Exhibit 10.9


                     REVOLVING SUBORDINATED PROMISSORY NOTE

December 20, 1996

     FOR  VALUE  RECEIVED,  IPL  Funding  Corporation,  an  Indiana  corporation
("Borrower"),  hereby promises to pay to the order of Indianapolis Power & Light
Company,  an Indianapolis  corporation  ("Lender"),  at the principal  office of
Lender at One Monument Circle, Indiananpolis, Indiana, or at such other place as
Lender may designate  from time to time,  the unpaid  principal  amount  hereof,
together with accrued interest thereon at a rate per annum equal to the floating
commercial  loan rate of interest for United  States  dollar  denominated  loans
announced  from time to time by ABN AMRO Bank  N.V.,  changing  when and as said
commercial  loan rate  changes  (which  rate shall not exceed the  maximum  rate
permitted by  applicable  law),  in lawful money of the United States of America
and in  immediately  available  funds,  on the  sixtieth  (60th)  day  after the
"Termination  Date" described in the Receivables  Purchase Agreement referred to
below  or, if such  sixtieth  (60th)  day is not a  Business  Day,  on the first
Business Day thereafter  (such  sixtieth  (60th) day or later Business Day being
referred to as the  "Maturity  Date"),  together  with costs of  collection  and
reasonable  attorney's  fees  incurred  by  Lender  in  the  collection  of  the
indebtedness evidenced hereby all without relief from valuation and appraisement
laws.  Except as otherwise  defined  herein,  capitalized  terms used herein and
defined in the  Receivables  Purchase  Agreement  dated as of December  20, 1996
between Borrower and the Lender (as amended,  modified or supplemented from time
to time  the  "Receivables  Purchase  Agreement")  shall  be used  herein  as so
defined.  This note is the "Subordinated  Note" referred to in the Subordination
Agreement.  Interest  shall be computed  hereunder for the actual number of days
elapsed  on the basis of a year  consisting  of three  hundred  sixty five (365)
days.

     All accrued  interest on the principal  amount of this Note will be due and
payable on the  twentieth  day of each month or, if such  twentieth day is not a
Business Day, the next  succeeding  Business Day, with interest  accrued thereon
until  such next  succeeding  Business  Day,  beginning  on  January  20,  1997;
provided,  however,  that  on or  prior  to the  Maturity  Date,  unless  Lender
instructs Borrower otherwise,  such interest may be paid by means of an increase
in the amount of the unpaid  principal  amount  hereof by an amount equal to the
interest being so paid.

     The  principal  amount  of this Note  shall be  initially  established  and
thereafter  adjusted  from  time  to time  in  accordance  with  the  terms  and
conditions of the  Receivables  Purchase  Agreement (the terms and conditions of
which are hereby  incorporated  in this Note by this reference) and the terms of
this Note.  Lender shall record the initial  principal  amount of this Note, all
adjustments  thereto and all payments  thereof on Schedule 1 annexed  hereto and
made a part hereof, or on a continuation  thereof which shall be attached hereto
and made a part hereof, and any such recordation  shall,  absent manifest error,
constitute  prima  facie  evidence of the  information  so  recorded;  provided,
however,  that the  failure  to so record  shall not  limit the  obligations  of
Borrower hereunder or under the Receivables Purchase Agreement.

     Borrower and, by its acceptance of this Note, Lender hereby acknowledge and
agree  that any and all  payments  made in  respect  of this  Note are and shall
remain  subordinate  and junior in right of payment to the Senior Debt,  as that
term is defined in the  Subordination  Agreement,  dated as of December 20, 1996
(the  "Subordination  Agreement")  by and among the Agent,  the Borrower and the
Lender to the extent provided therein.  Borrower shall,  subject to the terms of
the Subordination Agreement, have the right to pay all or any part of the unpaid
principal amount of this Note without premium or penalty at any time;  provided,
that  interest  shall be paid on the amount  repaid to and including the date of
repayment.

     Borrower hereby waives presentment, diligence, notice of dishonor, payment,
demand,  protest,  notice of protest, notice of nonpayment and all other demands
and  notices  of  every  kind  in  connection  with  the  delivery,  acceptance,
performance  and  enforcement of this Note and, to the full extent  permitted by
law, the right to plead any statute of  limitations  as a defense to any demands
hereunder.  Borrower and, by its acceptance of this Note,  Lender also assent to
extension  of the  time of  payment,  forbearance  or other  indulgence  without
notice.

     This Note  applies to,  inures to the benefit of, and binds the  successors
and  assigns  of,  Borrower  and  Lender.  Lender  may not  assign any duties or
obligations  hereunder without the prior written consent of Borrower.  THIS NOTE
IS MADE UNDER,  AND ALL  QUESTIONS  CONCERNING  THE  CONSTRUCTION,  VALIDITY AND
INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE
OF INDIANA.

     On the first  Business Day after the Maturity Date at the close of business
of which all principal and accrued interest owing on this Note have been paid in
full, this Note will be surrendered to Borrower for cancellation.

     IN WITNESS  WHEREOF,  Borrower has executed and delivered  this Note by its
duly authorized officer as of the day hereof.

                                                IPL FUNDING CORPORATION


                                                By  /s/ Steven L. Meyer
                                                  ------------------------------
                                                  Name: Steven L. Meyer
                                                       -------------------------
                                                  Title: Treasurer
                                                        ------------------------


<PAGE>

                                   SCHEDULE 1
                          TO REVOLVING PROMISSORY NOTE


                                    UNPAID
        INCREASE IN   DECREASE IN   PRINCIPAL
        PRINCIPAL     PRINCIPAL     AMOUNT AFTER   REASON FOR       NOTATION
DATE    AMOUNT        AMOUNT        ADJUSTMENT     ADJUSTMENT*      MADE BY

                                    $              Initial Balance











--------
*   Describe or use appropriate code specified below:

    A = increase in lieu of cash payment of interest
    B = increase/decrease pursuant to Section 1.2 of the Receivables Purchase
         Agreement
    C = decrease due to payment of principal