Document:

EXHIBIT 10.7

                    INTERCONNECTION AGREEMENT

                             Between

               INDIANAPOLIS POWER & LIGHT COMPANY

                               And

         HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

                               For

         Interchange Wholesale Sales and Purchases under
     Emergency Service, Energy Transfer, Interchange Power,
        Short Term Power, Limited Term Power (Firm), and
                    Diversity Power Schedules

                  Dated as of December 1, 1981

0.01 THIS AGREEMENT, dated as of the 1st day of December, 1981,
between INDIANAPOLIS POWER & LIGHT COMPANY ("IPL"), and HOOSIER ENERGY
RURAL ELECTRIC COOPERATIVE, INC. ("Hoosier"), both Indiana corporations:

                           WITNESSETH:

0.02 WHEREAS, IPL and Hoosier each owns electrical facilities and is
engaged in the generation, transmission, distribution, and sale of
electric power and energy in Indiana; and

0.03 WHEREAS, IPL and Hoosier desire that certain 161,000-volt and
138,000-volt transmission line facilities be provided and built so as to
establish a 138,000-volt interconnection between the IPL system and the
Hoosier system; and

0.04 WHEREAS, IPL and Hoosier desire to avail themselves of the mutual
benefits and advantages to be realized by interconnected systems
operation through such 138,000-volt interconnection; and

0.05 WHEREAS, the parties desire to fix the terms and conditions upon
which such interconnection shall be provided and built and upon which the
furnishing of interconnection services shall be effected;

0.06 NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:

                            ARTICLE 1

   PROVISIONS FOR AND CONTINUITY OF INTERCONNECTION OPERATION

Facilities To Be Provided By Hoosier

1.01 Hoosier shall provide, own, and install, or cause to be installed,
the following described facilities:

     1.011  A 138,000-volt single circuit transmission line
     approximately one mile in length, constructed with aluminum
     conductors not less than 795 MCM in size, to extend in a generally
     northeasterly direction from the existing switchyard, located at
     Hoosier's Ratts Generating Station ("Ratts"), to IPL's Petersburg
     Station (the "Ratts-Petersburg Line")

     1.012  At Ratts, a 161,000-138,000-volt autotransformer, including
     facilities essential to the protection of line and station
     equipment, and such equipment on the autotransformer necessary to
     attain a 200 MVA rating.

     1.013  At Ratts, the necessary terminal equipment, including
     facilities essential to the protection of line and station
     equipment.

     1.014  At Ratts and other suitable locations, such communication,
     telemetering, and load control facilities as shall hereafter be
     determined by the parties as necessary for the proper and efficient
     interconnected operation of the parties' systems.

Facilities To Be Provided By IPL

1.02  IPL shall provide, own, and install, or cause to be installed, the
following described facilities:

     1.021  At IPL's Petersburg Station ("Petersburg"), the necessary
     terminal equipment, including facilities essential to the
     protection of line and station equipment.

     1.022  At Petersburg, replacement of certain 138,000-volt equipment
     necessary to provide proper coordination and protection of line and
     station equipment consistent with sound engineering practices.

     1.023  At Petersburg, a new terminal for the existing line to
     Southern Indiana Gas and Electric Company's Dubois line, together
     with necessary protection, communication, metering, and load
     control facilities essential to the protection of line and station
     facilities.

     1.024  At Petersburg and other suitable locations, such communication,
     telemetering, and load control facilities as shall hereafter be
     determined by the parties as necessary for the proper and efficient
     interconnected operation of the parties' systems.

     1.025  At Petersburg, suitable 138,000-volt metering equipment as
     described in Section 4.02 below.

1.03  IPL shall arrange with Southern Indiana Gas and Electric Company
for the relocation and retermination of a portion of the Petersburg-Dubois
138,000-volt line owned by Southern Indiana Gas and Electric Company to a
new line terminal at Petersburg as described in Section 1.023 hereof.

1.04  In consideration of the provisions of this agreement, the
parties agree that within six (6) calendar months after the
Interconnection Date as defined in Article 9, payments will be made as
follows:

     1.041  IPL will keep an accurate accounting of its cost of
     establishing the facilities specified in Article 1.02 herein, and
     the cost of, or payments to Southern Indiana Gas and Electric
     Company for, the relocation of facilities in Article 1.03 hereof
     ("IPL Investment").  Such costs shall include:

     A.   The cost of material and labor for installing the facilities
          specified in Subsections 1.021, 1.023, 1.024 and 1.025
          herein, including all transportation, stores, interest, and
          engineering expenses and proper apportionments.

     B.   The cost of material and labor for removing and replacing
          three line breakers and associated equipment specified in
          Subsection 1.022 herein, including all transportation,
          stores, interest, and engineering expenses, and proper
          apportionments.

     1.042  Hoosier will keep an accurate accounting of its cost of
     establishing the facilities specified in Article 1.01 hereof
     ("Hoosier Investment").  Such costs shall include:

     A.   The material and labor cost of all new equipment required for
          the establishment of facilities herein specified, including
          all transportation, stores expenses, and proper apportionments.

     B.   The installation labor and original purchase cost of the
          autotransformer specified in Subsection 1.012 including
          engineering and proper apportionments.

     1.043  If the IPL Investment exceeds one-third (1/3) of the sum of
     IPL Investment and Hoosier Investment ("Total Investment"), Hoosier
     agrees to pay IPL the amount by which IPL Investment exceeds
     one-third (1/3) of the Total Investment.

     If the Hoosier Investment exceeds two-thirds (2/3) of the Total
     Investment, IPL agrees to pay Hoosier the amount by which Hoosier
     Investment exceeds two-thirds (2/3) of the Total Investment.

Interconnection Point

1.05  The Interconnection Point shall be that point at Petersburg where
the terminal facilities provided therefor by IPL shall be connected to
the Petersburg-Ratts Line.

Facilities Obligations Common To The Parties

1.06  Subject to accidents, strikes, litigation, delays in securing
delivery of equipment or other similar or dissimilar causes beyond the
reasonable control of the parties, including the procuring of the
necessary materials and labor and the obtaining of all the necessary
governmental authorizations and permits approving the use of such labor
and materials, the installation of the facilities to be provided by the
parties, as hereinabove described, shall be completed and in service on
or before June 1, 1982, (the "In-Service Date").  Should said facilities
be delayed beyond said date due to any of the aforesaid causes, it shall
nevertheless be completed as soon thereafter as practicable.

1.07  The parties shall cooperate to assure the maximum practicable
coordination of design and installation of the facilities to be installed
by each of them with new and existing facilities of the other.  Each
party agrees to promptly notify the other party of any potential delay in
the In-Service Date.

Synchronous Operation

1.08  When the installation of the facilities as provided for under this
Article 1 is completed, the systems of the parties shall be connected at
the Interconnection Point and thereafter throughout the duration of this
agreement, subject to the provisions of this Section 1.08 and Section
1.09, such systems shall be operated in continuous synchronism through
such line.  If synchronous operation of the systems through such line
becomes interrupted either manually or automatically because of reasons
beyond the control of either party or because of scheduled maintenance
that has been agreed to by both parties, the parties shall cooperate to
remove the cause of such interruption as soon as practicable and restore
such line to normal operating condition.  Neither party shall be
responsible to the other party for any damage or loss of revenue caused
by any such interruption.

1.09  The parties hereto agree that either party may interrupt
synchronous operation through this interconnection if either determines
that its facilities may be damaged due to excessive loadings, and such
loadings may be reduced or alleviated by such interruption.  If such
interruption occurs, the parties shall cooperate to remove the cause of
such loadings as soon as practicable and restore such interconnection to
normal operating condition.  Neither party shall be responsible to the
other party for damage or loss of revenue caused by such interruption.

The parties hereto further agree 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 herein described in the
event either party determines that this interconnection contributes to
the excess loading and requests such negotiation.

Maintenance of Equipment

1.10  The parties hereto shall each keep the lines, together with all
associated equipment and appurtenances, described in Article 1 hereof
that are located on their respective sides of the Interconnection Point
in a suitable condition of repair at all times, each at its own expense,
in order that said lines will operate in a reliable  and satisfactory
manner and in order that reduction in the capacity of said lines will be
avoided to the extent practicable.

1.11  The parties hereto understand that IPL and Hoosier each now has its
transmission system interconnected with the electric transmission systems
of other electric utility companies and each has contracted for other
such interconnections and may hereafter during the term of this agreement
desire to make additional interconnections with such companies or with
other electric utility companies.  Each such additional interconnection
with another electric utility system shall be discussed between the
parties and if, in the opinion of either party, the establishment of such
interconnection will cause transfer of power or reactive power through
the system of either party during normal parallel operation to or from
the systems with which either party proposes to add an interconnection to
its system, then before any such additional interconnection is made,
joint load studies shall be carried on to determine the effect which such
interconnection will have on the transmission systems of the parties.  If
as the results of such studies it is the reasonable opinion of one of the
parties that the proposed additional interconnection would cause
unreasonable transfers of power or reactive power through the electric
transmission system of such party or otherwise impair the ability of such
party to carry out its own obligations, then the party proposing such
additional interconnection shall, before such proposed interconnection is
placed in service:

     1.111     agree to compensate the other party for the use of that
     portion of its facilities determined to be dedicated to the new
     situation caused by the establishment of the proposed interconnection;
     and/or

     1.112     install and/or remove such equipment as may be reasonably
     necessary to avoid such unreasonable transfers of power or reactive
     power; or

     1.113     abandon the establishment of such additional interconnection.

                            ARTICLE 2

                     SERVICES TO BE RENDERED

2.01 It is the purpose of the parties hereto to realize on an equitable
basis, all benefits practicable to be effected through coordination in
the operation and development of their respective systems.  It is
understood by the parties that such benefits may be realized under the
stated terms and conditions of the following interconnection
services:

A.   the furnishing of mutual emergency and standby assistance, in
     accordance with Service Schedule A annexed hereto;

B.   the transfer of electric energy through the transmission system of
     one party for the benefit of the other, in accordance with Service
     Schedule B annexed hereto;

C.   the interchange, sale, and purchase of energy to effect operating
     economies, in accordance with Service Schedule C annexed hereto;

D.   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, in accordance with Service Schedule D annexed hereto;

E.   the sale and purchase of limited term power and energy available on
     the system of one party and needed on the system of the other, in
     accordance with Service Schedule E annexed hereto;

F.   the sale and purchase of diversity power and energy, in accordance
     with Service Schedule F annexed hereto.

In furtherance of such purpose the parties hereto shall create an
Operating Committee as provided in Article 7 hereof.

2.02  Inasmuch as the specific services to be rendered in furtherance of
such purpose will vary, and the terms and conditions applicable to such
services may require modification from time to time while this Agreement
is in effect, it is intended that such specific services and the terms
and conditions applicable thereto be set forth in service schedules
mutually agreed upon from time to time between the parties.  Such service
schedules, until and unless changed by such mutual agreement, shall be
those provided by Section 2.03 hereof, each of which, while in effect,
shall be deemed to be a part of this agreement.  Nothing contained herein
shall be construed as affecting in any way the right of IPL in furnishing
service under these rate schedules to unilaterally make application to
the Federal Energy Regulatory Commission ("FERC") for a change in rates
under Section 205 of the Federal Power Act and pursuant to the FERC's
Rules and Regulations promulgated thereunder.  Nothing contained herein
shall be construed as affecting in any way the right of Hoosier in
furnishing service under these rate schedules to unilaterally make
application to the Public Service Commission of Indiana for a change in
rates in accordance with the Public Service Commission Act and pursuant
to such Commission's Rules and Regulations promulgated thereunder.

2.03 The respective service schedules shall be designated:

        I.  Service Schedule A - Emergency Service
       II.  Service Schedule B - Energy Transfer
      III.  Service Schedule C - Interchange Power
       IV.  Service Schedule D - Short Term Power
        V.  Service Schedule E - Limited Term Power (Firm)
       VI.  Service Schedule F - Diversity Power

such service schedules having been agreed upon between the Parties
hereto, are attached hereto, made a part hereof, and marked Exhibits I,
II, III, IV, V, and VI, respectively.

2.04  Nothing in this Agreement shall require either party hereto to
purchase power or energy from a third party and resell it to the other
party hereto at a price less than the total cost of supplying such
purchased power or energy.

                            ARTICLE 3

                       SERVICE CONDITIONS

Control of System Disturbance

3.01  The parties hereto shall maintain and operate their respective
systems in accordance with sound operating practice so as to minimize the
likelihood of disturbance originating in either 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

3.02  It is intended that neither party hereto 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 from time to time of
operating procedures and schedules, in respect of carrying kilovar loads
by one system for the other in order to secure adequate service and
economical use of the facilities of both 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 of the parties, 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 both of their
systems.  The operating procedures and schedules so set up by the
Operating Committee shall be in accord with such principles and shall
require each of the parties to carry kilovar loads at such times and in
such amounts as will be equitable to both parties.

Control of Unscheduled Power Deliveries

3.03  The parties hereto shall exercise reasonable 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, deviations 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 events, electric energy delivered hereunder shall be
settled for either by the return of equivalent energy or by payment of
the out-of-pocket cost (such  cost being at the delivery point or points,
set forth in Section 4.01 of this agreement, taking into account
electrical losses incurred from the source or sources of such energy to
said delivery point or points) of electric energy delivered hereunder to
the supplying party plus ten percent of such cost.  If equivalent energy
is returned, it shall be returned at times when the load conditions of
the party receiving it are substantially 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

4.01  All electric energy delivered under this agreement shall be of the
character commonly known as three-phase sixty-cycle energy, and shall be
delivered at the Interconnection Point, as defined under Section 1.05
hereof, at a nominal voltage of 138,000-volts and at such other points
and voltages as may be agreed upon by the parties in a written amendment
hereto.

Metering Points

4.02  Electric Power and energy supplied under this agreement shall be
measured by suitable metering equipment, having appropriate voltage
rating, to be installed, owned and maintained at the Metering Point as
hereinafter defined; and at such other points, voltages, and ownership as
may be agreed upon by the parties in a written amendment hereto:

     4.021     At the Interconnection Point specified in Section 1.025
     above, by 138,000 volt metering equipment to be installed, owned
     and maintained by IPL.  ("Metering Point")

Metering

4.03  Suitable metering equipment at the metering point provided in
Section 4.02 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:

A.   a continuous automatic graphic record of both kilowatts and
     kilovars,

B.   an automatic record of the kilowatthours for each clock hour, and

C.   a continuous integrating record of the kilowatthours.

4.04  Unless otherwise provided for in this agreement, measurements of
electric energy for the purpose of effecting settlements under this
agreement shall be made by standard types of electric meters installed
and maintained, by the owner at the metering point provided for in
Section 4.02 hereof.  The timing devices of all meters having such
devices shall be maintained in time 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 hereto as hereinabove provided, the other party
hereto shall have the right to install check metering equipment at the
aforesaid metering points.  Check metering equipment so installed by one
party on the premises of another party, unless otherwise provided for in
this agreement, shall be owned and maintained by the party installing
such equipment.  Upon termination of this agreement, the party owning
such check 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.

4.05  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 hereto, 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.

4.06  If, at any test of metering equipment an inaccuracy shall be
disclosed exceeding two percent, the account between the parties hereto
for service theretofore delivered shall be adjusted to correct for the
inaccuracy over the shorter of the following two periods:  (1) for the
thirty-day period immediately preceding the day of the test or (2) for
the period that such inaccuracy may be determined to have existed.
Should the metering equipment provided for in Section 4.03 hereof at any
time fail to register, the electric power and energy delivered during
such failure shall be determined from the check meters, if installed, or
otherwise shall be determined from the best available data.

                            ARTICLE 5

                     RECORDS AND STATEMENTS

Records

5.01  In addition to records of the metering provided for in Article 4
hereof, the parties hereto shall keep, in duplicate, such other records
as may be needed to afford a clear history of the various deliveries of
electric energy made, and of the clock-hour integrated demands in
kilowatthours 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 to effect settlements
under this 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, unless the parties agree in writing
upon a different time interval for such delivery.

Statements

5.02  As promptly as practicable after the end of each calendar month,
the parties hereto shall cause to be prepared a statement setting forth
the electric power and energy transactions between them during such month
in such detail and with such segregations as may be needed for operating
records or for settlements under this agreement.

                            ARTICLE 6

                      BILLINGS AND PAYMENTS

6.01  All bills for amounts owed by one party hereto to the other shall
be due and payable on the fifteenth day of the month next following the
month in which the service was provided, or on the tenth day following
receipt of a bill therefor, whichever is later.  Interest on unpaid
amounts shall accrue at the annual rate of 1/2 percent above the prime
commercial lending rate established from time to time by Indiana National
Bank at Indianapolis, Indiana and is chargeable from the due date of the
bill to the date of payment.  The term "month" shall mean a calendar
month for the purpose of settlements under this agreement.

                            ARTICLE 7

                       OPERATING COMMITTEE

7.01  To coordinate the operation of their respective generating,
transmission and substation facilities, in order that the advantages to
be derived hereunder may be realized by the parties hereto 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 representative on said committee (and the
person or persons who may serve as alternates whenever such
representative is unable to act).  Each of such representatives and
alternates shall be persons familiar with the generating, transmission,
and substation facilities of the system of the party he represents, and
each shall be fully authorized (1) to cooperate with the other
representative (or alternates) and (2) to determine and agree from time
to time, in accordance with this agreement and with any other relevant
agreements then in effect between the parties, upon the following:

     7.011     All matters pertaining to the coordination of the maintenance
     of generating and transmission facilities of the parties hereto.

     7.012     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.

     7.013     Such other matters not specified herein in respect of which
     cooperation, coordination, and agreement as to quantity, time,
     method, terms and conditions are necessary to the efficient
     operation of the respective systems of the parties to the end that
     the intent and purpose of this agreement shall be realized by the
     parties to the fullest extent practicable.

7.02  For the purpose of inspection and reading of meters, checking of
records, and all other pertinent matters, said representatives or their
alternates shall have the right of access at any reasonable time to all
facilities and equipment of the parties hereto used or to be used in the
performance of this agreement.

                            ARTICLE 8

                      CONTINUITY OF SERVICE

8.01  Each party hereto shall exercise reasonable care and foresight to
maintain continuity of service as provided under this agreement, but
neither party shall be considered in default in respect of any obligation
hereunder if prevented from fulfilling such obligation by reason of
uncontrollable forces.  The term "uncontrollable forces" shall be deemed
for the purposes of this agreement to mean earthquake, storm, lightning,
flood, backwater caused by flood, fire, epidemic, accident, failure of
facilities, war, riot, civil disturbances, strike, labor disturbances,
restraint by court or public authority, or other similar or dissimilar
causes beyond the control of the party affected thereby, which causes
such party could not have avoided by exercise of reasonable care. A
party unable to fulfill any obligation by reason of uncontrollable forces
shall immediately notify the other party of such disability and shall use
its best efforts to remove such disability with reasonable dispatch.

                            ARTICLE 9

                      DURATION OF AGREEMENT

9.01  This agreement shall become effective at the date hereof, subject
to the filing requirements of FERC, or any other regulatory authority
having jurisdiction and to approval of any such authority, if required,
and shall continue in effect for a period of ten (10) consecutive years
commencing upon the Interconnection Date, as hereinafter defined, (the
"Initial Term"), and thereafter for successive terms of three (3) years
each unless and until terminated as provided in Section 9.02 hereof; the
Interconnection Date shall be the first day of the calendar month next
following the day, or on such day if it should be the first day of a
calendar month, upon which the systems of the parties are connected at
the Interconnection Point set forth in Article 1 hereof.  As soon as
practicable following the Interconnection Date, the parties, as a matter
of record, shall exchange letters confirming such date as the Interconnection
Date.

9.02  This agreement and any amendments pertaining thereto shall not
become effective until approved by the Rural Electrification Administration.

9.03  Either party upon at least thirty months' prior written notice to
the other, may terminate this agreement after the expiration of the
Initial Term or any successive term hereof; provided, that this agreement
shall not be deemed to have terminated until all prior commitments for
sale or purchase of power under this agreement have been fulfilled.

                           ARTICLE 10

                           ARBITRATION

10.01  In the event a disagreement between the parties hereto has reached
an impasse between the parties hereto with respect to (A) any matter
herein specifically made subject to arbitration, (B) any question of
operating practice involved in the deliveries of power and energy herein
provided for, (C) any question of fact involved in the application of the
provisions of this agreement, or (D) the interpretation of any provision
of this agreement, the disputed matter upon demand of either party, shall
be submitted to arbitration in the manner hereinafter provided.  An offer
of such submission to arbitration shall be a condition precedent to any
right to institute proceedings at law or in equity concerning such matter.

10.02  The party hereto calling for arbitration shall serve notice in
writing upon the other party hereto, setting forth in detail the subject
or subjects to be arbitrated, and the parties thereupon shall endeavor to
agree upon and appoint one person to act as sole arbitrator.  If the
parties fail so to agree within a period of fifteen days from the receipt
of the original notice, the party calling for the arbitration shall, by
written notice to the other party, give notice for appointment of a board
of arbitrators skilled with respect to matters of the character involved
in the disagreement, naming one arbitrator in such notice.  The other
party shall, within ten days after the receipt of such notice, appoint a
second arbitrator, and the two arbitrators so appointed shall choose and
appoint a third arbitrator.  In case such other party fails to appoint an
arbitrator within said ten days, or in case the two so appointed fail for
ten days to agree upon and appoint a third, the party calling for the
arbitration, upon five days' written notice delivered to the other party,
shall apply to the senior Judge, in point of service, of the United
States District Court for the Southern District of Indiana, for
appointment of the second or third arbitrator, as the case may be.

10.03  The sole arbitrator, or the board of arbitrators, shall afford
adequate opportunity to the parties to present information with respect
to the matters submitted for arbitration and may request further
information from either or both parties.  The findings and award of the
sole arbitrator or of a majority of the board of arbitrators shall be
final and conclusive with respect to the question or questions submitted
for arbitration and shall be binding upon the parties; provided, that
such findings and award shall not in any way vary the expressed terms of
this agreement or in any way extend the expressed scope and intent
hereof.  Each party shall pay for the services and expenses of the
arbitrator appointed by or for it, if there is a board of arbitrators.
All other costs incurred in connection with the arbitration shall be
divided in equal parts and paid by the parties accordingly, unless the
award shall specify a different division of such costs.

                           ARTICLE 11

                            LIABILITY

11.01  Each party hereto shall hold harmless the other party hereto from
and against any liability, loss, cost, damage and expense because of
injury or damage to persons or property resulting from, or arising out of
the use of its own facilities or the production or flow of electric
energy by or through such facilities, except when such injury or damage
is due to the negligence of the other party.

                           ARTICLE 12

                              TAXES

12.01  If at any time during the term hereof there should be levied or
assessed against either of the parties hereto any direct tax by any
taxing authority on the capacity or energy (or both) generated,
purchased, sold, transmitted, interchanged, or exchanged under this
agreement, which tax is in addition to or different from the forms of
direct taxes being levied or assessed on the date of this agreement, and
such direct tax results in increasing the cost to either or both parties
hereto of carrying out the provisions of this agreement, then the rate
and charges for capacity and energy (or both) furnished hereunder shall
be increased automatically to the extent necessary to make adequate and
equitable allowance for such tax.

                           ARTICLE 13

                             NOTICES

13.01  Except as otherwise provided herein, any notice given to either
party hereto by the other under any of the provisions of this agreement,
shall be in writing unless otherwise specifically provided, and shall be
deemed to be duly delivered when the same is either personally delivered
or deposited in the United States mail, postage prepaid and properly
addressed to the Chief Executive Officer of IPL, in the case of a notice
to be given IPL, or to the General Manager of Hoosier, in the case of a
notice to Hoosier.

13.02  Any notice, request or demand pertaining to matters of an
operating nature may be served in person or, by ordinary mail, messenger,
telephone, or telegraph, as circumstances dictate, to an Operating
Committee representative or alternate; provided, that should the same not
be written then confirmation thereof shall be made in writing as soon as
practicable thereafter upon request of the party being served.

                           ARTICLE 14

                     REGULATORY AUTHORITIES

14.01  This agreement is made subject to the authority of FERC 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 this agreement, this agreement may be
terminated forthwith upon notice.

                           ARTICLE 15

                             WAIVERS

15.01  Any waiver by either party hereto of its rights under this
agreement, shall not be deemed a waiver with respect to any subsequent
default or other matter.  Any delay, less than the statutory period
limitation, in asserting or enforcing any right under this agreement,
shall not be deemed a waiver of such rights.

                           ARTICLE 16

                 CONFLICTS WITH OTHER AGREEMENTS

16.01  Hoosier hereby represents to IPL that it has absolute authority to
enter into this agreement; that Hoosier's agreement with Public Service
Company of Indiana, Inc. and Southern Indiana Gas and Electric Company,
dated as of April 15, 1977, as amended, (the "Statewide Agreement") and
Hoosier's agreement with Big Rivers Electric Corporation, the City of
Henderson, Kentucky, and Southern Illinois Power Cooperative, dated as of
April 1, 1968, as amended, (the "KII Agreement") is not in conflict with,
and will not prevent Hoosier from performing its obligations under, this
agreement; and that Hoosier has done all things required of it under the
Statewide and KII Agreements as a condition to Hoosier's entry into this
agreement with IPL.

16.02  IPL hereby represents to Hoosier that it has absolute authority to
enter into this agreement; that IPL's agreement with Public Service
Company of Indiana, Inc., Kentucky Utilities Company and East Kentucky
Power Cooperative Inc., dated as of July 9, 1971, as amended, (the "KIP
Agreement") is not in conflict with, and will not prevent IPL from
performing its obligations under this agreement; and that IPL has done
all things required of it under, the KIP Agreement as a condition to
IPL's entry into this agreement with Hoosier.

                           ARTICLE 17

                ENTIRE AGREEMENT CONTAINED HEREIN

17.01  This agreement contains the entire agreement between the parties
hereto in respect of the subject matter hereof.

                           ARTICLE 18

                    CONSTRUCTION OF AGREEMENT

18.01  This agreement shall be governed by and construed according to the
laws of the State of Indiana.

                           ARTICLE 19

                           ASSIGNMENT

19.01  This agreement shall inure to and bind upon the respective
successors and assigns of the parties hereto, but the assignment hereof
by either such party, shall not relieve the assigning 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 contracted for herein.

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their respective duly authorized officers and their
respective corporate seals to be hereunto affixed as of the date first
above written.

                              INDIANAPOLIS POWER & LIGHT COMPANY

                              By /s/  Robert W. Hill

                                Robert W. Hill, President and Chief
                                  Operating Officer

HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

By  /s/ Virgil E. Peterson
  Virgil E. Peterson, Executive Vice President
    and General Manager

                                                                EXHIBIT I

                       SERVICE SCHEDULE A

                        EMERGENCY SERVICE

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - SERVICES TO BE RENDERED

2.1  Subject to the provisions of subsection 2.2 of this Section 2, in
the event of a breakdown or other emergency in or on the system of either
party involving either sources of power or transmission facilities, or
both, impairing or jeopardizing the ability of the party suffering the
emergency to meet the loads of its system, the other party shall supply
to the party having the emergency such electric energy as the supplying
party is requested to deliver; provided, that neither party shall be
obligated to supply such emergency energy which, in the supplying party's
sole judgment, cannot be delivered without creating a hazard to or
economic burden upon its operations or without impairing or jeopardizing
the total load requirements of its system; and provided further, that
neither party shall be obligated to supply such emergency energy for a
period in excess of forty-eight consecutive hours during any single
emergency.

2.2  The parties recognize that the supply of electric energy as
provided for in subsection 2.1 of this Section 2 is subject to two
conditions which may preclude the delivery of such energy as so
provided:

(a) the party requested to deliver electric energy may be
suffering an emergency in or on its own system as described in said
subsection 2.1, or

(b) the system of the party of whom such request is made may be
delivering electric energy, under a mutual emergency interchange
agreement, to the system of another interconnected company which is
suffering an emergency in or on its system.  Under conditions as cited
under (a) above, neither party shall be considered to be in default
hereunder if unable to comply with the provisions of said subsection 2.1.
Under conditions as cited under (b) above, neither party shall be
considered to be in default hereunder if it is unable to comply with the
provisions of said subsection 2.1 provided that the aforesaid
interconnected company has suffered said emergency in or on its system
prior to and within forty-eight hours of that of the other party hereto
and that, if requested by said other party, such delivery of electric
energy to said interconnected company shall be discontinued within
forty-eight hours following the start of such delivery, and a subsequent
delivery shall be made for a full forty-eight hour period to said other
party in accordance with the provisions of said subsection 2.1.

2.3  If at any time the record over a reasonably prior period shows
clearly that either of the parties has failed to deliver energy in
accordance with and subject to the provisions of subsection 2.1 and
subsection 2.2 of this Section 2, either party, by written notice given
to the other party, may call for a joint study by the parties of the
reserve generating capacity in and provided for their respective systems
and of their respective system transmission facilities affecting the
supply and delivery of power and energy under the Agreement.  It shall be
the purpose of such study to determine the adequacy or inadequacy of
reserve generating capacity and transmission facilities being provided to
meet the requirements of the parties' respective systems, reflecting
obligations under the Agreement, and, if inadequate, the extent of the
burden that one party may be placing upon the other.  If it should be
found that one party is placing an unreasonable burden upon the other,
the party causing such burden shall take such measures as are necessary
to remove the burden from the other party, or the parties shall enter
into such arrangements as shall provide for equitable compensation to the
party being burdened.

SECTION 3 - COMPENSATION

3.1  Emergency Energy shall be settled for, at the option of the
supplying party, either by payment or by return of equivalent energy.

3.2  If the supplying party opts to receive payment for Emergency Energy
delivered, the receiving party shall pay the supplying party the greater of:

     3.21      110% of the out-of-pocket cost of supplying such Emergency
               Energy that is generated from the supplying party's own
               system, and, for energy purchased by the supplying party from
               another system to supply any part of such Emergency Energy,
               100% of the amount paid by the supplying party therefor plus
               10% of that amount, not exceeding, however, 1.6 mills per
               kilowatthour; or

     3.22      30 mills per kilowatthour of such Emergency Energy

3.3  If the supplying party opts to receive equivalent energy for
Emergency Energy delivered, such equivalent energy shall be returned at
times when the load conditions of the party originally supplying
Emergency Energy are substantially equivalent to the load conditions of
such party that existed when the Emergency Energy was delivered or, if
such party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts and at such times as,
the Operating Committee agrees will compensate the original supplying
party, for the difference in conditions.

                                                        EXHIBIT II

                       SERVICE SCHEDULE B

                         ENERGY TRANSFER

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - TRANSFER ARRANGEMENT

2.1  In carrying out the interconnected operation of their respective
systems as provided for under the Agreement, energy being received by a
portion of one party's system from another portion of its system or to
the system of another interconnected company, may flow over the
transmission facilities of the other party as a natural result of the
physical and electrical characteristics of the interconnected network of
transmission lines to which the parties are connected.  Such flow of
energy may occur during periods when conditions of system operation are
normal or may occur during periods of emergency caused by the failure of
either sources of power or transmission facilities, or both.  In respect
to such flow of energy (hereinafter called "energy transfer") the parties
agree as follows:

     2.11      Such energy transfer over their respective transmission
               facilities shall be permitted whenever such transfer occurs;
               provided, that such energy transfer shall not be of such
               magnitude or duration as to affect adversely, or jeopardize
               the ability of, the party over whose system such energy
               transfers occur to render or accept service to or from
               companies with which it now has, or at any time hereafter may
               have contractual arrangements for the interchange of power or
               energy.

     2.12      The parties recognize that in carrying out the provisions of
               this Service Schedule, the above described energy transfer,
               either during periods when conditions of system operation are
               normal or during periods of emergency, or both, may
               eventually require the installation of additional
               transmission facilities in order that such energy transfer
               may be properly controlled to the end that the ability of the
               party over whose system such energy transfers occur to meet
               its own requirements, as described under 2.11 above, is not
               affected adversely or jeopardized.  In the event the need for
               such additional transmission facilities becomes apparent to
               either of the parties during any term of this Service
               Schedule, upon written notice given by either party to the
               other party and as soon as practicable following such notice,
               the parties shall jointly reexamine conditions relating to
               energy transfer.  In such reexamination, if called for, the
               parties shall agree upon such additional transmission
               facilities as may be required to be installed, if any, and
               upon an equitable basis for bearing the cost of installing,
               maintaining and operating such facilities, if installed.

SECTION 3 - POWER AND ENERGY ACCOUNTING

3.1  The parties recognize that energy transfers as described under
Section 2 of this Service Schedule, except for such amounts of electrical
losses as may be incurred because of such energy transfers, are the
simultaneous acceptance and delivery of like amounts of power and energy
by and from the system of the party over whose system such energy
transfers occur.  Power and energy associated with energy transfers,
including electrical losses associated therewith, shall be accounted for
each clock-hour as provided for under Article 5 of the Agreement. Proper
consideration to such electrical losses will be in accordance with the
manner agreed upon by the Operating Committee.  It is understood by the
parties, however, that such electrical losses resulting from energy
transfers, to be taken as losses over and above the losses prevailing
under basic conditions agreed upon by the parties, shall be supplied
simultaneously by the party for whom such energy transfers are being
made.  The parties agree that initially such basic conditions will be
established as those that exist when the scheduled net delivery between
the systems of the parties, and between their respective systems and the
systems of other interconnected companies, is zero kilowatts.  It is
further understood that, from time to time, conditions may require the
establishment of different basic conditions for such purpose. Either
party by written notice given to the other party may call for a prompt
reexamination and reconsideration of matters pertinent to the
establishment of said basic conditions, whenever such reexamination
appears to be warranted, and the parties will thereupon agree to effect
such changes in the basic conditions, if any, that will equitably
compensate the parties for such losses.  Should such reexamination be
required, a statement will be prepared by the parties which shall include
in detail the amounts of energy delivered and received by the parties
that are associated with energy transfer and the amounts of electrical
losses associated therewith.

                                                        EXHIBIT III

                       SERVICE SCHEDULE C

                        INTERCHANGE POWER

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the "Agreement")
shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - SERVICES TO BE RENDERED

Economy Energy

2.1  Either party may arrange to purchase from the other party electric
energy ("Economy Energy") when it is possible to effect a saving thereby
and, when, in the sole judgment of the supplying party, such energy is
available.  Prior to each Economy Energy transaction, the amount of
energy, the time of its delivery, and the charge therefore shall be
determined by the parties.  Receipt or delivery of Economy Energy may
also be arranged with other interconnected systems not parties to this
Agreement.

Non-Displacement Energy

2.2  It is recognized that occasions will arise when transactions under
subsection 2.1 above will be impracticable although a party may have
electric energy (herein called "Non-Displacement Energy") which it is
willing to make available from surplus capacity from its own system or
from outside sources, or both and which can be utilized advantageously
for short intervals by the other party.  In such event, the party
desiring such receipt of energy shall notify the other party of the
extent to which it desires to obtain Non-Displacement Energy, and if the
other party, in its sole judgment, determines that Non-Displacement
Energy is available, schedules providing the periods and extent of use
shall be mutually agreed upon.  Neither party shall be obligated to make
any Non-Displacement Energy available to the other.

SECTION 3 - COMPENSATION

Economy Energy

3.1  The charge for Economy Energy purchased by either party from the
other shall be based on the principle that the purchasing party shall pay
the out-of-pocket cost of the supplying party such energy and that the
resulting savings to the purchasing party shall be equally shared by both
parties.

3.2  When Economy Energy is obtained from or delivered to other
interconnected systems not signatories to this Agreement, payments shall
be based on the out-of-pocket cost of the supplying party or system
providing the energy and an allocation of the gross savings to be
realized.  For such purpose, gross savings is defined as the difference
between the out-of-pocket cost of the purchasing party or system to
generate such energy, and the out-of-pocket cost of the supplying party
or system to provide such energy.  Such allocation shall be made as
provided in subsections 3.21 and 3.22 of this section.

     3.21      Each party or system participating in the transaction other
               than the supplying and purchasing parties or systems, shall
               be paid (a) its cost of purchasing the energy supplied, plus
               (b) its cost of any additional transmission losses incurred,
               plus (c) fifteen percent of the savings remaining after
               deducting all such costs for transmission losses.

     3.22      The supplying party or system shall be paid out-of-pocket
               costs of providing the energy, plus one-half of the gross
               savings remaining after deducting all (b) and (c) costs
               enumerated in section 3.21 above.  The receiving party or
               system shall be entitled to the other one-half of the such
               savings.

Non-Displacement Energy

3.3  Non-Displacement Energy delivered hereunder shall be settled for
either by return of equivalent energy or, at the option of the supplying
party, by payment of the out-of-cost of the supplying party in generating
or supplying such energy plus ten percent of such cost.  Such cost shall
be as of the delivery point or points, as provided for in Section 4.01 of
said Interconnection Agreement, and shall take into account the electrical
losses incurred from the source or sources of such energy to said delivery
point or points.  If equivalent energy is returned, it shall be returned at
times when the load conditions of the receiving party are equivalent to the
load conditions of such party at the time the energy was delivered.  If such
party elects to have equivalent energy returned under different conditions,
such energy shall be returned in such amounts as will compensate the
supplying party for the difference in conditions as agreed by the Operating
Committee.

                                                       EXHIBIT IV

                       SERVICE SCHEDULE D

                        SHORT TERM POWER

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the "Agreement")
shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - SERVICES TO BE RENDERED

2.1  Either party, by giving the other party sufficient notice, may
reserve for periods of one or more days or weeks, such electric power
(herein called "Short Term Power") as the supplying party at that time
may have and is willing to supply as Short Term Power.  The party asked
to supply Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by the
other party as Short Term Power.  As used herein, the term "week" shall
mean any seven consecutive days.

2.2  The party desiring to reserve Short Term Power shall specify in a
notice to the other party the number of kilowatts and the period for
which it desires to reserve such power and the desired delivery schedule
for such power.  The supplying party shall promptly acknowledge receipt
of such notice and, shall signify the extent of its ability and willingness
to supply power in accordance with the provisions of such
notice.  Any such notice or acknowledgement thereof initially may be
given orally; however if requested by either party, it shall be confirmed
in writing and such confirmation shall be forwarded not later than the
third day following the day such oral notice is given, excluding
Saturdays, Sundays and holidays.

2.3  During the period the Short Term Power has been reserved as
provided in Section 2.2 above, the supplying party shall deliver upon
call electric energy (herein called "Short Term Energy") to the other
party at the delivery point or points set forth in Section 4.01 of the
Agreement in amounts not to exceed the number of kilowatts reserved.
However, in the event conditions arise during such period which could not
have been reasonably foreseen at the time Short Term Energy was reserved
and such conditions would cause the delivery of said power to be
burdensome to the supplying party, said party shall have the right to
require the purchasing party to reduce for any portion of such period the
amount of such energy being taken to the amount specified by the
supplying party.  The purchasing party shall promptly comply with such
requirement of the supplying party.

SECTION 3 - COMPENSATION

3.1  The purchasing party shall pay the supplying party;

     3.11  For any week that Short Term Power is reserved, $1.05 per
     kilowatt reserved; less, for each day during any part of which the
     amount of such Short Term Power is reduced by the supplying party,
     $0.18 per kilowatt of the reduction (except that in no event shall
     the total of such deductions in any week exceed $1.05 per
     kilowatt).  For each period less than one week that Short Term
     Power is reserved, $0.18 per kilowatt reserved per day; less, for
     any day during any part of which the amount of Short Term Power is
     reduced by the supplying party, $0.18 per kilowatt of the
     reduction; plus

     3.12  110% of the out-of-pocket cost of supplying the Short Term
     Energy taken during such reservation periods that comes from the
     supplying party's own system; plus, for energy purchased by the
     supplying party from another system to supply any part of the Short
     Term Energy taken during such reservation periods, 100% of the
     amount paid therefore by the supplying party plus 10% thereof not
     to exceed 1.6 mills per kilowatthour.

                                                       EXHIBIT V

                       SERVICE SCHEDULE E

                    LIMITED TERM POWER (FIRM)

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - SERVICES TO BE RENDERED

2.1  Either party by giving the other party notice may reserve for
periods of not less than one (1) or more than twelve (12) months, such
electric power (herein called "Limited Term Power (Firm)") as the other
party may be willing to make available as Limited Term Power (Firm).  The
party asked to supply Limited Term Power (Firm) shall be the sole judge
as to the amounts and periods that it has electric power available that
may be reserved by the other party as Limited Term Power (Firm).

     2.11 To reserve Limited Term Power (Firm), the party desiring such
          power shall specify in its notice to the supplying party the
          number of kilowatts and the period for which it desires to so
          reserve such power.  The supplying party shall signify the
          extent of its ability and willingness to comply with the
          provisions of such notice.  Any notice or any acknowledgement
          of such notice that initially may be given orally shall be
          confirmed thereafter in writing.

     2.12      During each period that Limited Term Power (Firm) has been
               reserved as above provided, the supplying party shall deliver
               upon call electric energy (herein called "Limited Term Energy
               (Firm)") to the other party at the delivery point or points
               set forth in Section 4.01 of Article 4 of the Agreement in
               any amount up to and including the number of kilowatts
               reserved.  However, in the event conditions arise during such
               period which could not have been reasonably foreseen at the
               time said power was reserved and such conditions would cause
               the delivery of Limited Term Energy (Firm) to be burdensome
               to the supplying party, the supplying party may, upon notice
               to the reserving party reduce or interrupt the delivery of
               such energy to preserve the integrity of, or to prevent or
               limit any instability on, its system.

     2.13      The Limited Term Power (Firm) billing demand for any period
               shall be taken as equal to the number of kilowatts reserved
               as Limited Term Power (Firm) for such period.

SECTION 3 - COMPENSATION

3.1  The reserving party shall pay the supplying party:

     3.1  For any month that Limited Term Power (Firm) is reserved,
     $5.50 per kilowatt reserved; plus,

     3.12 110% of the out-of-pocket costs of supplying the Limited Term
     Energy (Firm) taken during such reserved periods that is generated
     by the supplying party, plus, for energy purchased by the supplying
     party from another system to supply any part of the Limited Term
     Energy (Firm), 100% of the amount paid therefore by the supplying
     party, plus 10% thereof not to exceed 1.6 mills per kilowatthour.

                                                     EXHIBIT VI

                       SERVICE SCHEDULE F

                         DIVERSITY POWER

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - DIVERSITY POWER

2.1  From time to time, because of differences in load patterns one of
the parties hereto may have excess capacity during one seasonal load
period at the same time the other party is experiencing its peak load
season.  At such time it may be to the parties' mutual advantage to
schedule exchange of certain portions of any such excess capacity.
Such
capacity shall be termed and is herein called "Diversity Power."

     2.015     Seasonal Load Period shall mean for the Summer Season Load
     Period, the months of April thru September and for the Winter
     Seasonal Load Period, the months of October thru March.

2.2  At any time Diversity Power transactions are agreed upon between
the parties, the party which purchases Diversity Power during one
seasonal load period shall be obligated to have available a like amount
of Diversity Power for the other party during the other seasonal load
period.

2.3  The party supplying Diversity Power shall provide reserve capacity
for the committed amount, equivalent to that provided for its own
customers, exclusive of customers with interruptible service contracts.

2.4  Energy associated with the reservation of Diversity Power shall be
scheduled by the purchasing party no less than 18 hours in advance of
receiving such energy.  Energy receipts for a Monday shall be scheduled
no later than noon of the preceding Friday.

SECTION 3 - COMPENSATION

3.1  Demand Charges - There shall be no demand charge for Diversity
Power.

3.2  Energy Charges - Energy shall be billed at out-of-pocket cost plus
ten percent of such cost.  In the event that any part of the
out-of-pocket cost includes energy purchased by the supplying Party, only
the energy portion of such purchase cost shall be included.  Any
associated charges for demand, transmission, or other burden shall be
excluded.

                       Modification No. 1

                               to

                    INTERCONNECTION AGREEMENT

                     Dated December 1, 1981

                             between

               INDIANAPOLIS POWER & LIGHT COMPANY

                               and

         HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

                    Dated as of June 1, 1982

     THIS MODIFICATION No. 1, made and entered into as of the first day
of June, 1982 between INDIANAPOLIS POWER & LIGHT COMPANY (IPL), an
Indiana corporation, and HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
(Hoosier), also an Indiana corporation.

                      W I T N E S S E T H:

     WHEREAS, IPL and Hoosier entered into an Interconnection Agreement,
dated December 1, 1981; (said Interconnection Agreement, being herein
called the 1981 Agreement); and

     WHEREAS, the parties desire to further modify the 1981 Agreement,
as hereinafter set forth;

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth, the parties agree as follows:

     SECTION 1 - Section 3--Compensation of Service Schedule D - Short
Term Power of the 1981 Agreement shall be modified and amended to read as
follows:

"SECTION 3 - COMPENSATION

3.1  The purchasing party shall pay the supplying party;

     3.11 DEMAND CHARGE - For any week that Short Term Power is
     reserved, (a) $1.05 per kilowatt reserved if IPL is the supplying
     party or (b) a rate not to exceed $1.05 per kilowatt reserved if
     Hoosier is the supplying party; less, for each day during any part
     of which the amount of such Short Term Power is reduced by the
     supplying party, one sixth of the weekly rate per kilowatt of the
     reduction (except that in no event shall the total of such
     deductions in any week exceed the weekly rate).  For each period
     less than one week that Short Term Power is reserved, one sixth of
     the weekly rate per kilowatt reserved per day (not to exceed $0.175
     per kilowatt reserved per day); less, for any day during any part
     of which the amount of Short Term Power is reduced by the supplying
     party, one sixth of the weekly rate per kilowatt (not to exceed
     $0.175 per kilowatt) of the reduction.  In the event the supplying
     party, at the request of the purchasing party, obtains capacity
     from a third party specifically for the purpose of supplying any
     portion of the Short Term Power pre-arranged in accordance with
     Section 2.2 of this Service Schedule, the Demand Charge for such
     Short Term Power supplied shall be equal to all associated Demand
     Charges which the supplying party must pay therefore.

     3.12 ENERGY CHARGES - 110% of the out-of-pocket cost of supplying
     the Short Term Energy taken during such reservation periods that
     comes from the supplying party's own system; plus, for energy
     purchased by the supplying party from another system to supply any
     part of the Short Term Energy taken during such reservation
     periods, 100% of the amount paid therefore by the supplying party
     plus 10% thereof not to exceed 1.6 mills per kilowatthour."

     SECTION 2.     This Modification No. 1 shall be effective from the
date first above written to the expiration date of the 1981 Agreement.

     SECTION 3.  Except as hereinabove modified and amended, all the
terms and conditions of the 1981 Agreement shall remain in full force and
effect.

     SECTION 4.  This Modification No. 1 shall inure to the benefit of
and be binding upon the successors and assigns of the respective parties
hereto.

     IN WITNESS WHEREOF, the parties herein have caused this Agreement
to be executed by their duly authorized officers.

                              INDIANAPOLIS POWER & LIGHT COMPANY

                              By /s/ Robert W. Hill
                                 Robert W. Hill, President

                              HOOSIER ENERGY RURAL ELECTRIC
                                 COOPERATIVE, INC.

                              By  /s/ Virgil E. Peterson

                       Modification No. 2

                               To

                    INTERCONNECTION AGREEMENT

                             Between

               INDIANAPOLIS POWER & LIGHT COMPANY

                               And

         HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

                   Dated as of October 1, 1983

                       MODIFICATION NO. 2

                               To

                    INTERCONNECTION AGREEMENT

                             Between

               INDIANAPOLIS POWER & LIGHT COMPANY

                               And

         HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

     THIS MODIFICATION NO. 2, dated as of this 1st day of October, 1983,
between INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter called "IPL"), an
Indiana corporation, and HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.
(hereinafter called "Hoosier"), an Indiana corporation,

                           WITNESSETH:

     0.01 WHEREAS, there is not in force and effect between IPL and
Hoosier an interconnection agreement dated as of December 1, 1981, as
amended by a Modification No. 1 dated June 1, 1982 (such agreement as so
amended being hereinafter referred to as the "1981 Interconnection
Agreement"); and

     0.02 WHEREAS, in order to meet customer loads in the area, Hoosier
is required to establish as soon as practicable an electric substation
near the intersection of 800 North Road and 500 West Road in Johnson
County, Indiana (hereinafter referred to as the "Honey Creek Substation");
and

     0.03 WHEREAS, Hoosier is presently unable to supply electric power
to the Honey Creek Substation because it has no transmission lines in the
area thereof and it has been unable to work out a permanent arrangement
for the transmission of electric power to the Honey Creek Substation
either through the construction of its own transmission facilities or
through the utilization of the transmission facilities of another utility;
and

     0.04 WHEREAS, Hoosier represents to IPL that it is using, and will
continue to use, its best efforts either to construct adequate
transmission facilities, or to otherwise make arrangements, for the
transmission of electric power to the Honey Creek Substation within the
next five years, but that in the interim, Hoosier desires to provide
electric power to the Honey Creek Substation through the temporary
establishment of a tap point on IPL's 138KV transmission line running
from its Pritchard Generating Station to its Southport Substation
(hereinafter referred to as the "Honey Creek Tap Point"); and

     0.05 WHEREAS, IPL in reliance upon the foregoing representations
of Hoosier is willing to provide, but only on a temporary basis, the
Honey Creek Tap Point upon the terms and conditions herein provided;

     0.06 NOW, THEREFORE, in consideration of the premises and of the
mutual covenants set forth herein, the parties agree as follows:

                            ARTICLE 1

     1.01 The 1981 Interconnection Agreement shall be, and the same
hereby is, amended as follows:

     A.   Article 1 thereof is hereby amended by inserting immediately
     following the present subsection 1.014 thereof, a new subsection,
     designated "1.015" to read as follows:

          "1.015  At its Honey Creek Substation, 138,000 volt
          three-phase interrupting device, three motor operated
          supervisory controlled 138,000 volt switches, a 10/12.5 MVA
          transformer, 12,470 volt metering equipment, supervisory and
          communication equipment including bank differential
          indication to IPL's control center, relaying, switching, and
          appurtenant equipment, all of which equipment shall be
          subject to the approval of IPL."

     and inserting immediately following the present subsection 1.025
     thereof, a new subsection, designated "1.026" to read as follows:

          "1.026  At Honey Creek Tap Point, IPL agrees to make such
          modifications to its transmission facilities as are necessary
          to effect a connection at such Tap Point."

     and by inserting immediately following the present subsection 1.043
     thereof, a new subsection, designated "1.044" to read as follows:

          "1.044  Hoosier agrees to pay IPL within 15 calendar days of
          receipt of invoice, all IPL costs associated with
          establishing the Honey Creek Tap Point."

     and by amending subsection 1.05 thereof to read as follows:

     "1.05     The Interconnection Points shall be:

          "1.051  The Petersburg Interconnection Point - that point at
          Petersburg where the terminal facilities provided therefor by
          IPL shall be connected to the Petersburg-Ratts line.

          "1.052  The Honey Creek Tap Point - that point at which the
          facilities provided therefor by Hoosier shall be connected to
          modified facilities of IPL."

     and by inserting immediately following the present subsection 1.08
     thereof, a new subsection, designated "1.08A" to read as follows:

     "1.08A  The parties hereto mutually agree that their respective
     systems will not be operated in parallel through the Honey Creek
     Tap Point.  Electric energy supplied by IPL to Hoosier at the Honey
     Creek Tap Point will be used only to temporarily supply the
     ultimate customers of Johnson County REMC.  Any power (demand) or
     energy supplied through the Honey Creek Tap Point shall be
     accounted and settled for as if supplied through any of the
     interconnection points which exist between the two companies. This
     accounting shall include any power (demand) and energy losses
     occurring on the IPL system due to the transfer of the energy to
     the Honey Creek Tap Point."

     B.  Article 2 thereof is hereby amended by amending Section 2.01 to
     read as follows:

     "2.01  It is the purpose of the parties hereto to realize on an
     equitable basis, all reciprocal benefits practicable to be effected
     through coordination in the operation and development of their
     respective systems.  It is understood by the parties that such
     benefits may be realized under the stated terms and conditions of
     the following interconnection services:

     A.   the furnishing of mutual emergency and standby assistance, in
          accordance with Service Schedule A annexed hereto;

     B.   the transfer of electric energy through the transmission
          system of one party for the benefit of the other, in
          accordance with Service Schedule B annexed hereto;

     C.   the interchange, sale and purchase of energy to effect
          operating economies, in accordance with Service Schedule C
          annexed hereto;

     D.   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, in accordance with Service Schedule D annexed
          hereto;

     E.   the sale and purchase of limited term power and energy
          available on the system of one party and needed on the system
          of the other, in accordance with Service Schedule E annexed
          hereto;

     F.   the sale and purchase of diversity power and energy, in
          accordance with Service Schedule F annexed hereto;

     G.   the temporary use of IPL transmission facilities to provide
          service to Hoosier's Honey Creek Substation which is not
          directly connected to its transmission system, in accordance
          with Service Schedule G annexed hereto.

     In furtherance of such purpose the parties hereto shall create an
     Operating Committee as provided in Article 7 hereof."

     and by amending Section 2.03 to read as follows:

     "2.03     The respective service schedules shall be designated:

            I.  Service Schedule A - Emergency Service

           II.  Service Schedule B - Energy Transfer

          III.  Service Schedule C - Interchange Power

           IV.  Service Schedule D - Short Term Power

            V.  Service Schedule E - Limited Term Power (Firm)

           VI.  Service Schedule F - Diversity Power

          VII.  Service Schedule G - Temporary Transmission Use

     such service schedules having been agreed upon between the parties
     hereto, are attached hereto, made a part hereof, and marked
     Exhibits I, II, III, IV, V, VI and VII, respectively."

     and by adding Section 2.05 to read as follows:

     "2.05  Notwithstanding anything herein to the contrary, Hoosier
     hereby covenants and agrees that it will proceed diligently with
     the planning and construction of the transmission facilities
     necessary to supply electric power and energy to the Honey Creek
     Substation and/or will enter into arrangements with such electric
     utilities (other than IPL) as it deems appropriate in order to
     provide electric power and energy to the Honey Creek Substation on
     or before the termination of Modification No. 2 to this agreement
     and Service Schedule G, toward the end that the temporary electric
     transmission service being provided by IPL to Hoosier at the Honey
     Creek Tap Point may be replaced with electric transmission
     facilities of Hoosier or another electric utility within the five
     year term of said Modification No. 2 and Service Schedule G."

     C.  Article 4 thereof is hereby amended by amending subsection
     4.021 to read as follows:

          "4.021  At the Petersburg Interconnection specified in
          Section 1.05 above, by 138,000 volt metering equipment to be
          installed, owned and maintained by IPL ('Petersburg Metering
          Point')"

     and by inserting immediately following subsection 4.021 thereof, a
     new subsection, designated "4.022" to read as follows:

          "4.022  At the Honey Creek Tap Point specified in Section
          1.05 above, by 12,470 volt metering equipment to be installed
          and maintained by Hoosier ('Honey Creek Metering Point')"

     and by amending Section 4.03 to read as follows:

     "4.03  Suitable metering equipment at the metering point provided
     in Section 4.02 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:

     A.   a continuous automatic graphic record of both kilowatts and
          kilovars,

     B.   an automatic record of the kilowatthours for each clock hour,
          and

     C.   a continuous integrating record of the kilowatthours.

     Meter readings taken at the Honey Creek Substation shall be
     adjusted by adding such amount as may be necessary to fully
     compensate IPL for losses in the Honey Creek transformer and on
     IPL's system."

     D.  Article 7 thereof is hereby amended by inserting immediately
     following the present subsection 7.013 thereof, a new subsection
     designated "7.014" to read as follows:

          "7.014  All matters pertaining to rights of access, and
          rights to operate equipment installed as a part of this
          agreement."

     and by adding a new Section 7.03 to read as follows:

     "7.03  With respect to Hoosier's representations that it will use
     its best efforts to replace IPL's transmission facilities at the
     Honey Creek Tap Point with other transmission facilities, IPL
     representatives on the Operating Committee shall have the right of
     access at any reasonable time to any information relating to such
     representations and to Hoosier's progress in accomplishing the
     replacement of the temporary electric transmission service provided
     by IPL under Modification No. 2 to this agreement and Service
     Schedule G."

     E.  Article 8 thereof is hereby amended by adding a new Section
     8.02 to read as follows:

     "8.02  With respect to the Honey Creek Tap Point, Hoosier hereby
     agrees that IPL shall not be responsible for disruption of service
     or loss of continuity in providing service to the Honey Creek
     Substation and Hoosier hereby indemnifies and saves harmless IPL
     against any claim for injury to persons and damage to property in
     any way resulting from or growing out of any such service
     disruption or loss of continuity."

     F.  Article 9 thereof is hereby amended by correcting the reference
     to "Section 9.02" contained in Section 9.01 thereof to read
     "Section 9.03"; and by adding a new Section 9.04 to read as
     follows:

     "9.04  Notwithstanding anything herein to the contrary,
     Modification No. 2 to this agreement and Service Schedule G will
     terminate on the earlier of the following dates:  (i)  on the date
     Hoosier has replaced the service provided by IPL under said
     Modification No. 2 and Service Schedule G with transmission
     facilities of Hoosier or with transmission facilities of another
     utility, or (ii) on the date that is five years after the effective
     date of said Modification No. 2 and Service Schedule G as
     established by the Federal Energy Regulatory Commission (FERC);
     provided, that in the event Hoosier is in the process of replacing
     IPL's transmission service under said Modification No. 2 and
     Service Schedule G, but, through no fault of its own, Hoosier is
     unable to consummate such replacement within the five-year term of
     said Modification No. 2 and Service Schedule G, then the term
     thereof may be extended for an additional period of not more than
     three years, upon adequate assurances being given to IPL by Hoosier
     that replacement of such transmission service by IPL to Hoosier
     will be accomplished within such additional period.  If Hoosier
     fails to make such assurances, or IPL deems them inadequate, such
     term shall not be extended.  Hoosier agrees, in connection with any
     such termination, that IPL may unilaterally file an appropriate
     notice of termination with FERC, in which filing Hoosier shall
     concur.  Hoosier hereby releases IPL from all obligations,
     contractual or otherwise, to provide electric transmission service
     to the Honey Creek Substation through the Honey Creek Tap Point
     beyond the date of termination of said Modification No. 2 and
     Service Schedule G as hereinabove provided, and Hoosier agrees that
     after such termination it shall be required to rely exclusively
     upon its own electric transmission facilities or the electric
     transmission facilities of a utility other than IPL to supply
     electric power and energy to the Honey Creek Substation."

     G.  Article 10 thereof is hereby amended by adding a new Section
     10.04 to read as follows:

     "10.04  This Article 10 shall not apply to Modification No. 2 to
     this agreement or to Service Schedule G."

     H.  Article 14 thereof is hereby amended by adding a new Section
     14.02 to read as follows:

     "14.02  Hoosier hereby covenants and agrees to support, by
     concurrence or otherwise, at such reasonable time as IPL deems
     appropriate, any filing with FERC that IPL considers necessary and
     expedient to terminate and cancel Modification No. 2 to this
     agreement and Service Schedule G in accordance with the terms and
     conditions of Section 9.04 hereof."

     I.  Article 16 thereof is hereby amended by adding a new Section
     16.03 to read as follows:

     "16.03  Upon termination of the Honey Creek Tap Point, Modification
     No. 2 to this agreement and Service Schedule G (except for the
     reference correction in Section 9.01 which shall remain effective)
     shall be of no further force and affect and shall no longer be a
     part of this agreement."

                            ARTICLE 2

     2.01  Except as otherwise specifically provided by this
Modification No. 2 or subsequent modifications, the terms
"Interconnection Point", "Metering Point", and "Delivery Point", shall
include all points at which the parties thereto are
interconnected.

                            ARTICLE 3

     Except as hereinabove specifically amended, all other terms and
conditions of the 1981 Interconnection Agreement shall remain in full
force and effect.

     IN WITNESS WHEREOF, the parties hereto have caused this
Modification No. 2 to be executed by their respective duly authorized
officers as of the day, month and year first written above.

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ Robert W. Hill

                    HOOSIER ENERGY RURAL ELECTRIC
                      COOPERATIVE, INC.

                    By  /s/ Virgil E. Peterson
                      Virgil E. Peterson
                      Executive Vice President
                        and General Manager

                                      Exhibit VII
                                 (to the 1981 Agreement)

                       SERVICE SCHEDULE G

                   TEMPORARY TRANSMISSION USE

SECTION 1 - DURATION

     1.1  This Service Schedule, being part of Modification No. 2 to
     the Agreement dated December 1, 1981 between Indianapolis Power &
     Light Company ("IPL") and Hoosier Energy Rural Electric
     Cooperative, Inc. ("Hoosier") as amended by Modification No. 1
     dated June 1, 1982 (the "1981 Agreement"), shall become effective
     on the effective date of Modification No. 2 and shall continue in
     effect until terminated in accordance with that Modification.

SECTION 2.1 - SERVICES TO BE RENDERED

     2.1  IPL agrees to provide temporary transmission services for the
     purpose of delivering power (demand) and energy from any of the
     interconnection points between IPL and Hoosier to the tap point
     described and referred to in said Modification No. 2 as the Honey
     Creek Tap Point.

     2.2  Any power (demand) and energy delivered by IPL to the Honey
     Creek Tap Point shall be simultaneously supplied to IPL from
     Hoosier at any other interconnection point or points provided for
     in the 1981 Agreement.  The power and energy shall be adjusted to
     compensate IPL for electrical losses incurred in the delivery of
     such power.  Any difference in power or energy delivered to Hoosier
     through said tap point and that supplied by Hoosier to IPL shall be
     settled for in accordance with Section 3.03 of the 1981 Agreement.

     2.3  Hoosier agrees that the power (demand) delivered shall not
     exceed fifteen (15) MW at the Honey Creek Tap Point.

SECTION 3 - COMPENSATION

     3.1  Electric power measured in kilowatts delivered at the Honey
     Creek Tap Point under this Service Schedule shall be billed at
     $0.92 per kilowatt month.  This demand charge for use of IPL's
     transmission facilities shall be on the maximum hourly demand in
     kilowatts, measured in the calendar month of billing, and shall be
     adjusted to compensate IPL for losses in the IPL system and in the
     transformer bank used at the Honey Creek Tap Point.

                       Modification No. 3

                               To

                    INTERCONNECTION AGREEMENT

                             Between

               INDIANAPOLIS POWER & LIGHT COMPANY

                               And

         HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

                  Dated as of September 1, 1989

                       MODIFICATION NO. 3

                               To

                    INTERCONNECTION AGREEMENT

                             Between

               INDIANAPOLIS POWER & LIGHT COMPANY

                               And

         HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

     THIS MODIFICATION NO. 3, dated as of this 1st day of September,
1989, between INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter called
"IPL"), an Indiana corporation, and HOOSIER ENERGY RURAL ELECTRIC
COOPERATIVE, INC. (hereinafter called "Hoosier"), an Indiana corporation,

                           WITNESSETH:

     0.01 WHEREAS, there is now in force and effect between IPL and
Hoosier an interconnection agreement dated as of December 1, 1981, as
amended by a Modification No. 1 dated as of June 1, 1982 and Modification
No. 2 dated as of October 1, 1983 (such agreement as so amended being
hereinafter referred to as the "1981 Agreement"); and

     0.02 WHEREAS, IPL desires to utilize, when and as requested,
certain electric transmission facilities of Hoosier to transmit power and
associated energy from Big Rivers Electric Corporation (hereinafter
called "Big Rivers") located in Kentucky to IPL over a 20-year period
beginning January 1, 1991; and

     0.03 WHEREAS, Hoosier is willing to transmit such power and
associated energy from Big Rivers to IPL when and as requested over such
20 year period in accordance with the terms and conditions of this
Modification No. 3 and Service Schedule H annexed thereto, and

     0.04 WHEREAS, Hoosier desires to extend Service Schedule G and IPL
is willing to extend Service Schedule G through December 31, 2010, in
accordance with the terms and conditions of this Modification No. 3 and
Service Schedule G annexed thereto, and

     0.05 WHEREAS, both parties desire to revise and/or refile Service
Schedules A, B, C, D, E and F and file New Service Schedules A, B, C, D,
E, and F as part of this Modification No. 3.

                            ARTICLE 1

     1.01 The 1981 Agreement shall be, and the same hereby is, amended
as follows:

     I.   Article 2 thereof is hereby amended by revising Section 2.01
to read as follows:

     "2.01     It is the purpose of the parties hereto to realize on an
     equitable basis, all reciprocal benefits practicable to be effected
     through coordination in the operation and development of their
     respective systems.  It is understood by the parties that such
     benefits may be realized under the stated terms and conditions of
     the following interconnection services:

          A.   the furnishing of mutual emergency and standby
               assistance, in accordance with Service Schedule A
               annexed hereto;

          B.   the transfer of electric energy through the
               transmission system of one party for the benefit of the
               other, in accordance with Service Schedule B annexed  hereto;

          C.   the interchange, sale and purchase of energy to effect
               operation economies, in accordance with Service
               Schedule C annexed hereto;

          D.   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, in accordance with Service
               Schedule D annexed hereto;

          E.   the sale and purchase of limited term power and energy
               available on the system of one party and needed on the
               system of the other, in accordance with Service Schedule
               E annexed hereto;

          F.   the sale and purchase of diversity power and energy, in
               accordance with Service Schedule F annexed hereto;

          G.   the temporary use of IPL transmission facilities to
               provide service to Hoosier's Honey Creek Substation
               which is not directly connected to its transmission
               system, in accordance with Service Schedule G annexed
               hereto;

          H.   the transfer of electric power and associated energy
               from Big Rivers to IPL when and as requested in
               accordance with Service Schedule H annexed hereto.

          In furtherance of such purpose the parties hereto shall
          create an Operating Committee as provided in Article 7
          hereof."

     and by amending Section 2.03 to read as follows:

     "2.03     The respective service schedules shall be designated:

            I.  Service Schedule A - Emergency Service

           II.  Service Schedule B - Energy Transfer

          III.  Service Schedule C - Interchange Power

           IV.  Service Schedule D - Short Term Power

            V.  Service Schedule E - Limited Term Power (Firm)

           VI.  Service Schedule F - Diversity Power

          VII.  Service Schedule G - Temporary Transmission Service

          VIII.  Service Schedule H - Specific Transmission Service

     such service schedules having been agreed upon between the Parties
     hereto, are attached hereto, and made a part hereof, and marked
     Exhibits I, II, III, IV, V, VI, VII and VIII respectively."

and by deleting Section 2.05 (as added by Modification No. 2) in its
entirety.

     II.  Article 7 thereof is amended by deleting there from Section
7.03 (as added by modification No. 2) in its entirety.

     III. Article 9 thereof is hereby amended by revising Section 9.01
to read as follows:

     "9.01     This agreement shall become effective at the date hereof,
     subject to the filing requirements of FERC, or any other regulatory
     authority having jurisdiction and to approval of any such
     authority, if required, and except as otherwise provided in Service
     Schedules G and H shall continue in effect through December 31,
     2010, (the "Initial Term"), and thereafter for successive terms of
     three (3) years each unless and until terminated as provided in
     Section 9.03 thereof."

and by deleting Section 9.04 (as added by Modification No. 2) in its
entirety and by adding new Sections 9.04 and 9.05 to read as follows:

     "9.04     If any regulatory authority having jurisdiction over
     Modification No. 3 does not accept it for filing within ninety (90)
     days after its submission, or requires any modification to its
     rates, terms or conditions as a condition of accepting Modification
     No. 3 for filing, either party may terminate Modification No. 3, if
     in such party's good faith judgment such modification materially
     changes the benefits or burdens to the party desiring to terminate.
     In that event, such party may terminate Modification No. 3 by
     notifying the other party in writing of its intention to so
     terminate not more than thirty (30) days after final action is
     taken not to accept Modification No. 3 for filing or which requires
     such modification as a condition of such acceptance. Modification
     No. 3 shall terminate thirty (30) days after receipt of such notice
     by the other party.

     "9.05  If at any time after acceptance of Modification No. 3 any
     regulatory authority having jurisdiction over it modifies its
     rates, terms or conditions, either party may terminate Modification
     No. 3 if in such party's good faith judgment such modification
     materially changes the benefits or burdens of Modification No. 3 to
     the party desiring to terminate.  In that event, such party may
     terminate Modification No. 3 by notifying the other party in
     writing within 90 days after the notice of its intention to so
     terminate as well as the desired termination date."

     IV.  Article 10 shall be amended in its entirety to read as follows:

                           "ARTICLE 10

                          "ARBITRATION

     "10.01    Any controversy or claim arising out of or relating to
     this agreement or any breach thereof, shall first be submitted in
     writing as soon as practicable to the authorized representatives
     and one of their respective alternates designated under Subsection
     7.01 hereof, the 4 of whom shall constitute a Review Committee for
     the purpose of reviewing the controversy or claim and reaching a
     majority opinion as to the appropriate resolution thereof. In the
     event a majority opinion of the Review Committee cannot be reached
     within 30 days of submission, the matter shall be submitted to the
     President of IPL and the General Manager of Hoosier who shall use
     their best efforts to resolve such controversy or claim.  If the
     controversy or claim cannot be resolved within 30 days after submission
     to the President and General Manager, the same shall be settled by
     arbitration in accordance with the Commercial Arbitration Rules of The
     American Arbitration Association and judgment on the award rendered by
     the arbitrator may be entered in any court having jurisdiction thereof.
     Arbitration proceedings
     shall be conducted at Indianapolis, Indiana and arbitrators shall
     make awards within 90 days of the date proceedings begin unless
     otherwise agreed to in writing by the parties."

     V.   Article 11 shall be amended in its entirety to read as follows:

                           "ARTICLE 11

          "INDEMNIFICATION AND LIMITATION OF LIABILITY

     "11.01     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
     this agreement.

     "11.02  Indemnification Clause.  Each party shall indemnify, defend
     and hold harmless the other party from and against any liability,
     loss, cost, damage and expense because of injury or damage to
     persons or property resulting from, or arising out of the use of
     its own facilities or the production or flow of electric energy by
     and through its own facilities, except when such injury or damage
     is due to the sole negligence of the other party.  In addition,
     each party shall hold the other party harmless for any taxes,
     licenses, permits, fees, penalties, or fines assessed against one
     party upon any of the property of such party located on the
     premises of the other party.

     "11.03  Environmental Liability.  Each party shall be responsible
     for its own compliance with all applicable environmental
     regulations, and each party shall hold the other party harmless
     from any liability, loss, cost or expense arising out of, and shall
     bear all costs arising from, its failure to comply with such
     environmental regulations."

     VI.  Article 14 thereof is hereby amended by deleting Section
14.02 (as added by Modification No. 2) in its entirety.

     VII. Article 16 thereof is hereby amended by deleting Section
16.03 (as added by Modification No. 2) in its entirety.

     VIII.     Article 20 and Article 21 are hereby added to the 1981
Agreement to read as follows:

                           "ARTICLE 20

                            "DEFAULT

     "20.01  Default Defined.  As used herein, "Default" shall mean the
     failure of a party to make any payment or perform any obligation at
     the time and in the manner required by this agreement, except where
     such failure to discharge obligations (other than the payment of
     money) is the result of Force Majeure.  Failure to make any payment
     in the time and manner required by this agreement shall not be
     excused as a Default by payment of late charges in accordance with
     the provisions in Section 20.02 below.

     "20.02  Remedies For Default.  Upon failure of a party to make a
     payment or perform an obligation required hereunder, the other
     party shall give written notice of Default to the defaulting party.
     The defaulting party shall have thirty (30) days within which to
     cure the Default.  If a Default is not cured within such period,
     the party not in Default, at its option, may, in addition to all
     other rights and remedies available at law, in equity or under any
     other provision of this agreement:  (i) give notice to the
     defaulting party of its intention to cure the Default and to take
     such steps as such party deems necessary to cure the Default, or
     (ii) suspend this agreement for a period of 6 months, after which
     this agreement shall automatically terminate.  The defaulting party
     shall, in any event, pay to the other party the total of all
     additional costs reasonably incurred by such other party as a
     result of such Default and/or the curing of such Default,
     including, reasonable attorneys' fees, money reasonably paid to
     others, the reasonable equivalent in money for services of property
     obtained, and any other costs reasonably incurred by such other
     party in attempting to remedy such Default, together with interest
     on the total of such costs at the per annum rate of two (2) percent
     above the commercial lending rate as determined in Article 6 hereof.
     This provision is not intended as a liquidated damages
     provision or to limit liability in any way, and the party not in
     Default may also maintain such other actions for damages as may be
     provided by law, in equity or under this agreement."

                           "ARTICLE 21

                         "FORCE MAJEURE

     "21.02  Force Majeure.  The term "Force Majeure" shall mean any
     cause beyond the control of the party invoking the Force Majeure,
     including, but not limited to, failure or threat of failure of
     facilities, equipment or fuel supply, ice, act of God, flood,
     earthquake, storm, fire, lightning, explosion, epidemic, war, civil
     war, invasion, insurrection, military or usurped power, act of the
     public enemy, riot, civil disturbance or disobedience, strike,
     lockout, work stoppage, other industrial disturbance or dispute,
     labor or material shortage, national emergency, sabotage, failure
     of contractors or suppliers of materials; inability to obtain or
     ship materials or equipment because of the effect of similar causes
     on suppliers or carriers; restraint by court order or other public
     authority or governmental agency, or action or non-action by, or
     failure to obtain the necessary authorizations or approvals from,
     or obtaining the necessary authorizations or approvals only subject
     to unreasonable restrictions from, any governmental agency or
     authority, which by the exercise of due diligence such party could
     not reasonably have been expected to avoid.  Nothing contained
     herein shall be construed to require a party to settle any strike,
     lockout, work stoppage or other industrial disturbance or dispute
     in which it may be involved or to take an appeal from any judicial,
     regulatory or administrative action.  Any party rendered unable to
     fulfill any of its obligations under this agreement by reason of
     Force Majeure shall exercise due diligence to remove such inability
     with all reasonable dispatch.  In the event either party is unable,
     in whole or in part, to perform any of its obligations by reason of
     Force Majeure the obligations of the party relying thereon, insofar
     as such obligations are affected by such Force Majeure, shall be
     suspended during the continuance thereof but no longer.  The party
     invoking the Force Majeure shall specifically state the full
     particulars of the Force Majeure and the time and date when the
     Force Majeure occurred.  Notices given by telephone under the
     provisions of this Article shall be confirmed in writing as soon as
     reasonably possible.  When the Force Majeure ceases, the party
     relying thereon shall give immediate notice thereof to the  other
     party.  This agreement shall not be terminated by reason of Force
     Majeure but shall remain in full force and effect."

                            ARTICLE 2

     2.01 Except as hereinabove specifically amended, all other terms
and conditions of the 1981 Agreement and Modification No. 2 shall remain
in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have caused this
Modification No. 3 to be executed by their respective duly authorized
officers as of the day, month and year first written above.

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ Robert W. Hill
                       Robert W. Hill
                       Chairman and President

                    HOOSIER ENERGY RURAL ELECTRIC
                      COOPERATIVE, INC.

                    By  /s/ J. Steven Smith for
                       Virgil E. Peterson
                       Executive Vice President
                         and General Manager
                                              EXHIBIT I

                       SERVICE SCHEDULE A

                        EMERGENCY SERVICE

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - SERVICES TO BE RENDERED

2.1  Subject to the provisions of subsection 2.2 of this Section 2, in
the event of a breakdown or other emergency in or on the system of either
party involving either sources of power or transmission facilities, or
both, impairing or jeopardizing the ability of the party suffering the
emergency to meet the loads of its system, the other party shall supply
to the party having the emergency such electric energy as the supplying
party is requested to deliver; provided, that neither party shall be
obligated to supply such emergency energy which, in the supplying party's
sole judgment, cannot be delivered without creating a hazard to or
economic burden upon its operations or without impairing or jeopardizing
the total load requirements of its system; and provided further, that
neither party shall be obligated to supply such emergency energy for a
period in excess of forty-eight consecutive hours during any single
emergency.

2.2  The parties recognize that the supply of electric energy as
provided for in subsection 2.1 of this Section 2 is subject to two
conditions which may preclude the delivery of such energy as so provided:

(a) the party requested to deliver electric energy may be suffering an
emergency in or on its own system as described in said subsection 2.1, or

(b) the system of the party of whom such request is made may be
delivering electric energy under a mutual emergency interchange
agreement, to the system of another interconnected company which is
suffering an emergency in or on its system.  Under conditions as cited
under (a) above, neither party shall be considered to be in default
hereunder if unable to comply with the provisions of said subsection 2.1.
Under conditions as cited under (b) above, neither party shall be
considered to be in default hereunder if it is unable to comply with the
provisions of said subsection 2.1 provided that the aforesaid
interconnected company has suffered said emergency in or on its system
prior to and within forty-eight hours of that of the other party hereto
and that, if requested by said other party, such delivery of electric
energy to said interconnected company shall be discontinued within
forty-eight hours following the start of such delivery, and a subsequent
delivery shall be made for a full forty-eight hour period to said other
party in accordance with the provisions of said subsection 2.1.

2.3  If at any time the record over a reasonably prior period shows
clearly that either of the parties has failed to deliver energy in
accordance with and subject to the provisions of subsection 2.1 and
subsection 2.2 of this Section 2, either party, by written notice given
to the other party, may call for a joint study by the parties of the
reserve generating capacity in and provided for their respective systems
and of their respective system transmission facilities affecting the
supply and delivery of power and energy under the Agreement.  It shall be
the purpose of such study to determine the adequacy or inadequacy of
reserve generating capacity and transmission facilities being provided to
meet the requirements of the parties' respective systems, reflecting
obligations under the Agreement, and, if inadequate, the extent of the
burden that one party may be placing upon the other.  If it should be
found that one party is placing an unreasonable burden upon the other,
the party causing such burden shall take such measures as are necessary
to remove the burden from the other party, or the parties shall enter
into such arrangements as shall provide for equitable compensation to the
party being burdened.

SECTION 3 - COMPENSATION

3.1  Emergency Energy shall be settled for, at the option of the
supplying party, either by payment or by return of equivalent energy.

3.2  If the supplying party opts to receive payment for Emergency Energy
delivered, the receiving party shall pay the supplying party the greater
of:

     3.21      110% of the out-of-pocket cost of supplying such Emergency
               Energy that is generated from the supplying party's own
               system, and, for energy purchased by the supplying party from
               another interconnected system which is not a signatory to
               this Agreement ("Third Party") at the request of the
               receiving party, 100% of the amount paid to such Third Party
               plus up to 3.46 mills per kilowatthour (consisting of up to
               2.46 mills per kilowatthour for a transmission charge and 1
               mill per kilowatthour for difficult to quantify energy
               related costs) plus any transmission losses.

     3.22      30 mills per kilowatthour of such Emergency Energy

3.3  If the supplying party opts to receive equivalent energy for
Emergency Energy delivered; such equivalent energy shall be returned at
times when the load conditions of the party originally supplying
Emergency Energy are substantially equivalent to the load conditions of
such party that existed when the Emergency Energy was delivered or, if
such party elects to have equivalent energy returned under different
conditions, it shall be returned in such amounts and at such times as,
the Operating Committee agrees will compensate the original supplying
party, for the difference in conditions.

                                              EXHIBIT II
                             AMENDED
                       SERVICE SCHEDULE B

                         ENERGY TRANSFER

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - TRANSFER ARRANGEMENT

2.1  In carrying out the interconnected operation of their respective
systems as provided for under the Agreement, energy being received by a
portion of one party's system from another portion of its system or to
the system of another interconnected company, may flow over the
transmission facilities of the other party as a natural result of the
physical and electrical characteristics of the interconnected network of
transmission lines to which the parties are connected.  Such flow of
energy may occur during periods when conditions of system operation are
normal or may occur during periods of emergency caused by the failure of
either sources of power or transmission facilities, or both.  In respect
to such flow of energy (hereinafter called "energy transfer") the parties
agree as follows:

     2.11      Such energy transfer over their respective transmission
               facilities shall be permitted whenever such transfer occurs;
               provided, that such energy transfer shall not be of such
               magnitude or duration as to affect adversely, or jeopardize
               the ability of, the party over whose system such energy
               transfers occur to render or accept service to or from
               companies with which it now has, or at any time hereafter may
               have contractual arrangements for the interchange of power or
               energy.

     2.12      The parties recognize that in carrying out the provisions of
               this Service Schedule, the above-described energy transfer,
               either during periods when conditions of system operation are
               normal or during periods of emergency, or both, may
               eventually require the installation of additional
               transmission facilities in order that such energy transfer
               may be properly controlled to the end that the ability of the
               party over whose system such energy transfers occur to meet
               its own requirements, as described under 2.11 above, is not
               affected adversely or jeopardized.  In the event the need for
               such additional transmission facilities becomes apparent to
               either of the parties during any term of this Service
               Schedule, upon written notice given by either party to the
               other party and as soon as practicable following such notice,
               the parties shall jointly reexamine conditions relating to
               Energy Transfer.  In such reexamination, if called for, the
               parties shall agree upon such additional transmission
               facilities as may be required to be installed, if any, and
               upon an equitable basis for bearing the cost of installing,
               maintaining and operating such facilities, if installed.

SECTION 3 - POWER AND ENERGY ACCOUNTING

3.1  The parties recognize that energy transfers as described under
Section 2 of this Service Schedule, except for such amounts of electrical
losses as may be incurred because of such energy transfers, are the
simultaneous acceptance and delivery of like amounts of power and energy
by and from the system of the party over whose system such energy transfers
occur.  Power and energy associated with energy transfers, including
electrical losses associated therewith, shall be accounted for
each clock-hour as provided for under Article 5 of the Agreement. Proper
consideration to such electrical losses will be in accordance with the
manner agreed upon by the Operating Committee.  It is understood by the
parties, however, that such electrical losses resulting from energy
transfers, to be taken as losses over and above the losses prevailing
under basic conditions agreed upon by the parties, shall be supplied
simultaneously by the party for whom such energy transfers are being
made.  The parties agree that initially such basic conditions will be
established as those that exist when the scheduled net delivery between
the systems of the parties, and between their respective systems and the
systems of other interconnected companies, is zero kilowatts.  It is
further understood that, from time to time, conditions may require the
establishment of different basic conditions for such purpose. Either
party by written notice given to the other party may call for a prompt
reexamination and reconsideration of matters pertinent to the
establishment of said basic conditions, whenever such reexamination
appears to be warranted, and the parties will thereupon agree to effect
such changes in the basic conditions, if any, that will equitably
compensate the parties for such losses.  Should such reexamination be
required, a statement will be prepared by the parties which shall include
in detail the amounts of energy delivered and received by the parties
that are associated with energy transfer and the amounts of electrical
losses associated therewith.

     Accepted and approved this 8th day of December, 1989.

HOOSIER ENERGY RURAL ELECTRIC INDIANAPOLIS POWER & LIGHT COMPANY
  COOPERATIVE, INC.

By  /s/ R.E. Jones                      /s/  J.C. Berlier

     R.E. Jones, Division Manager    J.C. Berlier, Vice President
     Power Supply                       Supply Planning and Rates

                                              EXHIBIT III

                       SERVICE SCHEDULE C

                        INTERCHANGE POWER

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - SERVICES TO BE RENDERED

Economy Energy

2.1  Either party may arrange to purchase from the other party electric
energy ("Economy Energy") when it is possible to effect a saving thereby
and, when in the sole judgment of the supplying party, such energy is
available.  Prior to each Economy Energy transaction, the amount of
energy, the time of its delivery, and the charge therefore shall be
determined by the parties.  Receipt or delivery of Economy Energy may
also be arranged with other interconnected systems not parties to this
Agreement.

Non-Displacement Energy

2.2  It is recognized that occasions will arise when transactions under
subsection 2.1 above will be impracticable although a party may have
electric energy (herein called "Non-Displacement Energy") which it is
willing to make available from surplus capacity from its own system or
from outside sources, or both and which can be utilized advantageously
for short intervals by the other party.  In such event, the party
desiring such receipt of energy shall notify the other party of the
extent to which it desires to obtain Non-Displacement Energy, and if the
other party, in its sole judgment, determines that Non-Displacement
Energy is available, schedules providing the period and extent of use
shall be mutually agreed upon.  Neither party shall be obligated to make
any Non-Displacement Energy available to the other.

SECTION 3 - COMPENSATION

Economy Energy

3.1  The charge for Economy Energy purchased by either party from the
other shall be based on the principle that the purchasing party shall pay
the out-of-pocket cost of the supplying party such energy and that the
resulting savings to the purchasing party shall be equally shared by both
parties.

3.2  When Economy Energy is obtained from or delivered to a system
interconnected with either of the Parties which is not a signatory in the
Agreement ("Third Party"), payments among the participants in such a
transaction shall be based on the out-of-pocket costs of the supplying
party or Third Party providing the Energy and an allocation of the gross
savings, which are defined as the difference between (1) what the out-of-
pocket costs of the receiving party or Third Party would have been to
generate such Energy, and (2) the out-of-pocket costs of the supplying
party or Third Party providing the Energy.  Such allocation shall be made
as provided in subsection 3.21 and 3.22 hereinbelow.

     3.21      The transmitting party shall be paid (A) its cost of
               purchasing the Energy supplied, plus (B) its costs of any
               additional transmission losses incurred, plus (C) the greater
               of fifteen percent of the gross savings remaining after
               deducting all such payments for transmission losses or an
               amount up to 3.46 mills per kilowatthour of Energy received
               for transmission.

     3.22      The supplying party or Third Party shall be paid its out-
               of-pocket costs of providing the Energy, plus one-half of the
               gross savings remaining after deducting all payments made
               under subsection 3.21.

Non-Displacement Energy

3.3  Non-Displacement Energy delivered hereunder that is generated by
the supplying party's system shall be settled for either by return of
equivalent Energy or, at the option of the supplying party, by the
payment of the out-of-pocket costs of the supplying party generating such
Energy plus ten percent of such cost.  If equivalent Energy is returned,
it shall be returned at times when load conditions of the receiving party
are equivalent to the load condition of such party at the time the energy
was delivered or, different conditions, such energy shall be returned in
such amounts, to be agreed upon by the operating committee, as will
compensate for the difference in conditions.

3.4  Non-Displacement Energy delivered under subsection 2.2 above that is
purchased by the supplying party from another interconnected system at
the request of the receiving party shall be settled for by the payment of
100 percent of the amount paid to such Third Party, plus up to 3.46 mills
per kilowatthour (consisting of up to 2.46 mills per kilowatthour for a
transmission charge plus 1 mill per kilowatthour for difficult to
quantify energy related costs) plus any transmission losses.

                                              EXHIBIT IV

                       SERVICE SCHEDULE D

                        SHORT TERM POWER

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - SERVICES TO BE RENDERED

2.1  Either party, by giving the other party sufficient notice, may
reserve for periods of one or more days or weeks, such electric power
(herein called "Short Term Power") as the supplying party at that time
may have and is willing to supply as Short Term Power.  The party asked
to supply Short Term Power shall be the sole judge as to the amounts and
periods that it has electric power available that may be reserved by the
other party as Short Term Power.  As used herein, the term "week" shall
mean any seven consecutive days.

2.2  The party desiring to reserve Short Term Power shall specify in a
notice to the other party the number of kilowatts and the period for
which it desires to reserve such power and the desired delivery schedule
for such power.  The supplying party shall promptly acknowledge receipt
of such notice and, shall signify the extent of its ability and
willingness to supply power in accordance with the provisions of such
notice.  Any such notice or acknowledgement thereof initially may be
given orally; however if requested by either party, it shall be confirmed
in writing and such confirmation shall be forwarded not later than the
third day following the date such oral notice is given, excluding
Saturdays, Sundays and holidays.

2.3  During the period the Short Term Power has been reserved as
provided in Section 2.2 above, the supplying party shall deliver upon
call electric energy (hereincalled "Short Term Energy") to the other
party at the delivery point or points set forth in Section 4.01 of the
Agreement in amounts not to exceed the number of kilowatts reserved.
However, in the event conditions arise during such period which could not
have been reasonably foreseen at the time Short Term Energy was reserved
and such conditions would cause the delivery of said power to be
burdensome to the supplying party, said party shall have the right to
require the purchasing party to reduce for any portion of such period the
amount of such energy being taken to the amount specified by the
supplying party.  The purchasing party shall promptly comply with such
requirement of the supplying party.

SECTION 3 - COMPENSATION

3.1  The Party reserving Weekly or Daily Short Term Power shall pay the
supplying party the following Demand Charges:

     3.11      WEEKLY SHORT TERM POWER -- For any week that Short Term
               Power is reserved, up to $1.05 per kilowatt reserved;
               less, for each day during any part of which the amount
               of Weekly Short Term Power is reduced upon notice from
               the supplying party, one-sixth (1/6) of the supplying
               party's weekly demand rate per kilowatt for each
               kilowatt reduction but not more than the rate agreed
               upon for each kilowatt per month.

     3.12 DAILY SHORT TERM POWER -- For any day that Short Term Power
          is reserved, up to $0.21 per kilowatt reserved; less, for
          each day during which the amount of Daily Short Term Power is
          reduced upon notice by the supplying party, the demand charge
          per kilowatt for each day during which any such reduction is
          in effect shall be waived for each kilowatt of reduction.

     3.13 THIRD PARTY WEEKLY SHORT TERM POWER -- For any week that
          Weekly Short Term Power is reserved from a Third Party by the
          supplying party for and at the request of the receiving
          party, such Short Term Power shall be supplied at the rate of
          up to $0.295 per kilowatt reserved per week plus the demand
          charge paid therefore by the supplying party to the Third
          Party in the event the amount of Weekly Short Term Power
          reserved from a Third Party is reduced upon the request of
          the Third Party, the demand charge for each day during which
          such reduction is in effect shall be reduced by the amount of
          which the demand charge payable by the supplying party is
          reduced under its Agreement with such Third Party plus,
          one-sixth (1/6) of the rate per kilowatt agreement upon under
          this paragraph for each kilowatt of reduction per day, but
          not more than the rate agreed upon for each kilowatt per week.

     3.14 THIRD PARTY DAILY SHORT TERM POWER -- For any day that Daily
          Short Term Power is reserved from a Third Party by the
          supplying party for and at the request of the receiving
          party, such Short Term Power shall be supplied at the rate of
          up to $0.059 per kilowatt reserved per day plus the demand
          charge paid therefore by the supplying party to the Third
          Party.  In the event the amount of Daily Short Term Power
          reserved from a Third Party is reduced upon the request of
          the Third Party, the demand charge for each day during which
          such reduction is in effect shall be reduced by the amount by
          which the demand charge payable by the supplying party is
          reduced under its Agreement with such Third Party plus, the
          rate per kilowatt agreed upon under this paragraph for each
          kilowatt of said reduction.

3.2  The reserving party shall pay the supplying party for all Weekly or
Daily Short Term Energy delivered at the following rates:

     3.21 For each kilowatthour that is generated by the supplying
          party's system, 100 percent of the out-of-pocket costs of
          supplying Short Term Energy called for during such period,
          plus 10 percent of such costs.

     3.22 For each kilowatthour purchased by the supplying party from a
          Third Party in order to supply the Short Term Energy called
          for during such period, 100 percent of the amount of the
          Energy charge paid therefore by the supplying party plus 1
          mill per kilowatthour plus any transmission losses.

                                              EXHIBIT V

                       SERVICE SCHEDULE E

                    LIMITED TERM POWER (FIRM)

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - SERVICES TO BE RENDERED

2.1  Either party by giving the other party notice may reserve for
periods of not less than one (1) or more than twelve (12) months, such
electric power (hereincalled "Limited Term Power (Firm)") as the other
party may be willing to make available as Limited Term Power (Firm).  The
party asked to supply Limited Term Power (Firm) shall be the sole judge
as to the amounts and periods that it has electric power available that
may be reserved by the other party as Limited Term Power (Firm).

     2.11 To reserve Limited Term Power (Firm), the party desiring such
          power shall specify in its notice to the supplying party the
          number of kilowatts and the period for which it desires to so
          reserve such power.  The supplying party shall signify the
          extent of its ability and willingness to comply with the
          provisions of such notice.  Any notice or any acknowledgement
          of such notice that initially may be given orally shall be
          confirmed thereafter in writing.

     2.12      During each period that Limited Term Power (Firm) has been
               reserved as above provided, the supplying party shall deliver
               upon call electric energy (herein called "Limited Term Energy
               (Firm)") to the other party at the delivery point or points
               set forth in Section 4.01 of Article 4 of the Agreement in
               any amount up to and including the number of kilowatts
               reserved.  However, in the event conditions arise during such
               period which could not have been reasonably foreseen at the
               time said power was reserved and such conditions would cause
               the delivery of Limited Term Energy (Firm) to be burdensome
               to the supplying party, the supplying party may, upon notice
               to the reserving party reduce or interrupt the delivery of
               such energy to preserve the integrity of, or to prevent or
               limit any instability on, its system.

     2.13      The Limited Term Power (Firm) billing demand for any period
               shall be taken as equal to the number of kilowatts reserved
               as Limited Term Power (Firm) for such period.

SECTION 3 - COMPENSATION

3.1  The party reserving Limited Term Power (Firm) shall pay the
supplying party the following Demand Charges:

     3.11 MONTHLY LIMITED TERM POWER (FIRM) -- For any month that
          Limited Term Power (Firm) is reserved, up to $5.50 per
          kilowatt reserved; less, for each day during any part of
          which the amount of Monthly Limited Term Power (Firm) is
          reduced upon notice from the supplying party, one-twentieth
          (1/20) of the supplying party's monthly demand rate per
          kilowatt for each kilowatt of reduction but not more than the
          rate agreed upon for each kilowatt per month.

     3.12 THIRD PARTY MONTHLY LIMITED TERM POWER (FIRM) -- For any
          month that Monthly Limited Term Power (Firm) is reserved from
          a Third Party by the supplying party for and at the request
          of the receiving party, such Monthly Limited Term Power
          (Firm) shall be supplied at the rate of up to $1.28 per
          kilowatt reserved per month plus the demand charge paid
          therefore by the supplying party to the Third Party.  In the
          event the amount of Monthly Limited Term Power (Firm)
          reserved from a Third Party is reduced upon the request of
          the Third Party, the demand charge for each day during which
          such reduction is in effect shall be reduced by the amount by
          which the demand charge payable by the supplying party is
          reduced under its Agreement with such Third Party plus,
          one-thirtieth (1/30) of the rate per kilowatt agreed upon
          under this paragraph for each kilowatt of reduction per day,
          but not more than the rate agreed upon for each kilowatt per
          month.

3.2  The reserving party shall pay the supplying party for all Monthly
Limited Term Energy (Firm) delivered at the following rates:

     3.21 For each kilowatthour that is generated by the supplying
          party's system, 100 percent of the out-of-pocket costs for
          supplying Limited Term Energy (Firm) called for during such
          period, plus 10 percent of such costs.

     3.22 For each kilowatthour purchased by the supplying party from a
          Third Party in order to supply the Limited Term Energy (Firm)
          called for during such period, 100 percent of the amount of
          the Energy charge paid therefore by the supplying party plus
          1 mill per kilowatthour plus any transmission losses.

                                              EXHIBIT VI

                       SERVICE SCHEDULE F

                         DIVERSITY POWER

SECTION 1 - DURATION

1.1  This Service Schedule, being a part of an agreement dated as of
December 1, 1981, between Indianapolis Power & Light Company ("IPL") and
Hoosier Energy Rural Electric Cooperative, Inc. ("Hoosier") (the
"Agreement") shall become effective on the Interconnection Date as
defined in Article 9 of the Agreement and shall continue in effect until
termination of the Agreement.

SECTION 2 - DIVERSITY POWER

2.1  From time to time, because of differences in load patterns one of
the parties hereto may have excess capacity during one seasonal load
period at the same time the other party is experiencing its peak load
season.  At such time it may be to the parties' mutual advantage to
schedule exchange of certain portions of any such excess capacity.  Such
capacity shall be termed and is herein called "Diversity Power".

2.2  At any time Diversity Power transactions are agreed upon between
the parties, the party which purchases Diversity Power during one
seasonal load period shall be obligated to have available a like amount
of Diversity Power for the other party during the other seasonal load
period.  Seasonal load period shall mean for the Summer seasonal load
Period, the months of April thru September and for the Winter seasonal
load period, the months of October thru March.

2.3  The party supplying Diversity Power shall provide reserve capacity
for the committed amount, equivalent to that provided for its own
customers, exclusive of customers with interruptible service contracts.

2.4  Energy associated with the reservation of Diversity Power shall be
scheduled by the purchasing party no less than 18 hours in advance of
receiving such energy.  Energy receipts for a Monday shall be scheduled
no later than noon of the preceding Friday.

SECTION 3 - COMPENSATION

3.1  Demand Charges - There shall be no demand charge for Diversity Power.

3.2  Energy Charges - Energy shall be billed at out-of-pocket cost plus
ten percent of such cost.  In the event that any part of the
out-of-pocket costs includes energy purchased by the supplying Party,
only the energy portion of such purchase cost shall be included. Any
associated charges for demand, transmission, or other burden shall be
excluded.

                                                 EXHIBIT VII

                       SERVICE SCHEDULE G

                   TEMPORARY TRANSMISSION USE

SECTION 1 - DURATION AND TERMINATION

1.1  This Service Schedule G, being part of Modification No. 3 to the
Agreement dated December 1, 1981 between Indianapolis Power & Light
Company ("IPL") and Hoosier Energy Rural Electric Cooperative, Inc.
("Hoosier") as amended by Modification No. 1 dated June 1, 1982 and
Modification No. 2 dated October 1, 1983 (the "1981 Agreement"), shall
become effective on January 1, 1991 and shall continue in effect unless
it is otherwise terminated in accordance with this Service Schedule G or
Modification No. 3.

1.2  Hoosier may elect to terminate Service Schedule G at any time
during its term.  If such election is made prior to December 31, 1995,
Hoosier shall notify IPL at least 30 days in advance of the desired
termination date.  If such election is made after December 31, 1995,
Hoosier shall notify IPL at least 1 year in advance of the desired
termination date.

SECTION 2 - SERVICES TO BE RENDERED

2.1  IPL hereby represents that it has, and currently projects that it
will have, sufficient capacity in its transmission system to provide
Hoosier with the transmission service contemplated by this Service
Schedule G.  IPL hereby reserves and agrees to make available to Hoosier,
except as otherwise provided in Section 2.5 below, sufficient capacity in
said transmission system to provide for such transmission service
subject, however, to the capacity of such transmission system required to
serve the actual load of IPL's customers now and in the future.

2.2  IPL agrees to provide temporary transmission services to Hoosier
for the purpose of delivering up to 15 MW of power (demand) and energy
from any of the interconnection points between IPL and Hoosier to the tap
point described and referred to in Modification No. 2 as the Honey Creek
Tap Point.  This temporary transmission service shall be available at all
times during the term of this Service Schedule G except as stated in
Section 2.5 of this Service Schedule.

2.3  Any power (demand) and energy delivered by IPL to the Honey Creek
Tap Point shall be simultaneously supplied to IPL from Hoosier at any
other interconnection point or points provided for in the 1981 Agreement.
The power and energy shall be adjusted to compensate IPL for electrical
losses incurred in the delivery of such power.  Any difference in power
and energy delivered to Hoosier through said tap point and that supplied
by Hoosier to IPL shall be settled for in accordance with Section 3.03 of
the 1981 Agreement.

2.4  The parties shall plan, maintain and operate their respective
systems in accordance with sound engineering and operating practice, so
as to minimize the likelihood of disturbance(s) originating in either
party's system which might cause impairment of the transmission service
provided hereunder.

2.5  The Parties shall plan for continuous unrestricted operation to the
tap point at all times; provided, that either party may interrupt or
restrict service for necessary maintenance, system emergency, or if
either determines that its facilities may be damaged due to excessive
loadings caused by the transmission service provided hereunder.  Should
such interruptions or restrictions occur, the parties shall cooperate to
restore such service to normal as soon as practicable.  Excessive loads
are current flows exceeding the normal facility ratings with all
facilities in service, or current flows exceeding emergency facility
ratings under contingency conditions.  Neither party shall be responsible
to the other party for damage or loss of revenue caused by such
restrictions or interruptions.  Excessive loadings shall be verified by
either metering records or mutually agreed upon load flows. Maintenance
outages shall be coordinated between the parties whenever possible.

2.6  IPL shall periodically conduct studies of its future system, and if
such studies indicate problems due to IPL's load growth which may arise
in the future due to the transmission service provided hereunder, shall
as soon as practicable, develop plans and estimates of cost for the
installation of any additional equipment or facilities necessary to
effect a long term solution to such problem so that transmission services
hereunder may be reliably continued, and shall notify Hoosier of such
studies and plans.  IPL shall use its best efforts to provide Hoosier
with a three year advance notice of any impending problems.

Upon approval of long term remedial plans by Hoosier, IPL shall proceed
to install required facilities, and upon completion thereof, Hoosier
shall commence reimbursement to IPL of Hoosier's proportionate share of
costs involved in designing and installing such facilities which shall be
calculated as a function of variables such as:

a)   Share of existing facilities utilized by each party, and;

b)   Timing of required capacity with and without Hoosier's 15 MW power
     transfer; and

c)   Useful life of new facilities, and;

d)   Remaining term of Service Schedule, and;

e)   Other consequential variables determined at the time when excessive
     loadings are observed or mutually projected.

In the event Hoosier does not elect to participate in the remedial plans
prescribed above Hoosier may elect to continue service on a restricted
basis when necessary and on an unrestricted basis at all other times.

SECTION 3 - COMPENSATION

3.1  Electric power measured in kilowatts delivered at the Honey Creek
Tap Point under this Service Schedule shall be billed at $0.92 per
kilowatt month.  This demand charge for use of IPL's transmission
facilities shall be on the maximum hourly demand in kilowatts, measured
in the calendar month of billing, and shall be adjusted to compensate IPL
for losses in the IPL system and in the transformer bank used at the
Honey Creek Tap Point.

                                              EXHIBIT VIII

                       SERVICE SCHEDULE H

                  SPECIFIC TRANSMISSION SERVICE

SECTION 1 - DURATION AND TERMINATION

1.1  This Service Schedule H, being part of Modification No. 3 to the
Agreement dated December 1, 1981 between Indianapolis Power & Light
Company ("IPL") and Hoosier Energy Rural Electric Cooperative, Inc.
("Hoosier") as amended by Modification No. 1 dated June 1, 1982 and
Modification No. 2 dated October 1, 1983 (the "1981 Agreement"), shall
become effective on January 1, 1991 and shall continue in effect through
December 31, 2010, unless terminated in accordance with this Service
Schedule H or Modification No. 3.

1.2  IPL may elect to terminate Service Schedule H at any time during
its term.  If such election is made prior to December 31, 1995, IPL shall
notify Hoosier at least 30 days in advance of the desired termination
date.  If such election is made after December 31, 1995, IPL shall notify
Hoosier at least 1 year in advance of the desired termination date.

SECTION 2 - SPECIFIC TRANSMISSION SERVICES TO BE RENDERED AND CONDITIONS
THEREOF

2.1  Hoosier shall provide Transmission Service to IPL for an amount up
to 50 MW from January 1, 1991 through December 31, 1992 and 100 MW
thereafter through December 31, 2010 for power and associated energy over
Hoosier's electrical transmission facilities from its interconnection
with Big Rivers (i.e., the 161 kV interconnection located in Hancock
County, Kentucky at the border with Spencer County, Indiana) to Hoosier's
interconnection with IPL (i.e., the 138 kV interconnection at IPL's
Petersburg Plant in Pike County, Indiana).  Such transmission service
shall be available at all times during the term of this Service Schedule
H except as stated in Section 2.4 of this Service Schedule.

2.2  Hoosier hereby represents that it has, and currently projects that
it will have, sufficient capacity in its transmission system to provide
IPL with the transmission service contemplated by this Service Schedule
H.  Hoosier hereby reserves and agrees to make available to IPL, except
as otherwise provided in Section 2.4 below, sufficient capacity in said
transmission system to provide for such transmission service subject,
however, to the capacity of such transmission system required to serve
the actual load of Hoosier's members now and in the future and to serve
Wabash Power Association, Inc. and Virginia Power Company under contracts
existing prior to the date of this Service Schedule H.

2.3  The parties shall plan, maintain and operate their respective
systems in accordance with sound engineering and operating practice, so
as to minimize the likelihood of disturbance(s) originating in either
party's system which might cause impairment of the transmission service
provided hereunder.

2.4  The parties shall plan for the continuous, unrestricted operation
of their Interconnection at all times; provided, that either party may
interrupt or restrict service for necessary maintenance, for system
emergencies or if either party determines that its facilities may be
damaged due to excessive loads caused by the transmission service
provided hereunder.  Should such interruptions or restrictions occur, the
parties shall cooperate to restore such service to normal as soon as
practicable.  Excessive loads are current flows exceeding the normal
facility ratings with all facilities in service, or current flows
exceeding emergency facility ratings under contingency conditions.
Neither party shall be responsible to the other party for damage or loss
of revenue caused by such restrictions or interruptions. Excessive
loadings shall be verified by either metering records or mutually agreed
upon load flows.  Maintenance outages shall be coordinated between the
parties whenever possible.

2.5  Hoosier shall periodically conduct studies of its future system.
If such studies indicate problems due to the load growth of Hoosier's
members combined with sales to Wabash Power Association, Inc. and
Virginia Power Company under Contracts existing prior to the effective
date of this Service Schedule H which may arise in the future as the
result of the transmission service provided hereunder, Hoosier shall, as
soon as practicable, develop plans and estimates of cost for the
installation of any additional equipment or facilities necessary to
effect a long-term solution to such problem so that transmission services
hereunder may be reliably continued and shall notify IPL of such studies
and plans.  Hoosier shall use its best efforts to provide IPL with a
3-year advance notice of any such impending problems.

Upon approval of long-term remedial plans by IPL, Hoosier shall proceed
to install required facilities, and upon completion thereof, IPL shall
commence reimbursement to Hoosier of IPL's proportionate mutually agreed
upon share of costs involved in designing and installing said facilities
which shall be calculated as a function of the following variables:

a)   Share of existing facilities utilized by each party; and

b)   Timing of required capacity with and without IPL's 100 MW power
     transfer; and

c)   Useful life of new facilities; and

d)   Remaining term of Service Schedule; and

e)   Other consequential variables determined as of when excessive loads
     are observed or mutually projected.

In the event IPL does not elect to participate in the remedial plans
prescribed above, IPL may continue service on a restricted basis when
necessary and on an unrestricted basis all other times.

SECTION 3 - COMPENSATION AND BILLING

3.1  Throughout the term of this Service Schedule H the following firm
rates shall apply:

     3.11 Demand Charge of $50,000/month for 50 MW transmission
          capacity from January 1, 1991 through December 31, 1992 and a
          demand charge of $100,000/month for 100 MW of transmission
          capacity from January 1, 1993 through December 31, 2010.

     3.12 Energy Charge of 1 mill/kWhr used up to a usage rate of 50 MW
          per hour from January 1, 1991 through December 31, 1992 and a
          usage rate of 100 MW per hour from January 1, 1993 through
          December 31, 2010.

     3.13 In the event the transmission capacity currently in effect is
          reduced upon notice from Hoosier, the demand charge for each
          day during which any such reduction is in effect (excluding
          Saturdays and Sundays) shall be reduced by one-twentieth
          (1/20) of Hoosier's monthly demand rate currently in effect
          per kilowatt of reduction, but not more than the demand
          charge for that month.

                       MODIFICATION NO. 4
                             TO THE
                    INTERCONNECTION AGREEMENT
                             BETWEEN
               INDIANAPOLIS POWER & LIGHT COMPANY
                               AND
         HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

THIS AMENDMENT made and entered into as of the 1st day of January, 1995
by Indianapolis Power & Light Company ("IPL"), being an Amendment to the
Interconnection Agreement between Hoosier Energy Rural Electric
Cooperative, Inc. ("Buyer") and IPL dated December 1, 1981 (the "Agreement").

                           WITNESSETH:

WHEREAS, IPL and Hoosier Energy Rural Electric Cooperative, Inc., entered
into the Agreement on December 1, 1981, which Agreement has been amended
from time to time;

WHEREAS, the Agreement provides for the sale of power and energy by IPL
under Service Schedules described as:

          Service Schedule A            Emergency Service
          Service Schedule C            Interchange Power
          Service Schedule D            Short Term Power
          Service Schedule E            Limited Term Power (Firm)
          Service Schedule F            Diversity Power

WHEREAS, the Agreement provides for the recovery of incremental costs or
"out-of-pocket" costs occasioned by the sale by IPL of electric energy;

WHEREAS, IPL has implemented its Emissions Constrained Dispatch Plan,
attached hereto;

WHEREAS, the rates for Emergency Service, Interchange Power, Short Term
Power, Limited Term Power (Firm), and Diversity Power, do not expressly
include the cost of replacing sulfur dioxide ("SO2") emission allowances
expended in order to provide such energy in compliance with Federal laws
governing SO2 emission;

WHEREAS, IPL desires to amend the Agreement to clarify recovery of out-
of-pocket costs occasioned by the sale of said energy as including the
recovery of the incremental cost of SO2 emission allowances;

NOW, THEREFORE, in consideration of the premises and the terms and
conditions set forth herein; IPL desires to amend the Agreement as
follows:

Section 1.     Compensation for SO2 Emission Allowances.

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 attributed
to the sale by the incremental cost of the SO2 Allowances, as determined
in Section 2.2, 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 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 Amendment, 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.

Section 2.     Determination of SO2 Emission Allowances Due IPL.

     Section 2.1.   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 Allowances per MWH for each unit, will be
     used to determine the number of SO2 Allowances attributable to the
     sale.

     Section 2.2 .  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, the
     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.

Section 3.     Effective Date.

This Amendment to the Agreement shall be made effective as of January 1,
1995.

IN WITNESS WHEREOF, IPL has caused the foregoing Amendment to be signed
by its duly authorized officer, effective as of the date set forth above.

                              INDIANAPOLIS POWER & LIGHT COMPANY

                              By: /s/ John C. Berlier, Jr.
                                   John C. Berlier, Jr.
                                   Vice President
                                   Resource Planning and Rates

                        EMISSIONS CONSTRAINED DISPATCH PLAN
                             Effective January 1, 1995

Economic Dispatch is loading each generating unit so the lowest cost
generation is called upon first to generate the power needed, thereby
minimizing total electric energy generation cost.  Emissions Constrained
Dispatch is simply Economic Dispatch where the estimated value of the
SO2 allowances being consumed by a unit is included as a part of the
unit's cost of generation.  A lower emitting unit will reflect a
relatively lower emissions cost because it requires fewer sulfur dioxide
(SO2) allowances.

IPL's plan to implement Emissions Constrained Dispatch is to incorporate
SO2 allowance values into the existing Energy Management System (load
dispatching system), which economically dispatches IPL's generation.  As
the generation required (load) increases, the available unit with the
lowest incremental cost is dispatched to meet the increase.  As the
generation demanded decreases, the unit with the highest incremental cost
is dispatched to reduce its generation, thereby minimizing cost.<F1>

Currently, the Energy Management System uses incremental heat rates, along
with fuel and variable operation costs to determine the incremental cost of
generation on each unit in service.  Effective January 1, 1995, SO2
emissions related costs will be included in each unit's incremental cost
prior to the incremental costs being compared to make the unit dispatch.
The incremental SO2 value will be in units of dollars per million British
Thermal Units ($/MMBTU) and computed by the following guidelines:

        IPL plans to use EPA (Environmental Protection Agency)
        certifiable data for SO2 emission rates in conjunction with
        the incremental value of emission allowances to form the
        emissions dispatch cost in units of $/MMBTU.  Each
        generating unit affected by the Clean Air Act will have its
        own specific SO2 emissions data input into the Energy
        Management System at the beginning of each month.  That data
        will remain for the month unless projected coal deliveries
        for the month have an SO2 value that will change the current
        dispatch.  The Fuel Supply Organization will notify the System
        Operation Office of the projected coal delivery SO2 emission
        rate in #SO2/MMBTU, so that a correct So2 emission rate can
        be input into the Energy Management System.

        <F1>  Optimization of unit loadings in the Energy Management
System is constrained by equipment physical limitations such as maximum rate
of load pickup or maximum load reduction rate on a unit as well as
contrained by the maximum and minimum capability of the units.

        IPL's Treasury Organization will not less often than the 10th day
        of each month supply the IPL System Operation Office the incremental
        value of an emission allowance in units of dollars per ton of SO2
        based upon the Cantor Fitzgerald asking price for allowances, or
        other nationally recognized allowance trading market price, for use
        in IPL's emission constrained dispatch on a forward going basis.
        Beginning January 1, 1995, the allowance price that will be used
        for purposes of IPL's emissions constrained dispatch will be the
        asking price for allowances obtained from Cantor Fitzgerald on
        December 30, 1994.  The Treasury Organization will track the
        emission allowance market and if a significant change in
        allowance prices occurs within a given month, the Treasury
        Organization may provide an updated allowance price value to the
        IPL System Operation Office.  The updated allowance price will
        be entered into the Energy Management System and the economic
        dispatch algorithm will be updated accordingly.

The emissions cost will be added with the fuel and variable operating cost
to produce a total dispatch cost.  The total dispatch cost will be combined
with the incremental unit heat rate data to produce the total incremental
dispatch cost as calculated by the following formula:

        INCREMENTAL COST = (Fuel Cost + Emissions Value Divided By
                                Variable Operating Cost) X Incremental
                                Heat Rate

The dimensions for each of the variables is as follows:

        Emissions Value, $/MMBTU; Fuel Cost, $/MMBTU; Variable Operating
        Cost $/MMBTU; Incremental Heat Rate, MMBTU/MWH; Allowance Value,
        $/Allowance; Incremental Cost, $/MWH

The dispatch made using the total incremental cost, including SO2 emissions
related costs, will constitute IPL's Emissions Constrained Dispatch.

                             Modification No. 5

                                     To

                           INTERCONNECTION AGREEMENT

                                   Between

                      INDIANAPOLIS POWER & LIGHT COMPANY

                                     And

                HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

                        Dated as of March 31, 1999

                            MODIFICATION NO. 5

                                    To

                          INTERCONNECTION AGREEMENT

                                  Between

                      INDIANAPOLIS POWER & LIGHT COMPANY

                                    And

               HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

THIS MODIFICATION NO. 5, dated as of this 31st day of March, 1999,
between INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter called
"IPL"), an Indiana corporation, and HOOSIER ENERGY RURAL ELECTRIC
COOPERATIVE, INC. (hereinafter called "Hoosier"), an Indiana
corporation,

                                 WITNESSETH:

0.01   WHEREAS, there is now in force and effect between IPL and
Hoosier an interconnection agreement dated as of December 1, 1981,
as amended by a Modification No. 1 dated June 1, 1982,
Modification No. 2 dated October 1, 1983, Modification No. 3 dated
September 1, 1989, and Modification No. 4 dated January 1, 1995
(such agreement as so amended being hereinafter referred to as the
"1981 Agreement"); and

0.02   WHEREAS, Hoosier desires to reconfigure service to its
customer, Johnson County REMC, at its Honey Creek Substation
served currently by IPL to provide additional reliability and in
anticipation of customer load growth, by adding an electric
substation near the intersection of Smith Valley Road and Mullinix
Road in Johnson County, Indiana (hereinafter referred to as the
"Mullinix Substation"); and

0.03   WHEREAS, IPL agrees to establish an additional tap point
from which to serve Hoosier's customer, Johnson County REMC, at
the Mullinix Substation (hereinafter referred to as the "Mullinix
Tap Point");

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

                             ARTICLE 1

1.01 The 1981 Interconnection Agreement shall be, and the same
hereby is, amended as follows:

A.   Article 1 thereof is hereby amended by modifying subsection
1.015 thereof to read as follows:

"1.015   At its Honey Creek and Mullinix Substations, 138,000 volt
three-phase interrupting device; three motor operated supervisory
controlled 138,000 volt switches under IPL's control and
maintenance authority; a transformer of size limited to 20 MVA
unless otherwise agreed; 12,470 volt metering equipment;
supervisory and communication equipment including bank
differential indication to IPL's control center; relaying,
switching, and appurtenant equipment; all of which equipment shall
be subject to the approval of IPL."

By modifying subsection 1.026 thereof to read as follows:

"1.026   At Honey Creek and Mullinix Tap Points, IPL agrees to
make such modifications to its transmission facilities as are
necessary to effect a connection at such Tap Points."

By inserting immediately following the present subsection 1.052
thereof, a new subsection, designated "1.053" to read as follows:

"1.053   The Mullinix Tap Point - that point at which the
facilities provided therefor by Hoosier shall be connected to
modified facilities of IPL.

By modifying subsection 1.08A to read as follows:

"1.08A   The parties hereto mutually agree that their respective
systems will not be operated in parallel through the Honey Creek
and Mullinix Tap Points.  Electric energy supplied by IPL to
Hoosier at these Tap Points will be used only to temporarily
supply the ultimate customers of Johnson County REMC.  Any power
(demand) or energy supplied through the Tap Points shall be
accounted and settled for as if supplied through any of the
interconnection points which exist between the two companies.
This accounting shall include any power (demand) and energy losses
occurring on the IPL system due to the transfer of the energy to
the Honey Creek and Mullinix Tap Points."

B.   Article 2 thereof is hereby amended by modifying Section
2.01, subsection G, to read as follows:

"G.   the temporary use of IPL transmission facilities to provide
service to Hoosier's Honey Creek and Mullinix Substations which
are not directly connected to its transmission system, in
accordance with Service Schedule G annexed hereto."

C.   Article 4 thereof is hereby amended by modifying Section
4.022 to read as follows:

"4.022   At the Honey Creek and Mullinix Tap Points specified in
Section 1.05 above, by 12,470 volt metering equipment to be
installed and maintained by Hoosier ('Honey Creek Metering Point'
and 'Mullinix Metering Point)"

And by modifying Section 4.03 to read as follows:

"4.03   Suitable metering equipment at the metering point provided
in Section 4.02 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:

A.   a continuous automatic graphic record of both kilowatts and kilovars,

B.   an automatic record of the kilowatthours for each clock hour, and

C.   a continuous integrating record of the kilowatthours.

Meter readings taken at the Honey Creek and Mullinix Substations
shall be adjusted by adding such amount as may be necessary to
fully compensate IPL for losses in their respective transformers
and on IPL's system."

D.   Article 6 thereof is hereby amended by modifying Section 6.01
to read as follows:

"All bills for amounts owed by one party hereto to the other shall
be due and payable on the fifteenth day of the month next
following the month in which the service was provided, or on the
tenth day following receipt of a bill therefor, which is later.
Interest on unpaid amounts shall accrue at 1/2 percent over the
per annum rate of interest equal to the prime lending rate as may
from time to time be published in The Wall Street Journal under
"Money Rates" and is chargeable from the due date of the bill to
the date of payment.  The term 'month' shall mean a calendar month
for the purpose of settlements under this agreement."

E.   Article 8 thereof is hereby amended by modifying Section 8.02
to read as follows:

"8.02   With respect to the Honey Creek and Mullinix Tap Points,
Hoosier hereby agrees that IPL shall not be responsible for
disruption of service or loss of continuity in providing service
to the Honey Creek and Mullinix Substations and Hoosier hereby
indemnifies and saves harmless IPL against any claim for injury to
persons and damage to property in any way resulting from or
growing out of any such service disruption or loss of continuity."

F.   Service Schedule G is hereby revised and restated as provided
in Exhibit A to this Modification No. 5.

                              ARTICLE 2

2.01   Except as otherwise specifically provided by this
Modification No. 5 or subsequent modifications, the terms
"Interconnection Point", "Metering Point", and "Delivery Point",
shall include all points at which the parties thereto are
interconnected.

                              ARTICLE 3

3.01   Except as hereinabove specifically amended, all other terms
and conditions of the 1981 Agreement shall remain in full force
and effect.

IN WITNESS WHEREOF, the parties hereto have caused this
Modification No. 5 to be executed by their respective duly
authorized officers as of the day, month and year first written
above.

HOOSIER ENERGY RURAL ELECTRIC COOPERATIVE, INC.

By /s/ J. Steven Smith
J. Steven Smith
President and Chief Executive Officer

INDIANAPOLIS POWER & LIGHT COMPANY

By /s/ Ramon L. Humke
     Ramon L. Humke
     President and Chief Operating Officer

                                                EXHIBIT VII
                                                (to the 1981 Agreement)

                             SERVICE SCHEDULE G

TEMPORARY TRANSMISSION USE

SECTION 1 - DURATION AND TERMINATION

1.1   This Service Schedule G, being part of Modification No. 3 to
the Agreement dated December 1, 1981 between Indianapolis Power &
Light Company ("IPL") and Hoosier Energy Rural Electric
Cooperative, Inc. ("Hoosier") as amended by Modification No. 1
dated June 1, 1982 and Modification No. 2 dated October 1, 1983
(the "1981 Agreement"), shall become effective on January 1, 1991
and shall continue in effect unless it is otherwise terminated in
accordance with this Service Schedule G or Modification No. 3.

1.2   Hoosier may elect to terminate Service Schedule G at any
time during its term.  If such election is made prior to December
31, 1995, Hoosier shall notify IPL at least 30 days in advance of
the desired termination date.  If such election is made after
December 31, 1995, Hoosier shall notify IPL at least 1 year in
advance of the desired termination date.

SECTION 2 - SERVICES TO BE RENDERED

2.1   IPL hereby represents that it has, and currently projects
that it will have, sufficient capacity in its transmission system
to provide Hoosier with the transmission service contemplated by
this Service Schedule G.  IPL hereby reserves and agrees to make
available to Hoosier, except as otherwise provided in Section 2.5
below, sufficient capacity in said transmission system to provide
for such transmission service subject, however, to the capacity of
such transmission system required to serve the actual load of
IPL's customers now and in the future.

2.2   IPL agrees to provide temporary transmission services to
Hoosier for the purpose of delivering up to 20 MW of power
(demand) and energy from any of the interconnection points between
IPL and Hoosier for each of the tap points described and referred
to in the 1981 Agreement as the Honey Creek and Mullinix Tap
Points ("Tap Points").  This temporary transmission service shall
be available at all times during the term of this Service Schedule
G except as stated in Section 2.5 of this Service Schedule.

2.3   Any power (demand) and energy delivered by IPL to the Tap
Points shall be simultaneously supplied to IPL from Hoosier at any
other interconnection point or points provided for in the 1981
Agreement.  The power and energy shall be adjusted to compensate
IPL for electrical losses incurred in the delivery of such power.
Any difference in power and energy delivered to Hoosier through
said Tap Points and that supplied by Hoosier to IPL shall be
settled for in accordance with Section 3.03 of the 1981 Agreement.

2.4   The parties shall plan, maintain and operate their
respective systems in accordance with sound engineering and
operating practice, so as to minimize the likelihood of
disturbance(s) originating in either party's system which might
cause impairment of the transmission service provided hereunder.

2.5   The Parties shall plan for continuous unrestricted operation
to the Tap Points at all times; provided, that either party may
interrupt or restrict service for necessary maintenance, system
emergency, or if either determines that its facilities may be
damaged due to excessive loadings caused by the transmission
service provided hereunder.  Should such interruptions or
restrictions occur, the parties shall cooperate to restore such
service to normal as soon as practicable.  Excessive loads are
current flows exceeding the normal facility ratings with all
facilities in service, or current flows exceeding emergency
facility ratings under contingency conditions.  Neither party
shall be responsible to the other party for damage or loss of
revenue caused by such restrictions or interruptions.  Excessive
loadings shall be verified by either metering records or mutually
agreed upon load flows.  Maintenance outages shall be coordinated
between the parties whenever possible.

2.6   IPL shall periodically conduct studies of its future system,
and if such studies indicate problems due to IPL's load growth
which may arise in the future due to the transmission service
provided hereunder, shall as soon as practicable, develop plans
and estimates of cost for the installation of any additional
equipment or facilities necessary to effect a long term solution
to such problem so that transmission services hereunder may be
reliably continued, and shall notify Hoosier of such studies and
plans.  IPL shall use its best efforts to provide Hoosier with a
three year advance notice of any impending problems.

Upon approval of long term remedial plans by Hoosier, IPL shall
proceed to install required facilities, and upon completion
thereof, Hoosier shall commence reimbursement to IPL of Hoosier's
proportionate share of costs involved in designing and installing
such facilities which shall be calculated as a function of
variables such as:

a)   Share of existing facilities utilized by each party, and;

b)   Timing of required capacity with and without Hoosier's power
transfers; and

c)   Useful life of new facilities, and;

d)   Remaining term of Service Schedule, and;

e)   Other consequential variables determined at the time when
excessive loadings are observed or mutually projected.

In the event Hoosier does not elect to participate in the remedial
plans prescribed above Hoosier may elect to continue service on a
restricted basis when necessary and on an unrestricted basis at
all other times.

SECTION 3 - COMPENSATION

3.1   Electric power measured in kilowatts delivered at the Tap
Points under this Service Schedule shall be billed at $0.92 per
kilowatt month.  This demand charge for use of IPL's transmission
facilities shall be on the maximum hourly demand in kilowatts,
measured in the calendar month of billing, and shall be adjusted
to compensate IPL for losses in the IPL system and in the
transformer banks used at the Tap Points.EXHIBIT 10.14

                 INDIANAPOLIS POWER & LIGHT
           COMPANY SUPPLEMENTAL RETIREMENT PLAN
           AND TRUST AGREEMENT FOR A SELECT
           GROUP OF MANAGEMENT EMPLOYEES
         (AS AMENDED AND RESTATED EFFECTIVE
                  JANUARY 1, 1999)

                  TABLE OF CONTENTS

                                                             Page
ARTICLE I      DEFINITIONS                                      3
     Section 1.01.  Accrued Benefit                             3
     Section 1.02.  Actuarial Equivalent                        4
     Section 1.03.  Adjusted Accrued Benefit                    4
     Section 1.04.  Adjusted Preretirement Surviving Spouse
                    Death Benefit                               4
     Section 1.05.  Administrator                               5
     Section 1.06.  Board                                       5
     Section 1.07.  Break In Service                            5
     Section 1.08.  Company                                     6
     Section 1.09.  Company Retirement Plan                     6
     Section 1.10.  Compensation                                6
     Section 1.11.  Effective Date                              8
     Section 1.12.  Employer                                    8
     Section 1.13.  ERISA                                       8
     Section 1.14.  Hour of Service                             8
     Section 1.15.  Maximum Benefit Liability                   8
     Section 1.16.  Normal Retirement Age                      13
     Section 1.17.  Participant                                13
     Section 1.18.  Participant Account                        14
     Section 1.19.  Plan                                       14
     Section 1.20.  Plan Year                                  14
     Section 1.21.  Post-Tax Adjusted Benefit                  14
     Section 1.22.  Preretirement Surviving Spouse
                    Death Benefit                              17
     Section 1.23.  Prior Plan                                 17
     Section 1.24.  Service                                    17
     Section 1.25.  Tax Distributions                          18
     Section 1.26.  Total Disability                           18
     Section 1.27.  Trust Fund                                 18
     Section 1.28.  Trustee                                    19
     Section 1.29.  Valuation Date                             19
     Section 1.30.  Vested Portion                             19
     Section 1.31.  Participating Employers                    20
     Section 1.32.  Available Net Income                       20
     Section 1.33.  Compensation Committee                     21

ARTICLE II     PARTICIPATION                                   21
     Section 2.01.  Participants                               21
     Section 2.02.  Reemployment                               27

ARTICLE III    MONTHLY SUPPLEMENTAL PENSION BENEFITS           28
     Section 3.01.  Senior Executive Officer's
                    Monthly  Supplemental Pension
Benefits   28
     Section 3.02.  Other Executive Officer's Monthly
                    Supplemental Pension Benefits              29
     Section 3.03.  Special Monthly Supplemental
                    Pension Benefits                           30
ARTICLE IV     PAYMENT OF RETIREMENT BENEFITS                  31
     Section 4.01.  Entitlement to Retirement Benefits         31
     Section 4.02.  Non-Vested Benefits                        35
     Section 4.03.  Tax Distribution Payments                  36
     Section 4.04.  Reduction in Accrued Benefit and
                    Preretirement Surviving Spouse
                    Death Benefit                              41
     Section 4.05.  Distribution and Recontribution
                    of Income                                  46
     Section 4.06.  One-Time Lump Sum Distribution Election    47

ARTICLE V      MONTHLY DEATH BENEFITS                          48

ARTICLE VI     CONTRIBUTIONS TO THE TRUST FUND                 50
     Section 6.01.  Initial Company Contribution               50
     Section 6.02.  Annual Company Contribution                50
     Section 6.03.  Additional Company Contributions           51
     Section 6.04.  Form of Contribution                       51

ARTICLE VII    ESTABLISHMENT OF TRUST FUND                     52
     Section 7.01.  Trust Fund                                 52
     Section 7.02.  Establishment of Participant Accounts      52
     Section 7.03.  Allocation of Contributions                53
     Section 7.04.  Valuations                                 53
     Section 7.05.  Reallocation of Excess Participant
                    Account Balances                           54
     Section 7.06.  Payment of Expenses                        55
     Section 7.07.  Accounting and Record Keeping              56
     Section 7.08.  Limitation on Liability                    57
     Section 7.09.  Consultation and Indemnification           57
     Section 7.10.  Litigation                                 58
     Section 7.11.  Waiver of Bond                             58

ARTICLE VIII   INVESTMENT OF TRUST FUND                        58
     Section 8.01.  Management of Trust Fund and
                    Appointment of Investment Manager          58
     Section 8.02.  Powers of Trustee                          60

ARTICLE IX     RESIGNATION, REMOVAL, AND APPOINTMENT
               OF SUCCESSOR TRUSTEE                            65
     Section 9.01.  Resignation                                65
     Section 9.02.  Removal                                    65
     Section 9.03.  Successor Trustee                          66
     Section 9.04.  Accounting by Trustee                      66
     Section 9.05.  Merger or Consolidation of Trustee         67

ARTICLE X      NON-DIVERSION OF TRUST FUND                     67

ARTICLE XI     ADMINISTRATION                                  68
     Section 11.01.  Delegation of Responsibility              68
     Section 11.02.  Construction of Plan                      68
     Section 11.03.  Tax Information to Participants           69
     Section 11.04.  Determinations                            69

ARTICLE XII    MISCELLANEOUS                                   70
     Section 12.01.  Amendment or Termination of Plan          70
     Section 12.02.  Right to Merge Plan                       71
     Section 12.03.  Successors and Assigns                    72
     Section 12.04.  Choice of Law                             72
     Section 12.05.  No Employment Contract                    72
     Section 12.06.  Non-Alienation                            72
     Section 12.07.  Gender and Number                         73
     Section 12.08.  Headings                                  73
     Section 12.09.  Payment to Incompetents                   73
     Section 12.10.  Illegal or Invalid Provisions             74

               INDIANAPOLIS POWER & LIGHT COMPANY
             SUPPLEMENTAL RETIREMENT PLAN AND TRUST
      AGREEMENT FOR A SELECT GROUP OF MANAGEMENT EMPLOYEES
      (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1999)

     Pursuant to Section 12.01 of the Indianapolis Power & Light
Company Supplemental Retirement Plan and Trust Agreement for a Select Group
of Management Employees (the "Plan") which was originally executed on
November 1, 1988 by and between Indianapolis Power & Light Company, Inc.
(the "Company") and National City Bank, Indiana (the "Trustee") and last
amended and restated effective March 1, 1996, the Company hereby amends
and completely restates the Plan, effective as of January 1, 1999, as
follows:

                               WITNESSETH:

     WHEREAS, effective May 1, 1983, the Company established the Unfunded
Supplemental  Retirement Plan for a Select Group of Management Employees
(the "Prior Plan") which was designed to meet applicable exemptions under
Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA (as hereinafter
defined) and under Department of Labor Regulation Section 2520.104-23; and

     WHEREAS, in order to provide the active participants in the Prior Plan
with greater assurance that the benefits provided under such Prior Plan will
be duly made, the Company desires to establish a successor plan and trust
(the "Plan") for the active participants in the Prior Plan (and has
contemporaneously limited their participation in the Prior Plan to preclude
a duplication of benefits) and to transfer thereto sufficient assets to be
held therein and applied against the benefit obligations of the Company under
the terms of the Plan, until paid or returned in accordance with the terms of
this Agreement; and

     WHEREAS, in recognition of the management services and other benefits
provided to the Employer (as hereinafter defined) by the key employees who
are Participants (as hereinafter defined) under the Plan, it is the intention
of the Company to make contributions to the Plan in accordance with the terms
of this Agreement; and

     WHEREAS, the Plan is not intended to be a tax qualified plan under
Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), but is intended to meet and comply with the requirements of
ERISA and shall be interpreted accordingly to effect the intent of the
parties;

     NOW, THEREFORE, in consideration of the services which have been and
shall be performed by such Plan Participants, of the premises and of the
mutual covenants herein contained, the receipt and sufficiency of which are
hereby expressly acknowledged, the parties do hereby covenant and agree as
follows:

                                ARTICLE I

                               DEFINITIONS

     Section  1.01.  Accrued Benefit.  The term "Accrued Benefit" means the
monthly amount payable to a Participant at age sixty-five (65), based on such
Participant's average Compensation at the date of determination, under
Section 3.01 or Section 3.02, whichever is applicable, multiplied by a
fraction (not to exceed one (1)), the numerator of which is such
Participant's Service at the date of determination and the denominator of
which is the lesser of thirty (30) or the total Service such Participant
would have completed if his employment by the Employer had continued until
his attainment of the Normal Retirement Age; provided, however, that if the
Participant's employment with the Employer is terminated by reason of his
incurring a Total Disability, the fraction described above shall be one (1),
regardless of his Service at the date he incurs a Total Disability.

     Section  1.02.   Actuarial Equivalent.  The term "Actuarial Equivalent"
means the equivalent in value of the aggregate amounts expected to be paid
under different forms of payment under this Plan, on the basis of an assumed
rate of interest  of seven  percent (7%) and mortality rates under the
Unisex Pension 1984 Mortality Table (UP-84) with no age set back for the
Participant and a three (3) year age set back for the Participant's spouse.

     Section 1.03.  Adjusted Accrued Benefit.  The term "Adjusted Accrued
Benefit" means the Accrued Benefit of each Participant after it is adjusted
in accordance with Section 4.04(a) to reflect any Tax Distributions made to
such Participant and in accordance with Section 4.04(b) to reflect any
distributions made under Section 4.05 and not recontributed to the Plan.

     Section 1.04.  Adjusted Preretirement Surviving Spouse Death Benefit.
The term "Adjusted Preretirement Surviving Spouse Death Benefit" means the
Preretirement Surviving Spouse Death Benefit of a surviving spouse of a
deceased Participant after it is adjusted in accordance with Section 4.04(a)
to reflect any Tax Distributions made to such deceased Participant or to such
surviving spouse and in accordance with Section 4.04(b) to reflect any
distributions made under Section 4.05 and not recontributed to the Plan.

     Section 1.05.   Administrator. The term "Administrator" means the
Company, which shall have the sole authority to manage and to control the
operation and administration of this Plan.

     Section 1.06.  Board.  The term "Board" means the Board of Directors
of the Company.  Whenever the provisions of this Plan require action by the
Board, it may be taken by the Executive Committee of the Board with the same
force and effect as though taken by the entire Board.

     Section 1.07.   Break In Service.  The term "Break in Service" means
the last calendar day of any consecutive twelve (12) month computation period
as provided in Section 1.24 during which a person completes fewer than five
hundred and one (501) Hours of Service.

     Section 1.08.  Company.  The term "Company" means Indianapolis Power &
Light Company and any successor thereto or predecessor thereof.

     Section 1.09.  Company Retirement Plan.  The term "Company Retirement
Plan" means the Employees'Retirement Plan of Indianapolis Power & Light
Company as now in effect or hereafter amended.  The Company Retirement Plan
is not amended or modified in any manner by this Plan, and any benefits
payable to Participants or to their surviving spouses under this Plan shall
have no effect on the benefits payable to Participants or to their surviving
spouses under the Company Retirement Plan.

     Section 1.10.  Compensation.  The term "Compensation" means the base
salary received by a Participant from the Employer for services rendered to
the Employer and bonus payments made to the Participant under the IPALCO
Enterprises, Inc. Annual Incentive Plan; provided, however, that the term
"Compensation" shall also include any current compensation deferred by a
Participant under any qualified or nonqualified plan sponsored or maintained
by the Employer or under any agreement entered into between a Participant and
the Employer, including the IPALCO Enterprises, Inc. Annual Incentive Plan;
provided, further, that any deferred compensation included by the immediate
preceding proviso shall be included as Compensation at the time of the
deferral and not again included as Compensation at the time of payment to the
Participant.  For purposes of determining a Participant's Compensation for
a calendar month and notwithstanding anything contained herein to the
contrary, each bonus paid under the IPALCO Enterprises, Inc. Annual Incentive
Plan shall be deemed paid in equal amounts over each of the twelve (12)
calendar months occurring in the calendar year for which such bonus relates
(or, if the Participant was not employed for the entire twelve (12) months of
the calendar year, over each month occurring in the calendar year for which
the bonus relates and during which he completed at least one (1) Hour of
Service).  For example, if a bonus of sixty thousand dollars ($60,000) is
paid to a Participant under the IPALCO Enterprises, Inc. Annual Incentive
Plan for the calendar year ending on December 31, 2000, the Participant's
Compensation for each month in 2000 shall include the amount of five thousand
dollars ($5,000) for such bonus, and no amount of such bonus attributable
to the 2000 calendar year shall be included in 2001, regardless of when such
bonus is paid.

     Section 1.11.  Effective Date.  The term "Effective Date" means November
1, 1988.

     Section 1.12.  Employer.  The term "Employer" means the Company, any
entity which is affiliated with the Company within the meaning of Sections
210(b) and 210(c) of ERISA, and any successor thereto or predecessor thereof.

     Section 1.13.  ERISA.  The term "ERISA" means the Employee Retirement
Income Security Act of 1974, as now in effect or hereinafter amended and
shall also include any regulations promulgated thereunder.

     Section 1.14.  Hour of Service.  The term "Hour of Service" means the
hours which are recognized as such under the Company Retirement Plan.

     Section 1.15.  Maximum Benefit Liability.  The term "Maximum Benefit
Liability" means with respect to each Participant Account established
hereunder the lesser of (a) or (b) below:

          (a)  The greater of:

               (i)   the present value (as of the date of determination) of
          the Vested Portion of a Participant's Adjusted Accrued Benefit (or,
          if the payment of monthly benefits has already commenced, the
          remaining payments) due under Article IV to the Participant for
          whom such Participant Account is established or, if applicable, his
          surviving spouse, and

               (ii)  with respect to a married Participant or the surviving
          spouse of a deceased Participant, the present value (as of the date
          of determination) of the Adjusted Preretirement Surviving Spouse
          Death Benefit (or, if the payment of death benefits has already
          commenced, the remaining  payments) due under Article V to the
          surviving spouse of the Participant for whom such Participant
          Account is established.

          (b) The present value (as of the date of determination) of the
     Vested Portion of a Participant's or, if applicable, his surviving
     spouse's Post-Tax Adjusted Benefit (or, if the payment of monthly
     benefits has already commenced, the remaining payments) due under
     Article IV to the Participant or, if applicable, his surviving spouse
     for whom such Participant Account is established.

In calculating the Maximum Benefit Liability as of a determination date, the
following rules are applicable:

          (c) Any reductions in the Accrued Benefits and Preretirement
     Surviving Spouse Death Benefits of Participants or their surviving
     spouses, where applicable, which are to be made as of the date of
     determination under Section 4.04 shall be given effect, whether or
     not the Tax Distribution payments (or distributions of Available Net
     Income not recontributed under Section 4.05) attributable to such
     reduction have been made as of the date of calculation; provided,
     however, that if such Tax Distribution payment is not ultimately made
     by the Company under Section 4.03 (or such distribution of Available
     Net Income is not ultimately made under Section 4.05), the reduction
     shall not be given effect in any calculations of the Maximum Benefit
     Liability of a Participant's Accrued Benefit or Preretirement Surviving
     Spouse Death Benefit which are made after the due date of the Tax
     Distribution payment (or distribution of Available Net Income); and

          (d)   The Participant's Adjusted Accrued Benefit and Adjusted
     Preretirement Surviving Spouse Death Benefits shall be calculated
     based on the Participant's Compensation and Service at the date of
     determination and, if the Participant is less than age sixty-five
     (65) at the date of determination, shall be calculated based on
     the Company Retirement Plan benefit, payable at age sixty-five (65),
     accrued on the date of determination.

          (e)  Once a Participant reaches age sixty-five (65) or he or, if
     applicable, his surviving spouse commences pay status under the Plan,
     the Maximum Benefit Liability shall be determined based on Subsection
     (b) of this Section and without regard to Subsection (a) of this Section
     even if it results in a greater amount than the amount determined under
     Subsection (a) of this Section.

          (f)  Unless a Participant or, if deceased, his Surviving Spouse
     elects under Section 4.06 to receive the present value of the
     Participant's Adjusted Accrued Benefit or  Adjusted Preretirement
     Surviving Spouse Death Benefits, whichever is applicable, in a single
     lump sum payment, the Maximum Benefit Liability shall be determined
     without regard to the amount necessary to fund the present value of
     such Benefits in a single lump sum payment; provided, however, that
     upon the Participant or, if applicable, his Surviving Spouse electing
     to receive payments in the form of a single lump sum in accordance with
     Section 4.06, the Maximum Benefit Liability shall be recalculated no
     later than the fifteenth (15th) calendar day immediately following the
     date of the Participant's termination of employment with the Employers
     or, if later, from the date on which the election is received by the
     Company.

For purposes of making the calculation of present value, the present value
discount rate shall be eight percent (8%), and the mortality assumption
shall be computed in accordance with the 1983 Group Annuity Mortality Table;
provided, however, that for purposes of making a calculation of the required
lump sum amount to be paid under Section 4.06, the applicable interest rate
shall be equal to the product of:

          (g)  the average annual rate of interest on thirty (30) year
     Treasury securities for the twelve (12) month period immediately
     preceding the calendar month in which the single lump sum is to be paid,
     times

          (h)   one (1) minus the percentage determined under Section 4.03(b)
     for such Participant or, if applicable, his Surviving Spouse.

The Maximum Benefit Liability shall be calculated and certified by an actuary
designated by the Company who is acceptable to the Trustee and who is
enrolled by the Joint Board for the Enrollment of Actuaries.

     Section 1.16.  Normal Retirement Age.  The term "Normal Retirement Age"
means for each Participant age sixty-five (65).

     Section 1.17.  Participant.  The term "Participant" means any individual
designated in Article II of this Plan who is eligible for benefits under this
Plan.

     Section 1.18.  Participant Account.  The term "Participant Account"
means the separate account maintained by the Trustee for each Participant.

     Section 1.19.  Plan.  The term "Plan" means the Indianapolis Power &
Light Company Supplemental Retirement Plan and Trust Agreement for a Select
Group of Management Employees, which is intended to be a continuation of the
Prior Plan with respect to the active participants in the Prior Plan at the
Effective Date.

     Section 1.20.  Plan Year.  The term "Plan Year" means a consecutive
twelve (12) month period beginning on November 1 and ending on October 31.

     Section 1.21.  Post-Tax Adjusted Benefit.  The term "Post-Tax Adjusted
Benefit" means with respect to each Participant or, if applicable, his
surviving spouse the monthly amount that would be needed to be paid to a
Participant or, if applicable, his surviving spouse in any calendar year
for which payments are due under this Plan so that the net amount (without
regard to any applicable withholding) available to the Participant or, if
applicable, his surviving spouse after taking into account applicable
federal, state and local income taxes would be equal to what the net amount
would be if this Plan was a tax-qualified retirement plan under Section
401(a) of the Code and the amount payable to the Participant or, if
applicable, his surviving spouse would be fully taxable and equal to the
amounts determined under Article III or Article V, whichever is applicable,
without regard to the Section 4.04 reductions (other than the reductions
described in Subsection (c) below).  A Participant's or, if applicable, his
surviving spouse's Post-Tax Adjusted Benefit shall be redetermined each
January 1 in accordance with the following rules:

          (a)  For purposes of determining the amount of federal, state and
     local income taxes applicable on the amounts payable under this Plan,
     it shall be assumed that the Participant or, if applicable, his
     surviving spouse

               (i)   will receive no additional income from any source
         during such calendar year and,

               (ii)  has no personal exemptions and no deductions available,

              (iii)   if married, will be filing a joint return, and

               (iv)  if the payment is to be made in a lump sum, the taxes
          shall be determined as if the lump sum was spread equally over
          the life expectancy of the Participant or Surviving Spouse,
          whichever is applicable.

          (b)  For purposes of determining state and local taxes, the
     Participant or, if applicable, his surviving spouse shall be deemed
     to be a resident of Marion County, Indiana.

          (c)  If a Participant or his surviving spouse fails to recontribute
     to the Plan the entire amount of Available Net Income distributed to him
     under Section 4.05 with respect to a calendar year, the Post-Tax
     Adjusted Benefit shall be adjusted in accordance with Subsection (b) of
     Section 4.04.

          (d)  If tax rates are modified in a calendar year after the January
     1 determination date, the change in tax rates will not be reflected in
     the determination of a Participant's or, if applicable, his surviving
     spouse's Post-Tax Adjusted Benefit until the next following January 1;
     provided, however, that if on an applicable January 1 determination
     date tax rate changes for future calendar years are already established
     in the Code,  rate changes shall be taken into account for purposes of
     Section 1.15.

     Section 1.22.  Preretirement Surviving Spouse Death Benefit. The term
"Preretirement Surviving Spouse Death Benefit" means the monthly amount
payable to a surviving spouse of a deceased Participant under Article V.

     Section 1.23.  Prior Plan.  The term "Prior Plan" means the Indianapolis
Power & Light Company Unfunded Supplemental Retirement Plan for a Select
Group of Management Employees, as amended through October 31, 1988.  The
retired participants or, if applicable, the surviving spouses of deceased
participants in the Prior Plan shall continue to receive their benefits in
accordance with the Prior Plan.

     Section 1.24.  Service.  The term "Service" means the period of
employment of an individual by the Employer and, for purposes of vesting and
benefit accrual, shall be measured in consecutive twelve (12) month
computation periods (hereinafter sometimes referred to as "years") beginning
on the first (1st) calendar day of an individual's employment by the Employer
and anniversaries thereof and disregarding any such periods in which such
individual completes fewer than one thousand (1,000) Hours of Service.
Notwithstanding the above, upon termination of his employment with the
Employer, an individual shall receive credit for a fractional year of Service
for the period from the last such anniversary date.

     Section 1.25.  Tax  Distributions.   The term "Tax Distributions"
means the cash payments made by the Company under Section 4.03.

     Section 1.26.  Total Disability.  The term "Total Disability" means a
physical or mental condition which prevents a Participant from performing
his duties for the Employer; provided, however, that a Participant shall not
be deemed to have incurred a Total Disability unless such Participant is
eligible for Disability Retirement under the Company Retirement Plan.

     Section 1.27.  Trust Fund.  The term "Trust Fund" means the trust fund
created hereunder.

     Section 1.28.  Trustee.  The term "Trustee" means the initial Trustee of
the Trust Fund, and any successor acting as Trustee of the Trust Fund.

     Section 1.29.  Valuation Date.  The term "Valuation  Date" means each
and every October 31 and December 31.

     Section 1.30.  Vested Portion.  The term "Vested Portion" means the
portion of a Participant's Accrued Benefit, Adjusted Accrued Benefit or Post-
Tax Adjusted Benefit, whichever is applicable, which is vested and
nonforfeitable as determined based on that Participant's Service in
accordance with the following schedule:

         Years of Service
 Completed by Participant            Vested Portion

        Less than one (1) year             0%
        One (1) year                      20%
        Two (2) years                     40%
        Three (3) years                   60%
        Four (4) years                    80%
        Five (5) years or more           100%

provided, however, that notwithstanding the above, the Accrued Benefit or, if
applicable, Adjusted Accrued Benefit or Post-Tax Adjusted Benefit of a
Participant shall become one hundred percent (100%) vested and nonforfeitable
upon the Participant's attainment of age sixty-five (65) or upon his
incurring a Total Disability.

     Section 1.31.  Participating Employers.  The term "Participating
Employers" means the Company, IPALCO Enterprises, Inc., Mid-America Capital
Resources, Inc. and any other Employer who has adopted this Plan, whose
participation has been approved by the Company and who has agreed to
reimburse the Company for their pro-rata costs of the benefits provided
under the Plan to their respective employees.

     Section 1.32. Available Net Income.  The term "Available Net Income"
means, with respect to a Participant for a calendar year, the taxable income
(including all items of ordinary income and capital gains recognized for
federal income tax purposes in that calendar year and reduced by all ordinary
and capital losses recognized for federal income tax purposes in that
calendar year) of the Trust Fund for that calendar year multiplied by a
fraction, the numerator of which is the value of that Participant's
Participant Account at the Valuation Date immediately preceding that calendar
year and the denominator of which is the value of all Participant Accounts
at the Valuation Date immediately preceding that calendar year; provided,
however, that for purposes of these allocations, the value of each
Participant Account shall be decreased by fifty percent (50%) of any
distributions from such Participant Account under Article V and under
Section 4.01 since the applicable Valuation Date.  The term "Available Net
Income" shall not include income or loss attributable to any portion of the
Trust Fund that is treated as being owned by a Participant under Sections
671-678 of the Code.

     Section 1.33.  Compensation Committee.  The term "Compensation
Committee" means the Compensation Committee of the Board of Directors of
IPALCO Enterprises, Inc.

                             ARTICLE II

                           PARTICIPATION

     Section 2.01.  Participants.  The individuals eligible to participate in
this Plan on the Effective Date shall include only the Senior Executive
Officers and the Other Executive Officers of the Company who are designated
in this Section.   Effective January 1, 1999, the Senior Executive Officers
selected to participate in this Plan are as follows:

Name                        Current Title

John R. Hodowal             Indianapolis Power & Light Company
                            - Chairman of the Board and Chief Executive
                            Officer; IPALCO Enterprises, Inc. -
                            Chairman of the Board and President

Ramon L. Humke              Indianapolis Power & Light Company
                            - President and Chief Operating Officer; IPALCO
                            Enterprises, Inc. Vice Chairman

John R. Brehm               Indianapolis Power & Light Company
                            - Senior Vice President, Finance and
                            Information Services; IPALCO Enterprises, Inc. -
                            Vice President and Treasurer

Bryan G. Tabler             Indianapolis Power & Light Company
                            - Senior Vice President, Secretary
                            and General Counsel; IPALCO Enterprises,
                            Inc. - Vice President, Secretary and General
                            Counsel

Ralph E. Canter             Indianapolis Power & Light Company
                            - Senior Vice President, Customer Services

Stephen M. Powell           Indianapolis Power & Light Company
                            - Senior Vice President, Energy Supply

Paul S. Mannweiler          Indianapolis Power & Light Company
                            - Senior Vice President, External Affairs

N. Stuart Grauel            IPALCO Enterprises, Inc. - Vice
                            President, Public Affairs

Gerald D. Waltz             Former Indianapolis Power & Light Company -
                            Senior Vice President, Business
                            Development (Retired 5-1-98)

Robert W. Rawlings          Former Indianapolis Power & Light Company -
                            Senior Vice President, Electric
                            Production (Retired 5-1-98)

Maurice O. Edmonds          Former IPALCO Enterprises, Inc. -
                            Vice President, Corporate Affairs
                            (Retired 5-1-96)

Zane G. Todd                Former IPALCO Enterprises, Inc. and
                            Indianapolis Power & Light Company -
                            Chairman of the Board and Chief Executive
                            Officer (Retired 5-01-89)

Robert W. Hill              Former IPALCO Enterprises, Inc. -
                            Vice Chairman (Retired 5-01-91)

Gylith J. Cooper            Surviving Spouse of Richard Q.
                            Cooper - Former Indianapolis Power &
                            Light Company - Senior Vice President,
                            Steam System (Retired 5-01-89
                            and Deceased 4-19-94)

Beverly A. Minter           Surviving Spouse of Michael M. Minter - Former
                            Indianapolis Power & Light Company - Senior
                            Vice President, Planning and
                            Engineering (Deceased 12-05-93)

Thomas A. King              Former IPALCO Enterprises, Inc. -
                            Vice President, Corporate Affairs
                            (Terminated 8/31/92)

     Effective January 1, 1999, the Other Executive Officers selected to
participate in this Plan are as follows:

Name                        Current Title

Joseph A. Gustin            Indianapolis Power & Light Company
                            - Vice President, Information Services

Michael G. Banta            Indianapolis Power & Light Company
                            - Vice President, Financial Strategy

Max Califar                 Indianapolis Power & Light Company
                            - Vice President, Human Resources

Kevin P. Greisl             Indianapolis Power & Light Company
                            - Vice President, Business Development

Susan Hanafee               IPALCO Enterprises, Inc.- Vice
                            President, Corporate Affairs

Michael P. Holstein         IPALCO Enterprises, Inc. - Vice
                            President, Strategic Business Initiatives

Donald W. Knight            Indianapolis Power & Light Company
                            - Vice President, Fuel Supply

Steven L. Meyer             Indianapolis Power & Light Company
                            - Treasurer; IPALCO Enterprises,
                            Inc. - Assistant Treasurer

Stephen J. Plunkett         Indianapolis Power & Light Company
                            - Controller; IPALCO Enterprises, Inc. -
                            Controller

Joseph A. Slash             Indianapolis Power & Light Company
                            - Vice President, Community and Corporate
                            Effectiveness

Clark L. Snyder             IPALCO Enterprises, Inc. -
                            Assistant Secretary; Indianapolis Power &
                            Light Company - Assistant Secretary;
                            Mid-America Capital  Resources, Inc. - Vice
                            President, Secretary and General Counsel

Thomas A. Steiner           Indianapolis Power & Light Company
                            - Vice President, Internal Audit

William A. Tracy            Indianapolis Power & Light Company
                            - Vice President, Thermal Systems

David J. McCarthy           Indianapolis Power & Light Company
                            - Assistant General Counsel, Washington,
                            D.C. Office

Michael J. Farmer           Store Heat and Produce Energy, Inc.
                            - President and IPL, Vice President,
                            Transmission & Distribution
                            (Terminated August 14, 1998)

Robert A. McKnight, Jr.     Former Indianapolis Power & Light
                            Company - Vice President, Major
                            Project Management (Retired 4-1-97)

John D. Wilson              Former Indianapolis Power & Light
                            Company - Vice President, Information
                            Services (Retired 5-1-98)

John C. Berlier, Jr.        Former Indianapolis Power & Light
                            Company - Vice President, Resource
                            Planning and Rates (Retired 8-1-98)

Wendy V. Yerkes             Former Indianapolis Power & Light
                            Company - Assistant Secretary (Terminated
                            9-1-97)

Arthur G. Haan              Former Indianapolis Power & Light
                            Company - Vice President, General
                            Services (Retired 2-01-96)

Michael E. Shriner          Former Indianapolis Power & Light
                            Company - Vice President, Marketing
                            (Terminated 4-30-95)

Marcus E. Woods             Former Indianapolis Power & Light
                            Company - Vice President, Secretary
                            and General Counsel; IPALCO Enterprises,
                            Inc. - Secretary and General Counsel
                            (Retired 1-01-95)

Arnold A. Gordus            Former Indianapolis Power & Light
                            Company - Assistant Vice President,
                            Environmental Affairs (Retired 4-30-94)

Donald E. Blue              Former Indianapolis Power & Light
                            Company - Vice President,
                            Power Production (Retired 5-01-89)

Joseph E. Butler            Former Indianapolis Power & Light
                            Company - Vice President,
                            Community Affairs and Residential Sales
                            (Terminated 2/1/91)

Jan E. Lower                Former Indianapolis Power & Light
                            Company - Vice President, Community Affairs
                            (Terminated 4/30/93)

     An Other Executive Officer who is listed above and who subsequently
becomes a Senior Vice President, an Executive Vice President, the President,
Chief Operating Officer, Chief Executive Officer or Chairman of the Board of
the Company or who subsequently becomes a Vice President or Vice Chairman
of the Board of IPALCO Enterprises, Inc. shall be deemed to be a Senior
Officer under this Plan without the necessity of a Plan amendment.

     Additional management employees of the Company or officers and
management employees of any other Participating Employer may be added as
Participants to this Plan by action of the Compensation Committee, provided
such corporations have adopted this Plan and each has agreed to reimburse the
Company for their pro-rata costs of the benefits provided under the Plan to
their respective employees.  The Committee shall specify whether such
officers or management employees are to be considered Senior Officers or
Other Executive Officers under this Section 2.01.

     Section 2.02.  Reemployment.  Any former Participant whose employment
with the Employer is terminated and who subsequently returns to work for
the Employer after he has a Break in Service shall be reinstated as a
Participant and shall have his prior Service restored in determining his
vested rights and his Accrued Benefits under this Plan; provided, however,
that if a reemployed Participant is receiving monthly benefits under Section
4.01 at the time of his reemployment, such monthly benefits shall cease for
such period as he shall remain employed by the Employer and complete at least
forty (40) Hours of Service per month, and any monthly benefits payable to
him or to his surviving spouse thereafter under Article IV or V, whichever
is applicable, shall be adjusted to reflect any payments previously made to
such Participant before the date he returned to work for the Employer and
any payments made subsequent to the date he returned to work for the Employer
with respect to months in which he fails to complete at least forty (40)
Hours of Service; provided, further, that suspension of benefit payments to
any such reemployed Participant shall be made only after written notice has
been given to him by the Company by personal delivery or certified mail,
and such benefit suspensions shall comply with all requirements imposed
pursuant to Section 2530.203-3 of the Department of Labor regulations
which are incorporated herein  by reference.

                              ARTICLE III

                MONTHLY SUPPLEMENTAL PENSION BENEFITS

     Section 3.01.  Senior Executive Officer's Monthly Supplemental Pension
Benefits.  Except as provided by Section 3.03, the monthly supplemental
pension benefits for any Senior Executive Officer shall be equal to sixty
percent (60%) of the average monthly Compensation paid to that Senior
Executive Officer with respect to the thirty-six (36) calendar months, not
necessarily consecutive, during which his Compensation is the highest (or,
if his period of employment with the Employer is less than thirty-six (36)
months, his entire period of employment with the Employer), less the benefits
that would be payable to him for the month he attains age fifty-five (55) or,
if later, the first (1st) month following the date his employment with the
Employer is terminated under the Company Retirement Plan on a single-life
basis regardless of the form in which such benefits are actually paid;
provided, however, that if the Senior Executive Officer's benefits under the
Company Retirement Plan are not payable until his attainment of age
sixty-five (65) because of his not meeting the requirements for early
retirement under the Company Retirement Plan and his employment with the
Employers is terminated before his attainment of age sixty-five (65), his
Company  Retirement
Plan benefit offset under this Section shall be equal to the monthly amount
payable at the later of his attainment of age fifty-five (55) or the date on
which his employment with the Employers is terminated on a single life basis
which is the Actuarial Equivalent to the monthly amount payable to him at age
sixty-five (65) on a single life basis under the Company Retirement Plan.

      Section 3.02.  Other Executive Officer's Monthly Supplemental Pension
Benefits.  Except as provided by Section 3.03, the monthly supplemental
pension benefits for any Other Executive Officer shall be equal to fifty
percent (50%) of the average monthly Compensation paid to that Other
Executive Officer with respect to the thirty-six (36) calendar months, not
necessarily consecutive, during which his Compensation is the highest (or,
if his period of employment with the Employer is less than thirty-six (36)
months, his entire period of employment with the Employer), less the benefits
that would be payable to him for the month he attains age fifty-five (55) or,
if later, the first (1st) month following the date his employment with the
Employer is terminated under the Company Retirement Plan on a single-life
basis regardless of the form in which such benefits are actually paid;
provided, however, that if the Other Executive Officer's benefits under the
Company Retirement Plan are not payable until his attainment of age
sixty-five (65) because of his not meeting the requirements for early
retirement under the Company Retirement Plan and his employment with the
Employers is terminated before his attainment of age sixty-five (65), his
Company Retirement Plan benefit offset under this Section shall be equal to
the monthly amount payable at the later of his attainment of age fifty-five
(55) or the date on which his employment with the Employers is terminated on
a single life basis which is the Actuarial Equivalent to the monthly amount
payable to him at age sixty-five (65) on a single life basis under the
Company Retirement Plan.

       Section 3.03.   Special Monthly Supplemental Pension Benefits.  From
time to time the Compensation Committee, in its sole discretion, may provide
for alternative supplemental pension benefits under this Section 3.03 for any
Senior Executive Officer or Other Executive Officer in lieu of, and (in some
cases) not in addition to, the benefits described in Section 3.01 or Section
3.02,  whichever Section is applicable, because of special circumstances
relating to such Executive's employment with the Employer.  If the
Compensation Committee takes action to add new Participants or to modify the
benefits of current Participants, the action shall designate the name of the
individual and the applicable benefit to be provided for such individual. If
the benefits provided under this Section are offset by the Company Retirement
Plan benefit, the offsets shall be calculated consistent with and in
accordance with the manner the offsets are determined under Sections 3.01 and
3.02.

                                ARTICLE IV

                    PAYMENT OF RETIREMENT BENEFITS

     Section 4.01.  Entitlement to Retirement Benefits.  A Participant who
retires or otherwise terminates his employment with the Employer for reasons
other than his death shall be entitled to receive monthly supplemental
pension benefits under this Plan only if:

          (a)  his employment with the Employer terminates on or after his
     attainment of the Normal Retirement Age,

          (b)   his employment with the Employer terminates by reason of his
     incurring a Total Disability, or

          (c)   his employment with the Employer terminates after his
     completion of at least one (1) Year of Service.

The  amount of the monthly supplemental pension benefits to which an eligible
Participant is entitled upon his retirement or other termination of
employment shall be equal to the Vested Portion of his Post-Tax Adjusted
Benefit; provided, however, that the amount of a Participant's Post-Tax
Adjusted Benefit shall be redetermined each January 1; provided, further,
that under no circumstances may the Post-Tax Adjusted Benefit payable to a
Participant be less than the Vested Portion of his Adjusted Accrued Benefit
as determined on February 29, 1996.  The non-Vested Portion of a
Participant's Post-Tax Adjusted Benefit shall be governed by Section 4.02.
The monthly payments shall begin on the first (1st) calendar day of the
month coinciding with or next following the date on which a Participant
attains his Normal Retirement Age or, if later, the date his employment with
the Employer is terminated and shall continue through the month in which his
death occurs; provided, however, that if a Participant's employment with
the Employer is terminated before his attainment of the Normal Retirement
Age, he may elect with the consent of the Company to have his benefits begin
on the first (1st) calendar day of the month following the date on which his
employment with the Employer is terminated or, if later, the first (1st) day
of the calendar month immediately following his attainment of age fifty-five
(55).  If benefit payments to a Participant begin before his attainment of
the Normal Retirement Age, the amount of such Participant's monthly
supplemental pension benefits shall be reduced to the extent and in the same
manner as such payments would be reduced if made from the Company Retirement
Plan; provided, however, that notwithstanding anything contained in this
Section to the contrary, a Participant:

          (a)  who is:

                (i)  a Senior Executive Officer or

               (ii)  an Other Executive Officer specifically designated by
          the Compensation Committee, and

          (b)  who at the date of his employment termination with the
     Employer is at least age fifty-five (55) and has completed at least
     thirty (30) years of Service shall be eligible to elect the immediate
     commencement of his monthly supplemental pension benefits without
     reduction; provided, further, that a Participant whose combined age and
     Service at the date of his employment termination with the Employer is
     at least eighty-five (85) and who has not as of his employment
     termination date reached age sixty-two (62) shall under no circumstances
     have a reduction in his monthly supplemental pension benefit greater
     than twenty-five one-hundredths (0.25) for each calendar month in which
     the benefit commencement date precedes the date on which the Participant
     would have reached age sixty-two (62).  If a Participant is married at
     the date his benefit payments are to commence and notwithstanding
     anything contained in this Plan to the contrary, his monthly benefits
     shall be paid in the form of an actuarially equivalent joint and
     survivor annuity determined in the same manner as the Joint and Survivor
     Annuity Option under Section 205.50 of the Company Retirement Plan,
     unless such Participant, with the written consent of his spouse
     witnessed by a Notary Public, elects not to have his benefits paid in
     such form.

     Payment of benefits under this Section 4.01 shall be made in accordance
with and consistent with the requirements set forth in Section 205 of ERISA;
provided, however, that subject to the applicable spousal consent
requirements contained in Section 205 of ERISA, a Participant may elect for
his benefits to be paid in any actuarially equivalent form of payment which
is available under the Company Retirement Plan (other than a single lump
sum payment).

     Section 4.02.  Non-Vested Benefits.  If a Participant's employment with
the Employer is terminated before his completion of at least five (5) years
of Service, before his attainment of his Normal Retirement Age and not by
reason of his incurring a Total Disability, such Participant shall only be
entitled to the Vested Portion of his Post-Tax Adjusted Benefit, the
non-Vested Portion of his Post-Tax Adjusted Benefit shall be forfeited and
the portion of his Participant Account attributable to the non-Vested Portion
of his Post-Tax Adjusted Benefit shall be reallocated as provided in Section
7.05; provided, however, that if such Participant subsequently returns to
work for the Employer, the non-Vested Portion of his Post-Tax Adjusted
Benefit shall be immediately reinstated, his Participant Account shall be
reestablished and funded in accordance with Section 6.02 and he shall be
entitled to receive monthly supplemental pension benefits upon his subsequent
termination of employment with the Employer to the extent otherwise provided
under this Plan, less any benefits already paid to him under this Plan before
his reemployment with the Employer.

     Section 4.03.  Tax Distribution Payments.  On or before December 20 of
each calendar year in which a Participant or, if applicable, his surviving
spouse is required to take amounts into income for Federal income tax
purposes by reason of his participation in, or eligibility for benefits
(including benefits received under an annuity contract purchased in
accordance with Article X) under this Plan, the Company shall make a Tax
Distribution payment to each Participant or, if applicable, to the surviving
spouse of each deceased Participant equal to the product of:

          (a)  the amount (excluding amounts paid by the Company under this
     Section) which such Participant or, if applicable, his surviving spouse
     is required to recognize as income for Federal income tax purposes by
     reason of his participation in, or eligibility for benefits under, this
     Plan in such calendar year; and

          (b)  the  Participant's marginal individual composite Federal,
     Indiana and Marion County income tax rate (based on the Participant's
     estimated aggregate Compensation from the Employer during the calendar
     year and taking into account the deductibility for Federal income tax
     purposes of state and local income taxes, if then allowable, and, except
     as otherwise provided below, without regard to Section 1(g) of the Code)
     in effect for the calendar year during which the amount described in (a)
     above is required to be recognized as income by such Participant; and

          (c)   one hundred percent (100%) divided by the amount by which
     one hundred percent (100%) exceeds the rate in (b) above expressed as a
     percent.

The amount of the required Tax Distribution payments shall be certified to
the Company on or before December 10 of each calendar year by the actuary
designated by the Company to calculate the Maximum Benefit Liability under
Section 1.15.  For purposes of determining the amount of each Tax
Distribution payment, the amount described in (a) above shall be estimated
by assuming that each Participant, if applicable, shall continue his
employment with the Employer for the remainder of the calendar year, each
Participant's rate of Compensation shall remain unchanged for the remainder
of such calendar year and, if applicable, that the Trust Fund (including the
portion of the Trust Fund attributable to Company contribution made in such
calendar year) shall earn investment income, both realized and unrealized,
for the period of October 31 to December 31 (or, with respect to Company
contributions made after October 31 but before December 31, for the
remainder of period beginning on the date of contribution and ending on
such December 31) of such calendar year at the same rate of return earned
by the Trust Fund for the Plan Year ending on October 31 of such calendar
year; provided, however, that the assumed rate of interest to be applied
against the initial Company contribution made under Section 6.01 shall be
ten percent (10%).  Notwithstanding anything contained herein to the
contrary, if before November 1 of a calendar year a Participant or, if
applicable, his surviving spouse files a statement with the Company
certifying that to the best of his or her knowledge all or a portion of his
or her taxable income by reason or his or participation in this Plan shall be
subject to the additional Federal income tax under Section 1(g) of the Code
and provides the Company with information which will enable the actuary
designated by the Company to calculate the additional Federal income tax
under Section 1(g) of the Code resulting from his participation in this
Plan, including his or her estimated taxable income for such calendar year,
the table in Section 1 of the Code to be used by the Participant or, if
applicable, his surviving spouse for his Federal income tax return for such
calendar year and the number of personal exemptions that the Participant or,
if applicable, his surviving spouse intends to claim on his or her Federal
income tax return for such calendar year, the Company shall have its
actuary recalculate the amount of the Tax Distribution payment required
under this Section based on the information provided by the Participant or,
if applicable, his surviving spouse, so that the amount of the Tax
Distribution payment made to the Participant or, if applicable, his surviving
spouse shall equal the estimated tax liability of the Participant or, if
applicable, his surviving spouse for such calendar year by reason of his
participation in this Plan; provided, however, that any adjustments in the
Tax Distribution payments under this sentence shall be limited to adjustments
reflecting the applicability of Section 1(g) of the Code.  If the amount
described in (a) above which was estimated for purposes of calculating the
amount of any Tax Distribution payment to a Participant or, if applicable,
his surviving spouse is less than the actual (a) amount, the Company shall
pay to such Participant or, if applicable, his surviving spouse as soon as
practicable after the end of such calendar year and in no event later than
the March 15 immediately following such calendar year during which such
amount was recognized as income an amount equal to the product of:

          (d)  the amount by which the actual (a) amount exceeded the
      estimated (a) amount; and

          (e)  the rate described in (b) above; and

          (f)  one hundred percent (100%) divided by the amount by which
      one hundred percent (100%) exceeds the marginal individual composite
      Federal, Indiana and Marion County income tax rate expressed as a
      percent (based on the Participant's estimated aggregate Compensation
      from the Employer during the calendar year and taking into account the
      deductibility for Federal income tax purposes of state and local income
      taxes, if then allowable) in effect for the calendar year during which
      such additional Tax Distribution payment is to be made.

If the amount described in (a) above which was estimated for purpose of
calculating the amount of any Tax Distribution payment to a Participant or,
if applicable, his surviving spouse is greater than the actual (a) amount,
the amount of the Tax Distribution payment shall be recalculated by
substituting for the estimated (a) amount the actual (a) amount, and the
amount by which the Tax Distribution payment exceeds the recalculated
amount shall be offset against future Tax Distribution payments due until
exhausted.  Notwithstanding anything contained herein to the contrary, Tax
Distribution payments shall not be made by the Company to a married
Participant without the written consent of his spouse witnessed by a Notary
Public.

     Section 4.04.  Reduction in Accrued Benefit and Preretirement Surviving
Spouse Death Benefit.  Each Participant's Accrued Benefit and Preretirement
Surviving Spouse Death Benefit shall be adjusted as follows:

     (a)   As of the Effective Date and as of each Valuation Date, a
Participant's Accrued Benefit and the Preretirement Surviving Spouse Death
Benefit payable to the surviving spouse of a deceased Participant who dies
while still employed by the Employer shall be reduced to the extent provided
below to reflect the value of each Tax Distribution payment made under
Section 4.03 attributable to his initial Accrued Benefit and the initial
Preretirement Surviving Spouse Death Benefit at the Effective Date and
attributable to increases in the amount of his vested Accrued Benefit or
Preretirement Surviving Spouse Death Benefit.  The amount of the Accrued
Benefit and Preretirement Surviving Spouse Death Benefit reduction to be
effected as of the Effective Date shall be determined by multiplying the
Accrued Benefit of a Participant or, if applicable, Preretirement Surviving
Spouse Death Benefit as of the Effective Date which such Participant or, if
applicable, his surviving spouse is required to recognize as income for
Federal income tax purposes in 1988 by a percentage equal to the rate
described in Section 4.03(b) or, if the amount of the 1988 Tax Distribution
payment for the Participant or, if applicable, his surviving spouse was
recalculated in accordance with Section 4.03 based on tax information
provided by the Participant or, if applicable, his surviving spouse, a
percentage equal to the individual composite Federal, Indiana and Marion
County income tax rate used in recalculating the amount of the Tax
Distribution payment under Section 4.03 in 1988 in effect on the Effective
Date.  The amount of each Accrued Benefit and Preretirement Surviving Spouse
Death Benefit reduction for each Valuation Date shall be determined by
multiplying any increase in the Adjusted Accrued Benefit of a Participant or,
if applicable, Preretirement Surviving Spouse Death Benefit which as of the
preceding Valuation Date has not yet been recognized as income for Federal
income tax purposes and which such Participant or, if applicable, his
surviving spouse is required to recognize as income for Federal income tax
purposes in the calendar year during which such  Valuation Date falls by a
percentage equal to the rate described in Section 4.03(b) in effect on the
Valuation Date as of which the adjustment under this Section is made or, if
the amount of the Tax Distribution payment made in the calendar year during
which the Valuation Date occurs for the Participant or, if applicable, his
surviving spouse was recalculated in accordance with Section 4.03 based on
tax information provided by the Participant or, if applicable, his surviving
spouse, a percentage equal to the individual composite Federal, Indiana and
Marion County income tax rate used in recalculating the amount of the Tax
Distribution payment under Section 4.03 for such calendar year.  No reduction
in the Accrued Benefits and Preretirement Surviving Spouse Death Benefits of
a Participant or, if applicable, his surviving spouse shall be made under
this Section with respect to Tax Distribution payments which are not
attributable to increases in the Accrued Benefits or Preretirement Surviving
Spouse Death Benefits.  Notwithstanding anything contained herein to the
contrary, if the Tax Distribution payments required under Section 4.03
attributable to such Participant's Accrued Benefit or Preretirement Surviving
Spouse Death Benefit, or increase therein, are not timely paid by the
Company, the amount of the reduction in such Participant's Accrued Benefit
or Preretirement Surviving Spouse Death Benefit shall be retroactively
reinstated as of the date on which the reduction was made.

     (b)   In the event a Participant fails to recontribute to the Plan the
entire amount of Available Net Income distributed to him under Section 4.05
with respect to a calendar year, his Accrued Benefit and Preretirement
Surviving Spouse Death Benefit shall be reduced as of the date such
distribution is treated under Section 4.05 as having been made to him by an
amount equal to the product of:

          (i)    his Accrued Benefit (or Preretirement Surviving Spouse Death
     Benefit, as the case may be) as of the December 31 Valuation Date of the
     calendar year to which the distribution of Available Net Income relates,
     but before any adjustment has been made under Section 4.04(a) with
     respect to such calendar year;

     times

          (ii)   a fraction, the numerator of which is the amount of
     Available Net Income distributed to the Participant (and not
     recontributed by him to the  Plan) and the denominator of which is the
     amount of his Participant Account that has, as of the date of
     distribution, been taxed to the Participant for federal income tax
     purposes;

provided, however, that a Participant's Accrued Benefit and Preretirement
Surviving Spouse Death Benefit shall not be reduced under this Section
4.04(b) below the Adjusted Accrued Benefit and Adjusted Preretirement
Surviving Spouse Death Benefit accrued by that Participant as of October 31,
1992 without regard to this Section 4.04(b).

     Section 4.05.  Distribution and Recontribution of Income.  The
Administrator shall, as of each January 1 (or the first business day
thereafter if January 1 falls on a weekend), distribute to each Participant
the entire amount of that Participant's Available Net Income for the
immediately preceding calendar year; provided, however, that the amount of
distribution to which a Participant shall be entitled under this Section 4.05
shall be reduced (but not below zero (0)) by the amount of monthly pension
benefits paid to that Participant under this Plan during that immediately
preceding calendar year.  Each Participant to whom a distribution is made
under the preceding sentence shall be deemed to have immediately
recontributed such distribution to his Participant Account unless such
Participant elects (by completing, signing and delivering the appropriate
form to the Administrator on the date such distribution is made) to receive
such distribution in a single lump sum cash  payment.  A Participant who
elects to receive the entire amount of his Available Net Income in a single
lump sum cash payment shall receive a distribution of such amount as soon
after the Administrator receives his election as is administratively
feasible (but no later than sixty-five (65) days after the end of the
immediately preceding calendar year) and shall have his Adjusted Accrued
Benefit and Preretirement Surviving Spouse Death Benefit and his Post-Tax
Adjusted Benefit reduced in accordance with Section 4.04(b).   For all
purposes of this Plan, any distribution under the preceding sentence shall
be treated as having been made on January 1 (or the first business day
thereafter if January 1 falls on a weekend) regardless of when the
Participant actually receives a lump sum  payment of such distribution.
The Trustee may, in its sole discretion, elect each year on the appropriate
Internal Revenue Service form to have each distribution under this Section
4.05 treated as having been made in the taxable year of the Trust Fund that
ends within sixty-five (65) days prior to the date on which such distribution
is actually made.

     Section 4.06.  One-Time Lump Sum Distribution Election.  In lieu of
receiving the monthly retirement benefits otherwise payable under this
Article IV or, if applicable, benefits payable to his Surviving Spouse under
Article V, a Participant who has completed at least one (1) Hour of Service
on or after January 1, 1999 or, if applicable, his Surviving Spouse shall, on
a one-time basis, be entitled to receive the present value of his Post-Tax
Adjusted Benefit in a single lump sum payment.  The lump sum election must be
made within thirty (30) calendar days of the date of the Participant's
termination of employment with the Employers or, if applicable, the
Participant's death.  The lump sum payment shall be required to be made
within thirty (30) calendar days of the date on which the election is
received by the Company.

                             ARTICLE V

                      MONTHLY DEATH BENEFITS

     If any Participant shall die while still employed by the Employer, such
deceased Participant's surviving spouse, if any, shall be entitled to receive
monthly death benefits ("Preretirement Surviving Spouse Death Benefits")
under this Plan equal to fifty percent (50%) of such deceased Participant's
average monthly Compensation with respect to the last thirty-six (36)
consecutive months (or, if lesser, the deceased Participant's entire period
of employment with the Employer) ending on or before his death, less the
monthly benefits payable to such deceased Participant's surviving spouse for
that month under the Company Retirement Plan; provided, however, that the
monthly Preretirement Surviving Spouse Death Benefits shall be reduced,
where applicable, so that they are actuarially equivalent to the monthly
death benefits that would be payable for the life of an individual who is the
same age and sex as the Participant at the date of his death; provided,
further, that the amount of the monthly Preretirement Surviving Spouse Death
Benefits shall be adjusted to a Post-Tax Adjusted Benefit (as determined in
accordance with Section 1.21).  For purposes of determining actuarial
equivalency under this Article V, a seven percent (7%) interest assumption
and the 1971 Group Annuity Mortality Table shall be used.  The monthly
payments shall begin on the first (1st) calendar day of the month coinciding
with or next following a Participant's death and shall continue through the
month in which the surviving spouse's death occurs.  Notwithstanding
anything contained in this Article V to the contrary, the surviving spouse
of a deceased Participant who immediately before his death met the
requirements for benefits under Section 4.01 shall be entitled to a
qualified preretirement survivor annuity (as such term is defined in Section
205(e) of ERISA) with respect to such deceased Participant's Adjusted
Accrued Benefit in lieu of the monthly death benefits otherwise provided
under this Article if payment in such form would result in a greater monthly
benefit to such surviving spouse.

                            ARTICLE VI

                  CONTRIBUTIONS TO THE TRUST FUND

     Section  6.01.  Initial Company Contribution.  On or before December 10,
1988, the Company contributed to the Trust Fund with respect to each
Participant Account established hereunder as of the Effective Date an amount
equal to the Maximum Benefit Liability of such Participant Account
(determined as of the Effective Date).

     Section  6.02.  Annual Company Contributions.  The Maximum Benefit
Liability for each Participant Account established hereunder shall be
re-computed as of each October 31.   If the balance credited to a Participant
Account as of any October 31 is less than the Maximum Benefit Liability of
such Participant Account as of such date after the allocation of income and
the reallocation of excess Participant Account balances are completed for
such Valuation Date under Sections 7.04 and 7.05 respectively, the Company
shall within forty (40) calendar days after such October 31 contribute to the
Trust Fund the amount of the deficiency. In addition, the Company shall fund
within fifteen (15) calendar days any increase in the Maximum Benefit
Liability of a Participant Account as a result of a lump sum election made
under Section 4.06.

     Section 6.03.  Additional  Company  Contributions.  The Company may
at any time or from time to time make additional contributions of cash or
other property to the Trust Fund.

       Section 6.04.  Form of Contribution.  The Company's contributions
under Sections 6.01, 6.02 and 6.03 shall be paid directly by the Company to
the Trustee in cash or, at the option of the Company, in any other form
permissible under ERISA and acceptable to the Trustee; provided, however,
that the Company shall be permitted to meet all or any portion of its funding
requirements by transferring to the Trust Fund insurance policies insuring
the life of one (1) or more Participants in which case the value of the
insurance policies shall be determined based on their respective cash
surrender values.

                            ARTICLE VII

                    ESTABLISHMENT OF TRUST FUND

     Section 7.01. Trust Fund.  The Trustee shall hold all assets contributed
to, or earned by it, under the terms and conditions of this Plan and subject
to applicable  requirements under ERISA.

     Section 7.02.  Establishment of Participant Accounts.  The Trustee shall
establish and maintain a Participant Account for each Participant.  The
Participant Accounts as established hereunder shall be adjusted as provided
in this Plan.  Payment of benefits under Article V and Section 4.01 shall be
charged against the Participant Account of the Participant for whom the
payments are attributable.  The maintenance of the Participant Accounts is
for accounting purposes only, and a segregation of Trust Fund assets shall
not be required.  Any insurance policies held by the Trust Fund in accordance
with this Plan shall be commingled with the other assets of the Trust Fund
and shall not be credited to the Participant Account of the Participant on
whose life the policy is based.

     Section 7.03.  Allocation of Contributions.  Any contributions made
pursuant to Sections 6.01 and 6.02 of this Plan shall be credited to the
Participants Accounts upon which the contribution was based; provided,
however, that if the amount of the Company contribution is less than the
aggregate required contribution for the Participant Accounts for which the
contribution relates, the amount of the contribution to be allocated to each
Participant Account shall be determined by multiplying the amount of the
contribution by a  fraction, the numerator of which is the required
contribution for such Participant Account at the date of contribution and
the denominator of which is the aggregate required contributions for all
Participants Accounts (for which the contribution relates) at the date of
contribution; provided, further, that if the amount of Company contribution
is greater than the aggregate required contributions for all Participant
Accounts, the amount of the excess shall be allocated proportionately among
all Participant Accounts in accordance with the respective Maximum Benefit
Liabilities of such Participant Accounts as of the Valuation Date for which
the contribution relates.

     Section 7.04.  Valuations.  As of each Valuation Date, the Trustee
shall adjust the Participant Accounts to reflect contributions,
distributions, income earned, expenses not paid by the Company, increases or
decreases in the value of the Trust Fund assets and all other transactions
since the last preceding Valuation Date.  Any income or losses with respect
to the Trust Fund and appreciation or depreciation in Trust Fund assets shall
be allocated proportionally among all Participant Accounts in accordance with
the value of such Participant Accounts at the last preceding Valuation Date;
provided, however, that for purposes of these allocations, each Participant
Account shall be decreased by fifty percent (50%) of any distributions from
such Participant Account under Article V and under Section 4.01 since the
last preceding Valuation Date; provided, further, that gains or losses from
the sale or exchange of capital assets shall be treated as items of income or
loss and shall be allocated to Participant Accounts accordingly.

     Section 7.05.   Reallocation of Excess Participant Account Balances.  If
any Participant Account is liquidated because payments from such Participant
Account have been made in full or because the Participant on whose behalf
the Participant Account was established has terminated his employment with
the Employer before meeting the vesting requirements described in Section
4.01, the entire remaining balance in the liquidated Participant Account
shall be re-allocated as of such Valuation Date as follows:

          (a)  first, to the extent that other Participant Accounts on such
     Valuation Date have balances less than their Maximum Benefit
     Liabilities, the amount available for reallocation under this Section
     shall be re-allocated proportionally among the Participant Accounts not
     fully funded based on the respective amount of the deficiency of each
     such Participant Account at such Valuation Date; and

          (b)  second, any remaining amount to be re-allocated under this
     Section shall be allocated proportionally among all outstanding
     Participant Accounts based on their Maximum Benefit Liabilities at such
     Valuation Date.

     Section 7.06.  Payment of Expenses.  The Trustee shall be entitled to
receive such reasonable annual compensation for its services as shall be
agreed upon between the Company and the Trustee.   The Trustee shall also be
entitled to receive payment of all reasonable and necessary expenses in
administering the affairs of the Trust Fund including, without limitation,
all expenses which may be incurred in connection with the establishment and
administration of the Trust Fund, the employment of such administrative,
legal, accounting, actuarial or other expert and clerical assistance as the
Trustee, in its sole discretion, deems necessary or appropriate in the
performance of its duties, unless the Company elects to pay such
compensation or expenses.  Any compensation or expenses for which the
Trustee is entitled to payment or reimbursement under this Section shall be
paid out of the Trust Fund to the fullest extent then permitted under ERISA,
unless the Company elects to pay such compensation or expenses.

     Section 7.07.  Accounting and Record Keeping.  The Trustee shall keep
accurate and detailed accounts of all investments, receipts, disbursements
and other transactions relating to each Participant Account, and all such
records shall be open to inspection and audit at all reasonable times by any
person designated by the Company.  As soon as practicable after each
Valuation Date, the Trustee shall file with the Company a written report for
each Participant Account setting forth all gains or losses (both realized
and unrealized) and other transactions relating to the Trust Fund since the
last preceding Valuation Date.  As soon as practicable after each Valuation
Date, the Trustee shall provide each Participant with a statement of the
balance credited to his Participant Account at such Valuation Date.

      Section 7.08.  Limitation on Liability.  As long as the Trustee has
performed its duties and met its obligations pursuant to the terms and
conditions of this Plan, it shall have no liability whatsoever to pay any
claims for benefits or expenses or other payments authorized hereunder from
any Participant Accounts, if the assets of such Participant Account shall at
any time be depleted.  Except as otherwise provided by ERISA, the duties and
responsibilities of the Trustee shall be governed solely by the terms and
conditions of this Plan, and any amendments thereto.

     Section 7.09.  Consultation and Indemnification.  The Trustee may
consult with counsel, who may, but need not, be counsel to the Company, and
the Trustee shall not be deemed imprudent by taking or refraining from taking
any action in accordance with the opinion of such counsel.  The Company
agrees, to the fullest extent then permitted by law, to indemnify and hold
the Trustee harmless from and against any liability which the Trustee may
incur in the administration of the Trust Fund, unless such liability arises
from the Trustee's willful breach of the provisions of this Plan.

     Section 7.10.  Litigation.  The Trustee shall not be required to
commence or defend any litigation or dispute arising in connection with this
Plan, unless the Trustee is first indemnified by the Company against its
prospective costs, expenses and liability, and the Company hereby agrees to
indemnify the Trustee for any such costs, expenses and liability.

     Section 7.11.  Waiver of Bond.  The Trustee shall not be required to
give bond or any other security for the faithful performance of its duties
under this Plan, except such as may be required by a law which prohibits the
waiver thereof.

                           ARTICLE VIII

                     INVESTMENT OF TRUST FUND

     Section 8.01.  Management of Trust Fund and Appointment of Investment
Manager.  The Trust Fund shall be managed, invested, and reinvested by the
Trustee, subject, however, to the right of the Company to designate in
writing an investment manager in accordance with Section 402(c)(3) of ERISA
to manage or invest or reinvest the Trust Fund or any part thereof, in which
event the Trustee shall not be liable for the acts or omissions of such
investment manager or have any authority to manage or invest the assets of
the Trust Fund which are subject to management by such investment manager
until said investment manager is dismissed by the Company.  Any such
investment manager so designated shall have the same powers and duties with
respect to the management and investment of that portion of the Trust Fund
managed by such investment manager as those granted to the Trustee hereunder,
except to the extent otherwise provided in the instrument designating such
investment manager.  Notwithstanding anything contained in this Plan to the
contrary, the Company shall have the right to direct the Trustee to take the
following action with respect to insurance policies:

          (a)   to maintain or hold insurance policies which are transferred
     to the Trust Fund by the Company;

          (b)   to apply Company contributions to the Trust Fund towards the
     purchase of insurance policies or the payment of premiums with respect
     to insurance policies transferred to, or purchased by, the Trust Fund;
     or

          (c)  to convert to paid-up form, to surrender for the cash value
     thereof or to terminate any insurance policies held by the Trust Fund.

     Section 8.02.  Powers of Trustee.  Except as otherwise provided by
ERISA, the Trustee shall have the following powers in investing the Trust
Fund:

          (a)  To invest or reinvest all or any part of the Trust Fund in
     any real or personal property as the Trustee may deem advisable,
     including but not limited to:

               (i)   any securities normally traded by and obtainable
          through a stockbroker or "over the counter" dealer or on a
          recognized exchange;

              (ii)  any shares of an investment company registered under
          the Investment Company Act of 1940, as amended;

             (iii)  any insurance contracts or annuities;

              (iv)  the deposit of all or any part of the Trust Fund with an
          insurer for the payment of interest thereon;

               (v)  any securities issued or guaranteed by the United States
          of America or any of the instrumentalities or states thereof or of
          any county, city, town, village, school district or other political
          subdivision of any of said states;

              (vi)  certificates of deposit, time deposits or savings
          accounts including, but not limited to, those issued by its own
          departments or divisions or related financial institutions;

             (vii)  commercial paper, money market funds, treasury bills and
          similar investments; and

            (viii)  any combination of (i) through (vii) above and, except
          as otherwise provided by ERISA, without being restricted by any
          statute or rule of law governing the investments in which a
          trustee may invest funds held by it.

     (b)  To sell or exchange any part of the assets of the Trust Fund.

     (c)  To vote in person or by proxy the securities and investment company
shares which its holds as Trustee and to delegate such power.

     (d)  To consent to or participate in dissolutions, reorganizations,
consolidations, mergers, sales, transfers, or other changes in securities
and investment company shares which it holds as Trustee, and, in such
connection, to delegate its powers and to pay all assessments, subscriptions,
and other charges relating thereto.

     (e)  To  exercise all rights, privileges, options and elections with
respect to any insurance policies and to pay the premiums thereon; provided,
however, that any action taken by the Trustee with respect to any such
insurance contracts, including the payment of premiums, shall be subject to
the approval of the Company.

     (f)  To retain in cash and keep unproductive of income such amount as
the Trustee may deem advisable in its sole discretion, and the Trustee shall
not be required to pay interest on such cash balances or on cash in its hands
pending investment.

     (g)  To sell, exchange, convey or transfer any property at any time held
by the Trustee upon such terms as it may deem advisable, and no person
dealing with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the propriety of any such transaction.

     (h)  To enter into, compromise, compound and settle any debt or
obligation due to or from the Trustee and to reduce the rate of interest on,
to extend or otherwise modify or to foreclose upon, default or otherwise
enforce any such obligation.

     (i)   To cause any bonds, stocks or other securities held by the Trustee
to be registered in or transferred into its name as Trustee or the name of
its nominee or nominees or to hold them unregistered or in form permitting
transferability by delivery, but at all times with full responsibility
therefor as Trustee.

     (j)   To manage, administer, operate, repair, improve and mortgage or
lease for any number of years, regardless of any restrictions on leases made
by trustees, or otherwise to deal with any real property or interest therein;
to renew or extend or to participate in the renewal or extension of any
mortgage, and to agree to the reduction in the interest on any mortgage or
other modification or change in terms of any mortgage or guarantee thereof
in any manner and upon such terms as may be deemed advisable; to waive any
defaults whether in performance of any covenant or condition of any mortgage
or in the performance of any guarantee or to enforce any such default in such
manner as may be deemed advisable, including the exercise and enforcement of
any and all rights of foreclosure.

     (k)  To  make, execute and deliver as Trustee any and all deeds,
leases, mortgages, advances, contracts, waivers, releases or other
instruments in writing necessary or proper in the employment of any of the
foregoing powers.

     (l)  To settle, compromise or abandon all claims and demands in favor
of or against the Trust Fund.

     (m)  To exercise, generally, any of the powers which an individual
owner might exercise in connection with any property, either real, personal
or mixed, held by the Trust Fund, and to do all other acts which the Trustee
may deem necessary or proper to carry out any of the powers set forth in this
Article or otherwise in the best interests of the Trust Fund and the
Participants.

                           ARTICLE IX
             RESIGNATION, REMOVAL, AND APPOINTMENT
                      OF SUCCESSOR TRUSTEE

     Section 9.01.  Resignation.  The Trustee may resign upon sixty (60)
calendar days' prior notice in writing to the Company.  Such prior written
notice may be waived by the Company.

     Section 9.02.  Removal.  The Company may remove the Trustee, with or
without cause, upon sixty (60) calendar days' prior written notice to the
Trustee.  Such prior written notice may be waived by the Trustee.

     Section 9.03.  Successor Trustee.  Upon the resignation or removal of
the Trustee or inability of the Trustee for any reason to perform its duties
hereunder, the Company shall promptly appoint a successor Trustee, which
shall be a national bank or a state bank having its deposits insured by the
Federal Deposit Insurance Corporation, having capital and surplus of at least
fifty million dollars ($50,000,000).  Any such successor Trustee shall have
the same powers and duties as those conferred upon the initial Trustee
hereunder and shall evidence its acceptance of such appointment by written
instrument addressed to the Company.  Upon written notice from the Company of
the acceptance of such appointment by the successor Trustee, the Trustee
shall promptly assign, transfer and pay over the Trust Fund to such successor
Trustee; provided, however, that the Trustee may reserve such sum of money as
it shall deem advisable for payment of its fees and expenses in connection
with the settlement of its account or otherwise.

     Section 9.04.  Accounting by Trustee.  Within sixty (60) calendar days
after the date or resignation or removal of the Trustee, the Trustee shall
furnish a written accounting of the Trust Fund with respect to the period
since the last Valuation Date to the Company, and to the successor Trustee,
which report shall set forth all investments, receipts, disbursements, and
other transactions during such period.

     Section 9.05.  Merger or Consolidation of Trustee.   If the Trustee
shall at any time merge or consolidate with or shall sell or transfer all or
substantially all of its assets and business to another corporation, state
or federal, the corporation resulting therefrom shall be Trustee hereof in
lieu of its predecessor in interest without the execution of any instrument
and without action on the part of the Company; provided, however, that such
successor corporation shall be qualified under the laws of the State of
Indiana to undertake the duties of the Trustee hereunder.

                             ARTICLE X

                    NON-DIVERSION OF TRUST FUND

     Except as otherwise expressly provided in this Plan and then permitted
by ERISA, the Company shall not have the right or power to direct the Trustee
to return all or any part of the Trust Fund to the Company or to divert to
others any of the assets held in the Trust Fund until all Accrued Benefits
or Preretirement Surviving Spouse Death Benefits under this Plan have been
paid in full or satisfied by the purchase and delivery of single premium
non-transferable deferred annuity contracts.

                            ARTICLE XI

                          ADMINISTRATION

     Section 11.01.  Delegation of Responsibility.  The Administrator may
delegate duties involved in the administration of this Plan to the
Compensation Committee or to the Executive Committee of the Board or to such
other person or persons whose services are deemed necessary or convenient.
However, the ultimate responsibility for the administration of this Plan
shall remain with the Administrator.

     Section 11.02.  Construction of Plan.  The Compensation Committee shall
have the power to construe this Plan and to determine all questions of fact
or law arising under it.  It may correct any defect, supply any omission or
reconcile any inconsistency in this Plan in such manner and to such extent as
it may  deem expedient.  Except as otherwise permitted by ERISA, all acts and
determinations of the Compensation Committee shall be final and conclusive on
the Participants and on the surviving spouses of any deceased Participants
and shall not be subject to appeal or review except in those instances where
the Compensation Committee, in its sole discretion, refers such matter to the
Board.

     Section 11.03.  Tax Information to Participants.  The Administrator
shall timely provide necessary tax information to the Plan Participants
relating to their participation in this Plan to enable the Participants to
report properly any income required to be recognized by the Participants.

      Section 11.04.  Determinations.  The Company shall make all
determinations as to the right of any person to a  benefit.  Any denial by
the Company of a claim for benefits under this Plan by a Participant or by
any deceased Participant's surviving spouse shall be stated in writing by the
Company and delivered or mailed within ninety (90) calendar days to the
Participant or to such deceased Participant's surviving spouse; and such
notice shall comply with all requirements imposed by ERISA and shall set
forth the specific reasons for the denial, written to the best of the
Company's ability in a manner that may be understood without legal or
actuarial counsel.  In addition, the Company shall afford a reasonable
opportunity to any Participant or to such deceased Participant's surviving
spouse whose claim for benefits has been denied for a review of its decision
denying the claim in accordance with Section 503 of ERISA.

                            ARTICLE XII

                           MISCELLANEOUS

     Section 12.01.  Amendment or Termination of Plan.  This Plan may be
amended, modified, supplemented in any respect or terminated by action of the
Compensation Committee if the continued operation of this Plan is deemed
imprudent by the Compensation Committee as a result of changes in the law or
other circumstances outside of the control of the Company; provided, however,
that no amendment, modification, supplement or termination of this Plan shall
have the effect of:

           (a)  discontinuing, reducing or eliminating:

                (1)    the Post-Tax Adjusted Benefit of a Participant or, if
           applicable, his surviving spouse, or

                (2)   any optional form of distribution permitted under this
           Plan;

          (b)  substantially increasing the duties of the Trustee without its
     prior written consent;

          (c)  permitting a reversion of Trust Fund assets to the Company
     before the benefits provided under this Plan have been paid in full or
     otherwise satisfied as provided in Article X; or

          (d)   discharging the Company from its obligation to make the Tax
     Distribution payments provided under Section 4.03.

      Section 12.02.  Right to Merge Plan.  The Company reserves the right,
by action of its Board, to merge or to consolidate this Plan with, or to
transfer the assets or liabilities of this Plan to, any other similar
retirement plan at any time, except that no such merger, consolidation or
transfer shall be authorized unless each Participant would receive a benefit
immediately after the merger, consolidation or transfer (if the merged,
consolidated or transferred plan then terminated) equal to or greater than
the benefit to which he would have been entitled immediately before the
merger, consolidation or transfer (if this Plan then terminated).

     Section 12.03.  Successors and Assigns.  This Plan shall be binding upon
the successors and assigns of the Company.

     Section 12.04.  Choice of Law.  Except as otherwise required by ERISA,
this Plan shall be construed and interpreted pursuant to, and in accordance
with, the laws of the State of Indiana.

     Section 12.05.  No Employment Contract.  This Plan shall not be
construed as an agreement, consideration or inducement of employment or as
affecting in any manner the rights or obligations of the Employer or of any
Participant to continue or to terminate the employment relationship any time.

     Section 12.06.  Non-Alienation.  Neither a Participant nor his spouse
shall have any right to anticipate, to pledge, to alienate or to assign any
rights under this Plan, and any effort to do so shall be null and void.  The
monthly benefits payable under this Plan shall be exempt from the claims of
creditors or other claimants and from all orders, decrees, levies and
executions and any other legal process to the fullest extent then permitted
by law.  The preceding sentences shall also apply to the creation, assignment
or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order is
determined to be a qualified domestic relations order as defined in Section
206(d) of ERISA.

     Section 12.07.  Gender and Number.  Words in the masculine gender shall
be construed to include the feminine gender in all cases where appropriate;
words in the singular or plural shall be construed as being in the plural or
singular in all cases where appropriate.

     Section 12.08.  Headings.  The headings in this Plan are solely for
convenience of reference and shall not affect its interpretation.

     Section 12.09.  Payment to Incompetents.  If any Participant or
surviving spouse of a deceased Participant, entitled to benefits under this
Plan is, in the judgment of the Company, legally, physically or mentally
incapable of personally receiving and receipting for any payment due
hereunder, payment may be made to the guardian or other legal representative
of such Participant or such surviving spouse.

     Section 12.10.  Illegal or Invalid Provisions.  If any provision of this
Plan or the application of any such provision to any person or circumstance
shall be invalid under any law of the United States of America or of any
State or any political subdivision thereof, neither the application of such
provision to persons or circumstances other than those as to which such
provision is invalid nor any other provisions of this Plan shall be affected
thereby.

       IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Restatement of the Plan to be signed on this 31st day of December, 1998 and
to be effective as of January 1, 1999.  The terms of this Amendment and
Restatement only apply to Employees who have completed at least one (1) Hour
of Service on or after January 1, 1999; provided, however, that under no
circumstances shall this Amendment and Restatement reduce the Accrued Benefit
of a Participant to an amount less than the Accrued Benefit in effect for the
Participant as determined on December 31, 1998.

                              INDIANAPOLIS POWER &  LIGHT COMPANY

                                 By:  /s/ Otto N. Frenzel III
                                    Otto N. Frenzel III, Chairman
                                    of the Compensation Committee
                                    of the Board

                            FIRST AMENDMENT TO THE
                      INDIANAPOLIS POWER & LIGHT COMPANY
               SUPPLEMENTAL RETIREMENT PLAN AND TRUST AGREEMENT
                  FOR A SELECT GROUP OF MANAGEMENT EMPLOYEES
                       (AS LAST AMENDED AND RESTATED
                         EFFECTIVE JANUARY 1, 1999)

        Pursuant to Section 12.01 of the Indianapolis Power & Light Company
Supplemental Retirement Plan and Trust Agreement for a Select Group of
Management Employees (the "Plan"), as last amended and restated effective
January 1, 1999, the Compensation Committee of the Board of Directors of
IPALCO Enterprises, Inc. ("Compensation Committee") hereby amends Section
4.01 of the Plan to read in its entirety, as follows:

        Section 4.01.  Entitlement to Retirement Benefits.  A Participant
who retires or otherwise terminates his employment with the Employer for
reasons other than his death shall be entitled to receive monthly
supplemental pension benefits under this Plan only if:

                (a)     his employment with the Employer terminates on or
        after his attainment of the Normal Retirement Age,

                (b)     his employment with the Employer terminates by
        reason of his incurring a Total Disability, or

                (c)     his employment with the Employer terminates after
        his completion of at least one (1) Year of Service.

The amount of the monthly supplemental pension benefits to which an eligible
Participant is entitled upon his retirement or other termination of
employment shall be equal to the Vested Portion of his Post-Tax Adjusted
Benefit; provided, however, that the amount of a Participant's Post-Tax
Adjusted Benefit shall be redetermined each January 1; provided, further,
that under no circumstances may the Post-Tax Adjusted Benefit payable to a
Participant be less than the Vested Portion of his Adjusted Accrued Benefit
as determined on February 29, 1996.  The non-Vested Portion of a
Participant's Post-Tax Adjusted Benefit shall be governed by Section 4.02.
The monthly payments shall begin on the first (1st) calendar day of the
month coinciding with or next following the date on which a Participant
attains his Normal Retirement Age, or, if later, the date his employment
with the Employer is terminated and shall continue through the month in
which his death occurs; provided, however, that if a Participant's
employment with the Employer is terminated before his attainment of the
Normal Retirement Age, he may elect with the consent of the Company to have
his benefits begin on the first (1st) calendar day of the month following
the date on which his employment with the Employer is terminated or, if
later, the first (1st) day of the calendar month immediately following his
attainment of age fifty-five (55).  If benefit payments to a Participant
begin before his attainment of the Normal Retirement Age, the amount of such
Participant's monthly supplemental pension benefits shall be reduced to the
extent and in the same manner as such payments would be reduced if made
from the Company Retirement Plan; provided, however, that notwithstanding
anything contained in this Section to the contrary, a Participant:

        (a)     who is:

                (i)     a Senior Executive Officer or
                (ii)    an Other Executive Officer specifically desgianted
                by the Compensation Committee,

        and

        (b)     who at the date of his employment termination with the
        Employer is at least age fifty-five (55) and has completed at least
        thirty (30) years of Service

shall be eligible to elect the immediate commencement of his monthly
supplemental pension benefits without reduction; provided, further, that an
Other Executive Officer whose combined age and Service at the date of his
employment termination with the Employer is at least eighty-five (85) and
who as of his employment termination date has reached age fifty-five (55)
but has not reached age sixty-two (62) shall under no circumstances have a
reduction in his monthly supplemental pension benefit greater than twenty-
five one-hundredths (0.25) for each calendar month in which the benefit
commencement date precedes the date on which the Participant would have
reached age sixty-two (62).  If a Participant is married at the
date his benefit payments are to commence and notwithstanding anything
contained in this Plan to the contrary, his monthly benefits shall be paid
in the form of an actuarially equivalent joint and survivor annuity
determined in the same manner as the Joint and Survivor Annuity Option under
Section 205.50 of the Company Retirement Plan, unless such Participant,
with the written consent of his spouse witnessed by a Notary Public, elects
not to have his benefits paid in such form.

        Payment of benefits under this Section 4.01 shall be made in
accordance with and consistent with the requirements set forth in Section
205 of ERISA; provided, however, that subject to the applicable spousal
consent requirements contained in Section 205 of ERISA, a Participant may
elect for his benefits to be paid in any actuarially equivalent form of
payment which is available under the Company Retirement Plan (other than a
single lump sum payment).

        This First Amendment to the Plan has been executed on this
14th day of April, 1999 and shall be effective as of January 1, 1999.

                                COMPENSATION COMMITTEE
                                OF THE BOARD OF DIRECTORS OF
                                IPALCO ENTERPRISES, INC.

                                By: /s/ Otto N. Frenzel III
                                    Otto N. Frenzel III
                                    Its Chairman

                            SECOND AMENDMENT TO THE
                      INDIANAPOLIS POWER & LIGHT COMPANY
               SUPPLEMENTAL RETIREMENT PLAN AND TRUST AGREEMENT
                  FOR A SELECT GROUP OF MANAGEMENT EMPLOYEES
                       (AS LAST AMENDED AND RESTATED
                         EFFECTIVE JANUARY 1, 1999)

        Pursuant to Section 12.01 of the Indianapolis Power & Light Company
Supplemental Retirement Plan and Trust Agreement for a Select Group of
Management Employees (the "Plan"), as last amended and restated effective
January 1, 1999, the Compensation Committee of the Board of Directors of
IPALCO Enterprises, Inc. ("Compensation Committee") hereby amends Section
4.01 of the Plan to read in its entirety, as follows:

        Section 4.01.  Entitlement to Retirement Benefits.  A Participant
who retires or otherwise terminates his employment with the Employer for
reasons other than his death shall be entitled to receive monthly
supplemental pension benefits under this Plan only if:

                (a)     his employment with the Employer terminates on or
        after his attainment of the Normal Retirement Age,

                (b)     his employment with the Employer terminates by
        reason of his incurring a Total Disability, or

                (c)     his employment with the Employer terminates after
        his completion of at least one (1) Year of Service.

The amount of the monthly supplemental pension benefits to which an eligible
Participant is entitled upon his retirement or other termination of
employment shall be equal to the Vested Portion of his Post-Tax Adjusted
Benefit; provided, however, that the amount of a Participant's Post-Tax
Adjusted Benefit shall be redetermined each January 1; provided, further,
that under no circumstances may the Post-Tax Adjusted Benefit payable to a
Participant be less than the Vested Portion of his Adjusted Accrued Benefit
as determined on February 29, 1996.  The non-Vested Portion of a
Participant's Post-Tax Adjusted Benefit shall be governed by Section 4.02.
The monthly payments shall begin on the first (1st) calendar day of the
month coinciding with or next following the date on which a Participant
attains his Normal Retirement Age, or, if later, the date his employment
with the Employer is terminated and shall continue through the month in
which his death occurs; provided, however, that if a Participant's
employment with the Employer is terminated before his attainment of the
Normal Retirement Age, he may elect with the consent of the Company to have
his benefits begin on the first (1st) calendar day of the month following
the date on which his employment with the Employer is terminated or, if
later, the first (1st) day of the calendar month immediately following his
attainment of age fifty-five (55).  If benefit payments to a Participant
begin before his attainment of the Normal Retirement Age, the amount of such
Participant's monthly supplemental pension benefits shall be reduced to the
extent and in the same manner as such payments would be reduced if made
from the Company Retirement Plan; provided, however, that notwithstanding
anything contained in this Section to the contrary, a Participant who at
the date of his employment termination with the Employer is at least age
fifty-five (55) and whose combined age and Service total at least
eighty-five (85) at the date of his termination of employment shall be
eligible to elect the immediate commencement of his monthly supplemental
pension benefits without reduction.  If a Participant is married at the
date his benefit payments are to commence and notwithstanding anything
contained in this Plan to the contrary, his monthly benefits shall be paid
in the form of an actuarially equivalent joint and survivor annuity
determined in the same manner as the Joint and Survivor Annuity Option under
Section 205.50 of the Company Retirement Plan, unless such Participant,
with the written consent of his spouse witnessed by a Notary Public, elects
not to have his benefits paid in such form.

        Payment of benefits under this Section 4.01 shall be made in
accordance with and consistent with the requirements set forth in Section
205 of ERISA; provided, however, that subject to the applicable spousal
consent requirements contained in Section 205 of ERISA, a Participant may
elect for his benefits to be paid in any actuarially equivalent form of
payment which is available under the Company Retirement Plan (other than a
single lump sum payment).

        This Second Amendment to the Plan has been executed on this
23rd day of February, 2000 and shall be effective as of April 1, 2000.

                                COMPENSATION COMMITTEE
                                OF THE BOARD OF DIRECTORS OF
                                IPALCO ENTERPRISES, INC.

                                By: /s/ Otto N. Frenzel III
                                    Otto N. Frenzel III
                                    Its Chairman

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