
upon a different time interval for such delivery.




	Statements.  As promptly as practicable after the end of each calendar month, the
Parties shall prepare a statement setting forth the electric power and energy transactions between
the Parties during such month in such detail and with such segregations as may be needed for
operating records or for settlements under the provisions of the 2002 Agreement.

 

ARTICLE 6

BILLINGS AND PAYMENTS





	Billing Period.  Unless otherwise agreed upon by the Parties, the calendar month
shall be the standard billing period for all settlements under the 2002 Agreement.

	Billing scheduled Transactions.  All billing shall be based on scheduled
transactions unless otherwise determined as provided in Section 4.02 hereof.

	  Billing Payments.  All bills for amounts owed by one Party to the other Party
shall be due on the first business day following the fifteenth (15th) day after the end
of the calendar month or period service was rendered, or on the tenth (10th) business
day following receipt of a bill, whichever is later.  Payments shall be made by electronic transfer
or by such other mutually agreeable method as shall cause such payment to be available for the
account of the payee on or before the due date.  Interest on unpaid amounts, both principal and
interest, shall accrue daily at the then current prime interest rate per annum of The Chase
Manhattan Bank, N.A., New York, New York, plus two percent (2%) per annum, or the maximum rate
permitted by law, whichever is less, from the date due until the date upon which payment is
made.

	  Estimated Billing Factors.  In order that bills may be rendered promptly
after the end of each month, it may be necessary, from time to time, to estimate certain factors
involved in calculating the monthly billing.  Adjustments for errors in such estimates shall be
included in the bill for the month following the time when information becomes available to make
such corrections or adjustments in the billing for the preceding month or moths.

	Billing Disputes.  If a Party disputes the correctness of a bill, such Party
will, nevertheless, pay the undisputed portion of such bill, plus a minimum of one-half (1/2) of
the disputed amount, and shall submit to the other Party a written statement detailing the items
disputed.  If the Parties are unable to agree upon the disputed items, such items shall be
submitted to the Operating Committee for further action consistent with the 2002
Agreement.


 

 

ARTICLE 7

OPERATING COMMITTEE




	Operating Committee Organization and Duties.  To coordinate the operation of their
respective generation, transmission and substation facilities in order that the benefits of the
2002 Agreement may be realized by the Parties to the fullest practicable extent, the Parties shall
establish a committee of authorized representatives to be known as the Operating Committee.  Each
of the Parties shall designate in writing delivered to the other Party, the person who is to act as
its authorized representative (the "OC Representative") on said committee (and the person
or persons who may serve as Alternate whenever the OC Representative is unable to act).  The OC
Representative and Alternate or Alternates shall each be persons familiar with the generation,
transmission, and substation facilities of the system of the Party he represents, and each shall be
fully authorized (i) to cooperate with the other OC Representative (or Alternates) and (ii) as the
need arises and subject to the declared intentions of the Parties as herein set forth and to the
terms hereof and the terms of any other agreements then in effect between the Parties, to determine
and agree from time to time upon the following:






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









	Operating Committee Access.  For the purpose of inspection and reading of meters,
checking of records, and all other pertinent matters, the OC Representatives and their Alternates
shall have the right of entry at any reasonable time to all property of the Parties used in
connection with the performance of the 2002 Agreement.

	Unanimous Action.  All actions taken by said Operating Committee must be by
unanimous vote or consent of all OC Representatives (including Alternates acting during OC
Representatives' absence).

	Expenses.  The expenses for establishing and maintaining the Operating Committee
shall be the responsibility of each individual Party as regards its respective personnel.  Any
expenses jointly incurred by said Operating Committee in carrying out its duties, other than for
the Parties' personnel, shall be shared equally by the Parties.


 

	Authority to Amend or Supplement.  The Operating Committee may recommend changes to the
2002 Agreement, but said Operating Committee shall not have authority to amend or supplement the
2002 Agreement.

 

ARTICLE 8

CONTINUITY AND SUSPENSION OF SERVICE

RELATIVE RESPONSIBILITIES AND LIABILITY LIMITS




	Continuity and Suspension of Service.  Each Party shall exercise reasonable care and
foresight to maintain continuity of service as provided in the 2002 Agreement.  In no event shall
one Party be liable to the other Party or its customers for loss or damage arising from failure to
provide or for the interruption or suspension of any service provided for herein.  Each Party
reserves the right to suspend service without liability at such time and for such periods and in
such manner as it deems advisable, including, without limitation, suspensions for the purpose of
making necessary adjustments to, changes in, or repairs on, its facilities and to suspend service
in cases where, in its sole opinion, the continuance of service to the other Party would endanger
persons or property.  Both Parties shall use their best efforts to provide each other with
reasonable notice in the event of suspension of service.

	Relative Responsibilities.  Each Party assumes all responsibility for receipt and
delivery of electricity on its system to and from the Points of Interconnection specified in
Section 1.01 hereof or agreed upon pursuant to Section 1.02 hereof or as requested by PSI pursuant
to Section 4.01.  Neither Party assumes any responsibility with respect to the construction,
installation, maintenance or operation of the system of the other Party or of the systems of third
parties, in whole or in part.  In no event shall one Party be liable to the other Party for damage
or injury to any person or property, whatsoever, arising, accruing or resulting from, in any
manner, the receiving, transmission, control, use, application or distribution of said electric
power and energy.  Each Party shall use reasonable diligence to maintain its facilities in proper
and serviceable condition, and shall take reasonable steps and precautions for maintaining the
services agreed to be provided and received under the 2002 Agreement.  Each Party shall be
responsible for its own compliance with all applicable environmental regulations and shall bear all
costs arising from its failure to comply with such environmental regulations.

	Limitation of Liability.  In no event shall one Party be liable to the other
Party for any indirect, special, incidental or consequential damages with respect to any claim
arising out of the 2002 Agreement.

 

 

 

 

ARTICLE 9

TERM OF AGREEMENT



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


 

ARTICLE 10

WAIVERS




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





 

ARTICLE 11

TAXES




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





 

 

 

 

 

ARTICLE 12 

NOTICES




	Notices Relating to Provisions of the 2002 Agreement.  Except as herein otherwise
provided, any notice which may be given to or made upon either Party by the other Party, under any
of the provisions of the 2002 Agreement, shall be in writing unless it is otherwise specifically
provided herein, and shall be treated as duly delivered when the same is either (a) personally
delivered to the President or Chief Operations Officer of the other Party or (b) deposited in the
United States mail, postage prepaid and properly addressed to the President or Chief Operations
Officer of the other Party; provided, however, that either Party may alter its recipient for notice
hereunder by written notice to the other Party in accordance with the provisions of this Section
12.01.

	Notices of An Operating Nature.  Any notice, request or demand pertaining to
matters of an operating nature may be served in person or by United States mail, messenger,
telephone, or telegraph, facsimile transmission or orally, as circumstances dictate, from the OC
Representative of one Party to the OC Representative of the other Party; provided, that should the
same not be written, confirmation thereof shall be made in writing as soon as practicable
thereafter, upon request of the Party being served.

 

ARTICLE 13

REGULATORY AUTHORITIES




	Regulatory Authority.  The 2002 Agreement is made subject to the authority of the
Federal Energy Regulatory Commission or any other governmental regulatory agency having
jurisdiction in the premises and, if any of the terms and conditions hereof are altered or made
impossible of performance by order, rule, or regulation of any such regulatory agency, and the
Parties hereto are unable to agree upon a modification of such terms and conditions that will
satisfy such order, rule, or regulation, then neither Party shall be liable to the other for
failure thereafter to comply with such terms and conditions; provided, that if either Party deems
that the failure of such performance results in a substantial breach of the 2002  Agreement, then
the 2002 Agreement may be terminated forthwith upon thirty (30) days' advance written notice.



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

 

ARTICLE 14

MISCELLANEOUS




	No Partnerships; Tax Matters.  Notwithstanding any provision of the 2002 Agreement to
the contrary, the Parties do not intend to create hereby any joint venture, partnership,
association taxable as a corporation, or other entity for the conduct of any business for profit,
and any construction of the 2002 Agreement to the contrary which has an adverse tax effect on
either Party shall render the 2002 Agreement null and void from its inception.

	Computation of Time.  In computing any period of time prescribed or allowed by
the 2002 Agreement, the day of the act, event, or default from which the designated period of time
begins to run shall be excluded but the last day of such period shall be included, unless it is a
Saturday, Sunday, or legal holiday, in which event the period shall run until the end of the next
business day which is not a Saturday, Sunday, or legal holiday.

	Section Headings Not to Affect Meaning.  The descriptive headings of the
Articles, Sections, Subsections and paragraphs of the 2002 Agreement have been inserted for
convenience only and shall not modify or restrict any of the terms and provisions
thereof.

 

ARTICLE 15

ASSIGNMENT




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






 

ARTICLE 16

ENTIRE AGREEMENT CONTAINED HEREIN




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





 

ARTICLE 17

1992 AGREEMENT SUPERSEDED




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





 

ARTICLE 18

AGENCY OF CINERGY SERVICES, INC.



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



 

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




INDIANAPOLIS POWER & CINERGY SERVICES, INC., acting as

LIGHT COMPANYagent on behalf of PSI Energy, Inc.


 

 

By:/s/ William R. Dodds

William R. Dodds

Vice President - Power Delivery



Date:     


By:/s/ John Procario

John Procario

Vice President and COO



Date:     



 

 

 

 

 

 

 

 

 

 



 

Exhibit I



SERVICE  SCHEDULE  A



EMERGENCY SERVICE



 

 

 

 

 

 

 

 

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



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Exhibit II



SERVICE  SCHEDULE  B



INTERCHANGE ENERGY



 

 

 

 

 

 

 

 

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



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Exhibit III


SERVICE  SCHEDULE  C



SHORT TERM POWER / ENERGY



 

 

 

 

 

 

 

 

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





 

Exhibit IV



SERVICE  SCHEDULE  D



CARMEL SOUTHEAST TAP NETWORK POWER AND ENERGY TRANSFER



 

 

 

 

 

 

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